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        T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

              Monday, July 09, 2001, Vol. 2, No. 132


                            Headlines

* B E L G I U M *

SABENA SA: Company Profile
SABENA SA: Swissair Conflict Resolved in September

* F R A N C E *

AIR LIBERTE: Revises Bid Deadline to July 16

* G E R M A N Y *

BANKGESELLSCHAFT BERLIN: Buys Back $3.46MM Shares
BANKGESELLSCHAFT BERLIN: Denies Reports It Will Cut  4000 Jobs
BANKGESELLSCHAFT BERLIN: Senator Says Bank May Not Be Split
DEUTSCHE TELEKOM: Prosecutor Expands Probe
TEAMWORK INFORMATION: Decreases Sales by 7.5%

* G R E E C E *

OLYMPIC AIRWAYS: Axon Bids for Olympic Airways

* I T A L Y *

A.C. FIORENTINA: Puliga Reserves Judgment in Fiorentina Case
ALITALIA-LINEE: Government to Prepare Commercial Agreement

* P O L A N D *

STALEXPORT SA: Will Dispose of Steel Mills

* S W E D E N *

FRAMFAB AB: Divests Non-Core Companies

* S W I T Z E R L A N D *

ISMM GROUP: FIFA Fears Trading and Media Rights Loss
SWISSAIR GROUP: Sabena Joins Legal Action

* U N I T E D   K I N G D O M *

BALTIMORE TECHNOLOGIES: Shares Fall on Restructuring Plan
BALTIMORE TECHNOLOGIES: Will Cut Jobs to Reduce Cost
CAMMELL LAIRD: More Jobs Cut
GLOBAL TELESYSTEMS: Committee Representatives Retain Advisors
INDEPENDENT INSURANCE: Clients Get Some Hope
INDEPENDENT INSURANCE: Finds New Reinsurance Contracts
LASTMINUTE.COM: Culhane Steps Down as CFO
MARKS & SPENCER: Further Sales Deterioration
ONE.TEL: Centrica Buys One.Tel for GBP58MM
REDSTONE TELECOM: Threatens Rebels With Liquidation
SCOOT.COM: Retreats to Core Markets
SCOOT.COM: More Debt Problems
SCOOT.COM: Reveals First-Quarter Results
WEIR GROUP: Disposes Non-Core Businesses


=============
B E L G I U M
=============


SABENA SA: Company Profile
--------------------------

Name:        SABENA BELGIAN WORLD AIRLINES SA
             Avenue Mounierlaan 2
             1200 Brussels, Belgium

Phone        +32 2 723 31 11

Website:             www.sabena.com

SIC:                 Air transportation, scheduled (4512)
Employees:           11,294 (1999)
Operating Revenue:   108.719 billion BEF (2000)
Net Loss:            13.031 billion BEF (2000)
Total Assets:        95.138 billion BEF (2000)
Liabilities:         98.809 billion BEF (2000)

Type of Business: Airline. It not only maintains a fleet of more
than 80 aircraft, operates regional airline Delta Air Transport
and charter service Sobelair, but also operates a flight school,
aircraft maintenance facilities and hotels.

Trigger Event: An audit conducted by the International Pilot
Services Corporation revealed management mistakes that directly
led to the airline's cash flow problems. Due to significant
losses, the Belgian carrier underwent a restructuring plan that
included job cuts. Sabena now faces problems related to a lawsuit
against its shareholder, Swissair Group.

President & CEO:  Christoph M�ller
Chairman:         ValSre Croes Chairman
COO:              Mark Dunkerley
Vice-Chairman:    Philippe Suinen

Auditors:  Klynveld Peat Marwick Goerdeler (KPMG)
           Bedrijfsrevisoren

Last published in TCR-EUR on July 6, 2001


SABENA SA: Swissair Conflict Resolved in September
--------------------------------------------------

Belgian Prime Minister Guy Verhofstadt said Swissair Group AG's
move to withdraw from its 49.5% holding in Sabena Airlines would
not be resolved until September, AFX News reported on Thursday.

During talks with representatives of Sabena's employee unions,
Verhofstadt assured them that Sabena would not be subject to a
distress sale.


===========
F R A N C E
===========


AIR LIBERTE: Revises Bid Deadline to July 16
--------------------------------------------

Receivers of AOM-Air Liberte said that candidates for the
acquisition have until July 16 to revise their bids, according to
an AFX News report on July 4.

They said the 15 offers submitted were financially inadequate and
contained a worrying lack of information.

Bid from French property company FIDEI, backed by management and
the transport ministry, was rejected since it did not provide
enough financial guarantees. The bid proposed the retention of
2,827 of the total 4,978 staff.

If a satisfactory bidder does not step forward, the court would
be forced to liquidate the airlines.

The bid from Holco, which proposed retaining 2,532 workers, was
also rejected.

The French airlines, owned by Swissair Group and Marine-Wendel,
filed for bankruptcy in early June and the carriers have been
given three months to find potential buyers.


=============
G E R M A N Y
=============


BANKGESELLSCHAFT BERLIN: Buys Back $3.46MM Shares
-------------------------------------------------

Bankgesellschaft Berlin has bought about $3.46 million worth of
its own shares on the market in recent weeks ahead of its
upcoming capital increase, according to Reuters' July 4 report.

The bank, which gave no other details of the purchase, but said
the action was taken in conformity with the law, said the shares
would be reserved for use in the capital increase.

Bankgesellschaft was ordered by the German bank supervisory
authority BAKred to raise $1.69 billion in new capital, partly to
cover the property losses.

The bank is 57%-owned by the Berlin government. It has been
caught up in a scandal that has brought down the city government,
forced numerous senior resignations, as well as regulatory and
criminal investigations.


BANKGESELLSCHAFT BERLIN: Denies Reports It Will Cut 4000 Jobs
-------------------------------------------------------------

Bankgesellschaft Berlin on July 4 clarified media reports
regarding the loss of more than 4000 jobs at bank.

The Management Board said there has neither been a resolution nor
plans for 4000 redundancies in the group.


BANKGESELLSCHAFT BERLIN: Senator Says Bank May Not Be Split
-----------------------------------------------------------

Berlin finance senator Christiane Krajewski said it might not
split Bankgesellschaft Berlin into three units, according to the
AFX News in its July 3 edition.

Bankgesellschaft chairman Wolfgang Rupf has proposed that the
troubled bank will be split into retail banking, wholesale and
property arms, but Krajewski said it might not make sense to
separate retail and wholesale banking.

The bank's supervisory board had taken note of the three way
split plan but did not approve it.

Krajewski is chairman of the finance committee that oversees the
bank, in which Berlin has a 56.6%.


DEUTSCHE TELEKOM: Prosecutor Expands Probe
------------------------------------------

The Bonn public prosecutor has widened its investigation into
Deutsche Telekom's valuation of technical equipment, the July 5
edition of Reuters said. The technical equipment assets include
Telekom's network and communications technology.

The prosecutor is already investigating Telekom's valuations of
its real estate assets.

Last month, the German firm said it would cut its debt by 19 to
50 billion euros by the end of 2002 by selling non-core assets
and issuing shares in its mobile telephone subsidiary T-Mobile.
It would also sell its majority stakes in the remaining six of
its nine regional spin-off cable networks.


TEAMWORK INFORMATION: Decreases Sales by 7.5%
---------------------------------------------

The teamwork Group, according to the Frankfurt Stock Exchange
press release on July 4, managed to achieve sales of 2.7 million
euros in the first quarter of 2001. Compared with figures for the
previous year, this represents a decrease in sales of 7.5%.

EBIT in the first quarter stood at around -0.5 million euros, a
reduction in the EBIT loss of 90% compared with the previous
year. The loss per share for the period came to 0.2 euros.

The first quarter of fiscal year 2001 was marked by the
restructuring of teamwork AG. Earnings situation at teamwork AG
increased considerably with EBIT of -0.3 million euros, compared
with -2.93 million euros in the previous year.

Teamwork AG's share of Group sales was 71%, at 1.9 million euros.
This represented an increase in company sales of approximately
10% compared with the same quarter of the previous year. Sales
and earnings figures from teamwork AG are clear proof that the
restructuring measures introduced at the end of November last
year are taking hold.

The teamwork Group employed 116 as of March 31, 2001 (36.6% down
from the same period of the previous year).

Manfred Wurm, the Executive Board member in charge of Finance and
Controlling, has resigned at his own request and by mutual
consent. Heinz Ikenmeyer is now managing teamwork AG business as
the company's sole director, together with the receiver, lawyer
Dr. Frank Kebekus.


===========
G R E E C E
===========


OLYMPIC AIRWAYS: Axon Bids for Olympic Airways
----------------------------------------------

Private Greek carrier Axon airlines emerged as the preferred
bidder to purchase a majority stake in debt-ridden Olympic
Airways, the Associated Press reported on Thursday.

Negotiations will also be held with Cyprus Airways and
Australia's Integrated Airline Solutions.

Restis shipping group was, however, dropped from the competition
because it was interested only in a small part of the Greek
carrier, whose debt is estimated at $102 million and growing.

According to media reports, the bids are valued at between $85
million and $425 million.

Credit Suisse First Boston is the state's adviser for the sale of
Olympic Airways.


=========
I T A L Y
=========


A.C. FIORENTINA: Puliga Reserves Judgment in Fiorentina Case
------------------------------------------------------------

Judge Sebastiano Puliga reserved judgment in a case that could
end in bankruptcy and the exclusion of Italy's first division
football club Fiorentina from competition, according to Agence
France-Presse's July 3 report.

The adjournment of the hearing last week gave Fiorentina more
time to raise funds by selling its star players, including the
club's prime playing asset Portuguese playmaker Manuel Rui Costa.


ALITALIA-LINEE: Government to Prepare Commercial Agreement
----------------------------------------------------------

Transport Minister Pietro Lunardi and Economy Minister Giulio
Tremonti will prepare a memorandum of understanding for the
commercial agreement between Alitalia SpA and Air France, the
July 4 edition of AFX News reported.

Lunardi said the memorandum of understanding, the first step in a
long procedure, would not include the exchange of shares.

Alitalia is facing problems that include unprofitable
international and
intercontinental routes, loss of domestic market share, an
inadequate fleet and problems with Malpensa airport in Milan.


===========
P O L A N D
===========


STALEXPORT SA: Will Dispose of Steel Mills
------------------------------------------

Debt-ridden Stalexport will dispose its steel mills and focus on
steel trading and tollway maintenance, the Warsaw Business
Journal in its July 2 edition said.

According to company chairman Emil Wasacz, Stalexport plans to
cut cost that includes laying off of nearly 40% of its staff. Its
main goal remains selling its biggest loss-making mill Huta
Ostrowiec.

Stalexport's debt now exceeds $225 million.



===========
S W E D E N
===========


FRAMFAB AB: Divests Non-Core Companies
--------------------------------------

Framfab on Thursday said it sold its non-core companies as part
of the action program communicated earlier.

The Internet consultancy firm sold its advertising agency M.O.R.
to its employees. Framfab's office at Sveavagen 17 in Stockholm
was sold to Ecsoft Sweden, while Framfab AS in Norway to Skipper
Invest AS, also owned by its employees. The software development
company Dimac AB was sold to Dropside Technology Limited.

All subsidiaries outside the core business will be divested in
October. Framfab will then have approximately 900 employees,
compared to almost 3,000 employees in October 2000.


=====================
S W I T Z E R L A N D
=====================


ISMM GROUP: FIFA Fears Trading and Media Rights Loss
----------------------------------------------------

Soccer's world governing body FIFA (International Football
Association Federation) may lose millions of dollars in revenues
with the delay in the settling of the bankruptcy proceedings of
its former commercial partner ISL-ISMM, the Financial Times
reported on Thursday.

ISMM Group's administrator Ernst and Young confirmed it still has
to decide whether the commercial and media rights would revert
back to the soccer body.

E&Y is believed to be considering the option of selling the
rights to other parties to raise cash to pay off the group's
creditors.

If FIFA does not soon receive clearance to continue selling the
rights held by ISL-ISMM, it will be unable to generate revenues
from marketing contracts. The longer the delay in reaching a
decision, the more FIFA stands to lose.


SWISSAIR GROUP: Sabena Joins Legal Action
-----------------------------------------

Belgian carrier Sabena will join Belgium's legal action against
Swissair over the Swiss aviation company's refusal to raise its
stake in the Belgian airline to 85%, Associated Press in its July
5 edition said.

Lossmaking Sabena is demanding $1.09 billion from the Swiss
carrier for not honoring a commitment to upgrade the Belgian
airline's fleet.

Swissair has no comment on Sabena's legal action.

The Belgian state holds a 50.5% stake in Sabena, while Swissair
holds the remaining 49.5%.


===========================
U N I T E D   K I N G D O M
===========================


BALTIMORE TECHNOLOGIES: Shares Fall on Restructuring Plan
---------------------------------------------------------

The trading of software firm Baltimore Technologies took a 32%
fall on Thursday after announcing more job cuts, according to the
Financial Times' report.

Chief executive Fran Rooney said the company had to adjust its
cost base and headcount and is seeking a fresh source of
financing as part of its restructuring plan.

Baltimore's cash reserves stood at 54 million pounds on June 30,
after a three-month outflow of 21 million pounds.

Details of the restructuring program will be outlined in August
with the interim results.


BALTIMORE TECHNOLOGIES: Will Cut Jobs to Reduce Cost
----------------------------------------------------

Baltimore Technologies, which employs over 1,000 people, will cut
its staff to reduce costs because of tough market conditions, the
July 5 edition of CNN said. The Internet security company did not
disclose how many workers would go.

Baltimore said its overhaul would save about 14 million pounds a
year in costs.

Tech companies have been cutting staff as a U.S. economic
slowdown has fed through to Europe and led to delays in orders
and reduced demand.

The company in May posted a 17% fall in revenue for the first
three months to 23.7 million pounds, compared with 28.4 million
pounds in the final quarter of 2000. It has losses before
interest, tax, depreciation and amortization of 17.2 million
pounds, double the 8.7 million pounds of the last quarter of
2000.


CAMMELL LAIRD: More Jobs Cut
----------------------------

Receivers to Cammell Laird said the troubled shipbuilder would
again cut 71 jobs as efforts continue to find buyers for the
firms' yards, the July 5 edition of Press Association reported.

The yard at Birkenhead will lose 61 jobs, while 10 will be cut
from the Teesside site.

Work is due to run out by the end of the month in both yards,
where no fresh redundancies have been announced.


GLOBAL TELESYSTEMS: Committee Representatives Retain Advisors
-------------------------------------------------------------

Fiber-optic network group Global TeleSystems on July 3 said that
representatives of informal committees representing holders of
public debt and preferred stock securities issued by GTS and its
Global TeleSystems Europe BV subsidiary have retained independent
advisors.

The advisors began their due diligence investigations, and GTS
plans to make a formal recapitalization proposal to these
representatives in the near future. This is a continuation of the
process that began last month when the companies announced plans
to recapitalize their balance sheets by launching consensual
discussions with the holders of these securities in order to
eliminate or reduce the 158 million euro in annual cash interest
payment obligations of these companies.

Consistent with these plans, GTS announced that it did not make
the cash interest payment due on July 1 on its 5-3/4% Convertible
Senior Subordinated Debentures due 2010, or the dividend payment
due on June 15 on its depositary shares. The non-payment of cash
interest on the convertible debentures will not constitute an
event of default under indenture governing those debentures
unless interest is not paid by July 31.

GTS also announced that Deutsche Bank, Dresdner Bank and Bank of
America, which are providing financing to GTS' Global TeleSystems
Europe Holdings B.V. subsidiary, have agreed to extend for the
month of July the waiver of any defaults under their facility
caused by GTS' election to not pay the June 1 interest payment on
GTS Europe's public debt.

The failure to pay interest on GTS' public debt or preferred
shares is not a default under the bank financing agreement.
Pursuant to the agreement between GTS and the Bank Group, the
banks' consent will be required for future funding requests, but
the company announced that it does not currently foresee making
such requests pending its reaching an agreement with informal
committees representing its public debt and preferred
shareholders.

GTS and the Bank Group continue their discussions aimed at
replacing the current financing agreement with a longer-term
financing facility.

GTS has retained Houlihan Lokey Howard & Zukin as its investment
banker to assist in developing a financial restructuring plan and
undertaking discussions with GTS and GTS Europe bondholders and
preferred stockholders.


INDEPENDENT INSURANCE: Clients Get Some Hope
--------------------------------------------

The Irish Insurance Federation said that up to 9,000 Irish
automobile policy holders of the collapsed Independent Insurance
should get some coverage for claims they have already made, the
Irish Independent reported on Friday.

The Policyholders Protection Board in the UK will compensate
Irish clients, including motor and motorcycle policy clients. The
coverage does not extend to corporate clients of Independent,
believed to include over 50 Irish companies.

The claims are now being dealt with Independent's liquidator
PriceWaterhouseCoopers.


INDEPENDENT INSURANCE: Finds New Reinsurance Contracts
------------------------------------------------------

Three more contracts have been discovered, following last month's
report that Independent Insurance uncovered alleged reinsurance
arrangements to cap huge losses, according to The Times' Friday
report.

Independent directors said that the company's former chief
Michael Bright put the three contracts in place without their
knowledge. Bright denies this.

Details of the contracts and the impact on the insurer's
shattered finances are not yet known.

PricewaterhouseCoopers liquidators Mark Batten and Dan
Schwarzmann will provide an update on their investigations into
Independent's financial position today.


LASTMINUTE.COM: Culhane Steps Down as CFO
-----------------------------------------

Online booking agent Lastminute.com on Thursday said its finance
director Julian Culhane will be leaving the company at the end of
the month to return to corporate finance activity, CNN reported.

David Howell, former finance director of tour operator First
Choice, has been appointed to replace Culhane.

Culhane joined Lastminute in November 1999 from M&A advisor
Broadview. He helped plan its initial public offering and the
acquisition last September of French rival Degriftour.


MARKS & SPENCER: Further Sales Deterioration
--------------------------------------------

Retail giant Marks & Spencer PLC is expected to outline a further
deterioration in clothing sales when it publishes a first quarter
trading statement on July 11, according to AFX News' July 5
report.

The statement will cover the first 14 weeks trading of M&S'
financial year, to July 7. Analysts expect M&S' sales in
clothing, footwear and gifts to have worsened from the last
quarter, while food sales are expected to be strong.

Deutsche Bank retail analyst Sundeep Bahanda anticipates an 8%
rise in home furnishing sales and a 3% increase in like-for-like
food sales.

With the figures anticipated to be woeful and a large hostile
crowd expected at the shareholders meeting on the same day,
Belgian chairman and chief executive Luc Vandevelde is set for
another tortuous week.

The chairman can expect fierce criticism from employee
representatives still enraged at the retailer's plans to close
its Continental European subsidiaries with the loss of 3,350
jobs, while shareholders may seek to draw blood over the
chairman's remuneration of 650,000 sterling and bonus of 2.2
million sterling.


ONE.TEL: Centrica Buys One.Tel for GBP58MM
------------------------------------------

Centrica plc on July 3 said it has acquired One.Tel plc, the UK
operation of One.Tel Limited (One.Tel UK), for GBP58 million,
including assumed liabilities.

The acquisition was made through the administrators of Australian
telecom business, One.Tel Limited, which went into administration
on May 29.

The acquisition will also give Centrica control of the One.Tel
brand in Europe and North America.

The UK business, which was launched in August 1998 as a stand-
alone company, has continued to grow and trade profitably,
quickly becoming established as a leading residential services
provider.

One.Tel UK, like Centrica, is a reseller or virtual network
operator, with limited infrastructure ownership. It will continue
to trade under the One.Tel brand.


REDSTONE TELECOM: Threatens Rebels With Liquidation
---------------------------------------------------

Redstone Telecom warned its shareholder action group that any
effort to block the emergency restructuring would send Redstone
into receivership and liquidation, according to the July 5 report
of The Times.

On July 20, Redstone will seek shareholder approval for a share
placement to existing and new investors and a rights issue, which
together will raise 25.3 million pounds.

The action group is concerned about the massive dilution caused
by the share placement and rights issue.


SCOOT.COM: Retreats to Core Markets
-----------------------------------

Online directory service firm Scoot.com will retreat into its
core markets to raise cash to ensure Scoot can make it through to
break-even point by the end of next year, the Thursday edition of
BBC News said.

The move came a week after Scoot chief executive Robert Bonier
resigned, and after the firm said it would cut 285 jobs and
implement a strategy shake-up.

Fund-raising options include a possible sale of Loot, bought for
180 million pounds last July. Scoot may write down the value of
Loot in the form of an asset-impairment charge if it became
evident that Loot's value exceeded estimated future cash flows.

Scoot.com, with losses of 9.5 million pounds for the first three
months of the year, revealed it has shelved plans for expanding
into Germany, Spain and Portugal by the end of the year.


SCOOT.COM: More Debt Problems
-----------------------------

Troubled directories company Scoot.com, according to The Times'
Friday edition, has revealed more debt problems.

In August, Scoot will face a second call for cash to meet
payments of convertible debentures if the shares do not rise
above 13.6p. They closed at 3p on Thursday and analysts are not
hopeful of an increase in the near future.

Chief operating officer John Molyneux is urging shareholders to
vote on July 20 in favor of the share issue proposal to raise
funds, or the company will go into administrative receivership.

The company is also in talks with shareholder Vivendi about
raising cash to pay off the debentures and shore up the balance
sheet.


SCOOT.COM: Reveals First-Quarter Results
----------------------------------------

Scoot.com on July 5 said that its EBITDA loss for the three-month
period ending March 31 has reduced by 22%, to 9.5 million pounds,
compared to 12.2 million pounds in the fifth quarter of 2000.

The group's total revenues were up 8% to 9.6 million pounds,
compared to 8.9 million pounds in the previous quarter. EPS loss
of 2.11p before goodwill amortisation and exceptional items was
reduced by 21% compared to a loss of 2.66p in the last quarter.

Executive Chairman Dick Eykel said the company is developing a
number of initiatives that resulted from the strategic review
that began in the first half of 2001.

As a result, the attention for the remainder of 2001 will be
specifically on Scoot.com's existing markets, particularly in the
UK.

The management is focused on raising sufficient finance to meet
the company's near-term working capital requirements and the
implementation of significant cost-cutting measures to ensure the
company can be taken forward from a solid base.


WEIR GROUP: Disposes Non-Core Businesses
----------------------------------------

The Weir Group on July 5 said it has sold Weir Systems Limited as
part of its strategy to concentrate on core businesses with a
significant market share. It is also in the process of
withdrawing from three other non-core businesses.

Weir Systems, which provides computer software and services, has
been bought by a subsidiary of Maxima Information Group Ltd of
Cheltenham. The sale proceeds are undisclosed, but amount to less
than 1% of the net asset value of The Weir Group. The 84 staff
employed in Glasgow, Solihull and Nottingham has transferred with
the business.

The group has also been seeking buyers for its three non-core
businesses with continuing difficult market conditions in the UK.
The operations involved are Tooling Products, G Perry and the
Manchester operation of Strachan & Henshaw.

The proposed closures will result in around 150 job losses at
Strachan & Henshaw, 65 at G Perry and 120 at Tooling Products.

In the year to end December 2000 these four businesses incurred
an operating loss of 1.3 million pounds on sales of 28 million
pounds.

The sale and closures will result in an estimated exceptional
charge in group results for 2001 of 15 million pounds, of which
approximately half relates to asset impairment and goodwill which
has previously been written off to reserves.

                                 ************

       S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter -- Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Trenton, NJ
USA, and Beard Group, Inc., Washington, DC USA. Kimberly MacAdam,
Salve M. Mordeno and Ma. Cristina D. Pernites, Editors.

Copyright 2001.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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same firm for the term of the initial subscription or balance
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Christopher Beard at 301/951-6400.


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