/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010713.mbx 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 Friday, July 13, 2001, Vol. 2, No. 136 Headlines * A U S T R I A * LIBRO AG: Awaits Styria Takeover * B E L G I U M * LERNOUT & HAUSPIE: Bastiaens No Longer Detained PANTOCHIM: EU Okays BASF Acquisition of Chemical Companies * F R A N C E * BATA: Shoemaker Ceases Payment CS COMMUNICATION: Telecom Unit Applies for Liquidation * G E R M A N Y * ADAM OPEL: Plans to Reduce Costs Quickly EM.TV: To Raise Wages of Board Members TEAMWORK INFORMATION: Restructuring Makes Progress * I R E L A N D * IRISH ISPAT: British Firms Express Interest * N O R W A Y * ENITEL ASA: S&P Cuts Ratings to CCC * U N I T E D K I N G D O M * GLOBAL TELESYSTEMS: Agrees to Sale of Golden Telecom Shares INDEPENDENT INSURANCE: Ex-Chief Faces Lawsuit From HSBC INDEPENDENT INSURANCE: French Regulator Attacks FSA INDEPENDENT INSURANCE: State Faces Criticism From Business Bodies MARCONI PLC: Faces Calls for Board Changes MARKS & SPENCER: Consults Staff Over Restructuring Plan MARKS & SPENCER: Continues Sales Decline MARKS & SPENCER: Vandevelde Wants More Time MARKS & SPENCER: Will Release Value From Property MG ROVER: Aims to Break Even in 2002 MG ROVER: Posts 254MM-Pound Loss PHOTOBITION GROUP: Considers Buyout Option ============= A U S T R I A ============= LIBRO AG: Awaits Styria Takeover -------------------------------- Media group Styria is not yet ready for a speedy takeover of its struggling competitor Libro, the Financial Times & Die Presse reported on Wednesday. The company said that it would use the time needed for Libro to reach a settlement with the creditor banks. The banks, which favored Styria to take over Libro, are believed to have examined the possibility of a takeover before Libro filed for insolvency. ============= B E L G I U M ============= LERNOUT & HAUSPIE: Bastiaens No Longer Detained ----------------------------------------------- Former Lernout and Hauspie Speech Products chief executive Gaston Bastiaens was released from jail while a probe into possible stock price manipulation and possible fraud continues, the Wall Street Journal reported on Wednesday. Bastiaens was released, on condition that he must remain in Belgium. He is not allowed to contact the other suspects in the probe. PANTOCHIM: EU Okays BASF Acquisition of Chemical Companies ---------------------------------------------------------- The European Commission has cleared BASF AG's acquisition of Pantochim and Eurodiol, according to the Wednesday edition of AFX News. The Commission found that without a buyer, the two companies in judicial pre-bankruptcy regime would have become bankrupt and their capacity would definitely have been lost to the market. BASF was the only company to make a firm offer. Although BASF will achieve market shares of above 45% in some base chemical products, this will be less harmful to the market than if the Belgian companies were closed down. Pantochim and Eurodiol, which are currently in receivership, produce butanediol derivatives used as solvents in pharmaceuticals, chemical and other industries. =========== F R A N C E =========== BATA: Shoemaker Ceases Payment ------------------------------ The French factory of shoe manufacturer Bata Hellocourt, according to the Tuesday edition of Les Echos, has ceased payment. The factory, which employs 875 people, is soon expected to file for bankruptcy protection. Bata generates an average monthly loss of 4 million French francs. In June, its Canadian parent has confirmed it would not inject the 20 million French francs necessary to keep its shoe factory afloat. CS COMMUNICATION: Telecom Unit Applies for Liquidation ------------------------------------------------------ The receiver for CS Telecom, the telecom unit of electronics and communications group CS Communication & Systemes, has on Tuesday asked a Nanterre court in France to place the company in liquidation, Les Echos reported. CS Telecom, which was placed in receivership at the end of April, posted an operating loss of 215 million French francs last year. Negotiations to buy CS Telecom failed with Italtel and BC Partners, Les Echos added. ============= G E R M A N Y ============= ADAM OPEL: Plans to Reduce Costs Quickly ------------------------------------------ Adam Opel AG, a unit of General Motors Corp, said its cash burn rate is too high, AFX News reported on Wednesday. Materials costs need to be massively reduced because they constitute more than 50% of a car's value. According to Opel management board chairman Carl-Peter Forster, the company is examining all alternatives to a shutdown. EM.TV: To Raise Wages of Board Members -------------------------------------- EM.TV & Merchandising AG wants to increase the wages of its supervisory board chairman to 90,000 euros from 10,224, the Wednesday edition of AFX News said. Regular supervisory board members will be paid 30,000 euros, compared to the current pay of 5,112 euros. The media company hopes its shareholders will agree to the pay hikes in a vote at the AGM on August 1 Weekly magazine Die Teleboerse reported that the association for the protection of shareholders rights wants to vote against the wage increase due to wrong timing. EM.TV is in financial crisis and the supervisory board should be satisfied with less money. TEAMWORK INFORMATION: Restructuring Makes Progress -------------------------------------------------- The restructuring of teamwork information management AG is making progress, according to lawyer Dr. Frank Kebekus, receiver of the group's insolvency proceedings. The Frankfurt Stock Exchange in its Wednesday press release said that letters of intent have been concluded with two interested parties. The first party is an industrial partner from the software industry, while the second interested party is a financial investment group. Concluding negotiations with both parties are unanimously supported by the creditors' committee, which gave its complete approval of Kebekus's course of action in a meeting on July 6. A contract with one of the two interested parties will be concluded next month, leading to a debt relief. If assumptions are met within the timetable, restructuring of teamwork could presumably be concluded by the end of the third quarter of 2001. Teamwork, an information management solutions provider, began insolvency proceedings in November last year after it suffered cash-flow difficulties. ============= I R E L A N D ============= IRISH ISPAT: British Firms Express Interest ------------------------------------------- Ispat liquidator Ray Jackson of accountancy firm KPMG said that several companies, mainly from Britian and Ireland, have expressed interest in buying the Irish assets to operate it as a steel plant, the Thursday edition of The Irish Times said. The company values its land, buildings and equipment at just 3 million euros, from the book value of 15 million euro. The Cork facility has the capacity to allow ships of up to 3,000 tons to dock. Last month, Irish Ispat was closed by its parent firm Ispat International, with more than 400 jobs lost. It owes unsecured creditors 18 million euros and overall liabilities of almost 59 million euro. It is understood that the Cork company itself is owed around euro 22 million and the liquidator believes these debts are collectable. =========== N O R W A Y =========== ENITEL ASA: S&P Cuts Ratings to CCC ----------------------------------- In response to the continuing poor operating and financial performance of Norwegian telecommunications operator Enitel ASA, Standard & Poor's on Wednesday lowered its long-term corporate credit rating on Enitel to triple-'C' from single-'B'-minus. At the same time, the senior unsecured debt rating on Enitel was lowered to double-'C' from triple-'C'-plus. Ratings remain on CreditWatch with negative implications, where they were placed on September last year. In addition to the company's poor performance, the credit ratings agency believes that Enitel is not fully funded, and that it could require additional financing in the short term. Enitel's ratings reflect the company's weak financial and business profile. The company is currently incurring heavy losses, and its financial profile will remain weak as the group endeavors to boost revenues and gross profit to levels that can sustain operating and interest costs. =========================== U N I T E D K I N G D O M =========================== GLOBAL TELESYSTEMS: Agrees to Sale of Golden Telecom Shares ----------------------------------------------------------- Fiber-optic network group Global TeleSystems, Inc. on Wednesday said that its subsidiary Global TeleSystems Europe Holdings has agreed to sell 2,272,727 shares of common stock in Golden Telecom, Inc. to Golden Telecom for $11 per-share, or $25 million. After the conclusion of the sale, GTS will own 588,479 shares, or approximately 2.6%, of Golden Telecom. The agreement is part of GTS's previously announced plan to divest most or all of its interest in Golden Telecom as part of an overall restructuring program. Golden Telecom is the largest alternative provider of voice and data/Internet services in Russia and other countries of the Commonwealth of Independent States (CIS). INDEPENDENT INSURANCE: Ex-Chief Faces Lawsuit From HSBC ------------------------------------------------------- HSBC Republic Bank, the private banking arm of HSBC, is suing former Independent Insurance chief executive Michael Bright for 4.28 million pounds, the Financial Times' Wednesday edition said. The lawsuit was related to loans he took on December against shares in the collapsed insurer. INDEPENDENT INSURANCE: French Regulator Attacks FSA --------------------------------------------------- France's insurance regulator, Commission de Controle des Assurances (CCA), has criticized the UK watchdog Financial Services Authority over the collapse of Independent Insurance. According to CCA president Jacques Delmas-Marsalet, the Financial Times on Wednesday reported, there had been a failure of cooperation with the FSA. The CCA warned the FSA in December that the British insurer's subsidiary in France was under-reserving for some claims and not entering other claims at all. The FSA, however, said there was no tip-off by the French authorities and they were only contacted in January. "The focus of the French concern was to seek a commitment from the UK group that it would support the French operation. We have had numerous discussions with the CCA, including visiting them in Paris in May." INDEPENDENT INSURANCE: State Faces Criticism From Business Bodies ----------------------------------------------------------------- Business bodies, including the Small Firms' Association, have criticized what they called the lack of action by the government to support businesses that have been affected by the collapse of Independent Insurance, the Irish Times reported yesterday. The employers' organization IBEC said the government failed to offer any concrete support to Irish companies affected by the collapse of the insurer. IBEC said three key issues are now facing Irish companies affected by the collapse. These are the cost of placing business with other insurers, the liability for companies in respect of existing claims, and the potential liability for companies in respect of claims lodged in the future relating to a period in which the companies were insured with Independent. The Construction Industry Federation also described the government's response as extremely disappointing. MARCONI PLC: Faces Calls for Board Changes ------------------------------------------ Marconi Plc faced calls for further board changes on Monday after the resignation of Chief Executive designate John Mayo, Reuters reported. Merrill Lynch analyst Adnaan Ahmad said a whole new management board with operational and restructuring experience is preferred, as shares in the telecom equipment maker rose more than 9% after its directors bought shares, while stock remained more than 50% below the level prior to a devastating profit warning. A Marconi spokeswoman said Chief Executive George Simpson would stay, and there was no need for further board changes. Simpson and two other directors bought 321,000 pounds of shares. MARKS & SPENCER: Consults Staff Over Restructuring Plan ------------------------------------------------------- Marks & Spencer on Wednesday said it is consulting its employees on the intention to close stores in Continental Europe. Subject to the outcome of the consultation, the troubled retailer will consider all possible methods to achieve a disposal that preserves employment. This move follows the March announcement that it intends to close the subsidiaries in Continental Europe, franchise the Hong Kong stores and sell Brooks Brothers and Kings Super Markets, while retaining the franchise stores worldwide and the wholly owned business in Eire. MARKS & SPENCER: Continues Sales Decline ---------------------------------------- Retail group Marks & Spencer on Wednesday said its overall sales slumped 2.6% in the 14 weeks to July 7. The key category of clothing, footwear and gifts suffered a 9.1% fall. The reported 1.5% decline in the homeware sales is distorted by poor furniture sales in April, following the announcement of the intention to close the Direct Clothing Catalogue operation. The food business fared somewhat better with a 5.9% increase following the foot and mouth crisis, which drew in customers looking for higher-quality products. Looking ahead, the early feedback from customers and fashion experts on our Autumn Womenswear ranges has been positive, recognizing the move back to offering customers classically stylish clothes of excellent quality and value. The Per Una collection, supplied by George Davies, will be launched in 90 UK stores during October. The fashion line is targeted to younger women. MARKS & SPENCER: Vandevelde Wants More Time ------------------------------------------- Following a report on the 2.6% drop in group sales, Marks and Spencer executive chairman Luc Vandevelde at the annual shareholders meeting said he needed more time to turn the company around. Vandevelde, according to the Financial Times' Wednesday report, said he was confident that recovery was achievable. He plans to attract and retain the best people. He also asked shareholders to vote in favor of a plan to double the value of share options available to certain key executives, which is to three times the annual salary. Vandevelde had asked to be excluded from the scheme. However, about 40% of shareholders who attended the meeting voted against, while 14.9% of proxy votes were also opposed to the change. The chairman admitted that the task was far tougher than he had at first realized. He could not promise a positive sales performance by next March, thus, needing three years to turn the business round. MARKS & SPENCER: Will Release Value From Property ------------------------------------------------- Marks & Spencer on Wednesday said it would release value from a substantial proportion of the UK property portfolio, which had a total book value of 2.5 billion pounds. A range of options under consideration includes an outright sale of non-operational properties, sale and leaseback and property securitization. The retail group expects to raise approximately 800 million pounds within the current financial year, including an intended 300 million pounds to be raised from the sale and leaseback of approximately 80 stores already announced. Transaction on the Baker Street Head Office will follow, as the group relocates to Paddington Basin in 2003. MG ROVER: Aims to Break Even in 2002 ------------------------------------ MG Rover, after posting a narrowed pretax loss of 254 million pounds, said it is on track to break even in 2002, the AFX News reported on Wednesday. The company aims to reduce its annual loss for 2001 to below 254 million pounds and have an annual sales volume of over 180,000 cars. It also plans to expand sales into new importer markets in Argentina, South Africa, New Nealand, Mexico and Switzerland. With sales of 961 million pounds, MG Rover said it has a cash position of 329 million pounds by the year-end, including the long-term loan from former owner Bayerische Motoren Werke AG. MG ROVER: Posts 254MM-Pound Loss --------------------------------- British car company MG Rover reported a pre-tax loss of 254 million pounds for the eight months to December 31, 2000, compared with 780 million pounds loss incurred in 1999 under its previous owner, BMW. According to Press Association's July 11 edition, the figure is about 50 million pounds less than once feared. PHOTOBITION GROUP: Considers Buyout Option ------------------------------------------ The executive directors of Photobition Group Plc, the international display graphics supplier, are considering a management buyout of the company. According to the July 11 edition of Reuters, the company expects to report a pre-tax loss as trading during May and June had fallen below expectations. Photobition, with a debt pile of some 100 million pounds, is negotiating with its bankers on certain key covenants. *********** 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 publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is $575 per half-year, delivered via e-mail. 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