/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010719.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 Thursday, July 19, 2001, Vol. 2, No. 140 Headlines * B E L G I U M * CUSTOM SILICON: Lerner Steps Down From Board FLV FUND: Accepts Vermeulen Resignation FLV FUND: Audit Completes Fact Book REAL SOFTWARE: Seeks to Convert Bond Claims SABENA SA: Shareholders Reach Agreement * C Z E C H R E P U B L I C * CESKE ENERGETICKE: To Suffer Kc115BB Loss on Temelin Closure TELESYSTEMS INTERNATIONAL: Moody's Downgrades Note Issues to Ca * F I N L A N D * SONERA CORP.: Plummets on Debt Fears * F R A N C E * AIR LIBERTE: Rochet May Acquire Airline AIR LIBERTE: Takeover Still Unresolved MOULINEX SA: To Study Union's Rescue Plan * G E R M A N Y * BANKGESELLSCHAFT BERLIN: Announces 1.6BB-Euro Deficit for 2000 BANKGESELLSCHAFT BERLIN: Seeks 2BB-Euro Capital Increase BANKGESELLSCHAFT BERLIN: Staff Criticizes Chairman EM.TV: Haffa Stake Not for Sale SPAR-HANDELS: To Get Additional Funding From Intermarche * N E T H E R L A N D S * AD PEPPER: Rabe Steps Down as Board Member and COO UNITED PAN-EUROPE: Falls Anew on Bleak Outlook * S P A I N * SINTEL: Russian Firm May Be Interested in Sintel * S W E D E N * FRAMFAB AB: Continues to Divest Assets * U N I T E D K I N G D O M * 360NETWORKS: Cuts 44% of Staff BALTIMORE TECHNOLOGIES: Rejects Chantilley Bid BALTIMORE TECHNOLOGIES: US Investor Sells More Shares CAMMELL LAIRD: S&P Withdraws D Rating MARKS & SPENCER: Appoints New Head Of Womenswear Design REDSTONE TELECOM: Shareholders Call for LSE Help ============= B E L G I U M ============= CUSTOM SILICON: Lerner Steps Down From Board -------------------------------------------- Steve Lerner, a non-executive director of Custom Silicon Configuration Services, has resigned from the company's Board of Directors, Nasdaq Europe reported on Tuesday. CS2, whose creditor protection status was removed by the Brussels Commercial Court early this month, is a Belgian company offering advanced assembly and test services for semiconductors. The same court has approved the restructuring and repayment plan of the company, where a majority of debt will be exchanged into convertible bonds. FLV FUND: Accepts Vermeulen Resignation --------------------------------------- The Board of Directors of financial investment company FLV Fund has accepted the resignation of Philip Vermeulen, Nasdaq Europe reported on Tuesday. Piet Vandermeersch will temporarily function as acting managing director. Martin De Prycker is appointed as an independent director. FLV FUND: Audit Completes Fact Book ----------------------------------- The assignment of FLV Fund's internal audit committee to assemble a comprehensive fact book on Korea has been completed. According to Nasdaq Europe's Tuesday report, the fact book between 1999 until April 2001 does not show any indication that the directors, officers or employees of FLV Management are or have been guilty of any wrongdoing or an accomplice into any fraudulent actions. It shows that FLV Management and FLV Fund have been the victims of a fraud, instructing its legal advisors to take legal action against the persons involved in the fraud. REAL SOFTWARE: Seeks to Convert Bond Claims ------------------------------------------- Real Software on Monday said it would propose to convert claims from its subordinate bondholders into capital during the general meeting of its bondholders on July 23 to achieve a balance in the cash flow over the next three months, Reuters reported on Monday. Software and consulting firm would also suggest to suspend the date of maturity of the interest from July 23, 2001 until July 23, 2002. Furthermore, Real Software would propose to convert bondholders' claims prematurely into normal shares of the company, at a rate of 10 shares for one bond. SABENA SA: Shareholders Reach Agreement --------------------------------------- Shareholders of Belgian carrier, Swissair Group and the Belgian Government, on Tuesday said they have reached a solution that secures the future of Sabena, releasing Swissair Group from its commitment to increase its stake in Sabena to 85%, PR Newswire reported. Under the terms of the agreement, both parties have committed to a cash injection of 430 million euros, payable in two years. Swissair Group will pay 60% of the committed funds and the Belgian Government 40%. The first installment becomes due in October 2001. This agreement cancels a previous accord whereby Swissair Group agreed to increase its shareholding in Sabena to 85%. Swissair Group will now maintain its 49.5% shareholding. Neither the Swissair Group nor the Belgian Government will have any future funding obligations to Sabena, other than those set forth in the new agreement. The Belgian Government and Sabena will immediately withdraw their lawsuits against the Swissair Group. =========================== C Z E C H R E P U B L I C =========================== CESKE ENERGETICKE: To Suffer Kc115BB Loss on Temelin Closure ------------------------------------------------------------ Power company Ceske Energeticke Zavody (CEZ) will suffer a loss of 114.7 billion Czech koruna if the Temelin nuclear power plant is closed, Czech News Agency reported on Monday. Analysts said that the state would settle at least part of the loss so the company would not collapse financially and for the state not to be stripped of the proceeds from the planned privatization of CEZ. According to CEZ spokesman Ladislav Kriz, the value of CEZ would fall and small shareholders' assets would lose value if Temelin were closed down. The German Environment Ministry said that the report on the safety of operations at Temelin failed to dispel Germany's concerns about the safety of the plant. Temlin's opponents in Austria, the Czech Republic and Germany say that it is not safe because it combines a Soviet design with western fuel and safety technology. TELESYSTEMS INTERNATIONAL: Moody's Downgrades Note Issues to Ca --------------------------------------------------------------- Moody's Investors Service on Monday has downgraded the two senior discount note issues of Telesystem International Wireless (TIW) to Ca from Caa1. The rating was in response to the company's recently announced exchange offer whereby holders of the existing senior discount notes will be offered a combination of cash and new notes with a value substantially below the accreted value of the existing notes at approximately $480 million. Holders of TIW's existing 13.25% notes due on 2007 and 10.5% notes due on 2007 are being offered a total of $50 million in cash and $195 million in new 14% senior notes due on December 2003. Canadian-based TIW is a holding company for wireless operations in Western Europe, Brazil, and Central and Eastern Europe. ============= F I N L A N D ============= SONERA CORP.: Plummets on Debt Fears ------------------------------------ Shares of telecom operator Sonera were down 5.3% at 6.95 euros on Monday weighed on by persistent concerns about its high debt levels, the Monday edition of Reuters said. Sonera took on billions of euros in debt after it won a third- generation (3G) license in Germany, but it has since seen the value of the license and assets it planned to sell to fund the license burst along with the technology and telecom share bubble. The telecom firm has also warned that its full-year result will be hit by losses in its Turkcell unit stemming from the economic crisis in Turkey. =========== F R A N C E =========== AIR LIBERTE: Rochet May Acquire Airline --------------------------------------- AOM-Air Liberte chairman and CEO Marc Rochet has drafted its plan to take over the company with the backing of shareholder Swissair. According to the La Tribune & Financial Times on Monday, the new plan is based on a fleet of eight A340 planes, leased from Swissair subsidiary Flightlease, and 17 MD83 aircraft. Under its terms, Swissair will contribute 2 billion French francs, including 1.2 billion French francs to finance the employment plan and 800 million French francs to cover operating costs for 12 months. AIR LIBERTE: Takeover Still Unresolved -------------------------------------- The planned takeover for French air operator AOM-Air Liberte is not yet over as candidates had until Monday to present their definitive offers, the July 17 edition of Les Echos & Financial Times said. Chairman Jean-Francois Delepoulle of property company Fidei has indicated that his company had finalized its takeover offer. As a result, the administrators have asked for the extraordinary works council meeting to examine the offers. Meanwhile, Aeris announced on Monday it was pulling out of the race for the French airlines. MOULINEX SA: To Study Union's Rescue Plan ----------------------------------------- Appliance maker Moulinex-Brandt will study a report requested by unions into a restructuring plan that proposes fewer job cuts, according to the Reuters report on Monday. A meeting called for Monday to discuss the restructuring plan was adjourned to allow management to consider the opinion of an expert from the Secafi-Alpha consultancy. The expert suggested an alternative reorganization where between 350 and 400 jobs would be lost with no outright plant closures, compared with some 1,500 job losses and three French plant closures foreseen under the management's current plan. Moulinex, hit by emerging market crises in Russia, Asia and Latin America and has turned a profit only twice in the last 10 years, was taken over late last year by Italian firm El.Fi after two restructuring plans failed to restore it to health. ============= G E R M A N Y ============= BANKGESELLSCHAFT BERLIN: Announces 1.6BB-Euro Deficit for 2000 -------------------------------------------------------------- The 2000 financial year, according to Bankgesellschaft Berlin on Tuesday, was marked by consistent development of the group. As part of the restructuring of the group's real estate fund business and overall real estate operations started in mid-2000, acute and future risks from business decisions taken in previous years were identified and consequently subjected to a detailed analysis, externally by the German Federal Banking Supervisory Office and as well as through internal audits. These audits delayed the 2000 annual financial statements that led to a high amount of value adjustments and provisions due to the reassessment of loan exposure and risks from guarantees provided for the real estate fund business and plunged the group into difficulties in the first half of 2001. The result for German bank in the special audits for the 2000 financial year is a 1.648 billion deficit. No dividend will therefore be paid. Meanwhile, net interest received fell by 19.8% to 1.642 billion euros, in comparison with the 2.048 billion a year ago. A significant leveling of the yield curve caused a strong increase in interest payable and led to a fall in the interest spread from 1.07 to 0.82%. The increase in net commission by 10.0% to 462 million euros was largely due to the satisfying development of commission in securities/asset investments, which rose by 32% to 167 million euros. Profit from trading activities continued the positive trend of the previous year, increasing by 32.4% to 139 million euros. In addition, gains from security price increases in trading activities also rose. BANKGESELLSCHAFT BERLIN: Seeks 2BB-Euro Capital Increase -------------------------------------------------------- Following a deficit of 1.6 billion euros last year, Bankgesellschaft Berlin now plans to raise 2 billion euros to cover property and credit losses and help it rebuild its capital base. The bank, 57%-owned by the city of Berlin, said that the city had already provisionally agreed to fund 1 billion of the capital. It is in talks with other shareholders about raising the rest. Bankgesellschaft is offering key shareholders, including NordLB, two new shares for every one now held. Bankgesellschaft's latest problems mounted after recent revelations that former chairman Klaus Landowsky of its mortgage lending arm accepted undeclared political contributions from two entrepreneurs who were prominent members of his Christian Democratic party. It prompted to an investigation into the bank's activities by Germany's federal banking supervisory agency. BANKGESELLSCHAFT BERLIN: Staff Criticizes Chairman -------------------------------------------------- Staff representatives have called for the immediate dismissal of Bankgesellschaft Berlin chairman Wolfgang Rupf before the supervisory board meeting on Monday, the July 17 edition of Suddeutsche Zeitung & Financial Times said. A dispute concerning Rupf has escalated as Berlin finance senator Christiane Krajewski rejected the request, but more for political reasons than out of support for Rupf. Krajewski wants the chairman to head the AGM on August 29 as he has to take responsibility for the bank's decline and face shareholders' anger. EM.TV: Haffa Stake Not for Sale ------------------------------- The 43% stake held by EM.TV & Merchandising AG chairman and founder Thomas Haffa is not up for sale, Handelsblatt reported on Tuesday. A company spokesman admitted that former supervisory board chairman Nickolaus Becker had planned an offer for Haffa's stake. Haffa is now facing a more serious task of finding a buyer for The Muffets creator Jim Henson Company. Haffa paid around DM1.4 billion for the Henson Company in spring 2000, but was subsequently forced to write off half of this amount. The television and film rights dealer, which is facing major debt problems, further announced that its subsidiary Junior-Toys had sold its 65% stake for an undisclosed sum. EM.TV originally paid DM2.7 million for Junior-Toys. SPAR-HANDELS: To Get Additional Funding From Intermarche -------------------------------------------------------- The majority shareholder of Spar will inject over DM0.5 billion in the ailing German retailer this year to protect it form insolvency, Suddeutsche Zeitung & Financial Times reported on Tuesday. French group Intermarche (ITM), which lent Spar DM300 million this year, has decided to increase Spar's capital by DM250 million to stop Spar accruing excessive debt. Spar recorded operating losses of DM216 million last year, and sees to loose DM200 million for 2001. The company expects to break even in the fourth quarter of 2002, while turnover dropped from DM13.1 billion to DM12.7 billio1n in 2000. ===================== N E T H E R L A N D S ===================== AD PEPPER: Rabe Steps Down as Board Member and COO -------------------------------------------------- Online advertising marketer Ad pepper media International N.V. on Tuesday said that Board Member and COO Joachim Rabe would resign from office on 3 August. He has also given due notice of termination of his terms of employment. Rabe will remain a partner of the company. Ad Pepper Media's 2000 loss ballooned nearly four-fold last year to 9.6 million euro. UNITED PAN-EUROPE: Falls Anew on Bleak Outlook ---------------------------------------------- Shares of United Pan-Europe fell further by 20.7% on Monday as more investors expect the cable network operator will go bankrupt, Reuters reported. UPC had 7.2 billion euros of net debt by the end of the first quarter and has enough cash to run its business until 2003. Raising extra money will be difficult, as most investors have given up confidence in loss-making companies. Analysts say they don't think Liberty Media, which took control of UPC's parent company UnitedGlobalCom in February, will come to rescue the cable network operator, but they will buy the company when it's bankrupt. UPC has denied it is going bankrupt and said it had 1.5 billion euros cash available. ========= S P A I N ========= SINTEL: Russian Firm May Be Interested in Sintel ------------------------------------------------ Sintel's works committee has delivered a letter to science and technology minister Anna Birules asking for an urgent meeting over a possible purchase of the insolvent telecommunications group by Russia's Kamkabel. The committee, according to the Tuesday edition of Expansion & Financial Times, holds a letter addressed to the minister from Mid-Summer Investment Trust, which outlines the Russian telecommunications group's interest in Sintel. More than 1,000 workers of Sintel are still in protest not only at the company's critical situation, but also for the wages that the company owes. =========== S W E D E N =========== FRAMFAB AB: Continues to Divest Assets -------------------------------------- Internet consultancy firm Framfab said on Tuesday it sold the main part of Framfab Labs, its subsidiary Framfab Spain S.L. and divested its stakes in the Dutch companies Coin and Plinq, and Framfab S.p.A. in Italy. "The divestments that are part of our action program have now been completed. Framfab is now a focused Internet professional services company with operations in six countries in Europe, and we are now in a good position to restore our profitability," Framfab CEO Johan Wall said. The software development operations in Lund, with 54 employees that was part of Framfab Labs and that mainly has been engaged in the development of the Internet portal platform BRIKKS, will be sold to employees and external investors. Framfab will retain approximately 20% percent in the new company, but will not be represented on the board. Jonas Birgersson will have an indirect ownership of 10%. The new company will have Birgersson as its CEO and he will thus leave the Framfab Group. Framfab Spain S.L. has been sold to Madrid-based Grupo Rodania S.L. Framfab's 70% stake in Coin Corporate Interactive B.V. has been sold to Van Klaveren Management Support, while its 70% stake in digital entertainment company Plinq P.V. will be sold to the 30% owner Stichting Plebs Incorporated. Framfab will still retain its full ownership of Netlinq Framfab in Netherlands. Furthermore, Framfab's 11% stake in Framfab S.p.A. has been sold to the Italian company's management. =========================== U N I T E D K I N G D O M =========================== 360NETWORKS: Cuts 44% of Staff ------------------------------ Canadian-based telecommunications carrier 360networks will lay off about 800 employees, or about 44% of its workforce, to reduce operating expenses and conserve capital, the Tuesday edition of the Financial Times said. The company would not provide financial details of the layoffs, but said that employees in North America, Europe, South America and Asia would be affected by the layoffs, leaving 360networks with about 1,000 people globally. The company is seen to be on the verge of bankruptcy after it missed a $10.9 million coupon payment on one of its bond issues almost two weeks ago. 360networks, which has $2.5 billion in long term debt, is exploring all to raise new finances, including restructuring. It had appointed Lazard Freres to advise it. It also needs to raise $300 million by September to continue operations. BALTIMORE TECHNOLOGIES: Rejects Chantilley Bid ---------------------------------------------- Baltimore Technologies has rejected an approach from technology licensing company Chantilley, Financial Times reported on Tuesday. The Internet security group rejected the Chantilley bid because it felt the all-share deal would not create a stronger combined business. Chantilley has now indicated that it will withdraw its approach. The company, which has issued three profit warnings this year, has seen its stock market valuation fall from 5.1 billion pounds to about 360 million pounds. It announced the resignation of chief executive Fran Rooney last week. BALTIMORE TECHNOLOGIES: US Investor Sells More Shares ----------------------------------------------------- US-based Capital Group, institutional shareholder of Baltimore, has further reduced its stake to 3.71% from 9.1%, the Irish Independent reported on Tuesday. Analyst said the move by Capital, who has been continuously selling off its Baltimore shares in the past few months, was a vote of no confidence in the Internet security company. The Sunday Times had reported that software maker US firm Computer Associates was talking with Baltimore about a takeover bid. A Computer Associates spokesman would neither confirm nor deny on Monday that the company was in talks with Baltimore. Baltimore also denied it was in advanced takeover talks with Computer Associates or any other company. CAMMELL LAIRD: S&P Withdraws D Rating ------------------------------------- Standard & Poor's on Tuesday withdrew its D corporate credit and senior unsecured debt ratings on shipbuilder Cammell Laird Holdings PLC. All ratings on Cammell Laird were revised to D on April after the company failed to make the scheduled interest payment of 7.5 million euros on its 125-million-euro 10-year bond. Earlier, receiver PricewaterhouseCoopers announced a further 187 job losses at it Tyneside and Birkenhead yards. MARKS & SPENCER: Appoints New Head Of Womenswear Design ------------------------------------------------------- Marks & Spencer on Tuesday said it has appointed Barbara Horspool as the new Head of Design for Womenswear, responsible for design direction, range co-ordination and product appeal across the Womenswear Business Unit. Horspool is a commercial designer with a successful track record working for leading retail brands. She joins the retail group from Etam where she was International Design Director. She worked for 2� years at Marks & Spencer, prior to gaining extensive design and commercial experience with a number of other top brands such as Esprit, Conran, Dorothy Perkins, Storehouse, GUS and Sears. The Womenswear design team will be further strengthened by the appointment of Nicola Heywood who joins the company in August. REDSTONE TELECOM: Shareholders Call for LSE Help ------------------------------------------------ Shareholders in Redstone Telecom have called on London Stock Exchange to investigate a short-selling in the company's stock, after it emerged that many investors will be unable to exercise their vote because they have yet to receive their share certificates, according to The Times' report yesterday. The Redstone Action Group claims that some market-makers in the company's shares, including UBS Warburg, Peel Hunt and Merrill Lynch, have been unable to deliver stock bought by investors since mid-June. The group, which controls enough shares to vote down the emergency restructuring, claims that the market-makers have been caught out by short-selling of stock, creating a severe shortage of shares. Short-selling involves brokers selling shares they do not own in the hope of buying them back at a cheaper price and settling at a profit. ************ 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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *