/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010723.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 Monday, July 23, 2001, Vol. 2, No. 142 Headlines * B E L G I U M * LERNOUT & HAUSPIE: Inks License Deal With Orange SABENA SA: Board to Review Restructuring Plan in August * F I N L A N D * SONERA CORP.: To Report Second-Quarter Results Today * F R A N C E * AIR LIBERTE: Court Sets Bid Deadline of Thursday AIR LIBERTE: Swissair to Pledge 1.3BB Euros to Buyer FABRICATION OUTILLAGE: Faces Involuntary Liquidation GROUPE BULL: Narrows Losses by 70% * G E R M A N Y * BANKGESELLSCHAFT BERLIN: Parion Plans 150MM-Euro Capital Infusion DAIMLERCHRYSLER AG: Will Cut 583 Jobs in Brazil EM.TV: Again Delays Release of First-Quarter Results MAN AG: To Split Group * I T A L Y * ALITALIA: Recapitalization in Doubt After EU Decision on 1997 Aid * N E T H E R L A N D S * NEWCONOMY NV: Buyonline Goes Bankrupt UNITED PAN-EUROPE: UPC Digital Will Decide Company's Future * S W I T Z E R L A N D * SWISSAIR GROUP: Partnership With Sabena Moves Ahead * U N I T E D K I N G D O M * 360NETWORKS: Has 160MM-Euro Contract With Dutch Firm BALTIMORE TECHNOLOGIES: E-Defense Deal in Australia EQUITABLE LIFE: Denies Trading While Insolvent HUNTINGDON LIFE: Anonymity Plan Is Expected Soon HUNTINGDON LIFE: FSA Okays Anonymity Service INDEPENDET INSURANCE: FSA Unit Not Set Up When Insurer Failed MARKS & SPENCER: Dewhirst Agrees to 113MM-Pound Buyout NTL INCORPORATED: Exchange Offer Expires Today NTL INCORPORATED: Faces Cash Crisis NTL INCORPORATED: In Crisis Talks With Shareholder NTL INCORPORATED: Mounting Debt Hits Shares NTL INCORPORATED: Results Ease Debt Worries POLAROID CORPORATION: To Woo Holders on Restructuring Plan ============= B E L G I U M ============= LERNOUT & HAUSPIE: Inks License Deal With Orange ------------------------------------------------ Lernout & Hauspie Speech Products NV, a world leader in speech and language technology, products and services, on Thursday announced that it its Speech and Language Technologies Division (SLT) has signed a license agreement with mobile phone operator Orange. Under the research program, RealSpeak will be tested for its ability to serve as a natural and practical interface between people and their home appliances and systems. Requests for lighting, climate control, security system, audio-visual system, curtains, bath, and other consumer electronic devices in the home are expected to be readily voice-controlled from a variety of Orange wirefreeT devices. No financial details were given. SABENA SA: Board to Review Restructuring Plan in August ------------------------------------------------------- The board of directors of Belgian carrier Sabena will review and vote on the restructuring plan drafted by chief executive Christoph Muller on August 9, the Thursday edition of Reuters said. According to Muller, he has to wait for the struggling airline's two main shareholders to agree on how to finance Sabena before putting the finishing touches to his plan. Early this week, the Belgian government and Swissair Group agreed to invest 430 million euros ($377.5 million) in the airline over the next two years. They also agreed to free Swissair of its obligation to raise its stake in Sabena to 85% from 49.5 percent. ============= F I N L A N D ============= SONERA CORP.: To Report Second-Quarter Results Today ---------------------------------------------------- Sonera Corp. is expected to report a pretax loss for the second quarter today as shares have slumped to all-time lows this month, the July 18 edition of Dow Jones Newswires said. According to Mikko Vanhala, a telecommunications analyst for Handelsbanken, he expects Sonera to report a pretax loss of around 79 million euros on sales of about 555 million euros, while Conventum Securities forecasts a pretax loss of 85.6 million euros on sales of 556 million euros. Sonera plans to sell the Deutsche Telekom shares that it now holds and use all of the share-sale proceeds to pay down its debt, which stood at 5.6 billion euros at the end of first quarter. Credit ratings agency Standard & Poor's said further measures, such as asset sales, would be necessary. =========== F R A N C E =========== AIR LIBERTE: Court Sets Bid Deadline of Thursday ------------------------------------------------ The Creteil Commercial Court in France has given interested parties until July 26 to submit their bids to rescue AOM/Air Liberte, AFX News reported on Thursday. The court has studied 15 takeover offers. The public prosecutor was said to be in favor of French property company FIDEI's and Holco's offers. The Holco acquisition bid, led by Air France pilot Jean-Charles Corbet, is offering the best guarantees for the employees. Real-estate firm Fidei has reached a provisional agreement with for the French airlines' shareholder Swissair Group. Under the pact, Swissair would provide a financial contribution of between 1 billion French francs and 2 billion French francs before pulling out of the two airlines, while Fidei and parent company Leucadia National Corp. would invest up to 200 million French francs to gain control of the airlines. AIR LIBERTE: Swissair to Pledge 1.3BB Euros to Buyer ---------------------------------------------------- Swissair Group AG will pledge up to 1.3 billion French francs as a contribution to the successful bidder for its AOM-Air Liberte units, according to AFX News' Thursday report. Lawyer Jean-Pierre Versini, who represents acquisition candidate Fidei, said the 1.3 billion is included in the bids of both Fidei and a management buy-out by AOM-Air Liberte chairman Marc Rochet. The exact figure will be announced when the Commercial Court of Creteil, which is still examining the 15 proposals, selects the successful bidder. FABRICATION OUTILLAGE: Faces Involuntary Liquidation ---------------------------------------------------- The Montbeliard county court has placed electric tooling company Fabrication Outillage Electrique (FOE) in a state of involuntary liquidation on July 18, Les Echos & Financial Times reported on Thursday. FOE, which employs a workforce of 175, posted a first half loss of 26 million French francs. It blamed competition from China and Southeast Asia for its losses. GROUPE BULL: Narrows Losses by 70% ---------------------------------- Asset sales have helped Groupe Bull narrow its net loss by 70% in the first half, the Thursday edition of Reuters said. The computer firm posted a net loss of 29.2 million euros, compared with a 96.1 million euro loss a year ago, on turnover of 1.271 billion euros. Bull has been divesting assets and reorganizing business lines, allowing it to reduce its debt by 50%, or to 126 million euros at the end of June from 301 million euros on January 1. The company is also carrying out a cost reduction plan, whereby 1,800 jobs will be cut. ============= G E R M A N Y ============= BANKGESELLSCHAFT BERLIN: Parion Plans 150MM-Euro Capital Infusion ----------------------------------------------------------------- Insurance group Parion Finanz Holding AG, which controls a 7.5% stake in Bankgesellschaft Berlin, plans to contribute 150 million euros to the capital increase of the troubled German financial institution, Die Welt & Financial Times reported on Thursday. Under the agreement, the bank shall quickly decide on its restructuring and management. Shareholder NordLB, which holds 20% of Bankgesellschaft, announced it has not yet decided whether to contribute to the bank's capital increase. Parion said it would not participate in additional interests for the planned dormant partnership. DAIMLERCHRYSLER AG: Will Cut 583 Jobs in Brazil ----------------------------------------------- DaimlerChrysler aims to cut 583 jobs at its Mercedes Benz plant in Brazil through a voluntary retirement program to reduce fixed costs and improve competitiveness, Reuters reported on Thursday. Under the program, workers at the plant will be able to receive up to eight months of pay and six months of health insurance. The measure would be implemented over a year and had already been approved by the metal-workers union. The plant produces 160 trucks and buses per day and has 10,400 workers. EM.TV: Again Delays Release of First-Quarter Results ---------------------------------------------------- Media group EM.TV & Merchandising will postpone the release of its first-quarter results for a third time. The results were due at the end of May. The company had earlier delayed the release by three weeks, and then until the end of June. It said it would now release the figures this week. A company spokeswoman said Formula One was behind the delay as external auditors could not agree on the valuation for EM.TV's stake in Formula One holding company SLEC. EM.TV also missed a deadline for its 2000 full-year results, posting them on April 30 this year, instead of the April 2deadline. The latest delay will probably saddle it with a fine of up to 100,000 euros for missed deadlines. MAN AG: To Split Group ---------------------- Truck and engineering group MAN AG will be split up next year and has sold individual units, the July 18 edition of Reuters said. According to media reports, carmaker Volkswagen was ready to buy the trucks unit, MAN's largest division. Financial group Allianz, which is part of a consortium that holds a stake in MAN, was in talks with VW about selling its MAN stake. CEO Rudolf Rupprecht said MAN was in talks on a cooperation with possible partners but he declined to specify which business unit the talks affected. The company has been hit this year by weak earnings at trucks and industrial equipment/plant engineering. In the first quarter, group pre-tax profit fell 19% to 91 million euros from the same period last year and earnings before interest and tax fell 6% to 138 million euros. ========= I T A L Y ========= ALITALIA: Recapitalization in Doubt After EU Decision on 1997 Aid ----------------------------------------------------------------- The recapitalisation of Italian carrier Alitalia is in doubt after the European Commission confirmed a previous decision to clear a 1997 recapitalization plan for the airline, M2 Communications Ltd. reported on Thursday. The decision reaffirms that the 1997 investment of $1.2 billion in Alitalia constituted state aid and may prevent the Italian Treasury, Alitalia's major shareholder, from injecting any new capital. The 1997 decision to clear the funding was appealed against by Alitalia and the European Court of First Instance had to reassess its decision. The decision will possibly force Alitalia to seek further cash injections or aid from the market or a potential partner. Under European Union rules, government cash injections, after the first one, can only be given if the state can prove that it is acting as a private investor. ===================== N E T H E R L A N D S ===================== NEWCONOMY NV: Buyonline Goes Bankrupt ------------------------------------- Internet firm BuyOnline, in which Internet hothouse fund Newconomy has a 19.5% stake, was declared bankrupt. The value of the BuyOnline stake was already fully depreciated in a previous revaluation round so that the bankruptcy would not further affect Newconomy's results. Earlier this month, Newconomy said its fully-owned subsidiary Macropolis had been declared bankrupt. UNITED PAN-EUROPE: UPC Digital Will Decide Company's Future ----------------------------------------------------------- The future of UPC depends on the success of the cable company's set-top boxes for digital television, the July 18 edition of Het Financieele Dagblad & World Reporter said. At the moment, only several tens of thousands of subscribers have set-top boxes. By the end of the year, UPC expects 250,000 customers to be connected to UPC Digital. This is the only way to increase earnings per customer. UPC said it is not concerned about a possible insolvency despite its 7.6-billion-euro debt. The company claims it still has 1.8 billion euros to spend this year. ===================== S W I T Z E R L A N D ===================== SWISSAIR GROUP: Partnership With Sabena Moves Ahead --------------------------------------------------- The joint financial solution reached by Swissair and Sabena brings good news to North America where synergies between the two airlines have grown since 1999, the Thursday edition of Business Wire said. The Swissair Group and the Belgian Government last week has reached a financial solution that secures the future of Sabena whilst releasing the Swiss aviation group from its commitment to increase its Sabena stake to 85%. Under the terms of the agreement, the two parties have committed to a cash injection of 430 million euros to be paid in four installments over the next two years. Swissair Group will pay 60% of the committed funds, while the Belgian Government 40%. The first installment becomes due in October 2001. Swissair and Sabena are partners in the AAdvantage(R), Midwest Express Airlines, and US Airways Dividend Miles frequent flyer programs. =========================== U N I T E D K I N G D O M =========================== 360NETWORKS: Has 160MM-Euro Contract With Dutch Firm ---------------------------------------------------- Fiber-optic network builder 360networks may not be able to pay the full amount of a 160 million euro order for fiber from Dutch telecommunications company KPNQwest as the company recently filed for protection from creditors in Canada and for Chapter 11 in the U.S., KPNQwest's head of investor relations Jerry Yohananov told Dow Jones Newswires on Wednesday that the company has not received any news from 360networks suggesting it will not take up the full space. He added that KPNQwest has already received a down payment of around 20 million euros from 360networks, but said the Dutch company does not believe it is prudent to count on receiving any more with 360network's current situation. 360networks could not immediately be reached for comment. BALTIMORE TECHNOLOGIES: E-Defense Deal in Australia --------------------------------------------------- Baltimore Technologies said the Internet security firm is part of a consortium selected for a 456,139-pound e-defense deal in Australia, the Irish Independent reported on Friday. The company is part of the CSC-led consortium, which is to upgrade the Australian defense communications network to provide secure communications and provide e-business solutions to the 90,000 Australian defense personnel. Baltimore has issued three profit warnings this year and has seen its stock market valuation fall from 5.1 billion pounds to about 360 million pounds. It's chief executive Fran Rooney has recently resigned. EQUITABLE LIFE: Denies Trading While Insolvent ---------------------------------------------- Equitable Life has denied that it was trading while insolvent prior to the decision to cut the value of its pension plans, Electronic Telegraph reported on Thursday. Some policyholders, including accountants, have argued because Equitable claims it needs to make the cuts to bring liabilities into line with underlying assets. According to policyholder Peter Vincent of Tunbridge Wells, he could have avoided investing if Equitable had made the announcement sooner. However, chairman Vanni Treves said the move could not have been made sooner because if the board said it was contemplating on it earlier, it would have caused chaos and for people to rush for the door. HUNTINGDON LIFE: Anonymity Plan Is Expected Soon ------------------------------------------------ A proposal to secure the anonymity of investors who buy shares in animal testing laboratory Huntingdon Life Sciences is expected in the next few weeks to restore normal trading in the stock, the Friday edition of The Times reported. Lawyers of the Association of Private Client Investment Managers and Stockbrokers are looking at options to protect individuals and stockbrokers from animal rights activists. The Financial Services Authority has already given its blessing to set up a corporate nominee service, in which the identities of investors would be hidden by the company as a secret account. HUNTINGDON LIFE: FSA Okays Anonymity Service -------------------------------------------- City regulator Financial Services Authority has given animal research company Huntingdon Life Sciences, which tests drugs on animals on behalf of pharmaceutical companies, the go-ahead to set up a corporate nominee service, the Wednesday edition of the Financial Times said. The service allows investors to protect their identity from animal rights campaigners by holding their shares in a secret account in the company's name. The move is a first step towards restoring normal trading in Huntingdon's shares following the withdrawal of several financial backers under pressure from animal rights groups. Huntingdon is also discussing with the London Stock Exchange ways to protect the anonymity of brokers. Many brokers, including Barclays, TD Waterhouse and Pershing, have stopped trading or holding the shares after being targeted by protesters. INDEPENDET INSURANCE: FSA Unit Not Set Up When Insurer Failed ------------------------------------------------------------- The Financial Services Authority admitted its vital risk assessment department was not functioning when Independent Insurance collapsed into receivership in June, the Friday edition of The Times said. According to FSA chief operating officer Paul Boyle, the department was set up only on April 1 and that it has yet to begin work. The risk-assessment team is supposed to ensure that companies regulated by the FSA do not pose a risk of financial stability, consumer protection, consumer understanding and financial wrongdoing. The Serious Fraud Office is investigating Independent Insurance after it collapsed into receivership because of under-reserving. MARKS & SPENCER: Dewhirst Agrees to 113MM-Pound Buyout ------------------------------------------------------ Marks & Spencer supplier Dewhirst Group has agreed to a buyout from its directors and founding family members that values the business at 85p a share, or nearly 113 million pounds, the Thursday edition of This Is London said. The offer made through Kirkgate firm represents a premium of 48% to the closing price on January 9. Kirkgate already has undertakings for 25% of the company's capital. Dewhirst was forced into a major revamp to comply with M&S directives to use overseas factories. NTL INCORPORATED: Exchange Offer Expires Today ---------------------------------------------- NTL Incorporated subsidiary NTL Communications Corp., according to Nasdaq Europe's July 19 edition, has extended its offer to the holders of all of its issued and outstanding 12-3/8% Senior Notes due 2008, to exchange such notes for a like principal amount at maturity of its 12-3/8% Senior Notes due 2008, which have been registered under the United States Securities Act of 1933. The exchange offer will expire today at 5 o'clock in the afternoon, New York City time, unless extended. The Chase Manhattan Bank is acting as exchange agent for the exchange offer. Requests for assistance or documents should be directed to Chase Manhattan Bank in New York at 212-638-0828, in London at +44-207-777-5550 or in Luxembourg at +352-46-85236. NTL INCORPORATED: Faces Cash Crisis ----------------------------------- NTL may be forced into a financial restructuring after its shares and bonds plunged 13%, or 76 cents to $4.91, the Electronic Telegraph reported on Thursday. The cable company has $15 billion of debt and its bonds also fell dramatically, causing fears that the markets may not fund any extra investment needed to see the company into profitability. NTL recently said it was fully funded until 2003 and said it was going to beat analysts' expectations. The possibility of restructuring is bound to fuel speculation of a merger between NTL and another loss-making cable company Telewest. Telewest chief executive Adam Singer and NTL's Barclay Knapp have recently announced they would market their broadband services jointly. NTL INCORPORATED: In Crisis Talks With Shareholder -------------------------------------------------- NTL and its shareholder France Telecom were in crisis talks about how to restructure the cable group after shares plunged a further 10% on Wednesday, the July 19 edition of The Independent said. The liquidity crisis affecting the cable giant is thought to have ended NTL's plan to float off its broadcasting transmission business as a separate tracking stock. The plan was proposed to raise cash without giving up the cash flow from NTL's most profitable unit. Analysts said a controversial $2 billion sale of the broadcasting transmission arm would not improve debt-to-cash flow ratios. However, one observer noted there have been hints that NTL might sell the broadcasting outright. NTL, which owns networks in the UK, France, Switzerland and Germany, is now left with market capitalization of just $1.4 billion, compared with borrowings and convertible preference share debt of $21 billion. NTL INCORPORATED: Mounting Debt Hits Shares ------------------------------------------- Shares of cable operator NTL fell to about $5 on Wednesday as investors were concerned about the company's mounting debt, the Financial Times reported on Thursday. The shares now stand at less than 5% of their peak value of $109.10 in January last year. Analysts said bond and shareholders had woken up to the high debt burdens and potential funding shortfalls. They estimated that NTL might require an additional $1 billion in 2003 through vendor financing. The company is fully funded until the first quarter of 2003 but is not expected to have positive free cashflow until the beginning of 2004. NTL INCORPORATED: Results Ease Debt Worries ------------------------------------------- Cable television operator NTL Incorporated reported better-than- expected second quarter results with earnings before interest, tax, depreciation and amortization (EBITDA) hitting a record of 115 million pounds, the Thursday edition of Reuters said. Industry analyst Rebecca Allen at JP Morgan said the market was expecting a 90 to 100 million pounds loss. NTL's 300-million-euro 12.375% bond due on February 2008 rose as much as 10 points to 56% of face value, after slipping around 20 points earlier last week. POLAROID CORPORATION: To Woo Holders on Restructuring Plan ---------------------------------------------------------- Camera maker Polaroid, according to the July 18 edition of the Financial Times, will meet its bondholders early next month in an attempt to restructure its debts. If bondholders do not agree to the restructuring plans, the company could be forced to file for Chapter 11 bankruptcy protection. Polaroid, which recently posted a greater than expected loss as demand for instant cameras and film weakened, said it was unable to make bond interest payments of $10.5 million due in July and $15.8 million due in August. It has reached an agreement with its US and European bank lenders and obtained a waiver of bank loan covenants until October 12, the Times added. The company already sold two real-estate holdings in the second quarter for $70 million and $36 million. It has also said it is looking at restructuring options including a sale. Polaroid chairman and chief executive Gary DiCamillo plans to achieve between $235 million and $260 million in cost savings as its debt load is now close to $1 billion. ************* 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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