/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010801.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 Wednesday, August 01, 2001, Vol. 2, No. 149 Headlines B E L G I U M LERNOUT & HAUSPIE: Inks Software Distribution Deal F I N L A N D SONERA CORP.: Sale of Group3G Holdings Anticipated F R A N C E AIR LIBERTE: Holco Project Lacks 500 to 800MM French Francs G E R M A N Y BROKAT AG: Cash-Burn Rate Could Lead To Insolvency EM.TV: Sells Stake in Crown for $90MM MAN AG: Cuts More Jobs at Truck Division MOENUS TEXTILMASCHINEN: Management Sees Hope for Moenus I R E L A N D XEROX CORPORATION: Galen May Invest in Irish Site P O L A N D BYTOM: Shareholders Delay Liquidation S P A I N SINTEL: Judge Fines Former Executives TERRA LYCOS: Cuts Second Quarter Loss TERRA LYCOS: Net Loss Widens to 390.44MM Euros S W E D E N BOLIDEN LIMITED: May Profit After Termination of Rate Contract S W I T Z E R L A N D SWISSAIR GROUP: Says Lufthansa Report is Speculation SWISSAIR GROUP: Shares Rise as Buyer Takes French Subsidiary U N I T E D K I N G D O M 360NETWORKS: Court Orders Wind Up For Irish Unit BALTIMORE TECHNOLOGIES: Admits Overstated Revenue Setback BALTIMORE TECHNOLOGIES: Shares Plunge on Overstated Sales BARINGS: Court Postpones Case to October DOLPHIN TELECOM: S&P Lowers Ratings to D GLENFIELD & KENNEDY: Cuts 50 Jobs to Reduce Cost INDEPENDENT INSURANCE: Confirms Asset Sale - - - - - - - - ============= B E L G I U M ============= LERNOUT & HAUSPIE: Inks Software Distribution Deal -------------------------------------------------- Belgian software firm Lernout & Hauspie Speech Products NV on Monday said its Speech and Language Technologies division has signed distribution deals with companies in Australia, New Zealand, Mexico and the U.K. to sell its software. The new agreement, as well as previous agreements with U.S.-based Learning Co. Inc., MediaGold International and HCL Infosystems Ltd., will make the company's products available in the corporate, VAR and vertical markets. ============= F I N L A N D ============= SONERA CORP.: Sale of Group3G Holdings Anticipated -------------------------------------------------- Telecommunications group Sonera Corp is expected to reduce its stake in German mobile phone company Group3G to reduce interest charges, the Monday edition of Suddeutsche Zeitung & Financial Times said. According to a German press report, Sonera refused to comment on the rumors about a withdrawal from Group3G but admitted its plan to downscale shareholdings. Sonera's debts amount to 5.1 billion euros. =========== F R A N C E =========== AIR LIBERTE: Holco Project Lacks 500 to 800MM French Francs ----------------------------------------------------------- The successful Holco buyout for AOM-Air Liberte lacks between 500 to 800 million French francs, AFX News in its July 29 edition said, citing AOM-Air Liberte receiver Gilles Baronnie. Meanwhile, Holco lawyer Yves Leonzil said it is in talks over financing with French Mutual Maaf. Under the terms by the Creteil Commercial Court, AOM-Air Liberte shareholder Swissair will pay the Holco group 1.3 billion French francs and provide 530 million in aircraft lease subsidies over the next 10 years. Holco will invest 230 million French francs, including 80 million in risk capital and 150 million in shares held by pilots. Baronnie said it is difficult to calculate the additional sum required, as this will depend on sales, productivity and the reception of proposals over redundancies. ============= G E R M A N Y ============= BROKAT AG: Cash-Burn Rate Could Lead To Insolvency -------------------------------------------------- Brokat Technologies AG might be forced to file for insolvency amid fears it will run out of money as a result of its dangerously high cash-burn rate, according to the July 27 edition of AFX News. With 41-million-euro in funds in June, Brokat will run out of money by the end of the third quarter as it has a cash burn rate of 16 million euros per month, analyst Mirko Maier at Landesbank Baden-Wuerttemberg estimated. "If the current cash burn rate continues, they can survive for two and a half months and then they're likely to face insolvency proceedings," Maximilian Schoeller, an analyst at Merck Finck & Co, said. The troubled software company has rejected analysts' concerns as it plans to find a strategic investor before September ends. Net losses for Brokat, including goodwill depreciation of 735 million euros for its acquisition of Blaze Software and GemStone Systems, were 825 million euros. EM.TV: Sells Stake in Crown for $90MM --------------------------------------- Troubled film and television rights trader EM.TV & Merchandising AG announced the sale of its stake in U.S. media company Crown Entertainment to Hallmark Entertainment for $90 million plus an extra $13 million in various agreed payments, Handelsblatt reported yesterday. According to EM.TV director Rainer Huether, the move will make it possible for the company to reduce existing bank loans and improve their long-term liquidity. The sale of Crown is not fully the work of EM.TV-appointed new chairman Werner Klatten since the deal was already in the pipeline before EM.TV founder Thomas Haffa left the company. Haffa is under investigation from the department of public prosecution on suspicion of insider trading and share-price manipulation. EM.TV has debts of over one billion marks, including an 860 million mark convertible bond and bank loans of 235 million marks. The company had a net loss of 2.63 billion marks last year due mainly to write-offs arising from bad investments. MAN AG: Cuts More Jobs at Truck Division ---------------------------------------- MAN AG will lay off 1,900 more people at the truck division due to slowing economic growth, Bloomberg reported Monday. "The truck market isn't doing very well at the moment, so they have to do something about it," HypoVereinsbank AG analyst Juergen Warfsmann said. The shares of Germany's No. 2 truck maker rose to 25.31 euros, valuing the company at about 3.6 billion euros. The stock has lost a quarter of its value in the past six months while the German benchmark DAX index has lost 14% in the same period. MOENUS TEXTILMASCHINEN: Management Sees Hope for Moenus ------------------------------------------------------- The management, workers and unions of looms manufacturer Moenus Textilmaschinen AG believe that the company can continue its business even though it has filed for bankruptcy, the Sunday edition of Suddeutsche Zeitung & Financial Times said. According to company head and major shareholder Peter Boden, Moenus is not in debt, but has insufficient liquid capital to meet a large increase in existing orders. The company will undergo a complex insolvency procedure that should enable it to re-capitalize and get back on its feet. ============= I R E L A N D ============= XEROX CORPORATION: Galen May Invest in Irish Site ------------------------------------------------- Pharmaceutical group Galen Holdings is believed to be exploring potential investment opportunities at the Xerox plant in Dundalk, Ireland. The photocopier giant, according to The Irish Times' report yesterday, has held discussions with several companies about investment or leasing opportunities at the facility as a result of its decision to exit the inkjet business. Last month, Xerox Europe announced that 350 jobs would be lost at its Dundalk site following the group's decision to close its small office and home office equipment business division. The Irish staff has appealed to Tanaiste, Harney, to pressure the troubled copier maker to pay departing employees their pension contributions. =========== P O L A N D =========== BYTOM: Shareholders Delay Liquidation ------------------------------------- Bytom shareholders have delayed the clothing manufacturer's liquidation as a general shareholders meeting gave the board of directors until the middle of October to turn the company around, Warsaw Business Journal reported on Monday. The Social Insurance Administration agreed to postpone Bytom's 4 million zloty debt, allowing it to pay in 60 installments. Bank Handlowy, Bytom's biggest investor with 28% of shares, said it would not press for payment of 5.9 million zloty owed to it. ========= S P A I N ========= SINTEL: Judge Fines Former Executives ------------------------------------- Spanish judge Baltasar Garzon has fined six former executives of Sintel for Pta13.17 billion due to bankruptcy involving malpractice, El Pais & Financial Times in its July 28 edition said. The executives were not named. Sintel workers have been staging a 24-hour protest against the company's suspension of payments for six months now, with debts of Pta21 billion. Around 700 workers are affected by a labor force adjustment plan agreed to by the labor ministry, with the remaining 1,100 affected by another adjustment that is being considered by the ministry. TERRA LYCOS: Cuts Second Quarter Loss ------------------------------------- Terra Lycos, one of Europe's biggest internet firms, had cut its losses in the second quarter to 65 million euros, 10 million euros less than in the first three months of the year, the Monday edition of BBC News said. The firm, operating in 41 countries and 20 languages, recently announced a push in the US market, but its strategy has been hampered by a plummeting share price. Terra Lycos's shares have already fallen by one-third this year, after dropping by 80% in 2000. TERRA LYCOS: Net Loss Widens to 390.44MM Euros ---------------------------------------------- Internet company Terra Lycos SA posted a first-half net loss of 390.44 million euros, compared with a 165.62-million-euro loss in the year-earlier period, Dow Jones Newswires reported on Monday. Terra Lycos added its pretax loss was 564.45 million euros, against a loss of 243.50 million euros a year earlier, while its operating loss widened to 229.34 million euros from a loss of 180.76 million euros in the same period last year. The company said it had an EBITDA (earnings before interest, taxes, depreciation and amortization) loss of 145.05 million euros for the first six months of 2001, against an EBITDA loss of 152.95 million euros in the year-ago period. A number of upheavals at Terra Lycos have put the company under strain this year, including the resignation of three senior executives in April and a number of downgrades by investment houses. =========== S W E D E N =========== BOLIDEN LIMITED: May Profit After Termination of Rate Contract -------------------------------------------------------------- Boliden has improved its chances of generating profits after terminating a fixed exchange rate contract, the Dagens Industri & Financial Times reported on Monday. The mining group announced losses of 212 million Swedish krona in the first half of 2001, compared with losses of 439 million Swedish krona in the same period last year. The entire loss was based on the fixed exchange rate. The termination of the currency contract fulfilled the last condition to secure Boliden's share issue. The company will raise 2.65 billion Swedish krona and Boliden managing director Jan Johansson said that the amount has already been secured. ===================== S W I T Z E R L A N D ===================== SWISSAIR GROUP: Says Lufthansa Report is Speculation ---------------------------------------------------- Aviation conglomerate Swissair Group described as speculation media reports it is discussing merging Swissair unit Atraxis and the IT subsidiary of Germany's Lufthansa AG, the Monday edition of Reuters said. Earlier this month, both companies said Swissair technology unit Atraxis and Lufthansa's System Group were in advanced merger talks. Swissair Chairman Mario Corti said the loss-making airline was reviewing its network and looking at possible cooperation deals, but analysts and fund managers were not convinced Lufthansa would be the ideal partner. AIG Privatbank fund manager Orun Palit thinks Swissair is more likely to seek a tie-up with British Airways Plc. Morgan Stanley said it was raising its estimates for the group although it regarded Swissair as a high-risk investment and was waiting to see more asset sales to cut its debt load. SWISSAIR GROUP: Shares Rise as Buyer Takes French Subsidiary ------------------------------------------------------------ Swissair Group shares closed 7% higher at 140.25 Swiss francs after it disposed of a stake in near-bankrupt French subsidiary AOM-Air Liberte, Bloomberg reported Monday. AOM-Air Liberte was rescued Friday after former Air France SA pilot Jean-Charles Corbet bought it for 1 symbolic French franc. Swissair will pay 1.3 billion French francs for reorganization. Analysts said the sale helps Swissair avoid the 1 billion Swiss franc cost of liquidating AOM-Air Liberte and advances Chief Executive Mario Corti's disposal of other airline stakes. Corbet succeeded in his bid to take over AOM-Air Liberte when a French commercial court ahead of three other bids approved his offer. His business plan for the airline is intended to retain about 3,000 jobs from a total 5,000. =========================== U N I T E D K I N G D O M =========================== 360NETWORKS: Court Orders Wind Up For Irish Unit ------------------------------------------------ The High Court on Monday agreed to wind up 360networks (Ireland) Ltd, which last year opened a cable network station in Dublin to connect Ireland to North America and Europe, according to The Irish Times' report yesterday. The Irish company is a subsidiary of Canadian company 360networks Inc, which builds and supplies global fiber-optic communication networks through operating subsidiaries worldwide. Justice O'Higgins also made an order to wind up 360 Atlantic (Ireland) Limited, another subsidiary of 360networks Inc. He appointed chartered accountant Rory O'Ferrall of Deloitte and Touche as official liquidator to both companies. The winding-up petitions were brought by building contractor John Sisk and Company, and stated both companies owed some 6 million pounds to it. Sisk also learned 360networks Inc owed Chase Manhattan Bank north $1 billion and that it was unlikely the assets of the group would be able to cover that debt. BALTIMORE TECHNOLOGIES: Admits Overstated Revenue Setback --------------------------------------------------------- Internet security group Baltimore Technologies admitted it had overstated revenues in India, the Middle East and Africa last year because of incorrect contract classifications, the Financial Times reported Monday. Baltimore CFO and acting CEO Paul Sanders said there was no evidence of fraud or anyone financially gaining from it. He added it was unclear whether the group would be pursuing the issue further. Baltimore, which has issued three profit warnings this year, is expected to present a restructuring plan this month to help it manage within its existing cash resources. BALTIMORE TECHNOLOGIES: Shares Plunge on Overstated Sales --------------------------------------------------------- Shares in Baltimore Technologies dipped 10% in London on Monday when the company revealed it had overstated software revenues by more than 5 million sterling pounds in the India, Middle East and Africa, according to The Irish Times' report. The Internet security firm blamed former employees for the incorrectly recorded figures for software supplied to distribution partners that may not have been sold. The restatement will mean a reduction in revenues for the 12-month period ended December 31, 2000 of 5.5% to 70.1 million pounds from 74.2 million pounds. In addition, revenues will be reduced 3.8% to 22.8 million pounds from 23.7 million pounds in the three-month period to March 31, 2001. The company said the revenue restatements would have no effect on the results for the three-month period ended June 30th, 2001 or on the company's current cash position. Earlier in July, CEO Fran Rooney stood down and the company is expected to announce major job losses on August 22, with its second-quarter results. BARINGS: Court Postpones Case to October ---------------------------------------- The court case to decide who pays the bill for the collapse of Barings bank will be postponed until October 2 after liquidator Ernst & Young failed to agree to a settlement with Coopers & Lybrand, one of its former auditors, the Financial Times reported Monday. Ernst & Young told the High Court in London that it had failed to reach definitive agreements over a negligence claim against the auditor. The collapse of the talks promises to add a further layer of cost and complexity to the already labyrinthine case, in which E & Y is suing Coopers and its fellow auditor Deloitte & Touche for 1 billion pounds. Coopers, which is now part of PriceWaterhouseCoopers, expressed regret at the development. It remains ready for the trial and is confident that they have a very strong case as the collapse of Barings was due to management failure and fraud, not their audit. E & Y and PwC both declined to give further details of the reasons for the failure of the talks. DOLPHIN TELECOM: S&P Lowers Ratings to D ---------------------------------------- Standard & Poor's on Monday lowered the long-term corporate credit ratings of Dolphin Telecom PLC to 'D' from triple-'C'-minus and its senior unsecured debt rating to 'D' from single-'C'. The downgrade follows the award of a petition for administration, which will give the U.K.-based telecommunications company protection from its creditors. Dolphin's administrators will undertake a review of the company's financial situation and meet with creditors to include the company's rated debt obligations. GLENFIELD & KENNEDY: Cuts 50 Jobs to Reduce Cost ------------------------------------------------ Receivers of water valve and fittings manufacturer Glenfield & Kennedy have axed 50 jobs of the firm's 118 staff to cut costs, the Monday edition of Business AM said. Receiver Blair Nimmo of KPMG Corporate Recovery said the company would continue to trade while a buyer was sought. Glenfield & Kennedy blamed the strength of the pound and a downturn in spending by utilities for its failure. In February, Glenfield & Kennedy placed its Firhill Ironworks foundry in Glasgow into voluntary receivership and fired 44 workers. INDEPENDENT INSURANCE: Confirms Asset Sale ------------------------------------------ Independent Insurance Group PLC has confirmed it plans to dispose of properties worth in excess of 50 million sterling pounds, AFX News reported Monday, citing a spokeswoman for the group's liquidator PriceWaterhouseCoopers. Edenbridge, Cheadle and Minster Court are part of the portfolio to be sold. PwC is currently reviewing various options on how the sale will be conducted. Proceeds of the asset sale will be used to pay the failed insurer's creditors. 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. Lyndsey Resnick, 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 * * *