/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010814.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 Tuesday, August 14, 2001, Vol. 2, No. 158 Headlines * B E L G I U M * FLV FUND: Posts $8.2MM Second-Quarter Loss LERNOUT & HAUSPIE: Says Buyers in Sight SABENA SA: CEO Announces Business Plan * F R A N C E * AIR LIBERTE: Air France Hires Air Liberte Staff AIR LIBERTE: Works Committee to Draft Redundancy Plan * G E R M A N Y * BRUEDER MANNESMANN: To Sell Deutsche Armaturen IXTELSERV AG: Files for Insolvency KINOWELT MEDIEN: To Close Arthouse Unit * I T A L Y * FREEDOMLAND-ITN: Posts Net Loss of 214BB Lira * N E T H E R L A N D S * PHARMING GROUP: Biotech Group Files for Receivership UNITED PAN-EUROPE: Merges With Canal Plus in Poland * P O L A N D * ELEKTRIM SA: Creditor's Demand Delays Vivendi Talks * U N I T E D K I N G D O M * 360NETWORKS: To Post Second-Quarter Results by September BARINGS: Creditors Demand Cut in Liquidator Fee BRITISH TELECOM: Viag Interkom to Cut 13% of Workforce BRITISH TELECOM: Will Demolish Public Phones CLAIMS DIRECT: Founders Still in Talks With Third Party EQUITABLE LIFE: Confident It Will Escape Mis-Selling Case INDEPENDENT INSURANCE: Crash May Hit 500 Irish Firms LOEWEN GROUP: Second-Quarter Loss Widens to $116.7MM MARKS & SPENCER: British Land to Acquire M&S Stores MARKS & SPENCER: Wants Buyer to Re-Employ Staff MICHAEL PAGE: Recruitment Company Faces FSA Investigation MICHAEL PAGE: Warns of Gloomy Trading NTL INCORPORATED: In Debt Talks With Telewest REDSTONE TELECOM: Investors Await FSA Inquiry SAVE GROUP: Anglo Petroleum Buys Save Group for 55MM Pounds ============= B E L G I U M ============= FLV FUND: Posts $8.2MM Second-Quarter Loss ------------------------------------------ Flanders Language Valley Fund NV, a venture capital fund closely linked to Lernout & Hauspie Speech Products NV, posted a net accounting loss of $8.2 million for the second quarter of 2001, while net operating losses amounted to US$9.1 million. According to Nasdaq Europe's report on Friday, the result reflects the decrease of the fair value of venture capital investments, following the further deterioration of the stock markets and further write-downs on initial investments. Nasdaq Europe halted trading in the share last November. LERNOUT & HAUSPIE: Says Buyers in Sight --------------------------------------- Lernout & Hauspie Speech Products is on target to meet a court- ordered restructuring plan for the software company, the Industry Standard reported on Friday. The company has been talking to investors interested in buying part or all of its key technology in the form of a new company that would avert the need for bankruptcy. L&H is under orders from the commercial court in Belgium to file an acceptable restructuring and recovery plan by September 30. If the company does not succeed, then it will be liquidated. President and Chief Executive Officer Philippe Bodson declined to give details about potential bidders, but hinted that it is unlikely the company will find a buyer willing to invest the $100 million or $125 million it would cost to maintain all of its current operations and employees. SABENA SA: CEO Announces Business Plan -------------------------------------- Sabena CEO Christoph Muller has announced the terms of the Belgian airline's business plan in order to restore profitability, the De Standard & Financial Times reported on Friday. The business plan includes the loss of 1,400 full-time jobs, nine planes and eight destinations. Partners will be required for the cargo, catering, maintenance and hotel divisions. Muller also indicated that the causes of Sabena's downfall are exaggerated growth of flights keeping occupancy low, few business passengers and too many low-revenue transfer passengers. =========== F R A N C E =========== AIR LIBERTE: Air France Hires Air Liberte Staff ----------------------------------------------- National carrier Air France has already recruited 500 of the AOM/Air Liberte staff that have lost jobs under the troubled company's restructuring plan that included 1,900 job cuts, the Associated Press reported on Friday. The airlines' new managing team has contacted state-owned railroad operator Societe Nationale des Chemins de Fer, national mail company La Poste and airline Corsair in an attempt to find new positions for its employees. AOM/Air Liberte, which is losing between 5 million and 7 million French francs a day, should break even in a few weeks, as debt has reached 400 million French francs. Holco's purchase plan for AOM/Air Liberte is worth around 2.3 billion French francs. Swissair is contributing some 1.3 billion French francs. AIR LIBERTE: Works Committee to Draft Redundancy Plan ----------------------------------------------------- A works committee, which comprises around 50 elected and union representatives, began its task on Friday of drawing up a redundancy plan affecting a third of the employees of troubled French airline Air Liberte, Le Monde & Financial Times in its August 11 edition said. The committee must determine which employees will be made redundant. The establishment of the committee was included in a recovery plan by new owner Jean-Charles Corbet. The plan will maintain 2,706 jobs and shed 1,800. ============= G E R M A N Y ============= BRUEDER MANNESMANN: To Sell Deutsche Armaturen ---------------------------------------------- Hand and machine tools distributor Brueder Mannesmann AG plans to sell parts of its troubled Deutsche Armaturen AG unit, the Friday edition of Dow Jones Newswires said. By relieving itself of the embattled armature maker, Brueder stands to gain profitability. Brueder Mannesmann did not name the proposed buyer. IXTELSERV AG: Files for Insolvency ---------------------------------- Telecommunications provider Ixtelserv AG has filed for insolvency at a Frankfurt court, Dow Jones Newswires reported on Friday. Ixtelserv is partially owned by financial holding firm Pegasus Beteiligungen AG. KINOWELT MEDIEN: To Close Arthouse Unit --------------------------------------- Film-rights company Kinowelt Medien AG will close its art film distribution company, Arthaus, as part of its restructuring, Dow Jones Newswires reported on Sunday. Early this month, CFO Eduard Unzeitig resigned amid growing pressure to find a partner to alleviate the company's debt burden. Kinowelt Medien subsidiary Brameier Fanworld AG filed for insolvency in July. The move aims to discontinue further financial investment in the company's heavy loss-generating operations. ========= I T A L Y ========= FREEDOMLAND-ITN: Posts Net Loss of 214BB Lira --------------------------------------------- Freedomland Internet Television SpA posted a net loss of 214 billion liras in the fiscal year ending June 30, Dow Jones Newswires reported on Friday. The company said that 110 billion liras in one-time writedowns resulting from its legal troubles and the collapse of an agreement to sell the company contributed significantly to the loss. Freedomland's problems began in October when its founder and chairman Virgilio Degiovanni came under investigation for falsifying the number of customers it had. After he resigned, Freedomland struck a deal to sell a portion of Degiovanni's 66% stake to a consortium of investors, but the agreement collapsed. Freedomland also cited uncertainty about a new industrial plan as among the reasons for the company's writedowns. Sales for the fiscal year were 13.5 billion liras, while the pretax loss was 205.1 billion liras. ===================== N E T H E R L A N D S ===================== PHARMING GROUP: Biotech Group Files for Receivership ---------------------------------------------------- Biotech firm Pharming Group N.V., according to Nasdaq Europe on Friday, has filed for receivership in order to seek protection from its creditors as financial position of the company has deteriorated. The 15-million-euro financing facility cannot be obtained since certain conditions cannot be met. The request for receivership followed a breakdown in talks with potential partners about mergers or acquisition. The entire board of supervisory directors, consisting of Chairman Marinus Minderhoud, Vice-chairman Pierre Douaze, and Koen Wiedhaup, Jan H. G. Jonkman and Leon W. Hoyer has resigned. Pharming's Chief Financial Officer Ino H. M. Cooijmans has been suspended. Personnel, as well as the Works Council, has been informed,. Pharming focuses on the development, production and commercialization of human therapeutic proteins to be used in highly innovative therapies. UNITED PAN-EUROPE: Merges With Canal Plus in Poland --------------------------------------------------- Canal Plus SA has inked a deal with Dutch cable telecommunications company UPC NV to merge the two groups' Polish satellite assets, the Dow Jones Newswires reported on Friday. Both companies will create a new company called TPK, with UPC owning 25% and Canal Plus taking 75% ownership, on payment of 150 million euros cash to its Dutch partner. According to Dennis Siemelink at Delta Lloyd Securities in Amsterdam, the actual amount of money received under the deal would not help UPC much, looking at the company's total net debt of an estimated 7.6 billion euros at the end of the first quarter. Siemelink added the company would have to shave off some more operations to really help it. Canal Plus and UPC said the merger will accelerate break-even for both parties in Poland. =========== P O L A N D =========== ELEKTRIM SA: Creditor's Demand Delays Vivendi Talks --------------------------------------------------- Negotiations on the sale of Elektrim SA's telecommunications assets to France's Vivendi Universal SA were delayed due to demands from Elektrim creditor PZU Zycie SA, Dow Jones Newswires reported on Friday. Polish life insurer PZU Zycie SA is demanding early redemption of 200 million zlotys of its current Elektrim bonds, secured by a stake in Elektrim's telecom unit, or, alternatively, a change of the pledge. Elektrim and Vivendi were supposed to finish off the 709-million- euro asset sale by the end of July. The deadline was moved back due to legal complications. =========================== U N I T E D K I N G D O M =========================== 360NETWORKS: To Post Second-Quarter Results by September -------------------------------------------------------- Optical network services provider 360networks on Friday said it expects to file its second quarter 2001 financial statements and the related management's discussion and analysis on September 15. The company has determined it will be unable to complete all the work necessary to finalize the financial report for the six months ended June 30 by the prescribed due date of August 29. The delay is a result of the additional requirements created by 360networks' decision to seek creditor protection and the decrease in finance personnel after its workforce reduction. The company intends to comply with the provisions of the Alternate Information Guidelines contained in the Ontario Securities Commission Policy 57-603, by issuing a default status report every two weeks until the second-quarter 2001 results are issued. 360networks and several of its operating subsidiaries filed for protection under the Companies' Creditors Arrangement Act (CCAA) in the Supreme Court of British Columbia in June. The company's principal U.S. subsidiary, 360networks (USA) Inc., and 22 of its affiliates concurrently filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. The company has also instituted insolvency proceedings in Europe. BARINGS: Creditors Demand Cut in Liquidator Fee ----------------------------------------------- Creditors of Barings bank, a group of hedge funds that brought 100 million pounds of Barings' debt at distressed prices following its collapse, has demanded that liquidator Ernst & Young reduce its fees in order to give them more money. Based on a Sunday report from the Financial Times, the claim was one reason for the collapse of talks in July aimed at a partial settlement of the lawsuit against two accountancy firms that formerly acted as Barings' auditors. The funds, including the Halcyon fund and Franklin Mutual Advisers, pressed for E&Y and lawyers Slaughter and May to raise the settlement by lowering provisions against future legal action and cutting their fees by 5 million pounds. The 90-million-pound deal was provisionally agreed among ING Barings, E&Y, the creditors and Coopers & Lybrand, one of Barings' former auditors, earlier this year to avoid costly litigation. The liquidator has launched a 1-billion-pound negligence claim against Barings auditor Cooper & Lybrand and Deloitte & Touche, which audited subsidiary Baring Futures Singapore, over the losses incurred by its Singapore trader Nick Leeson. E&Y, Coopers and Cadwalader, Wickersham & Taft, the law firm for the hedge funds, declined to comment. BRITISH TELECOM: Viag Interkom to Cut 13% of Workforce ------------------------------------------------------ British Telecommunications PLC's German mobile subsidiary Viag Interkom GmbH will cut about 13% of its 4,200 workforce, Dow Jones Newswires reported Friday. Chief Executive Joachim Preisig said the jobs would be eliminated through normal attrition. The moves are part of an effort to reach earnings before interest, taxes, depreciation and amortization by March 2003. Viag, a unit of BT Wireless, is Germany's fourth-largest mobile group. It is the key to BT's strategy of de-merging its wireless division as part of its debt reduction plans. BT took control of Viag earlier this year. BRITISH TELECOM: Will Demolish Public Phones -------------------------------------------- British Telecom is planning to demolish hundreds of unprofitable pay phones in UK high streets as part of a plan to make its retail division more commercially aggressive, according to the Sunday edition of the Independent News. The telecoms company owns 141,000 payphones, including its iconic red kiosks, and modern boxes as well as phones in shopping centers and railway stations. Its revenues from many payphones have fallen by an average of 37% with the explosion in mobile phone use. BT's plans will not affect rural areas, where many local communities heavily rely on the public phone. BT is expected this week to consider the sale of its fixed-line domestic telephone network to reduce its debt. Earlier this month, BT received an 8-billion-pound offer for its local loop business from a consortium of banks known as Earthlease. The other 18-billion-pound bid from a consortium headed by German investment bank West LB was for BT's entire fixed line business. The telecoms giant rebuffed both bids, but both consortia are believed to be reviewing their options for a fresh assault. CLAIMS DIRECT: Founders Still in Talks With Third Party ------------------------------------------------------- Claims Direct founders Tony Sullman and Colin Poole, who quit posts earlierin June, are still in negotiations with third party Simon Ware-Lane on their 10p-a-share takeover bid for the UK insurance company, the Financial Times reported on Sunday. Non-executive directors agreed on Friday to recommend the founders' 19.4-million-pound offer to take the company private, because an alternative deal with Ware-Lane failed to materialize. An alternative proposal with Ware-Lane is believed to be the focus of the talks. It would see control of the private company, once Sullman and Poole secure it, pass to Ware-Lane. The personal injury specialist ran into difficulties after allegations that some people winning compensation cases in court were seeing their damages virtually wiped out by Claims Direct's fees. EQUITABLE LIFE: Confident It Will Escape Mis-Selling Case --------------------------------------------------------- Mutual life assurer Equitable Life is confident it will escape another legal case to establish whether thousands of policyholders without guaranteed annuity rates (GARs) were victims of mis-selling, the Independent News reported on Saturday. The House of Lords in July ruled that Equitable had to pay out extra sums to this group that could cost them 2.6 billion pounds. The ruling forced Equitable to pay no bonuses to any policyholders for seven months last year and has strongly hindered its prospects of strong investment returns. This is likely to be the 29,000 individuals who took out a policy from January last year. This payout would be on top of a separate mis-selling bill of up to 200 million pounds, which Equitable may have to distribute to policyholders in income drawn down policies who should possibly have been sold more conventional annuities. INDEPENDENT INSURANCE: Crash May Hit 500 Irish Firms ---------------------------------------------------- The Small Firms Association (SFA) has warned the government that more than 500 Irish companies face serious difficulties and possible closure because of the collapse of British firm Independent Insurance, the Sunday Times reported. The Irish Hotels' Federation (IHF) has identified 24 companies in its sector that could be hurt by it. The companies identified include a small family-based hotel, which faces a 500,000-pound liability that should have been paid by its insurer. Other affected companies are in the construction and food preparation sectors. The British Policyholders Protection Board last week provided relief to about 9,000 Irish private Independent policyholders, reclassifying their policies as British. It did not extend protection to corporate policyholders. LOEWEN GROUP: Second-Quarter Loss Widens to $116.7MM ---------------------------------------------------- The Loewen Group Inc., the second-largest operator of funeral homes and cemeteries in North America, announced on Friday its net loss for the second quarter ended June 30 widened to $116.7 million, compared to net loss of $76.3 million in 2000. Second quarter revenues were $204.2 million, down $14.7 million from the prior year, reflecting primarily the reduction of 280 locations due to the company's ongoing disposition program. Loewen Group's earnings from operations were $17.3 million in 2001, compared to $23.5 million last year, before impairment provisions of $139.4 million and $92.0 million, respectively. The company's cash position increased during the quarter by $24.7 million to $220.4 million at the end of the second quarter. For the six months ending June 30, funerals performed on a same store basis declined 1.6%. compared to the same period last year. The company's efforts to rebuild its cemetery sales force have been slower than planned and have also contributed to the sales declines versus prior years. The Canada-based Loewen Group owns or operates approximately 950 funeral homes and 325 cemeteries across the United States, Canada, and the United Kingdom. It employs approximately 11,000 people. MARKS & SPENCER: British Land to Acquire M&S Stores --------------------------------------------------- UK property firm British Land, according to the Sunday Telegraph & Financial Times, is considered the leading bidder for a portfolio of Mark & Spencer stores, worth around 350 million pounds. Other investors interested in buying M&S' store portfolio include REIT Asset Management, London & Regional, Rotch and a number of foreign buyers. MARKS & SPENCER: Wants Buyer to Re-Employ Staff ------------------------------------------------ Troubled retailer Marks & Spencer PLC would prefer to sell its 18 stores in France to a single group that would re-employ the stores' 1,700 staff members, AFX News reported on Sunday. According to the head of the company's French operations, Alain Juillet, the best solution would be for a single group to commit to taking on the majority of the staff, thereby preserving existing work contracts. French department store chain Galeries Lafayette is known to be one of the buyers, AFX added. Marks & Spencer should have a final list of two or three buyers by early October. MICHAEL PAGE: Recruitment Company Faces FSA Investigation --------------------------------------------------------- Michael Page International, one of the world's leading professional recruitment consultancies, is braced for a showdown with city officials when it reports its interim results this week. after it emerged that the Financial Services Authority has began an investigation into the company, the Independent News reported on Saturday. The FSA is looking into whether investors were misled in the run- up to the company's 650-million-pound stock market flotation in March last year. The city watchdog is also examining statements made by the company whether the group has kept the markets properly informed of price sensitive information. If the FSA finds evidence of wrongdoing, it can publicly fine the company. Granville Baird analyst Ian Jermin said there is a possibility Michael Page may come out with another profit warning. The company has issued a profit warning in late June. MICHAEL PAGE: Warns of Gloomy Trading ------------------------------------- Executive-recruitment group Michael Page sees no sign of recovery in its market when it became a subject of an inquiry by the Financial Services Authority because of allegations that it may have given insufficient information to investors when it floated earlier this year. After issuing a profit warning in late June, Michael Page will possibly not give any positive signals about its outlook. The company will be particularly hard hit by the slowdown because of job freezes and retrenchment programs. Firms that also recruit temporary staff can sometimes be cushioned from the effects of slowdowns. Michael Page chief executive Terry Benson will resist announcing any job cuts, saying the firm will maintain its 2,800 workforce, although revenue figures per consultant are tumbling. NTL INCORPORATED: In Debt Talks With Telewest --------------------------------------------- Cable companies NTL and Telewest PLC have held debt-restructuring talks with JP Morgan Chase, Dow Jones Newswires reported on Sunday. The discussions revolve around the feasibility of JP Morgan Chase leading a syndicate of lenders that would refinance the borrowings of the two groups, allowing them to redeem their outstanding corporate bonds. NTL is under siege from investors over massive debt and will need to borrow 1.8 billion pounds to be profitable by the end of 2003. REDSTONE TELECOM: Investors Await FSA Inquiry --------------------------------------------- The Redstone Action Group is awaiting the results of the Financial Services Authority's (FSA) investigation into whether Redstone Telecom kept investors properly informed of price sensitive information, the Independent News reported yesterday. The city regulator is now coordinating with the Department of Trade and Industry on the matter. Redstone finance director Andrew Walsh confirmed that the FSA contacted the telecom carrier. The company provided information about the matter some months ago but has had no contact with the regulator recently. Redstone narrowly avoided bankruptcy last month when its investors backed a rescue-refinancing package. However, some shareholders were unable to cast their votes as heavy short selling of the shares by some brokers caused a dearth in the stock. As a result, many small shareholders did not receive their share certificates in time to vote at the extra-ordinary meeting on July 18. The situation caused a row between the London Stock Exchange and the Financial Services Authority over who was responsible. SAVE GROUP: Anglo Petroleum Buys Save Group for 55MM Pounds ----------------------------------------------------------- Anglo Petroleum has bought Save Group, Britain's largest independent service-station network, for about 55 million pounds, the Sunday Times reported. The deal will add 410 petrol stations to the 45 already owned by Anglo. Anglo also has a dealer network of 80 stations that it does not own but to which it sells supplies. Senior associate Salman Nissan of accountancy firm Andersen, Anglo's adviser on the deal, said its client is buying the business and the assets but not the company and its liabilities. Save collapsed this year with debts of about 100 million pounds, half of which was owed to banks. Barclays, NatWest and Lloyds TSB failed to agree refinancing terms with the company, which left Save struggling with interest payments of about 5 million pounds a year. Save Group went into administration after the disruption to petrol supplies caused by last year's fuel price protests. The chaos made all its financial problems worse. The company appointed Ernst & Young as its administrators. ************ 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 * * *