/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010820.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, August 20, 2001, Vol. 2, No. 162 Headlines * B E L G I U M * LERNOUT & HAUSPIE: Court Approves Bowne Offer to Buy Mendez SABENA SA: Unions Seek Audit on Restructuring Plan *F R A N C E * FRANCE SOIR: Management and Union Agree on Jobs Plan LA CITY: Enters Voluntary Liquidation * G E R M A N Y * BANKGESELLSCHAFT BERLIN: Banker in Talks to Buy Bankgesellschaft DAIMLERCHRYSLER: Will Not Withdraw South African Unit MAN AG: Sees Earnings Affected by ERF Irregularities MAN AG: Suspends UK Chiefs * N E T H E R L A N D S * IMPRESS METAL: S&P Drops Rating to CCC+ LETSBUYIT.COM: Wins Injunction Against Shmulik Stein NOM: Will Lose Millions in Frisian's Suspension of Payment * S W I T Z E R L A N D * CARRIER1 INTERNATIONAL: S&P Places Ratings on Watch Negative * U N I T E D K I N G D O M * CLAIMS DIRECT: Business Record of Claims Suitor EQUITABLE LIFE: Delay in Pension Processing Angers Investors LASTMINUTE.COM: Expects to Break Even in 2002 LASTMINUTE.COM: Loss Widens to 12.9MM Pounds MARCONI PLC: Share Falls Again MARKS & SPENCER: Tommy Hilfiger Considers Buying Brooks Brothers PSINET INC: TELUS Bid Seeks Court Approval SCOOT.COM: DMGT Agrees to Buy Loot for 45MM Pounds ============= B E L G I U M ============= LERNOUT & HAUSPIE: Court Approves Bowne Offer to Buy Mendez ----------------------------------------------------------- The commercial court in Ieper, Belgium has approved the offer of Bowne & Co. Inc. to acquire Mendez SA and related assets from Lernout & Hauspie Speech Products NV for about $44.5 million, the August 16 edition of Dow Jones Newswires said. The transaction will soon be closed as Bowne already received approval for the deal from a U.S. Bankruptcy Court in Delaware. Bowne has outbid Lionbridge Technologies Inc., which offered $27 million for Mendez, a provider of localization, translation technology and technical services. Lernout & Hauspie put Mendez up for sale last year after seeking bankruptcy protection following an accounting scandal. SABENA SA: Unions Seek Audit on Restructuring Plan -------------------------------------------------- Unions representing employees at Belgian airline Sabena SA want an external audit of a 430-million-euro recapitalization and restructuring plan, the August 16 edition of Dow Jones Newswires said. Unions said they would not negotiate with management on the plan, which calls for laying off 1,421 workers, shutting down airline routes and selling non-aviation divisions, until after the audit has been completed. Sabena's management will meet unions August 22 to outline the details of the plan, Dow Jones added. =========== F R A N C E =========== FRANCE SOIR: Management and Union Agree on Jobs Plan ---------------------------------------------------- Management and the CGT du Livre union at France Soir has agreed on August 13 regarding a jobs plan at the French daily, cutting the number of redundancies to 56 from the 76 originally planned, Le Monde in its August 15 edition said. Bankruptcy now seems a more unlikely outcome for France Soir, whose losses are put at 10 million French francs per month on top of an estimated deficit of 110 million French francs. Management now has several weeks to put together a relaunch plan, find the funds needed to satisfy the paper's Italian shareholders and negotiate the jobs plan. LA CITY: Enters Voluntary Liquidation ------------------------------------- Ready to wear clothing group La City has called in the receivers at the Bobigny commercial court and asked for a period of voluntary liquidation, according to the August 10 edition of Liberation & World Reporter. Company director and founder Thierry Abimelech hopes that the legal administrators will examine his recovery plan that does not involve any job cuts. The group, created in 1989 aimed at young urban women from 18 to 35 years old, registered its first loss in 2000-2001, despite an increased turnover. ============= G E R M A N Y ============= BANKGESELLSCHAFT BERLIN: Banker in Talks to Buy Bankgesellschaft ---------------------------------------------------------------- Ex-Goldman Sachs banker Christopher Flowers announced he was in talks to buy Bankgesellschaft Berlin, the Financial Times in its August 16 edition reported. Flowers, now associated with US private equity group Ripplewood Holdings, said he was in takeover talks with the state of Berlin, which owns almost 57% of the bank. Flowers declined to name a price or reveal the names of his backers. He added he did not want 100% of the bank but at least 75%. Shareholders will be asked to approve a 2-billion-euro cash injection this month to boost the capital ratios of the bank, which reported a 1.65-billion-euro loss for 2000. DAIMLERCHRYSLER: Will Not Withdraw South African Unit ----------------------------------------------------- Car manufacturer DaimlerChrysler has denied any intention of pulling out from South Africa after just having invested $182 million, the August 16 edition of the Financial Times said. However, DaimlerChrysler South Africa will have to transfer a part of it to Germany if the strike of its assembly workers do not end soon. According to managing director Christoph Kopke, they lose more cars as strike continues. DaimlerChrysler is South Africa's largest foreign investor. The company's withdrawal of export contract for 17,000 vehicles a year would deal a severe blow to South Africa's efforts to entice foreign investment and deepen fears of an uncompetitive and fractious workforce. MAN AG: Sees Earnings Affected by ERF Irregularities ---------------------------------------------------- Group earnings at industrial equipment maker MAN AG for 2001 will be adversely affected by accounting irregularities at its U.K.- based unit ERF unit based in the U.K., Dow Jones Newswires reported on Thursday. A company spokesman said that MAN had forecast an undisclosed net loss for its ERF unit due to routine and ongoing restructuring costs following its acquisition. The irregularities at ERF consisted of inflating the amount booked for trade credits to customers, depressing the real loan figures and raising the amount of payments receivables. MAN AG: Suspends UK Chiefs -------------------------- MAN AG has suspended on Thursday the chief executive and chief financial officer of ERF, its newly acquired UK subsidiary, after discovering accounting irregularities of more than 6.3 million pounds, the Financial Times in its August 16 edition said. John Bryant was suspended as ERF's chief executive, while Klaus Wagner as chief financial officer. The irregularities consisted of inflating the amount booked for trade credits to customers, depressing the real loan figures and raising the amount of payments receivables. The German trucks and engineering group bought heavy truckmaker ERF from Canada's Western Star Trucks last year in a 118-million- pound deal including debt. ===================== N E T H E R L A N D S ===================== IMPRESS METAL: S&P Drops Rating to CCC+ --------------------------------------- Standard & Poor's on August 15 has lowered its subordinated debt rating on packaging company Impress Metal Packaging Holdings B.V. to triple-'C'-plus from single-'B'-minus. At the same time, the long-term corporate credit and senior secured debt ratings on Impress was lowered to single-'B' from single-'B'-plus. The downgrade reflects continued difficult market conditions for metal packaging in the second quarter of 2001, continued depressed margins, operational issues in North America and Germany and S&P's concerns over Impress' limited availability under liquidity facilities. Net sales for Impress in the second quarter of 2001 fell by 6% year-on-year for comparable units. LETSBUYIT.COM: Wins Injunction Against Shmulik Stein ---------------------------------------------------- Online retailer LetsBuyIt.com N.V. has obtained a preliminary injunction from an Amsterdam court against Shmulik Stein International Investment Ltd., the August 16 edition of Dow Jones Newswires said. The verdict orders the U.K. company to pay LetsBuyIt.com approximately 7.5 million euros that includes an advance payment for damages of approximately 6.8 million euros. SSII has also been ordered to provide LetsBuyIt.com with bridge loan financing of 7 million euros. SSII can object to the judgment during a period of two weeks commencing the date that the judgment is served to SSII, Dow Jones added. To recall, Shmulik Stein has refused to deliver LetsBuyIt.com a promised capital injection of 30 million euros. NOM: Will Lose Millions in Frisian's Suspension of Payment ----------------------------------------------------------- The possible insolvency of shipyard Frisian Shipyard Welgelegen will cost investment company NOM millions of guilders, the Het Financieele Dagblad & World Reporter in its August 11 edition said. The shipyard, in which NOM has a majority stake, filed for suspension of payment early this month. It came into difficulties when an order for the construction of an oil tanker was cancelled. The shipyard reportedly owes NOM Fl 7.3 million of subordinated loans, of which it will see back only 30% if a rescue plan is implemented. ===================== S W I T Z E R L A N D ===================== CARRIER1 INTERNATIONAL: S&P Places Ratings on Watch Negative ------------------------------------------------------------ Standard & Poor's has placed on Wednesday its single-'B'-minus long-term corporate credit and senior unsecured debt ratings on Carrier1 International S.A., a wholesale provider of data and voice transmission services, on CreditWatch with negative implications. The CreditWatch placement reflects Carrier1's ongoing weak financial performance, high cash burn rate, limited financial flexibility, and strategic uncertainties following the retirement of the company's chief executive officer. Carrier1's results for the quarter ending June 30, 2001, were poor. The company generated negative consolidated gross margins due to an increase in voice termination costs, while its EBITDA loss increased to $29.9 million in the second quarter from $14.4 million in the first quarter. The increased operating loss primarily reflects the deterioration in gross margins and a $16.8 million bad debt expense, compared with $7.0 million in the first quarter. Carrier1's extremely high bad debt expense and negative gross margins demonstrate the weakness of the company's business position. =========================== U N I T E D K I N G D O M =========================== CLAIMS DIRECT: Business Record of Claims Suitor ----------------------------------------------- Simon Ware-Lane, who is in takeover talks with controversial insurer Claims Direct, is associated with dissolved and heavily indebted companies, the Daily Mail in its August 15 edition said. The businessman, living both in Spain and in Hampshire, wants to merge Claims Direct with smaller rival Claimline, where he is a shareholder. Ware-Lane sits on the board of Charles Church Spitfires, with a negative worth of 1.1 million, and Loan Line, with a negative net worth of 148,000. He is also listed as a director of dissolved companies CCW, with a negative worth of 1.4 million, Alexi Church, 90,000 in the red, and Classic Sporting Marketing, with liabilities of 204,000. Ware-Lane's business track record adds to the controversy surrounding the plans of Claims Direct founders Tony Sullman and Colin Poole, who succeeded in a 10p-a-share bid last week. EQUITABLE LIFE: Delay in Pension Processing Angers Investors ------------------------------------------------------------ Thousands of Equitable Life customers, already angered by a 16% cut in their investments, face further losses when taking their pension because of the insurer's overloaded administration system, the Friday edition of The Times said. Equitable is taking up to four weeks to process a request for a transfer. According to Equitable Members' Action Group chairman Paul Braithwaite, he was outraged by the delays. The mutual life assurer is facing a legal case as to whether thousands of policyholders without guaranteed annuity rates (GARs) were victims of misselling. LASTMINUTE.COM: Expects to Break Even in 2002 -------------------------------------------- Online travel agent and retailer Lastminute.com said its UK and French businesses would reach operating profitability in nine months time, the August 16 edition of the Financial Times reported. "Lastminute.com continues to improve on all of the retail basics. Costs, margins, conversion rates and cash flow continue to move ahead in a period traditionally quiet for sales," chairman Allan Leighton said. The company added that trading in its fourth quarter started extremely well. Its July's total transaction value 60% up on that of June. LASTMINUTE.COM: Loss Widens to 12.9MM Pounds -------------------------------------------- Online booking agent Lastminute.com has recorded a pre-tax loss of 12.9 million pounds in the three months to June 30, against 9.3 million pounds in the same period last year, and 14.3 million pounds in the preceding quarter, the Financial Times reported on Thursday. Lastminute has cut its operating cash outflow from 9.1 million pounds to 8.6 million pounds, quarter-on-quarter, leaving it with 53.3 million pounds in cash on its balance sheet, about enough to last another six quarters at the current burn rate, FT added. The group's loss per share rose from 6.2p in 2000 to 7.3p. MARCONI PLC: Share Falls Again ----------------------------- Shares in troubled telecoms equipment maker Marconi fell a further 5% to a new low of 68p on Thursday, almost sealing its relegation from the FTSE 100 index, the August 17 edition of The Times said. A bleak warning from US-based Ciena added to Marconi's woes and rekindled speculation that Marconi may have to issue another profits warning. Ciena said that the overall telecom equipment market will likely show continued slowdown over the next year. Marconi has a net debt of 3 billion pounds. Its market capitalization has fallen almost 95% in less than a year, from a peak of 34.8 billion pounds. MARKS & SPENCER: Tommy Hilfiger Considers Buying Brooks Brothers ---------------------------------------------------------------- Hong Kong-based Tommy Hilfiger Corp. is exploring an acquisition of the U.S. clothing store chain Brooks Brothers from Marks & Spencer Plc, Bloomberg reported on Thursday. "We have a short list of potential buyers and we're working with that," Marks & Spencer spokeswoman Jane Lowe said. She declined to name the companies, citing confidentiality agreements. Marks & Spencer also expects to announce the sale of its U.S.- based Kings Super Markets next month. PSINET INC: TELUS Bid Seeks Court Approval ------------------------------------------ PSINet will now seek court approval to complete TELUS' purchase bid of US$77 million for PSINet's Canadian facilities and operations, the August 16 edition of PRNewswire said. The purchase price is subject to final adjustments and will be satisfied by a cash payment and assumption of certain liabilities. Regulatory approvals and employee retention conditions to closing have been satisfied. Through the acquisition, telecommunications company TELUS expects to gain approximately 250 employees, a state-of-the-art Internet data center in Toronto and approximately 8,600 corporate accounts across the country. SCOOT.COM: DMGT Agrees to Buy Loot for 45MM Pounds -------------------------------------------------- Daily Mail & General Trust has agreed to buy the Loot business of online directory Scoot.com for 45 million pounds, the Friday edition of This Is London said. DMGT will further provide Scoot with a bridging loan of 10.5 million pounds. Some of the facility will be used to repay bank loans while the remainder of about 7 million pounds will be used as working capital. A Scoot spokesman said that with the facility, the company would be able to survive into next year, once the deal is completed. DMGT will buy both the UK and Irish arms of Loot. About 800 of its staff will leave the group with the sale. ************* 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. Lourdes Reyes, 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. 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