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        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, September 11, 2001, Vol. 2, No. 177


                            Headlines

* A U S T R I A *

LIBRO AG: Amadeus Unit Splits Up With Virgin

* B E L G I U M *

LERNOUT & HAUSPIE: In Talks to Save Part of SLT Division
SABENA SA: Flights Are Back to Normal

* F R A N C E *

MOTUPET: To Axe 97 Staff in Irish Plant
MOULINEX SA: In Receivership for Six Months

* N E T H E R L A N D S *

KPN NV: Bonds Fall Five Points on Baa3 Rating
KPN NV: Confirms Talks With SingTel on Indonesian Firm
KPN NV: In KPN Netwerk Bouw Acquisition Talks
KPN NV: No Signs KPN Will Divest KPNQwest Stake

* P O L A N D *

ELEKTRIM SA: To Sell Internet Assets
NETIA HOLDINGS: Moody's Cuts Rating to Caa1

* S W I T Z E R L A N D *

PAVAG: Ceases Plastic Production
SWISSAIR GROUP: Hotelplan Threatens to Bring Court Action

* U N I T E D   K I N G D O M *

BRITISH TELECOM: Legal Problems Delay Property Sale
BRITISH TELECOM: MmO2 to Kill Off Genie Name
CORUS GROUP: To Post First-Half Loss of 300MM Pounds
MARCONI PLC: Resists Simpson's 1.8-BB-Pound Pay-Off
MARCONI PLC: Talks With Banks Continue
NTL INCORPORATED: Appoints Goldman Sachs to Find Buyer for Unit
PSINET INC: Partners With Below Zero
RAILTRACK GROUP: To Dismiss 2,000 Executives


=============
A U S T R I A
=============


LIBRO AG: Amadeus Unit Splits Up With Virgin
--------------------------------------------

Austrian bookseller Amadeus, owned by the insolvent Libro, has
ended cooperation with music retailer Virgin, the September 6
edition of Der Standard & World Reporter said.

Virgin will vacate the third floor of the Amadeus store in Linz,
while Amadeus will move out of the Virgin Megastore in Vienna,
affecting seven of its 30 branches.

Amadeus will be sold, and talks are allegedly being held with
major German book retailers to boost the loss-making company, the
report added.


=============
B E L G I U M
=============


LERNOUT & HAUSPIE: In Talks to Save Part of SLT Division
--------------------------------------------------------

Belgian language and speech technology group Lernout & Hauspie
Speech Products, according to the September 6 edition of De
Financieel Ekonomische Tijd/FT Information, is in talks with six
interested parties to save an important part of the Speech and
Language Technology (SLT) division with less money than the
original mentioned $100 million.

LHSP vice-president Thomas Denys said the company would
concentrate on the existing products and product development.


SABENA SA: Flights Are Back to Normal
-------------------------------------

A Brussels court has ordered Sabena pilots to go back to work on
Friday, ending a two-day strike at the Brussels airport, Dow
Jones Newswires in its September 7 edition reported.

The Belgian Cockpit Association unexpectedly extended its
Thursday strike into a second day on Friday after pilots'
representatives failed to reach a deal with Sabena management on
alternatives to a proposed restructuring plan that would endanger
1,400 jobs, including about 200 pilots.

Sabena canceled 130 flights on Friday, where 20,000 tourists and
business travelers were stranded, forcing them to find
alternative flights.

Sabena went to court arguing the pilots' strike was illegal and
harmful to the company's reputation and finances. The court
agreed and said it would fine pilots 100,000 francs each for
hindering the normal activities of Sabena if they continued.


===========
F R A N C E
===========


MOTUPET: To Axe 97 Staff in Irish Plant
---------------------------------------

French car components group Montupet will make 97 people
redundant at its Calcast plant in Derry, at the North West region
of Ireland to make the plant more competitive, the Friday edition
of The Irish Times said.

Montupet believes its move to cut jobs will help safeguard the
remaining 240 workers at the plant.

Trade union leaders in Derry hailed the French group as a white
knight when it acquired Calcast in October of last year after it
had been in receivership for 10 months. Now, they are not
convinced that the 97 job losses will be the last.

Amalgamated Electrical and Engineering Union official Uel Adair
said he has received no details, but expects the redundancies to
take place before November.

The Calcast plant, which makes the engine heads for the Ford
motor company's Explorer model, is one of the two operations
owned by Montupet in Northern Ireland. The group's Dunmurry plant
in Belfast currently produces five different cylinder heads for a
number of car manufacturers including Peugeot and Renault.
  
Montupet's Northern Ireland managing director Daniel Cofflard
said production at the Derry plant was expected to return to
normal after the summer.


MOULINEX SA: In Receivership for Six Months
-------------------------------------------------------------

The commercial court of Nanterre, near Paris, has put Moulinex SA
in receivership for six months after the French appliance maker
filed for bankruptcy for its Moulinex and Brandt operations and
subsidiaries earlier on Friday, the Associated Press reported.

Lawyers Didier Segard and Francisque Gay were appointed as
receivers, to assess Moulinex operations and find ways to rescue
the troubled company. Chairman Patrick Puy will remain in office
to manage the company.

The court also appointed SCP Becheret-Thierry to represent
creditors, Moulinex said.

The bankruptcy filing was taken after the company's main
shareholder, Italian group Elettro Finanziaria SpA (El.Fi),
withdrew its backing for a 350-million-euro rescue package.

Moulinex has been making losses since 1999, plagued by industry
overcapacity, fierce competition from overseas suppliers, and an
818-million-euro debt. El.Fi bought a 74.3% stake in Moulinex
last year and merged with its own domestic appliance unit Brandt.

Moulinex has a total of 21,500 employees worldwide and a
commercial presence in 170 countries. It had sales of $2.3
billion last year.


=====================
N E T H E R L A N D S
=====================


KPN NV: Bonds Fall Five Points on Baa3 Rating
--------------------------------------------

Koninklijke KPN NV's bonds fell five points on Friday after
Moody's Investors Service downgraded the company's senior
unsecured debt rating to Baa3 from Baa2 and left it on review for
possible downgrade, according to Dow Jones Newswires.

Moody's said its actions follow the collapse of merger talks with
Belgacom SA, and the downgrade reflects its expectation that KPN
will not now be able to implement debt reduction to such an
extent as to be able to reduce the existing financial risk to a
level commensurate with Baa2 in the foreseeable future.

The Eurobonds were down five points in early trade, with its
6.05% 2003 issue at 85, its 4.0% 2004 at 74, its 7.125% 2006 at
80 and its 4.75% 2008 last at 66, despite KPN updating the market
on its divestment program and announcing it is reorganizing its
Belgian operations.

Goldman Sachs gave KPN bonds an underperform recommendation on
Friday.


KPN NV: Confirms Talks With SingTel on Indonesian Firm
------------------------------------------------------

Dutch telecommunications company Royal KPN NV has confirmed it is
in discussion with Singapore Telecommunications Ltd. on a
possible sale of its 22.3% stake in Indonesia's biggest cellular
phone operator PT Telkomsel, the Friday edition of Dow Jones
Newswires said.

KPN spokesman Bram Oudshoorn declined to say when an agreement
will be reached or how much the company hopes to get for its
stake.

SingTel also confirmed on Friday it is in talks with KPN on a
possible transaction.

KPN is looking for ways to reduce its debt load of 22.8 billion
euros. It recently posted a widened net loss for the first half
of 2001 of 1.038 billion euros, compared to a net loss of 19
million euros for the same period in 2000.


KPN NV: In KPN Netwerk Bouw Acquisition Talks
---------------------------------------------

Royal KPN N.V. said on Friday it is conducting negotiations with
construction company Koninklijke Volker Wessels Stevin N.V. on
the acquisition of KPN's fully-owned subsidiary KPN Netwerk Bouw
B.V.

The KPN Netwerk Bouw sale not only fits in with KPN's previously
announced strategy to concentrate on its core activities, but
also with Volker Wessels Stevin's goal of expanding its
activities in the provision of services for telecom
infrastructure.

KPN Netwerk Bouw has 2,500 employees and has establishments at 27
locations in 20 cities. The company designs, builds and manages
telecommunications structures. Last year, it achieved revenues of
around 600 million euros, making it a market leader in the
Netherlands.

Koninklijke Volker Wessels Stevin, with its more than 130
operating companies and around 13,500 employees, is active in the
Netherlands, United Kingdom, Germany, Belgium, North America and
Canada.


KPN NV: No Signs KPN Will Divest KPNQwest Stake
-----------------------------------------------

Dutch data communications company KPNQwest NV has not received
any indications from its joint venture parent Royal KPN NV that
it would sell its 44% stake, the Friday edition of Dow Jones
Newswires said, citing KPNQwest chairman Jack McMaster.

KPNQwest and KPN had been in contact following comments from KPN
that it would consider all options to reduce its 22.8-billion-
euro debt pile, except the sale of its fixed-line network.

"If KPN wanted a fire sale, Qwest wouldn't allow it," McMaster
said.
He said the market mistakenly believes that KPN will have no
choice but to divest its holding in KPNQwest to pull itself out
of debt.

However, according to a joint venture agreement, KPN cannot sell
its stake in KPNQwest without the consent of KPN partner Qwest
Communications International.


===========
P O L A N D
===========


ELEKTRIM SA: To Sell Internet Assets
------------------------------------

Power and telecom conglomerate Elektrim is in talks with
prospective investors to sell some its Internet-related and data
transmission subsidiaries, thw Warsaw Business Journal reported
yesterday, citing Elektrim spokeswoman Ewa Bojar.

Last week, French company Vivendi Universal agreed to purchase
Elektrim's fixed-line telecom assets for 491 million euros. It
will also buy the cable television assets for $150,000 and gain
control of Poland's largest mobile operator Polska Telefonia
Cyfrowa.

While the finalization of the deal gives Elektrim much needed
cash, the French declined to purchase the Polish firm's Internet
and data transmission companies, leaving Elektrim to either find
investors or try to revive the companies.

Cash-strapped Elektrim has debts of about 800 million euros.


NETIA HOLDINGS: Moody's Cuts Rating to Caa1
-------------------------------------------

Moody's Investors Service has on Friday lowered the senior
implied rating and unsecured issuer rating of Netia Holdings S.A.
to Caa1 from. The ratings remain under review for possible
further downgrade.

The downgrade reflects growing concerns as to Netia's ability to
secure additional funding for its business and service its debt
obligations.

Based on current performance trends, Moody's estimates that Netia
is funded into early 2002 only, after which point the company
will require significant funding of approximately $300 to $350
million in order to grow its business, continue to meet operating
costs and license requirements, and service increasingly cash-pay
interest on its senior notes.

Moody's added that Netia's ability to gain access to further
public capital is highly uncertain.

The ratings downgrade also reflects increasing concerns as to the
strategic direction and momentum of the company, particularly the
resignation of its CEO Mattias Gadd.

Headquartered in Warsaw, Poland, Netia is the leading Polish
alternative fixed-line telecommunications provider. The company
has a total debt of approximately PLN 3.2 billion.


=====================
S W I T Z E R L A N D
=====================


PAVAG: Ceases Plastic Production
--------------------------------

Flexible plastic packaging manufacturer Pavag, a subsidiary of
Perga Plastic of Germany, will cease production after it failed
to implement a rescue package announced in June 2001, the Neue
Zrcher Zeitung in its September 5 edition said.

The district court of Willisau has consequently withdrawn its
protection from creditors.
   
Nebikon-based Pavag has remained loss-making despite massive
turnover growth in recent years. The majority of Pavag's 120
employees will be transferred to a successor company known as
Pavag Folien AG.


SWISSAIR GROUP: Hotelplan Threatens to Bring Court Action
---------------------------------------------------------

Swiss travel agent Hotelplan, according to the Friday edition of
Le Temps/FT Information, has threatened to bring a court case
against Swiss aviation company Swissair Group for failing to keep
to contractual agreements made between Hotelplan and the
airline's charter subsidiary Balair.

Hotelplan is demanding a SFr20 million compensation.

After deciding in April to abandon the operation of Balair next
year, Swissair was supposed to integrate the subsidiary's medium-
haul flights into its regional subsidiary, Crossair, and take
over the long-haul charter flights itself. Swissair and Hotelplan
have reached an agreement in July after long negotiations.

The deal is in question because of a dispute over the price of
operating the long-haul charter flights. Hotelplan claims that
Swissair has changed its price that each seat costs it 20 or 30%
more.

Swissair has refused to comment.


===========================
U N I T E D   K I N G D O M
===========================


BRITISH TELECOM: Legal Problems Delay Property Sale
---------------------------------------------------

British Telecom's plan to sell its 2.3-billion-pound property
portfolio is being delayed by legal issues, the Independent News
reported yesterday.

A BT spokesman said the company was committed to close the sale
of its 65 million square feet of phone exchanges and offices to
property developer Land Securities Trillium and William Pears
Group this month.

Land Securities and William Pears have formed a joint-venture
company, named Telereal, to hold the properties. When the deal is
completed, Telereal, which will finance the transaction through
the bond market, will also manage the properties for BT.

The property sale is part of BT's plans to further reduce its
debt mountain. BT has already cut its debt by more than 10
billion pounds to around 17.5 billion pounds.


BRITISH TELECOM: MmO2 to Kill Off Genie Name
--------------------------------------------

British Telecommunications PLC's newly renamed wireless unit mm02
will kill off Genie, the brand for its mobile-Internet business
BT Cellnet, due to heavy losses during the past 18 months,
according to The Sunday Times.

Genie's losses are thought to have risen to close to 40 million
pounds a quarter, greatly exceeding revenues of 11 million
pounds.

MmO2 plans to demerge from British Telecom in November as part of
the company's plans to cut bulging debt. The move will require
the approval of shareholders at a meeting in October.


CORUS GROUP: To Post First-Half Loss of 300MM Pounds
----------------------------------------------------

Corus Group, known as British Steel before its merger with Dutch
firm Hoogovens in 1999, is expected to announce half-year losses
of up to 300 million pounds, the Monday edition of The Times
said.

The Anglo-Dutch steel manufacturer continues to be affected by
the global economic slowdown, by oversupply in the steel industry
and the high rate of sterling against the euro. It will confirm
the need to further restructure the company and close plant
because of a deterioration in trading.

Earlier this year, Corus said it would cut 6,000 jobs in the UK
in a bid to revive its fortunes.


MARCONI PLC: Resists Simpson's 1.8-BB-Pound Pay-Off
---------------------------------------------------

New Marconi chairman Derek Bonham will resist any claim for the
1.8-million-pound compensation package of ousted chief executive
Lord George Simpson, the Independent News reported yesterday.

Bonham said he wanted Lord Simpson to follow the example set by
Sir Roger Hurn, who said he would forgo any compensation for loss
of office as chairman.

"I am putting myself in the position of a very irate shareholder
and I know what I would like to happen," according to Bonham.

Lord Simpson, who is entitled to a 1-million-pound compensation
for loss of office and a total cash windfall of 800,000 pounds on
top his traditional pension entitlement and any share options,
was not available for comment on Sunday.


MARCONI PLC: Talks With Banks Continue
--------------------------------------

Telecommunication equipment maker Marconi PLC is still in
discussion with banks about how best to secure its long-term
financial position, the Wall Street Journal reported yesterday.

After issuing a second profit warning in two months and revealing
a rapidly growing debt burden of 4.4 billion pounds last week,
Marconi has come under increasing pressure to answer investors'
doubts about its long-term viability.

The company has yet to draw on a credit facility of three billion
euros it negotiated with more than 20 banks, led by HSBC Holdings
PLC and Barclays Bank PLC, in May.

Marconi now aims to reduce its debt to between 2.7 billion pounds
and 3.2 billion pounds by the end of March.


NTL INCORPORATED: Appoints Goldman Sachs to Find Buyer for Unit
---------------------------------------------------------------

Debt-laden cable TV operator NTL, chaired by Barclay Knapp, has
appointed US investment bank Goldman Sachs to find a trade buyer
for its aerials and transmission business, valued by analysts at
1.4 billion pounds, according to The Observer on Sunday.

NTL is believed to have received several offers for its business,
acquired in 1996 from the former Independent Broadcasting
Authority. Among the bidders are US companies American Tower
Corp. and Spectrasite Holdings Inc. France Telecom may also be
interested, but would probably need backing from a financial
partner.

Last year, the aerials and transmission unit produced revenue of
more than 200 million pounds. Customers include terrestrial
channels such as ITV and Channels 4 and 5, as well as the
emergency services and mobile phone firms.

NTL, whose debts total about $16 billion, is in need of cash as
it urgently seeks to cut borrowings ahead of a possible alliance
with cable rival Telewest.


PSINET INC: Partners With Below Zero
------------------------------------

PSINet UK, one of the world's largest and most experienced
providers of IP-based communications services, has partnered with
Scotland's leading co-location specialist Below Zero, the
September 6 edition of M2 Presswire said.

According to Angela Mathis, Vice President of Channel Sales and
Marketing PSINet Europe, the partnership will help maneuver both
parties towards providing companies in Scotland with high quality
Internet infrastructure.

PSINet was the first ISP for businesses and Below Zero was
Scotland's first co-location specialist

Under the agreement, Below Zero will have access to PSINet's
dedicated data network to provide its customers with secure and
reliable connectivity.

PSINet Europe was established in 1997 and is headquartered in
Geneva, Switzerland. Its wholly owned subsidiaries are located in
Austria, Belgium, France, Germany, Hungary, Italy, Netherlands,
Spain, Switzerland and the UK. PSINet Europe, which employs 770
personnel, is an independent subsidiary of US-based PSINet Inc.


RAILTRACK GROUP: To Dismiss 2,000 Executives
--------------------------------------------

Railtrack Group PLC is set to sack 2,000 managers, prompting a
bid for union recognition from its white collar workers

The AFX Europe reported on Sunday that the Transport & Salaried
Staff Association is preparing to demand that Railtrack
negotiates with its leaders ahead of the management redundancies.

                                 ************

      S U B S C R I P T I O N   I N F O R M A T I O N

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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.

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