/raid1/www/Hosts/bankrupt/TCREUR_Public/011003.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, October 03, 2001, Vol. 2, No. 193


                            Headlines

* B U L G A R I A *

BALKAN AIRLINES: Currently in Talks With London-based Investors
BALKAN AIRLINES: Many Investors Willing to Lend Cash, Buy Assets

* G E R M A N Y *

BANKGESELLSCHAFT BERLIN: Pohl Lined Up as Next Chairman
DEUTSCHE TELEKOM: Bids to Raise Stakes in Ukrainian Holding
MICROLOGICA AG: Could Face Delisting From Neuer Markt in 30 Days
TOOLEX: Receivers Consider Newtoms Takeover Offer

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

KPN NV: SNT Sales Purchase Agreement Is Firm

* N O R W A Y *

KVAERNER PLC: Moody's Downgrades Rating From B1 to B3
KVAERNER ASA: To Relocate Group Management in UK to Oslo

* P O L A N D *

DAEWOO MOTOR: Creditors Have Two Months to Present Claims

* S W E D E N *

SVENSK VODKA: Blames Managing Director for Slide to Insolvency

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

SWISSAIR GROUP: Units Seek Bankruptcy Protection
SWISSAIR: Swiss Banks to Buy 70% Stake in Crossair
SWISSAIR: Crossair to Take Over Swissair Flight Operations
SWISSAIR: Belgium to Revive Case Against Swissair

* U N I T E D   K I N G D O M *

BEESON GREGORY: CEO Quits Over Conflict With Chairman on Moves
FEDERAL-MOGUL: $4 Billion Debt Rating Downgraded to "D"
FUTURE NETWORK: Chief Anderson Resigns Amid Debt Crisis
FUTURE NETWORK: Finalizes Details of 35-MM-Pound Rights Issue
GLOBAL TELESYSTEMS: Rumors Drive Bonds Value Up as much as 14%
INVENSYS PLC: Mulls 750-MM-Pound Asset Disposals
JOHN LAING: Business Sell-Off Adds to Debt Burden
MARCONI PLC: Admits It Will Miss 'Crucial' First-Half Sales
MARKS & SPENCER: Admits Delay on Sale of U.S. Subsidiaries
MARKS & SPENCER: Deutsche Bank, Morgan Stanley to Manage Bond
SSL INTERNATIONAL: Colorplast Buys SSL Unit for 117MM Pounds


===============
B U L G A R I A
===============


BALKAN AIRLINES: Currently in Talks With London-based Investors
---------------------------------------------------------------

Troubled Balkan Airlines and London-based Steadcraft and Apollo
Aviation Advisors are currently exploring ways to revive the
carrier's long-distance routes operations, reports Reuters.

Court-appointed administrator Ralitsa Topchieva says that if
negotiations will be successful, the Bulgarian flag carrier could
soon revive its routes to New York, the Far East, India and South
Africa.

The administrator did not give any details on the talking points,
except that the London-based financiers may possibly invest in
aircrafts, with flight operations retained by the carrier.

The carrier was subjected to insolvency proceedings in March
after its Israeli investor, the Zeevi group, grounded it over a
row with the Bulgarian government.

The airliner has revived limited flights to European routes such
as London, Paris, Rome, Frankfurt, and to airports in the United
States and South Africa.


BALKAN AIRLINES: Many Investors Willing to Lend Cash, Buy Assets
----------------------------------------------------------------

Several investors have expressed interest in pitching money to
ailing Balkan Airlines as it works its way to financial health
via a restructuring scheme, reports Reuters.

In a recent press conference, court-appointed administrator
Ralitsa Topchieva revealed that the Japanese Tokuda Holding "has
shown strong interest in investing in Balkan."

Two other investors have also expressed their intent to refinance
the carrier, although at this point nothing definite has been
reached yet, says Topchieva.

Meanwhile, as part of a restructuring scheme, the Bulgarian flag
carrier intends to sell non-core assets such as aircraft
workshops, hotels, apartments abroad and a recreation center.

A Russian consortium already wants to invest in the company's
workshop in Varna to service Russian aircraft such as Tupolev and
Antonov, reveals Balkan laywer Todor Nenov.

In addition, the Marshal Group is also eyeing the company's
workshop in Sofia to service Boeing and Airbus, adds Nenov.


=============
G E R M A N Y
=============


BANKGESELLSCHAFT BERLIN: Pohl Lined Up as Next Chairman
-------------------------------------------------------

Former Bundesbank president Karl Otto Pohl, a senior adviser to
U.S. investor Christopher Flowers, could be the next supervisory
board chairman of Bankgesellschaft Berlin if the international
consortium bidding to take control of the troubled German bank
proves successful, the September 30 edition of the Financial
Times said.

Members of the Flowers consortium are confident their offer to
buy the embattled bank from its owner, the city state of Berlin,
is financially superior to that of Norddeutsche Landesbank.

Sources close to the consortium note that, unlike rivals, they
would keep Bankgesellschaft intact, retain its headquarters in
Berlin and try to minimize job losses.

Berlin's ownership is seen widely to have contributed to the
plight of Bankgesellschaft, which lost 1.65 billion euros last
year (refer to http://bankrupt.com/misc/bgb.pdffor the bank's  
financial details).

Much of the shortfall stemmed from injudicious property loans and
funds in the region, prompting accusations that some credit
decisions may have been influenced by political factors.


DEUTSCHE TELEKOM: Bids to Raise Stakes in Ukrainian Holding
-----------------------------------------------------------

Deutsche Telekom is reportedly deep in negotiations with other
groups holding shares in Ukrainian Mobile Communications (UMC) in
a bid to raise its stakes in the company, Reuters says.

The German company has long expressed its desire to acquire more
shares in the state-owned company if only telecom operator TDC
and KPN group would be willing to give up each of their 16.3
percent stakes.

Recently, however, KPN revealed that it will give up its share in
UMC to reduce debts.  

Similarly, telecom monopoly Ukrtelekom, which owns 51 percent of
UMC, hinted at giving up its 25 percent holding to make up for
the shortfall in the government's privatization revenues.


MICROLOGICA AG: Could Face Delisting From Neuer Markt in 30 Days
----------------------------------------------------------------

Communications media developer Micrologica AG could face
delisting from the Neuer Markt a month from now if it fails to
overturn a court ruling putting it well within the ambit of the
so-called "penny stock" rules.

The new rules, announced in July and which took effect Monday,
facilitate easier delisting of underperforming or illiquid
companies on the exchange's high-growth market segment.

The rules also allow for the delisting of companies within one
month after they institute insolvency proceedings. The court
recently upheld the validity of these rules.

Micrologica lawyer Thorsten Bieg, who questioned the rules, said
he has not yet seen the basis for the recent ruling, but he will
definitely appeal it, reports the Borsen-Zeitung/FT Information.

He said if the ruling was based on the insolvency proceeding
instituted by Micrologica, his client will not qualify anymore
because the proceeding may soon be lifted.


TOOLEX: Receivers Consider Newtoms Takeover Offer
-------------------------------------------------

Receivers of Toolex are presently considering an offer by Newtoms
to takeover assets and operations, reports De Volkskrant/FT
Information.

Newtoms is a DVD replication line vendor and a subsidiary of
Dutch surface electroplating giant OTB Group.

Toolex, which manufactures systems for replicating optical discs
such as CD-ROM and DVD, recently sought suspension of payment in
filing for insolvency.

The insolvency applies to seven Toolex companies, the report
says.


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


KPN NV: SNT Sales Purchase Agreement Is Firm
--------------------------------------------

Dutch e-commerce company SNT Group NV said it expects to sign
sales purchase agreements this week with Royal KPN NV and Atos
Origin, AFX news said Monday.

SNT is expected to acquire the customer relationship management
(CRM) operations of Royal KPN NV and Atos Origin.

SNT spokeswoman Anne de Graaf dismissed reports Monday that
suggested the planned undertaking could foul up given the recent
fall in SNT share price.

"Movements in the SNT share price have no influence on the terms
of the transaction, given that the memorandum of understanding
was based on a fixed share price formula," Graaf said.

To fulfill the agreement, SNT will pay 180 million euros in
convertible preference shares for KPN's CRM and about 78
million euros in cash and shares for Atos Origin's customer
call centers.


===========
N O R W A Y
===========


KVAERNER PLC: Moody's Downgrades Rating From B1 to B3
-----------------------------------------------------

International credit rating group Moody's has downgraded Kvaerner
plc to B3 from B1, despite logging record transactions on the
Oslo stock exchange last week, reports Dagens Naeringsliv/FT
Information.

The rating agency also indicated that the company, a subsidiary
of Kvaerner, could face further downgrade, depending on the
latter's developments.

Last week, the company recorded 5,457 transactions on its shares,
which drove it up by more than 25 percent by Friday.


KVAERNER ASA: To Relocate Group Management in UK to Oslo
--------------------------------------------------------

After finally divesting itself of several interests and
properties in the United Kingdom, Kvaerner announced Monday it is
now ready to transfer its Group Management to Oslo.

The Anglo-Norwegian engineering and construction company told
Reuters the relocation follows three years of restructuring that
involved disposal of a number of UK-based building and civil
engineering operations.

This relocation will also include the senior management of
Kvaerner's Oil & Gas business area. The management of the E&C
business area will remain in London.

"With the current mix of activities, and with Oslo being the
larger market-place for the trading in Kvaerner shares, it has
now been judged more efficient to relocate the Group's senior
executives to Norway," says a company press release.

"The relocation will take place progressively over the next few
months, as and when business circumstances allow," adds the
statement.


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


DAEWOO MOTOR: Creditors Have Two Months to Present Claims
----------------------------------------------------

Creditors of Daeweo Motor Polska light-truck factory have been
ordered to present their claims within two months following the
declaration of bankruptcy by a Polish court, reports the
Associated Press.

The court pronounced the declaration Monday, citing the $214
million debt of the light-truck division and the lack of support
from the equally troubled South Korean parent company.

The ruling also authorized a judge to manage the insolvent
factory while it searches for a strategic investor to continue
operations.

The factory's debt includes obligations to the state, banks,
suppliers and an investment pledge of $76 million for a planned
new truck factory.

POL-MOT Holding SA is the only company that has so far expressed
interest in pitching money to the troubled van manufacturer.


===========
S W E D E N
===========


SVENSK VODKA: Blames Managing Director for Slide to Insolvency
--------------------------------------------------------------

Swedish spirits manufacturer Svensk Vodka is blaming its own
managing director Michael Lindberg for the company's woes and
slide to insolvency, reports Dagens Industri/FT Information.

Accordingly, Lindberg withheld crucial information about the real
state of the company.

Reports are also rife that he is one of two shareholders who have
allegedly engaged in insider trading.  He owns 10 percent of the
company's shares.

But Lindberg claims the board knew about the company's woes long
before the Swedish press bared it last week.

The company recently lost its alcohol license and collaboration
agreement with J&J, one of the leading causes for its
deterioration.


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


SWISSAIR GROUP: Units Seek Bankruptcy Protection
------------------------------------------------

Swissair Group Mario Corti announced Monday that its SAirLines
and Flightlease divisions would seek creditor protection, reports
Reuters.

He also said that foreseen reduction in airline capacity would
result in 2,560 job cuts, 1,750 of them in Switzerland.


SWISSAIR: Swiss Banks to Buy 70% Stake in Crossair
--------------------------------------------------

Swiss Group CEO Mario Corti, according to Reuters, announced
Monday that Swissair has secured a deal with Swiss Banks UBS and
Credit Suisse Group, which are interested in buying Swissair's
70% stake in Crossair.

Corti said the banks have agreed to provide 250 million Swiss
francs in a bridge loan to help keep some operations afloat
pending a possible sale.


SWISSAIR: Crossair to Take Over Swissair Flight Operations
----------------------------------------------------------

Swissair's regional subsidiary Crossair will take over the core
flight operations of the ailing flag carrier, Reuters said
Monday.

Corti blamed the terrorist attacks on the United States recently
for the multibillions Swiss francs losses incurred by the
company, causing its financial condition to worsen further.

Corti said the airline expects a negative impact on cash flow and
equity, which will reach 3.1 to 3.8 billion French francs by the
end of 2002.


SWISSAIR: Belgium to Revive Case Against Swissair
-------------------------------------------------

The Belgian state said Monday it will reopen its legal action
against Swissair, Reuters reports.

Swissair announced recently that it will no longer provide
additional capital injection into troubled Belgian national
airline Sabena as it had promised earlier.

Spokeswoman of Belgian Minister for Public Enterprises Rik Daems,
Regine Van Tomme, said the decision by Swissair violated recent
agreements with the Belgian state. She noted, "This means that
the old lawsuits continue and that the possibility of additional
damage claims are being examined."

The Belgian government owns 50.5% of Sabena, while the Swiss
airline holds the other 49.5% share.  

In July, Sabena filed a case against Swissair to compel it to
increase ownership in Sabena and supply loan or credit line of
529 million euros.

The lawsuit was dropped following a deal to inject a final 430
million euros into the ailing airline.

In return Swissair would not have to raise its stake in Sabena to
85 percent.


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


BEESON GREGORY: CEO Quits Over Conflict With Chairman on Moves
--------------------------------------------------------------

Beeson Gregory CEO David Norwood has resigned over what appears
to be a disagreement with company chairman Andrew Beeson on the
failed merger talks with Evolution Group, reports The Times.

According to the report, Norwood had strongly pushed for the
merger with Evolution, a niche investment bank similar to Beeson
Gregory.

But Beeson, who replaces Norwood as CEO, believed that, had the
merger been completed, it would have been "dilutive" to
shareholder value.

The CEO's departure came just 10 months after assuming the post.
He will remain with the bank as director, in-charge of developing
its investment portfolio.


FEDERAL-MOGUL: $4 Billion Debt Rating Downgraded to "D"
-------------------------------------------------------

Standard & Poor's lowered Monday the debt ratings of Federal-
Mogul Corporation to 'D' levels following its voluntary filing
for protection under Chapter 11 of the U.S. Bankruptcy Code.

Approximately $2.1 billion of public debts and $1.9 billion of
bank debts were affected by the recent downgrade.

Below is the summary of S&P's ratings action:

RATINGS LOWERED                   TO       FROM
(1) Corporate credit rating       D        CCC+
Senior secured debt               D        CCC+
Senior unsecured debt             D        CCC-
Preferred stock                   D        CC
Federal-Mogul Financing Trust
Preferred stock rating*           D        CC

*Guaranteed by Federal-Mogul Corp.


FUTURE NETWORK: Chief Anderson Resigns Amid Debt Crisis
-------------------------------------------------------

Future Network chairman Chris Anderson, according to the
September 29 report of The Guardian, has resigned after the
magazine group that he founded rushed through a 33 million pound
emergency rights issue aimed at reducing its mounting debts.

Clear Channel boss Roger Parry will replace Anderson, who will
remain on the board as a non-executive director.

The report added that Anderson also have to sell around 10
million shares in the company to help repay a 4.7 million pound
loan from investment bank Morgan Stanley.

After the completion of the share sale, his stake will be worth
just 6 million pounds.

Future has been in negotiation with bankers in the past few weeks
about ways to restructure its debt position.

The company has already been forced to cut around 800 staff and
close 40 magazine titles.


FUTURE NETWORK: Finalizes Details of 35-MM-Pound Rights Issue
------------------------------------------ ------------------

Two weeks ago, troubled U.K. publisher Future Network finalized
the details of a 34.6-million-pound rights issue and a new five-
year 35-million-pound revolving debt facility, according to the
Financial Times' September 28 report.

The new shares, to be issued on a six-for-five basis at 20p each,
should raise 33 million pounds net, cutting the company's debt to
25 million pounds.

Directors, including media heir Elizabeth Murdoch, are expressing
their faith in the company by buying new shares as part of the
rights issue.

Future posted interim pre-tax losses for the six months ending
June amounting to 106.8 million pounds.

Losses from discontinued operations, restructuring costs and
goodwill write-downs accounted for the bulk of the shortfall.

Revenue in the first-half fell sharply as a result of lower
advertising revenue and fall in copy sales.

Forty magazine titles have ceased operation since the beginning
of the year: 18 in Europe, 16 in the United Kingdom and six in
the United States.


GLOBAL TELESYSTEMS: Rumors Drive Bonds Value Up as much as 14%
--------------------------------------------------------------

Rumors that KPNQuest is planning to buy Global Telesystems Europe
have resulted in pushing up the value of the latter's bonds,
reports Reuters.

According to the account, GTS's 275-million-euro 11 percent bond
due December 2009 fetched as much as 14 percent Monday,
substantially higher than the 12 percent recorded last week.

KPNQuest, however, dismissed the rumor as pure speculation. GTS
likewise refused to comment on the matter.

Beginning June this year, GTS announced it would not pay interest
payments due on its bonds and started talks with bondholders to
swap debt for equity.

Since then, the company has been trying to attract buyers.


INVENSYS PLC: Mulls 750-MM-Pound Asset Disposals
------------------------------------------------

Invensys, the cash-strapped engineering group, wants to raise up
to 750 million pounds through asset disposals as part of a
radical restructuring program to reduce the company's 3.2 billion
pound debt, the September 30 edition of the Financial Times said.

New chief executive Rick Haythornthwaite has not yet decided
which of the group's four divisions would be restructured.

However, it is believed that Automation Systems, which provides
factory automation products, systems and services, will possibly
be the first one to be overhauled.

It is expected that Software Systems, which delivers software
solutions to businesses, would also be restructured as it has
suffered from the US economic downturn and the adverse effects on
the industry following the attacks on the US.

Analysts believe that its power storage unit, part of Invensys'
Power Systems division, could be one of the first to be put up
for auction.

The unit has sales of about 500 million pounds a year.


JOHN LAING: Business Sell-Off Adds to Debt Burden
-------------------------------------------------

John Laing plc, a leading UK developer, owner and operator of
housing, property and infrastructure, faces 16 million pounds of
extra interest charges this year as a result of the sale of its
ailing construction business, the Daily Telegraph reported on
Monday.

The company's year-end debt will be 150 million pounds, five
times as high as last year.

Following the disastrous sale of the loss-making construction
division, there are concerns about the board's ability to
continue trading with its housebuilding and infrastructure
investment.

Housebuilding generates 70% of the company's continuing operating
profits.

After last week's discounted rescue rights issue at 100p a share,
the company's value more than halved to 188 million pounds.

Laing's woes date back to the mid-1990s when it took on fixed
contracts such as Cardiff Millennium Stadium, which had huge cost
overruns.

In the past three years, the construction business has posted
operating losses of 195.7 million sterling.



MARCONI PLC: Admits It Will Miss 'Crucial' First-Half Sales
-----------------------------------------------------------

For the first time, troubled telecom equipment maker Marconi
admits the recent U.S. terrorist attack will likely cause it to
miss first-half sales forecasts, reports The Times Tuesday.

According to a document released recently by the company in the
US, the attack has rendered projected sales uncertain.

Meeting its first-half sales is presently crucial for the company
in its bid to reduce a o4.4 billion debt pile.

Meanwhile, the same disclosure also revealed that Sir Alan Rudge,
chairman of the company's remuneration committee, received $5.3
million (o3.6 million) last year for the acquisition of Metapath
Software.

The company spent $681 million for Metapath in a buying spree
that left Marconi with "a mountain of debts," the report says.

It was also Rudge who approved the controversial remuneration
package for Lord Simpson of Dunkeld, who quit his chief executive
post last month.


MARKS & SPENCER: Admits Delay on Sale of U.S. Subsidiaries
----------------------------------------------------------

The timetable for the planned sale of its US subsidiaries has
changed and it is uncertain when the deal will be sealed, admits
Marks & Spencer recently.

This is a drastic departure from an earlier claim less than two
weeks ago that the sale of Brooks Brothers and Kings Super
Markets are still on track despite the recent US attack.

The original timetable scheduled the disposal of Kings Super
Markets by end of October, with Brooks next to go a few weeks
later.

Now, only a few believe a deal will be signed before Christmas.

Still, the company insists the delay won't bar its plans to
return o2 billion to shareholders by March next year.



MARKS & SPENCER: Deutsche Bank, Morgan Stanley to Manage Bond
--------------------------------------------------------------

The benchmark two-tier euro and sterling-denominated bond of
Marks & Spencer will be led and managed by Deutsche Bank and
Morgan Stanley, Reuters said Monday.

The unsecured transaction will be documented under the issuer's
Euro medium-term note program.

Launching of the bond will depend on market conditions, following
a series of European investor presentations, a statement quoted
by Reuters said.

Mark's and Spencer Plc is rated A3 by Moody's Investors Service
and A by Standard & Poor's ratings agency.



SSL INTERNATIONAL: Colorplast Buys SSL Unit for 117MM Pounds
------------------------------------------------------------

Healthcare products manufacturer SSL International announced
Monday it has sold its continence care business to Danish
healthcare equipment maker Coloplast A/S for 80 million pounds
($117 million) in cash, reports Reuters.

SSL said the cash raised from the sale will be used to reduce net
borrowings.

Following the sale, a pre-tax profit on disposal of the business
of about 29 million pounds after goodwill is expected.

                                    ***********

         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 Maria 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
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Information contained herein is obtained from sources believed to
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The TCR Europe subscription rate is $575 per half-year, delivered
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