/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/011025.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 Thursday, October 25, 2001, Vol. 2, No. 209 Headlines * A U S T R I A * LAUDA AIR: Sixty Days to Insolvency * B E L G I U M * KORTRIJKSE TEXTIEL: No Bidders Emerge for KTM LERNOUT & HAUSPIE: Sells Transcription Unit for $24.9MM SABENA SA: Sobelair Pilots Plan 72% Buyout of Sabena * F I N L A N D * SONERA CORPORATION: EU Probe on Rights Issue Far-fetched * F R A N C E * EUROPEENNE D'EXTINCTEURS: Requests Receivership From Court MOULINEX-BRANDT: News of SEB's Takeover Push Shares 20% Up MOULINEX-BRANDT: Future of Austrian Unit, Elektra Bleak MOULINEX-BRANDT: Merloni Expresses Interest Over Part of Brandt * G E R M A N Y * DAIMLERCHRYSLER AG: Reports Losses That Exceed Expectations MAN AG: To Accelerate Planned Job Cuts Amidst Fall in New Orders METABOX: Needs 7MM Deutsche Marks to Defer Insolvency SEMECS GMBH: Files for Insolvency * I R E L A N D * AER LINGUS: Begins Search for Private Partner * I T A L Y * ALITALIA SPA: Records 17.1% Dip in Traffic Volume for September FILA HOLDINGS: Sale Still on Track, Says CEO * N E T H E R L A N D S * PHARMING GROUP: Transkaryotic's Bid Favored Over Genzyme's UNITED PAN-EUROPE: Channel Shutdown Blurs Financial Targets * N O R W A Y * KVAERNER ASA: CEO Meets Yukos Counterpart to Know Real Score * P O L A N D * DAEWOO MOTOR: Lays Off 1,200 Workers, While 600 More Await Fate POLSKIE LINIE: To Cut 808 Jobs December, Sell Swissair Stake * S W E D E N * MODIG MACHINE: On the Road to Financial Turnaround * S W I T Z E R L A N D * SWISSAIR GROUP: Rescue Benefits for Bondholders Still "Distant" SWISSAIR GROUP: Salvage Package Not Yet in Its Final Form SWISSAIR GROUP: Atraxis in Liquidity Problems * U N I T E D K I N G D O M * RAILTRACK GROUP: Byers Formally Unveils Blueprint of New Company ============= A U S T R I A ============= LAUDA AIR: Sixty Days to Insolvency ----------------------------------- According to Austrian carrier Lauda Air, its share capital is almost entirely exhausted and the company has been granted 60 days to sort issues out before having to file for insolvency. A report obtained from Die Presse and FT Information said that Lauda Air Luftfahrt AG is in desperate need of financial support if it is to continue operations. Since AUA Austrian Airlines's takeover, records of new management for the first half of the year reveal Lauda Air losses of about 37 million euros. ============= B E L G I U M ============= KORTRIJKSE TEXTIEL: No Bidders Emerge for KTM --------------------------------------------- The possibility of a buyer to come out in the open for insolvent cotton spinning mill Kortrijkse Textiel maatschappij (KTM) is remote, De Financieel Ekonomische Tijd and FT Information said. Despite a series of restructuring efforts and a full order book, the company failed as the economic demands declined. KTM's insolvency will claim about 115 unemployed. Put under receivership, half of KTM's staff are said to have taken up employment elsewhere, while another number still remains to finish current orders. KTM specializes in the production of weaving yarns for the carpet, furniture and household textile industries. LERNOUT & HAUSPIE: Sells Transcription Unit for $24.9MM ------------------------------------------------------- On Monday, Lernout & Hauspie Speech Products NV spokesman Ron Schuermans said it sold in New York its medical transcribing arm to Medquist Inc. for $24.875 million, Dow Jones Newswires reports. The business employs more than 1,200 employees who transcribe medical reports. Lernout & Hauspie Monday re-filed for bankruptcy protection with the court in Ypres, Belgium. The commercial court in Ypres is expected to decide late Tuesday on Lernout & Hauspie's request of at least two months of protection from creditors. The same court had already once granted the company a nine-month Chapter 11-style protection from creditors, known as a concordat, but a higher court overruled that decision last week. SABENA SA: Sobelair Pilots Plan 72% Buyout of Sabena ---------------------------------------------------- A group of pilots of Sabena subsidiary Sobelair are planning a management buy-out to save the charter airline, Dow Jones Newswires reports Tuesday. According to the report, pilot representative Geert Vertongen said their group "officially informed" Sabena Chairman Fred Chaffart of their interest to take over Sabena's 72% stake in Sobelair. He said the group has yet to receive any feedback. He adds that most of the 27% remaining shares are controlled by SFI, the Societe Federale d'Investissement, a government holding. Unlike troubled Belgian airliner Sabena, Sobelair is currently not under bankruptcy protection. The spokesperson said that if the buy-out will be considered, the group will launch talks with tour operator JetAir next week. JetAir is currently Sobelair's main customer and is believed to be interested in the continuity of Sobelair's operations. ============= F I N L A N D ============= SONERA CORPORATION: EU Probe on Rights Issue Far-fetched -------------------------------------------------------- A spokeswoman for the European Union Commission says it is unlikely that the E1 billion ($891 million) rights issue of Sonera will attract scrutiny from the Commission. EU Competition spokeswoman Amelia Torres explained Tuesday that just because the Finnish government is spearheading the rights issue, does not bring the move within the meaning of state aid. Torres says it is not unusual for a government holding a majority stake in a company to be involved in such deals. Sonera is currently under a debt mound of E4.49 billion ($4 billion), which it plans to reduce by half through the rights issue. =========== F R A N C E =========== EUROPEENNE D'EXTINCTEURS: Requests Receivership From Court ---------------------------------------------------------- Fire extinguishers manufacturer Europeenne d'Extincteurshas has decided to ask the commercial court of Lyons to put it into receivership. A report from La Tribune and FT Information said that the Company wants to avoid bankruptcy at all costs. If the court approves their petition, it will present a recovery package. The Company's owners and financiers, including Atenor, Societe Generale through an investment subsidiary and foreign pension funds, have refused to inject more capital investments. Europeenne currently hopes to find new financial partners. A UK group is said to be interested. Despite launching a restructuring program in early 2000, the company still managed to record a net loss of 57.5 million euros for the first half of this year and over 37 million in losses last year. Europeenne shares dipped from 80 euros to 1.10 euros. Suspended two weeks ago, its shares were re-listed Tuesday. Before its collapse, the company registered a turnover of 159 million euros. MOULINEX-BRANDT: News of SEB's Takeover Push Shares 20% Up ---------------------------------------------------------- Moulinex shares jumped 30% higher than the previous closing at the start of trading Tuesday following the approval by a French court of SEB's partial takeover of the Company. Dow Jones Newswires said the shares settled at E1.20 ($1.06), 20% up than the previous E1.00, when the Paris Bourse closed. The auspicious trading day, however, did not end without a slight hitch. An "order imbalance" forced it to be temporarily suspended shortly after the opening of trading. SEB successfully maneuvered early this week its partial takeover bid for Moulinex, netting the approval by a French court of its acquisition that excludes the latter's loss-making vacuum cleaner and microwave oven business units. MOULINEX-BRANDT: Future of Austrian Unit, Elektra Bleak ------------------------------------------------------- The future of the Austrian unit Elektra Bregenz of home appliance maker Moulinex remains uncertain, the Wirtschaftsblatt and FT Information reported Tuesday. Although production is continuing at the Austrian company, the future of Brandt and its wholly owned subsidiary Elektra Bregenz are unknown. Offers for Brandt must be submitted by November 9. Brandt's parent company Moulinex on Monday narrowly escaped insolvency after a bid from its competitor SEB won court approval. MOULINEX-BRANDT: Merloni Expresses Interest Over Part of Brandt --------------------------------------------------------------- Italian home appliance maker Merloni may acquire part of home appliance manufacturer Brandt, a report obtained from Il Sole 24 Ore and FT Information Tuesday said. Merloni chairman Vittorio Merloni says that although sales in the industry have dropped since September 11, the group's earnings are still strong in the second half of 2001. Furthermore, Merloni intends to acquire other related European companies in operation. Brandt was put in receivership with its parent company Moulinex since September after its main owners El.Fi Elettrofinanziaria SpA withdrew a 215-million pound rescue package in its favor. ============= G E R M A N Y ============= DAIMLERCHRYSLER AG: Reports Losses That Exceed Expectations ----------------------------------------------------------- DaimlerChrysler reported losses in the third quarter but still managed to raise its stock as the dive exceeded previous expectations, reports the Financial Times. According to the report, the restructuring carmaker could still come within its projected 1.2 billion to 1.7 billion Euros ($1- 1.5 billion) operating profit for the full-year. The group's adjusted operating profit rose 23% to E666 million ($594 million) in the third quarter. Sales fell 3% to E36 billion ($32 billion) but still exceeded analysts' expectations, the report noted. The Company's Chrysler unit, which aims to return to profitability next year, recorded "better-than-expected" figures, with losses amounting to only E267 million ($237.7 million). This is a substantial dip from the E579 million ($515 million) losses recorded during the same period last year. Still, analysts believe cost-cutting moves may yet be necessary especially if the US car market weakens further. HypoVereinsbank analyst Georg Sturzer, however, believes these cost-cutting measures "would be on a much smaller scale than the current programme." MAN AG: To Accelerate Planned Job Cuts Amidst Fall in New Orders ---------------------------------------------------------------- Troubled German truck maker MAN AG says it doesn't have a choice but to speed up its planned job cuts as new orders for trucks in the first nine months this year dipped by 16%. "The current market situation forces us into a rapid cutback in staff levels," Reuters quoted spokesman Roland Poschung as saying Tuesday. In July this year, the Company announced a job cut involving 4,000 of its 35,000 employees as the demand slowed. The Company, which has already issued four profit warnings during the year, is targeting a full-year pre-tax profit of E400 million ($355 million). But with the unexpected dip in new orders, analysts now doubt whether the Company could still meet said targets. METABOX: Needs 7MM Deutsche Marks to Defer Insolvency ----------------------------------------------------- German set-top box manufacturer Metabox needs 7 million Deutsche marks in the next few days for to avoid possible insolvency, Borsen-Zeitung and FT Information said Tuesday. A meeting has been scheduled for October 30 to discuss fund raising measures and details on how to resolve Metabox conflict. Failure to come up with something after this meeting will set off insolvency proceedings. According to Metabox chief executive Herbert Steinhauer, the company needs to secure the 7 million Deutsche marks creditors are claiming. Metabox needs another 10 million Deutsche marks to remain in operation. Steinhauer disclosed that Metabox currently has liquid funds of about 900,000 Deutsche marks. Metabox shares fell by 16.5% to 0.60 euros on Monday. SEMECS GMBH: Files for Insolvency --------------------------------- German industrial electronics supplier Semecs GmbH & Co. KG has filed for insolvency at the Heidelberg district court, the Frankfurter Allgemeine Zeitung and FT Information said Friday. The company blames its downfall on the decrease in market demands in the telecom and car industries. Semec achieved a turnover of 100 million last year. In the same circumstances, the company's Dutch parent company Nedworks also filed for insolvency last week. ============= I R E L A N D ============= AER LINGUS: Begins Search for Private Partner --------------------------------------------- Aer Lingus has no choice but to look for private investors as the European Commission insists that no government aid should be extended to ailing airlines, the Financial Times reports. But industry officials doubt the Irish carrier will be able to attract investors even if the Irish government gave Tuesday its blessings to the move. Accordingly, it is doubtful that any airline will want a minority stake in the carrier, which is predominantly owned and controlled by the Irish government. The airline has been averaging losses of about 2 million Irish Punts ($40.7 million) a day since bookings dipped following the September 11 incident. Brussels has been very adamant that "only private sector investment should be contemplated to secure the future of the airline," says Irish Public Enterprise Minister Mary O'Rourke. The carrier plans to reduce 25% of its operations and cut a third of its present workforce. ========= I T A L Y ========= ALITALIA SPA: Records 17.1% Dip in Traffic Volume for September --------------------------------------------------------------- Troubled Italian carrier Alitalia SpA disclosed Tuesday that its traffic volume dived sharply in September as a result of the terrorist attacks in the United States, Reuters reports. According to the airline, its overall traffic volume, measured by revenue per passenger per kilometer, fell 17.1%, with its intercontinental routes absorbing the most impact at 28.5%. Its domestic routes also experienced a 1.8% reduction in passenger volume as anxiety over air travel surged following the attacks. Alitalia said its cargo traffic also dipped by 15.3% and 26% in August and September, respectively. FILA HOLDINGS: Sale Still on Track, Says CEO -------------------------------------------- Fila CEO Michele Scannavini disclosed Monday that the Company's disposal is still on track, despite admitting that the U.S. crisis has created some difficulties. A Dow Jones Newswires article revealed that the Company's sale process was one of those discussed in a recent meeting of HdP SpA's major shareholders to plot strategies following the September 11 incident. According to Scannavini, the Company has been in talks with a number of potential buyers. Fila is a unit of Italian fashion and publishing conglomerate HdP SpA, whose shareholders are among Italy's largest corporations such as IntesaBCI SpA and Mediobanca SpA, tire and cable maker Pirelli SpA and insurer Assicurazioni Generali SpA. ===================== N E T H E R L A N D S ===================== PHARMING GROUP: Transkaryotic's Bid Favored Over Genzyme's ---------------------------------------------------------- A second American company has offered to buy the subsidiary of Pharming NV and appears to be the one favored if only the latter can help it, Dow Jones Newswires said Tuesday. Pharming spokesman Rein Strijker confirmed recently that Transkaryotic has placed a bid for the Company's Belgian subsidiary and is a lot better than the offer of Genzyme Corp. However, since the Company is under receivership, the choice actually belongs to a Belgian Court, which is expected to hand a decision in a few days. Strijker said the court is now holding hearings to determine whether Transkaryotic's bid is sufficient enough to end the legal moratorium of the Belgian subsidiary. "(It) will allow us to pay all creditors, and will guarantee employment for all employees in Belgian (unit) for at least 15 months, while the money that's left after that is for Pharming NV," explains Strijker in favoring Transkaryotic's offer. "The Genzyme bid also contains assurances for employees and partly fulfills the needs of creditors, but it doesn't address the needs of Pharming Group as the only shareholder of the Belgian subsidiary," the spokesman adds. Strijker says the Belgian subsidiary's book value is E20 million ($17.8 million). UNITED PAN-EUROPE: Channel Shutdown Blurs Financial Targets ----------------------------------------------------------- Heavily indebted United Pan-Europe Communications is reportedly cutting off the air two television channels by year-end, casting doubts as to its ability to hit financial targets. In an article by the Financial Times, the paper said the Dutch group has reportedly told its staff that "Sports1" and alternative lifestyle channel "Innergy" will be shut down by year-end. The two channels are among the eight that UPC produces and are a key part of a package of television, video and Internet applications intended to persuade customers to pay more for its set-top computer, said the report. The Dutch cable group is targeting a subscription of 250,000 to its set-top computer installation before the end of the year. As if hinting of things to come, the company missed a September launched, which until now has yet to be re-scheduled. The company aims to break even by 2004. =========== N O R W A Y =========== KVAERNER ASA: CEO Meets Yukos Counterpart to Know Real Score ------------------------------------------------------------ Kvaerner CEO Harald Arnkvaern was expected to meet yesterday with his Yukos counterpart in a move to allay the uncertainties behind the latter's move that made it the Company's largest shareholder Tuesday. According to a report by the Financial Times, the meeting with Mikhail Khodorkovsky was to take place at Oslo. Details of the meetings were not disclosed as of press time. However, many believe the primary objective Arnkvaern hoped to achieve was getting the Russian firm's commitment to stay on as its shareholder. On Monday, a Yukos spokesman disclosed the oil firm is willing to give up its stake in Kvaerner should it receive a very good offer for it. The uncertainty grew even further when news items suggested that Yukos purportedly invested in Kvaerner because of its hydrocarbon and process technology units. Now that the business units have been acquired by the Russian oil firm for $100 million, it could well be on its way out of the near-bankrupt Kvaerner, according to the reports. But a company insider says this is not likely since the oil firm is seeking representation in Kvaerner's board. "If they are seeking board representation, they intend to stick around for a while and influence the direction of the company," the insider said. =========== P O L A N D =========== DAEWOO MOTOR: Lays Off 1,200 Workers, While 600 More Await Fate --------------------------------------------------------------- Receiver Zbigniew Zaporowski disclosed recently that it has began laying-off 1,200 workers, while 600 more positions hang in a balance on the eve of a production agreement signing. AFX reported Tuesday that the company is planning to resume production of 500 vans a month, but only needs half of the 2,400 workers it currently employs. Meanwhile, the fate of about 600 workers remains uncertainty days before the signing of an agreement with a local firm. Failure to close a deal would mean goodbye for the 600 workers, says Zaporowski. POLSKIE LINIE: To Cut 808 Jobs December, Sell Swissair Stake ------------------------------------------------------------ Polish carrier Polskie Linie Lotnicze LOT says the deteriorating condition of the European air transport sector is threatening to ground its fleet, Reuters reported Tuesday. The Company which presently employs 4,300 workers has confirmed that its plans to layoff up to 20% or about 808 of its employees starting December. The planned layoff could involve as many as 97 pilots, 90 employees from air personnel, 175 from ground personnel and 446 administration employees. Since the September 11 attacks and Swissair's filing for protection, the Polish carrier has also struggled, recording a 251.7 million zlotys ($61.1 million) net loss, tripling last year's figure for the first-half. The Polish government is reportedly looking for potential buyers of the Swissair stake. British Airways and Lufthansa are among those being eyed, Reuters said. =========== S W E D E N =========== MODIG MACHINE: On the Road to Financial Turnaround -------------------------------------------------- Cash shortage threaten the continued operations of industrial manufacturer Modig Machine Tool AB as it will undoubtedly call for a financial restructuring, Dagens Industri/FT Information reports. Major Shareholder Swedish state-owned pension fund Sjatte AP- fonden has invested 27 million Swedish kroner in the company so far. A number of Sjatte AP-fonden's companies have already been declared insolvent. Moreover, in the first eight months of this year, the fund reveals negative returns of 12.5%. However, Sjatte AP managing director Erling Gustafsson remains optimistic that the downturn in global markets provide positive investment opportunities. ===================== S W I T Z E R L A N D ===================== SWISSAIR GROUP: Rescue Benefits for Bondholders Still "Distant" --------------------------------------------------------------- A cash settlement for Swissair's bondholders is still a "distant" reality even with the rescue package now in place, Reuters reported Tuesday. Bankers believe the most that bondholders can recover will be 42% of their investment at the time the airline filed for protection early this month. "If the deal does go through, it at least gives an indication the Swiss government is there to help," said Jens Jantzen, transport credit analyst at Bear Stearns. "There will be money flowing back into Swissair from Crossair...that will underpin the distressed values of the assets of Swissair and will therefore somewhat help Swissair bondholders," he said. But Jantzen also shares the majority view that Crossair's success will first benefit secured creditors before it will trickle down to bondholders. Secured creditors are up in the queue for repayment in a bankruptcy, ahead of bondholders, but behind employees and the "taxman," the report said. SWISSAIR GROUP: Salvage Package Not Yet in Its Final Form --------------------------------------------------------- The salvage package hurriedly put up for insolvent Swissair Group is not yet final, as it may yet be modified by the European Commission, Reuters reported Tuesday. According to the report, the commission is seriously evaluating the package to make sure that it will not lead to unfair competition in the European air transport industry. The commission is particularly concern that the package could lead the airline to cut fares substantially to stay afloat in the increasingly competitive market. "It (the Commission) reserves the option of asking Swiss authorities for pertinent changes to the aid in question depending on its analysis," a Commission statement said. The Swiss Transport Ministry assured that EU Commissioner Loyola de Palacio had "shown her satisfaction" after an explanation in a phone call by Swiss President Moritz Leuenberger recently. The two officials are scheduled to discuss the matter further during a meeting set for November 15. SWISSAIR GROUP: Crossair to Start International Flights in 2002 --------------------------------------------------------------- With a salvage package now in place, Crossair could now go ahead with its plan to fly 70% of Swissair's destination by leasing 52 short- and long-haul planes of the latter, Reuters said Tuesday. The arrangement is part of the SFr4 billion rescue package hurriedly put up Monday by Swiss multinational companies. But Crossair will unlikely use the Swissair brand because of possible legal complications, aside from the bad image that has now tarnished the reputation of its erstwhile parent. Crossair's business plan pegs the start of the long-distance operation by April 2002, starting with only 30% capacity for a start. It expects to amass net losses of SFr783 million ($472 million) in 2002, an SFr88 million ($53 million) profit in 2003, and a profit of SFr389 million ($234 million) by 2004. Meanwhile, according to Reuters, the airline is planning to prioritize the former employees of Swissair when it begins hiring staff next week. SWISSAIR GROUP: Atraxis in Liquidity Problems --------------------------------------------- Atraxis AG, the IT subsidiary of collapsed Swiss air transport group SairGroup, is in an uncertain liquidity situation, a report from the Neue Zurcher Zeitung and FT Information states. In order to secure liquidity, Atraxis hopes to benefit from a bridging loan currently being blocked by its parent company creditor. Atraxis has reacted to falling income through staffing cuts, although it hopes to avoid the resignation of employees with expertise. Half of Atraxis turnover is generated within the unit while about 25% from companies of SAirGroup. Atraxis has earlier delayed the insolvency threat faced by SairGroup through a turnover structure. However, its income is now affected by falling passenger figures, as one-third of its turnover is generated by host solutions such as bookings and check-ins. =========================== U N I T E D K I N G D O M =========================== RAILTRACK GROUP: Byers Formally Unveils Blueprint of New Company ---------------------------------------------------------------- Transport minister Stephen Byers has officially bared the details of the government's proposal on the takeover of Railtrack plc by a new company, reports the Financial Times. In a written answer addressed to the House of Commons, Byers confirmed that the new company will have a board of between 12 and 15 directors. The Strategic Rail Authority, the industry and passenger groups will be afforded membership to the board, he said. Two of the non-executive directors will be nominated by the Authority and the train operating companies, while seven will be independent, Byers said. The minister clarified that the proposal, which outlines a company limited by guarantee, will be considered alongside other bids, including that of state-backed German bank WestLB. Byers also confirmed that the government will lend about 30 billion pounds ($42.8 billion) to the new company. The Conservative Party in the Commons, however, believes the government will end up spending 300 million pounds ($428 million) more on Railtrack's successor. *********** 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 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 240/629-3300. * * * End of Transmission * * *