/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/011029.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, October 29, 2001, Vol. 2, No. 211 Headlines * B E L G I U M * LERNOUT & HAUSPIE: Draws New $40MM Bid on SLT Unit SABENA SA: Lawyer Denies Airline Is About to Be Declared Bankrupt SABENA SA: Transfers Landing/Take-off Rights to Subsidiary SABENA SA: November 5 Liquidation Plan Rumored * G E R M A N Y * ADAM OPEL: New Plan to Cut Dealer Network, Change Marketing Plan EXODUS COMMUNICATIONS: To Close Four European Facilities TEAMWORK INFORMATION: Secures Injunction Barring De-listing * I T A L Y * ALITALIA SPA: Economy Minister Reverses Counterpart's Statement ALITALIA SPA: Chairman Denies Move to Ditch U.S. Partner Delta * N E T H E R L A N D S * KPN NV: Will Talk With Unions Over 4,800 Jobcuts LAURUS NV: To Cut E95M in Costs by 2002 * N O R W A Y * KVAERNER ASA: Risks Being Declared Bankrupt Today KVAERNER ASA: DnB Not Willing to Write Off Debts KVAERNER ASA: Sells Recycling, Dewatering Units for NOK50 MM * S W E D E N * LM ERICSSON: Turns in Another Poor Quarter, Posts SEK5.8B Loss * S W I T Z E R L A N D * SWISSAIR GROUP: Gov't to Absorb CHF1.7B Deficit Due to Rescue Aid SWISSAIR GROUP: Most Swiss Provinces Don't Want Any Part in Aid SWISSAIR GROUP: Crossair to Create 9.8 Million New Shares SWISSAIR GROUP: Sacks 9,000 Workers, Won't Pay November Salaries SWISSAIR GROUP: TAP to Sue Swissair, Seek Sabena Lawyers * U N I T E D K I N G D O M * MARCONI PLC: Bondholders Want Part in Restructuring Talks RAILTRACK GROUP: PM Blair Pledges Compensation to Bondholders ============= B E L G I U M ============= LERNOUT & HAUSPIE: Draws New $40MM Bid on SLT Unit -------------------------------------------------- Lernout & Hauspie Speech Products NV said Wednesday that it has received a new bid for its speech and language technology (SLT) division, the Dow Jones Newswires says Thursday. A letter from a L&H lawyer confirms that the bidder is a U.S. public company in the advanced speech technology industry and holds an offer between $25 and $40 million. The bidder intends to acquire most of SLT and assures 220 to 300 of its staff to remain employed, documents Lernout sent to the press say. Citing a letter from L&H Senior VP Thomas Denys, Lernout staff representative said the new group is "much more vertically integrated than L&H now and offers integral solutions in the market of telephony, automotive, embedded and mobile solutions". Quoting Denys, the Dow Jones Newswires reports that the bid involves "10% of the shares in the merged, already listed entity, which is to be capitalized at $40 million," excluding a $15 million cash outlay. Lernout refiled another two month suspension of payments at the Ypress courts Monday, after a Belgian appeals court rejected its request for Chapter 11-type bankruptcy protection last week. However, the Commercial Court in Ypress declared L&H bankrupt Wednesday. SABENA SA: Lawyer Denies Airline Is About to Be Declared Bankrupt ----------------------------------------------------------------- Sabena still has enough money to continue operations for several more weeks, a lawyer of the Belgian airline said last week in refuting rumors that a Belgian court will declare it bankrupt anytime soon. Dow Jones Newswires quoted Thierry Bosly to have said that the rumors were "totally untrue". Emerging from a hearing Wednesday last week, Bosly said the proceeding he had just attended only discussed "a plan to transfer activities" to another airline "and to maintain a level of employment". "The court could declare bankruptcy but that's not the topic today," Bosly said. The lawyer disclosed that Sabena is currently negotiating a partial or full takeover of its operations by another airline, which he declined to identify. "I hope to have a memorandum of understanding by Nov. 7," he said. Sabena has until November 7 to file a recovery plan with the court. Creditors are scheduled to meet November 15 to vote on said plan. SABENA SA: Transfers Landing/Take-off Rights to Subsidiary ---------------------------------------------------------- Sabena's board of directors has agreed in principle to transfer its landing and take-off slots to its low-cost subsidiary Delta Air Transport, Dow Jones Newswires said late last week. The move follows speculations that the Company is about to go into voluntary liquidation. The carrier still continues to keep mum over recent bankruptcy rumors, which until recently has picked November 5 as the date of its demise. SABENA SA: November 5 Liquidation Plan Rumored ---------------------------------------------- Sabena's continued silence over its status led a local television channel to speculate last week that the Company will go into voluntary liquidation by November 5. Citing Walloon public channel RTBF, AFX news said the carrier's regional airline unit Delta Air Transport will first acquire its five long-haul and 10 Airbus A320 aircrafts prior to the liquidation. In addition, the carrier's Sobelair charter unit and its Sabena Technics aircraft maintenance business will accordingly be spun off, the report said. Sabena spokesman Olivier Gillis refused to confirm the report when confronted by Agence France-Presse. He only said that the Company has until November 8 to present a restructuring plan. Speculations were also rife that the carrier will allow its pilot training school and engine maintenance business to go bust. Meanwhile, there are rumors that Virgin Express, former City Bird owner Victor Hasson, or AMR Corporation's American Airlines are allegedly planning to buy the ailing Belgian airline. ============= G E R M A N Y ============= ADAM OPEL: New Plan to Cut Dealer Network, Change Marketing Plan ---------------------------------------------------------------- Adam Opel CEO Carl-Peter Forster revealed last week that a plan to restructure its dealer network in Germany and overhaul its regional sales and marketing operations is currently being drafted, says the Financial Times. Speaking before reporters during the Tokyo motor show last week, Forster said the plan is apart from the ongoing restructuring program. According to Forster, the new "network blueprint" will be more oriented towards vehicle servicing than new car sales. Forster says the latest plan outlines the reduction of dealer- groups owning two or more outlets to about 500 from the present 900. It also calls for the reduction of total dealer outlets in Germany from 2,300 to 1,600. "We want to strengthen dealers and assign certain market areas which, in theory, should allow them to be profitable which is not currently the case," Forster explains. He says the shake-up of its non-manufacturing activities could prove more beneficial than the present program to cut capacity and jobs in Germany and Belgium. He also expects a savings of more than E1 billion ($894 billion) out of the new plan. Adam Opel is the main European arm of General Motors Corporation. EXODUS COMMUNICATIONS: To Close Four European Facilities -------------------------------------------------------- The German site of bankrupt U.S. Internet hosting company Exodus Communications Inc. is due to be shutdown in the coming days, Reuters reported last week. The Munich site as well as those in Amsterdam, the Netherlands and the two in Dublin, Ireland will be closed as part of an ongoing restructuring program. None of the facilities is operating; hence, no customers or employees will be affected by the closing, says Reuters. Meanwhile, the Company disclosed that it had filed for reorganization of its entity in Amsterdam to protect it from creditors and allow operations to continue. Exodus filed for Chapter 11 bankruptcy last month in the United States. TEAMWORK INFORMATION: Secures Injunction Barring De-listing ----------------------------------------------------------- Restructuring Teamwork Information Management AG successfully secured an injunction preventing the Deutsche Bourse from de- listing it from the Neuer Markt, said Borsen-Zeitung/FT Information last week. The injunction is the first of its kind to be issued by a German court against the stock exchange, which recently passed a rule that makes it easy to delist companies undergoing restructuring. The injunction granted to Teamwork will be effective until October 1 next year. The court has yet to disclose its reasons for issuing the injunction. According to the report, the injunction is very significant for Teamwork, which is making progress in its recovery program. "The fact that the company will continue to be listed will help its talks with potential financial investors," the report said. ========= I T A L Y ========= ALITALIA SPA: Economy Minister Reverses Counterpart's Statement --------------------------------------------------------------- Italy's Economy Minister Giulio Tremonti indirectly reprimanded last week his counterpart at the transport ministry for his "premature and inopportune" announcement that Alitalia is about to severe ties with Delta Airlines. "Hypotheses and declarations on the future of Alitalia are, at the moment, premature and inopportune, considering that it is a listed company," Tremonti said in a terse statement. Transport Minister Pietro Lunardi earlier hinted that the Italian carrier might ditch the American partner due to the troubles it is presently facing. Accordingly, the national flag carrier doesn't need "a weak partner" at these times. Both airlines recently inked a partnership that facilitated its entry into the Sky Team airline alliance. The two have also combined recently their "Frequent-flyer" program, which was then taken as a strong signal of their further cooperation in the future. ALITALIA SPA: Chairman Denies Move to Ditch U.S. Partner Delta -------------------------------------------------------------- Cash-strapped Italian flag carrier Alitalia SpA is not going to ditch U.S. partner Delta Airlines after all. Alitalia Chairman Fauso Cereti clarified last week that it is not abandoning the trouble-bound Delta. Accordingly, it is the carrier's strongest possible U.S. partner at the moment. Earlier, Italy's transport minister said the national carrier will likely ditch Delta for another, saying that Alitalia doesn't need a weak partner these days. Delta recently sought to defer aircraft deliveries to minimize daily losses exacerbated by the September 11 incident. ===================== N E T H E R L A N D S ===================== KPN NV: Will Talk With Unions Over 4,800 Jobcuts ------------------------------------------------ The Board of Management of KPN announces its plans to meet union representatives on the Social Plan for the inevitable layoff of about 4,800 employees. The cost-cutting program that KPN announced last year mainly involve jobcuts that the Company is implementing now until 2002, the AFX News Thursday report says. The paper adds that KPN aims to save 700 million euros per year starting 2003 through personnel reduction, decreased natural wastage and improved efficiency. To freeze hiring, KPN will cut jobs to affect 2,600 staff from KPN's Fixed Network Services, 750 from its distribution outlets and 550 workers from KPN Head Office and Central Services. KPN's original plan called for 2,000 layoffs on contractual employees and was achieved in June. The company has now finalized plans to cut about 6,000 jobs from its own personnel in Netherlands. The management board maintains that an early wrap-up of the redundancies will be the key to achieving KPN's debt reduction plan to nurse the company back to profitability. LAURUS NV: To Cut E95M in Costs by 2002 --------------------------------------- Dutch supermarket retailer Laurus NV Thursday announced cost cutting measures that will save the company 95 million euros before the 2002 ends, Dow Jones Newswires reports. Laurus's chief executive Jan Konings is quoted at an EGM as saying the company would cut costs by spending reductions in personnel, information and communication technology and marketing. During the meeting, Konings adds that evidence of the effects of of the measures will be emerge by the end of this year and early 2002. The move is part of a recent company restructuring plan. =========== N O R W A Y =========== KVAERNER ASA: Risks Being Declared Bankrupt Today ------------------------------------------------- Cash-strapped Kvaerner ASA delivered yet another big surprise to investors and analysts late last week after announcing that it needed NOK500 million ($56 million) over the weekend or else be declared bankrupt today. It is not yet clear whether or not the Company was able to access the NOK1 billion ($112 million) in receivables from its Finnish shipbuilding subsidiary. Kvaerner's banks had made it a condition before they release the money to cover the NOK500 million funds shortage. According to the Financial Times, the announcement came as a surprise especially because the Company had given assurances that its liquidity problems was already in check after issuing its second profit warning this month. In fact, it disclosed recently that it is near to securing an emergency NOK1 billion ($112 million) rights issue. Kvaerner was scheduled to meet its principal shareholders and lenders over the weekend. KVAERNER ASA: DnB Not Willing to Write Off Debts ------------------------------------------------ Kvaerner's bank Norwegian financier DnB says it is neither in talks nor willing to write off the Company's debts amidst a huge cash squeeze, Reuters reported late last week. "Debt write-offs have not been an issue at any meeting," DnB spokesman Jarl Veggan told Reuters. Kvaerner needed NOK500 million ($56 million) over the weekend to fill a funding shortage or else it would be declared bankrupt today. KVAERNER ASA: Sells Recycling, Dewatering Units for NOK50 MM ------------------------------------------------------------ Near-bankrupt Kvaerner ASA disclosed late last week that it had sold the recycling and dewatering unit of its Pulp and Paper division for NOK50 million ($5.6 million). Vienna-listed Voith Paper acquired the subsidiary, filling Kvaerner's coffers with needed cash amid a NOK500 million ($56 million) fund shortage over the weekend. "The products, the technology and the know-how of the recycling and the dewatering division complement well the product line of Voith Paper's Fibre Systems division," Kvaerner said in announcing the sale. The recycling and dewatering unit is headquartered in Tranby, Norway, and has a total staff of approximately 60. It has operations in the United States and Canada. =========== S W E D E N =========== LM ERICSSON: Turns in Another Poor Quarter, Posts SEK5.8B Loss -------------------------------------------------------------- Telecoms equipment maker Telefonaktiebolaget LM Ericsson had another losing quarter, recording an underlying SEK5.8 billion ($55 million) in losses for the third quarter, the Financial Times said late last week. Accordingly, the sharp drop of sales in Latin America during the quarter and the continued price pressure and under utilization of capacity were the primary causes for the negative performance. Total sales for the quarter are seen at SEK55 billion ($5.2 billion), the report said. The company narrowly avoided losses in its mobile systems division, with an underlying operating profit of SEK200 million ($18.9 million). Profit margin for the division is only 1% compared to 17% for the same period last year, while sales fell by 11% to SEK43 billion ($4.08 billion), according to the report. In the fourth quarter, the company is expecting systems sales to decrease by 10%. The company anticipates that the difficult market conditions will persist well into next year, the report said. Meanwhile, the Company says Chairman Lars Ramqvist will step down March next year. Current Electrolux CEO Michael Teschow will replace him, according to a company statement. ===================== S W I T Z E R L A N D ===================== SWISSAIR GROUP: Gov't to Absorb CHF1.7B Deficit Due to Rescue Aid ----------------------------------------------------------------- Switzerland's finance ministry disclosed last week that the government will overshoot its 2001 budget by CHF1.7 billion ($1.03 billion) as a result of its part in the rescue package of Swissair Group AG. According to the ministry, the biggest pie in the deficit will be the government's CHF1.23 billion ($745 million) advance to shoulder the cost of continuing Swissair's long-distance flights. SWISSAIR GROUP: Most Swiss Provinces Don't Want Any Part in Aid --------------------------------------------------------------- Several Swiss cantons or provinces don't want any part in the rescue package for bankrupt Swissair Group AG. According to a report by Reuters, the Conference of Cantonal Financial Directors failed last week to solve the split-up of the remaining CHF80 million ($48.7 million) the other provinces are supposed to pitch into the rescue package. So far, only the Canton of Zurich and public authorities in the Basle region have pitched in CHF331 million ($200 million). "There was no solution. Finance Minister Kaspar Villiger now plans to have one-to-one meetings with the cantonal finance directors and on November 8 there will be a new meeting. It will be very difficult," said conference secretary Kurt Stalder. According to Stalder, many cantons are allegedly against the idea of funding a private airline. However, he said, it's a matter of "political solidarity" that all cantons must participate in the rescue effort. SWISSAIR GROUP: Crossair to Create 9.8 Million New Shares --------------------------------------------------------- Crossair AG unveiled last week its plan to raise capital of about CHF2.74 billion ($1.65 million) by creating 9 million new registered shares, says Dow Jones Newswires. According to the report, the shares will then be split 1-for-5. The plan also includes a 1-for-2 split of participation certificates, which will subsequently be converted into shares. The plan is part of the recently put up rescue package for its erstwhile parent company Swissair Group AG. The salvage plan calls for Crossair to create 9,785,714 new registered shares at CHF280 ($169) a piece, which will raise shareholders' equity to CHF3.04 billion ($1.84 billion) from what presently is CHF329 million ($199 million). At present, shareholders' equity of Crossair currently consists of 1.3 million registered shares with a nominal value of CHF250 ($151), and 120,000 participation certificates without par value. Following the transaction, Crossair's biggest shareholder will include the Swiss government (19%) and banks UBS AG and Credit Suisse Group, which will have a combined stake of 18%. Crossair says there will be a 12-month lock-up period on the sale of its stock. The plan will be presented to the shareholders for approval on December 17 during an extraordinary meeting. SWISSAIR GROUP: Sacks 9,000 Workers, Won't Pay November Salaries ---------------------------------------------------------------- Bankrupt flag carrier Swissair notified workers last week that they won't receive their November salaries even if a CHF4.2 billion ($2.5 billion) rescue package is now in place. A Company statement said workers have to wait until other creditors receive any payout for their claims once the fate of the airline is totally sealed. According to Reuters, this process could take years. The statement also said that the troubled carrier has already notified some 9,000 out of its 70,000 staff of their dismissal. Trade unions estimate the November wages and the cost of redundancies to be about CHF750 million ($454 million). SWISSAIR GROUP: TAP to Sue Swissair, Seek Sabena Lawyers -------------------------------------------------------- TAP-Air Portugal (Transportes A,reos Portugueses) seeks to hire the services of the same lawyers who fought for Sabena SA on a case against Swissair, a report from Diario Economico confirms. TAP is seeking compensation from Swissair after breaking an agreement with the Portuguese airline, the Dow Jones Newswires said Thursday. =========================== U N I T E D K I N G D O M =========================== MARCONI PLC: Bondholders Want Part in Restructuring Talks --------------------------------------------------------- A group of bondholders holding about E600 million ($536 million) worth of bonds is asking for a "seat at the table in any discussion" about Marconi's debt restructuring. An article by the Financial Times said that the group has hired U.S. lawyer Bingham Dana to make sure this happens. At present, only HSBC and Barclays are representing the Company in any restructuring negotiations. The group is particularly concern that banks might secure an agreement that would give them greater security over Marconi's assets should it fall into liquidation. "We've got more at stake than the banks have, so we want a seat at the table in any discussion," one bondholder told the Financial Times. According to the bondholders, any agreement reached without their consent would trigger a default and require repayment under the original terms. RAILTRACK GROUP: PM Blair Pledges Compensation to Bondholders ------------------------------------------------------------- Prime Minister Tony Blair assured Railtrack shareholders late last week they will receive "something" for their investment in the troubled rail network Company. Blair, however, ruled out the GBP3.60 per share earlier suggested by Railtrack, leaving the final amount to be decided in the ongoing negotiations, according to The Daily Telegraph. The prime minister's assurance came at the heels of a recent protests staged by 253,000 private investors after ministers insisted they would not receive any compensation. *********** 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 * * *