/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/011116.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 Friday, November 16, 2001, Vol. 2, No. 225 Headlines * B E L G I U M * FLV FUND: Holders' Meeting Set for Next Month LERNOUT & HAUSPIE: Sells Medical Transcription Unit to MedQuist LERNOUT & HAUSPIE: Sets Nov. 21 Deadline to File Claims SABENA SA: 1,695 Employees Will Keep Their Jobs SABENA SA: Brussels Court Probes on Legality of Slot Transfers SABENA SA: Business Barons Seek for Sabena Investors SABENA SA: DAT Investors Ink Deal With Virgin Express * F R A N C E * MOULINEX SA: De-listed in Paris MOULINEX SA: Tension Subsides as Medef Okays Compensation * G E R M A N Y * DEUTSCHE TELEKOM: Will Use Tax Credit to Cut Debt LANDESBANK HESSEN: Fitch Downgrades Rating to C * I T A L Y * GRAPES COMMUNICATIONS: S&P Cuts Rating to CC * N E T H E R L A N D S * KPN NV: Shares Rise 3% LCI TECHNOLOGY: Will File Request for Suspension of Payment UNITED PAN-EUROPE: Expects AEX Removal After 3 Months UNITED PAN-EUROPE: Faces Penalty Listing UNITED PAN-EUROPE: May Sell Tevel Stake UNITED PAN-EUROPE: Nosedives After Suspension UNITED PAN-EUROPE: Plans Further Cost-Cutting UNITED PAN-EUROPE: Plans Further Cost-Cutting * N O R W A Y * BELSHIPS ASA: Widens Loss in Third Quarter * S P A I N * IBERIA SA: Will Cut 2,500 Jobs * S W E D E N * ABNW: Considers Reorganization to Facilitate Financing ABNW: May Face De-Listing on Wireless House Takeover * S W I T Z E R L A N D * CARRIER1 INTERNATIONAL: Widens Third-Quarter Loss SULZER MEDICA: Third-Quarter Profit Dips by 49% * U N I T E D K I N G D O M * MARCONI PLC: May Cut More Jobs MARCONI PLC: Writes Off Fore Systems RAILTRACK GROUP: Byers Agrees to Publish Minutes of Meeting RAILTRACK GROUP: Spat Blocks Closing of 2BB-Pound Deal ============= B E L G I U M ============= FLV FUND: Holders' Meeting Set for Next Month --------------------------------------------- Flanders Language Valley Fund has set the extra-ordinary general shareholders meeting on December 5, at 10 o'clock, in its Flanders Language Valley Campus in Belgium. The shareholders will discuss on the conversion of the 5,468,538,625 Belgian francs share capital into 135,561,531,50 euro and to decrease the 63,257,032.91 euro share capital to 72,304,498.59 euro in order to compensate for losses incurred. The meeting also resolves to decrease prices of the warrants by 1.36 euro per warrant. The close association of FLV with troubled vocal technology specialist Lernout & Hauspie Speech Products NV has made it difficult to continue operations. LERNOUT & HAUSPIE: Sells Medical Transcription Unit to MedQuist --------------------------------------------------------------- MedQuist Inc., the largest electronic medical transcription service company in the United States, said Wednesday it acquired Lernout & Hauspie Medical Solutions Holdings, Inc., the third largest medical transcription company in the United States. Consideration for this stock transaction was roughly $25 million cash. In October, the U.S. bankruptcy court approved MedQuist as the highest auction bidder for L&H's medical transcription division. Earlier this week, the Belgian bankruptcy court approved the transaction, clearing the way for the closing of the acquisition. L&H's medical transcription division has approximately 1,000 employees. For more information, contact Brian J. Kearns of MedQuist Inc. at 856/810-8000, ext.4418 LERNOUT & HAUSPIE: Sets Nov. 21 Deadline to File Claims ------------------------------------------------------- BUSINESS WIRE, November 14 Lernout & Hauspie Speech Products N.V. wishes to advise creditors that, pursuant to the Judgment dated October 24, 2001, of the Ieper, Belgium Commercial Court, creditors wishing to assert claims as part of the Belgian bankruptcy liquidation proceeding of L&H NV must file their declaration of receivables with the clerk's office of the Commercial Court at Ieper, Grote Markt 10, Ieper, Belgium, on or before November 21, 2001. The prior filing of a proof of claim with the United States Bankruptcy Court for the District of Delaware in connection with Lernout & Hauspie Speech Products N.V.'s chapter 11 bankruptcy case or the filing of a declaration of receivables with the Ieper Commercial Court in connection with the Company's prior concordat proceeding is not a substitute for filing a claim with the Ieper, Belgium Commercial Court as part of the Company's Belgian bankruptcy liquidation proceeding. Creditors that wish to assert claims against Lernout & Hauspie Speech Products N.V. should consult their counsel to determine the advisability of filing such claims in the Belgian bankruptcy liquidation proceeding. Creditors of Dictaphone Corporation and L&H Holdings USA, Inc. (both of which also have chapter 11 bankruptcy cases pending before the United States Bankruptcy Court for the District of Delaware) are not required to file claims with the Ieper, Belgium Commercial Court in the Belgian bankruptcy liquidation proceeding unless they specifically are asserting claims against Lernout & Hauspie Speech Products N.V. For more information, contact Vanessa Richter of Corporate Communications at +32-57-22-9518 or email vanessa.richter@lhs.be SABENA SA: 1,695 Employees Will Keep Their Jobs ----------------------------------------------- A quarter, or 1,695 employees of failed Belgian air carrier Sabena will keep their jobs to keep DAT going, reports Le Soir/FT Information. Most of the 7,500 employees received letters Wednesday telling them that their contract was being terminated. The 1,695 kept on will be added to the 1,000 DAT employees currently in service. SABENA SA: Brussels Court Probes on Legality of Slot Transfers -------------------------------------------------------------- The Brussels judiciary believes that bankrupt airline Sabena cannot transfer its slots to its successor DAT under the terms of a creditor protection agreement, reports the Financieel Ekonomische Tijd and FT Information. Jean-Claude van Espen, Brussels examining magistrate, is currently conducting an inquiry on the legality of the reported transfers. The judge has been looking into claims against Swissair directors, the Belgian State, Sabena and its board for fraud, forgery and fraudulent insolvency, abuse of confidence and corporate effects. However, lawyer and prominent receiver Eddy van Camp said that the transfer of slots was a prudent move, as they would have been worthless after bankruptcy. SABENA SA: Business Barons Seek for Sabena Investors ---------------------------------------------------- Business barons have brought together companies to help salvage bankrupt national airline Sabena, the Financial Times reported Wednesday. The aim is to gather 155 million euros. "The number of companies is growing," says former European commissioner Viscount Etienne Davignon, who is leading the search for investors. Belgium prime minister Guy Verhofstadt added that 12 private investors, mainly banks owed money by Sabena, have confirmed they would take part to keep the airline afloat. Other companies include those in the brewing, pharmaceuticals, supermarkets and industrial coatings business. Earlier, Brussels-based carrier Virgin Express announced a new code-sharing agreement with Sabena's still-operating subsidiary DAT, which Virgin hopes will lead to the creation of a new Belgian airline. SABENA SA: DAT Investors Ink Deal With Virgin Express ----------------------------------------------------- Belgian low-cost airline Virgin Express has reached a commercial agreement with Belgian investors willing to build a new Belgian regional airline around Delta Air Transport (DAT), Dow Jones Newswires reported Wednesday. "Our discussions with the group of private Belgian investors, who have raised funds with a view to set up a viable new airline built around DAT, are proving encouraging," Virgin Express said in a press release. According to Virgin Express spokesman Yves Panneels, both airlines signed code-sharing agreements for flights to London, Rome and Barcelona. In the past, Virgin Express and bankrupt Belgian airline Sabena had signed similar agreements. =========== F R A N C E =========== MOULINEX SA: De-listed in Paris ------------------------------- Shares of Moulinex, the bankrupt French consumer electrical goods manufacturer, were de-listed at the close of trading on the Paris stock market Tuesday, Les Echos/FT Information reported. Trading in Moulinex shares has been suspended since October 25. MOULINEX SA: Tension Subsides as Medef Okays Compensation --------------------------------------------------------- Tension at the Cormelles-le-Royal plant of Moulinex, the bankrupt French electrical appliances manufacturer, subsided after it was announced that the additional compensation payment for redundancies were agreed. According to the Wednesday edition of La Tribune/FT Information, the employers' federation Medef had agreed to pay at least 60,000 French francs. Earlier, the disgruntled employees Moulinex have set fire to a portion of the microwave factory in northwestern France in a protest seeking financial compensation. The factory is is one of several plants due to be closed as part of a takeover plan by Moulinex's rival, Seb. ============= G E R M A N Y ============= DEUTSCHE TELEKOM: Will Use Tax Credit to Cut Debt ------------------------------------------------- German telecommunications group Deutsche Telekom will use a 1.4 billion euro tax refund to cut its 65.2 billion euro debt mountain this year, reports the Financial Times. The refund was linked to the Sprint stake that DT sold this year. Following the disposal, the tax authorities recognized the write- down and would now refund down payments made on the basis of the old valuation. DT added that the refunds would not prevent the company from reporting a loss. LANDESBANK HESSEN: Fitch Downgrades Rating to C ----------------------------------------------- International rating agency Fitch downgraded Tuesday the Individual rating of Landesbank Hessen-Thueringen (Helaba) to 'C' from 'B/C'. The rating action reflects the deterioration of Helaba's already low profitability and increasing risk in its loan portfolio, as well as uncertainty over how Helaba will perform as it restructures its operations in preparation for the removal of the state guarantee mechanisms are removed in 2005. "Profitability is below the Landesbank average, as well as weak by international standards," Fitch said. "Because it is wholesale funded and a high proportion of its balance sheet consists of low margin interbank and public sector assets, margins are very low." ========= I T A L Y ========= GRAPES COMMUNICATIONS: S&P Cuts Rating to CC -------------------------------------------- Standard & Poor's lowered to double-'C' from triple-'C'-minus the long-term corporate credit and senior unsecured debt ratings of telecommunications operator Grapes Communications N.V. following the company's recent cash tender offer. At the same time, the ratings were placed on CreditWatch with negative implications. Standard & Poor's views Grapes' tender offer as coercive, as refusal to accept the offer and the restructuring plan may lead to an even worse prospect of recovery for bondholders. The company, which has about 18,400 customers at the end of the first half of 2001, recorded pro forma revenues of 23.4 million euros for the six months ended June 2001. ===================== N E T H E R L A N D S ===================== KPN NV: Shares Rise 3% ---------------------- Troubled Dutch telephone company Royal KPN NV gained 17 cents, or 3.1%, to 5.61 euros following a report that France's Wanadoo SA wants to buy its telephone-directory unit, Bloomberg reported Wednesday. "This unit of KPN would fit well with us," Wanadoo Chief Financial Officer Wilfried Verstraete said in a statement. KPN has not officially said the unit is for sale. LCI TECHNOLOGY: Will File Request for Suspension of Payment ----------------------------------------------------------- LCI Technology Group NV said Tuesday it would file a request for suspension of payment with the District Court of 's- Hertogenbosch, The Netherlands. Earlier, the company announced liquidity problems, particularly as a result of a large scale fraud in its Austrian subsidiaries. Although LCI reached an agreement with ING Bank NV to buy back under certain conditions part of its debts, a bridge loan to secure the continuity during the time needed to realize a debt reduction could not be obtained on time. LCI's management concluded that a settlement with liabilities with creditors could not be done without the protection of suspension of payment, to have the opportunity. After consultation with the administrators, a special shareholders meeting may be called upon to explain the situation. LCI Technology Group, which operates in 14 countries in Europe and the United States, consists of 22 companies in the Information and Communications Technology industry. It has a global workforce of around 1,000. For further information please contact, LCI Technology Group N.V. at telephone +31 73 645 5255 or fax +31 73 645 5296 or email info@nl.lcigroup.com UNITED PAN-EUROPE: Expects AEX Removal After 3 Months ----------------------------------------------------- United Pan-Europe Communications NV expects Euronext to remove its shares from the AEX index after three months, after the shares were put on "penalty bench" due to a negative shareholders equity in September. If the situation persists for more than three months, the company is removed from the AEX index. AFX News reported Wednesday that this would, however, not result in a de-listing of the company. UNITED PAN-EUROPE: Faces Penalty Listing ---------------------------------------- Euronext Amsterdam suspended the trading of shares of cable TV operator United Pan-Europe Communications NV until 1000 GMT Wednesday. Euronext added the company would receive a penalty listing after shareholders equity turned negative. In a penalty listing, shares trade normally, but shareholders are warned that the company is in a state of financial distress. UPC reported that its shareholders' equity fell into a 740.2 million euro deficit. UNITED PAN-EUROPE: May Sell Tevel Stake --------------------------------------- United Pan-Europe Communications, which is encountering financial difficulties, is expected to sell its 46.5% stake in Israel-based communications company Tevel. According to the Wednesday edition of Israel's Business Arena, UPC's decision stems from its intention to focus on companies in which it has the controlling interest. UPC, however, has not yet entered into negotiations. Tevel is currently valued at less than NIS800 million. It had NIS282 million in negative equity as of June 2001, and NIS2.9 billion in liabilities. UNITED PAN-EUROPE: Nosedives After Suspension --------------------------------------------- Shares in debt-laden Dutch cable operator UPC were down 8.6% at 0.53 euros on Wednesday's trading after facing suspension for two hours to warn investors of the company's weak financial position, Reuters reported. Dutch stock exchange operator Euronext Amsterdam suspended the trade of UPC shares because its third quarter earnings showed that its equity has had a negative value since the end of September. UNITED PAN-EUROPE: Plans Further Cost-Cutting --------------------------------------------- After reporting a narrower loss in the third quarter, cable operator UPC said it intends to reduce its costs further in order to meet its targets for the current financial year. According to the Wednesday edition of Total Telecom, the planned shrinkage may indicate further job cuts in the company. UPC recently announced that it would lay off 1,500 workers to reach annualized cost savings of up to 60 million euros in 2002. The company added they would also look at ways to restructure its balance sheet. As of September 30, UPC had a total of 7.2 billion euros in net debt, with a total liquidity of 1.1 billion euros and 894 million euros "cash in hand." =========== N O R W A Y =========== BELSHIPS ASA: Widens Loss in Third Quarter ------------------------------------------ Belships, the shipping company with operations focused on product tankers, dry bulk and gas, reported Wednesday a net loss of US$778,000 for the third-quarter, compared with a loss of US$513,000 in the same period of last year. For the first nine months, the company gained US$391,000 from a loss of US$2.655 million last year. As of September 30, Belships' liquid assets had fallen to US$9.8 million compared with US$11.3 million at the close of the second quarter. Belships further reported that its mortgage debt was cut by US$1.7 million during the third quarter to US$64.9 million. The fleet's estimated market value at the end of the period was US$1.9 million under book value. The Oslo-based company has paid no dividends during the last 12 months. The company also reported losses during the previous 12 months. ========= S P A I N ========= IBERIA SA: Will Cut 2,500 Jobs ------------------------------ Spanish flag carrier Iberia will trim down its workforce by 9% as it cuts costs in reaction to the sharp downturn in the global aviation industry. According to the Financial Times' Wednesday edition, 2,516 workers will loose their jobs as part of a wider restructuring that includes an 11% capacity reduction and a freeze on aircraft deliveries, in a bid to save 27 billion peseta by the end of 2003. Iberia said if the measures were not implemented, it would suffer a loss of 46.7 billion peseta next year. =========== S W E D E N =========== ABNW: Considers Reorganization to Facilitate Financing ------------------------------------------------------ A Brand New World said Wednesday it would reorganize the company in order to facilitate long-term financing of the company's business. The reorganization would be carried out through a public offering extended to ABNW stockholders for the exchange of shares in ABNW for stock in its subsidiary, Wireless House AB. After the reorganization, Wireless House will become the parent company. Wireless House is considering the possibility of conducting a new share issue for approximately 50-100 million Swedish krona with right of priority for its shareholders. Kista-based ABNW was founded in 1994 and employs 139 people. The company focuses on the development and marketing of systems and products for infrastructure that makes possible mobile Internet. ABNW: May Face De-Listing on Wireless House Takeover ---------------------------------------------------- Troubled IT company A Brand New World (ABNW), could be de-listed from the stock market as reports emerge that its subsidiary Wireless House will take over the company, Svenska Dagbladet and FT Information reported Tuesday. According to the ABNW board of directors, the move would be realized through a share exchange. Wireless House would later make a share issue of between 50 million Sweden kroner ($4.7 million) and 100 million Sweden kroner ($9.5 million). ABNW managing director Pal Kruger confirms there is no other way to raise funds for the ailing parent company and that the changes are a precondition to avoid insolvency. ABNW recently posted loss of 122 million Swedish krona for the third quarter. ===================== S W I T Z E R L A N D ===================== CARRIER1 INTERNATIONAL: Widens Third-Quarter Loss ------------------------------------------------- Pan-European bandwidth provider Carrier 1 International widened its EBITDA loss to US$45.7 million in the third quarter to end- September from a loss of US$29.9 million in the second quarter, AFX News reported Wednesday. Net losses ballooned to US$495.1 million from a loss of US$30.6 million in the third quarter last year. AFX further reported that Carrier1's sales dropped to US$87.0 million from US$108 million. SULZER MEDICA: Third-Quarter Profit Dips by 49% ----------------------------------------------- The third quarter net profit of Sulzer Medica AG, Europe's biggest orthopedics company, fell to 20.7 million Swiss francs from 40.3 million Swiss francs a year earlier, reported Dow Jones Newswires. The bottom line was boosted by a book gain of around 8 million Swiss francs from the partial sale of Sulzer Medica's minority stake in U.S. company Thoratec Corp. Operating profit for the quarter fell sharply to 4.8 million Swiss francs from 43.7 million Swiss francs due to exceptional items and goodwill amortization, the news agency added. Sulzer Medica is facing 1,820 lawsuits tied to its hip product in the U.S., 64 of which are class action suits. The company reiterated that it might file for Chapter 11 in the U.S. if no in- or out-of-court agreement can be reached. =========================== U N I T E D K I N G D O M =========================== MARCONI PLC: May Cut More Jobs ------------------------------ Telecoms equipment manufacturer Marconi may cut more jobs if market conditions do not improve, reports The Guardian newspaper. The group, which has seen its share price collapse and three senior executives ousted since first warning on profits in July, recently revealed it had dropped 5.1 billion pounds into the red in the first six months of the year (see http://www.bankrupt.com/misc/marconi.pdffor the company's interim report). "At the moment we are not announcing any more job cuts but it depends on the market going forward," Chief executive Mike Parton said. Marconi has already cut its workforce by 7,000 over the past six months. It now employs 32,600 people in its core equipment business. Marconi also plans to sell non-core assets to reduce its 3.5 billion pound debt by 500 million pounds. MARCONI PLC: Writes Off Fore Systems ------------------------------------ Troubled UK telecommunications equipment group Marconi, according to the Wednesday edition of the Financial Times, has written off the entire goodwill from its 3.1 billion pound cash acquisition of US-based Fore Systems. "The reason we have written it down to zero is that the business has been very difficult, with turnover down more than 50% over the previous year," finance director Steve Hare said. Chairman Derek Bonham earlier blamed some of Marconi's current problems on cash acquisitions. "Paying cash has left the company with the 4.3 billion pounds debt burden at the end of September," he said. Fore's problems come amid a steep fall in demand from non- telecoms corporate customers in the US. It had also been hit by the faster migration from ATM to gigabyte ethernet. RAILTRACK GROUP: Byers Agrees to Publish Minutes of Meeting ----------------------------------------------------------- Transport Secretary Stephen Byers agreed Wednesday to publish the minutes of a private meeting with Railtrack, the Times newspaper reported. The move came after a cross-party committee of MPs questioned Byer's decision to put the rail network into receivership. Byers earlier denied that he had undermined or threatened Rail Regulator Tom Winsor in order to ensure that his plans to wind up Railtrack went through. RAILTRACK GROUP: Spat Blocks Closing of 2BB-Pound Deal ------------------------------------------------------ A property deal expected to raise 2 billion pounds ($2.9 billion) intended to improve Railtrack plc's Tube stations hit a snag on the government's decision to derail Railtrack. Land Securities, one of the two bidders to develop London Underground's property estate concluded that a decision "looks increasingly uncertain, primarily due to the political sensitivities surrounding the future of London Underground". Announcement regarding the winning bidder was due last month, but was put off until the collapse of Railtrack becomes clearer. Land Securities chief executive Ian Henderson said that the property deal had been jeopardized due to disagreements over the government's role in forcing Railtrack into administration. *********** 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 * * *