/raid1/www/Hosts/bankrupt/TCREUR_Public/011119.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, November 19, 2001, Vol. 2, No. 226


                            Headlines

* B E L G I U M *

CUSTOM SILICON: Third-Quarter Revenue Drops by 82%
SABENA SA: Technics Staff Members to Lose Jobs
SABENA SA: Technics Unit in Takeover Talks

* D E N M A R K *

2M INVEST: Heads for Liquidation

* F I N L A N D *

SONERA CORP.: Commences Ex-Rights Trading

* I R E L A N D *

FRUIT OF THE LOOM: To Shed 65 Jobs in Ireland

* N O R W A Y *

BRAATHENS ASA: Sunde Increases Stake in Braathens
KVAERNER ASA: Sells Activities to Yukos for $100MM
STEPSTONE ASA: Hopes to Raise 35MM Euro in Rescue Issue

* P O L A N D *

LOT: May Face Insolvency Next Year

* S P A I N *

IBERIA SA: Will Axe 2,500 Jobs

* S W E D E N *

SCANDINAVIA ONLINE: Posts Third-Quarter Loss
SONG NETWORKS: Holders Okay Share Issue

* U N I T E D   K I N G D O M *

ATLANTIC TELECOM: Cuts Off Customers
BRITISH NUCLEAR: Court Approves Reprocessing Plant Opening
BRITISH TELECOM: Mm02 Fails to Make Stoxx Index
BRITISH TELECOM: Unloads Far East Assets to Cut Debt
BRITISH TELECOM: Regulator Imposes Fines, New Service Standards
BRITISH TELECOM: Will Replace United Business Media on FTSE
EASYNET GROUP: Shares Jump After Marconi Announces Reorganization
GLOBAL TELESYSTEMS: Commences Restructuring Proceedings
INVENSYS PLC: Shares Rise Amidst Shake-up Plans
MARKS & SPENCER: Regains Lost Market Share
RAILTRACK GROUP: Byers Faces Railtrack Probe
TELEWEST COMMUNICATIONS: Improved EBITDA Lifts Telewest by 30%
VAUXHALL: Will Cease Frontera Production in Spring
XEROX CORPORATION: EU Clears Flextronics Buy


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


CUSTOM SILICON: Third-Quarter Revenue Drops by 82%
--------------------------------------------------

Custom Silicon Configuration Services said Thursday that the
company's creditor protection plan has not helped sustain
revenues.

Net revenue for the third quarter dropped more than 82% from the
previous quarter to 0.531 million euros, the lowest quarter-
revenue in the company's history. See
http://www.bankrupt.com/misc/cs2.pdffor the company's interim  
result.

CS2 said the decrease in net revenue resulted from the persistent
slowdown in the semiconductor market and more in particular with
the wireless telecommunication manufacturers and assemblers.

The company further reported a net loss for the third quarter of
11.242 million euros, or 0.70 euro per share. Cumulative net
losses as per September 30 amount to 25.840 million euros, or
1.61 euro per share.

"The balance sheet reflects the finalization of the debt-
rescheduling implementation following the Payment and Recovery
Plan as well as the one-time write-offs on assets resulting from
the decision to dispose of the Kortenberg lease," CS2 said.

As of September 30, the company has 2.814 million euros in cash,
cash equivalents and short-term receivables. The amount is
clearly insufficient to carry the company through the fourth
quarter, taking into account the expected cash drains and
payments due under the Recovery and Payment Plan.

Zaventem-based CS2 specializes in advanced packaging and test
services for semiconductors. The company is now listed as CSCS on
Nasdaq Europe, the pan-European stock exchange for growth
companies.


SABENA SA: Technics Staff Members to Lose Jobs
----------------------------------------------

About a third of the 2,000 staff members at Sabena Technics will
lose their jobs when a new owner takes over the aircraft
maintenance and repair unit of the bankrupt Belgian airline
Sabena SA, reports Dow Jones Newswires.

A collective dismissal procedure for around 700 workers will most
likely be determined at Wednesday's works council, union
representatives said.

Some jobs could be saved if Sabena's successor Delta Air
Transport starts long-haul operations using some of Sabena's
Airbus aircraft, the news agency added.


SABENA SA: Technics Unit in Takeover Talks
------------------------------------------

Sabena Technics is in talks with four parties interested in
taking over the aircraft maintenance and repair unit of the
bankrupt Sabena, reports Dow Jones Newswires.

Christian Van Buggenhout, head administrator for the bankruptcy
of Sabena S.A., said the search for an investor is being
conducted "in perfect symbiosis with Sabena Technics'
management."

He also wants to sell Technics as soon as possible to the highest
bidder.

Sabena Technics, which has lost 37% of its work since the
airline's collapse, hopes to conclude the deal before the end of
the year.

The Sabena administrators are currently assessing the value of
Sabena Technics.


=============
D E N M A R K
=============


2M INVEST: Heads for Liquidation
--------------------------------

Danish venture capital company 2M Invest will have to enter
liquidation unless new capital is injected in the company.

According to a report from Borsen/FT Information, 2M Invest is
struggling with low cash and abandoned sale of portfolio
companies.

The company has now pawned shares in its most important portfolio
companies as a guarantee for an agreement with its bank on
extended loans.

Henrik Hjort of Danish investment organization Uni-invest also
said that an external capital or sale of companies would save the
company's situation.

2M Invest recorded a loss of 87.9 million Danish krone for the
first nine months of 2001.

For further information, please contact Michael Mathiesen,
President & CEO, at telephone +45 39 45 01 00 or Hans Ole Larsen,
Chief Financial Officer, at telephone +45 39 45 01 00


=============
F I N L A N D
=============


SONERA CORP.: Commences Ex-Rights Trading
-----------------------------------------

Sonera, an international forerunner in mobile communications and
mobile-based services and applications, commenced the trading of
its ADSs, each representing one Sonera share, on the Nasdaq
National Market on November 14.

Sonera shares have traded ex-rights on the Helsinki Exchanges
since November 12.

Shareholders of Sonera earlier approved the firm's one-billion-
euro ($893.6 million) rights issue to raise funds and reduce its
net debt to 2.5 billion euro by the end of the year.


=============
I R E L A N D
=============


FRUIT OF THE LOOM: To Shed 65 Jobs in Ireland
---------------------------------------------

Clothing company Fruit of the Loom, which is in the process of
being bought from its creditors, plans to consolidate operations
at its Ballymacarry plant in northwestern Ireland by cutting 65
jobs, reports The Irish Times.

Fruit of the Loom said the consolidation in Buncrana was the
first step in an investment program at its Irish operations that
would allow it implement 24-hour-day, seven-day-week working
across its textile operations.

Fruit of the Loom currently employs 360 people at Ballymacarry, a
further 240 people at its Shore Road plant in Buncrana and 230
people across the border at its Campsie plant in Derry. The
consolidation will see workers at the older Shore Road site
transfer to the newer, purpose-built site at Ballymacarry.

The clothing company's Irish operations have had a tough time. It
closed plants at Malin, Milford and Raphoe.


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


BRAATHENS ASA: Sunde Increases Stake in Braathens
-------------------------------------------------

Investor Olav Nils Sunde has increased his shareholding in
Norwegian airline Braathens to more than 10% through his
transportation company Color Group, the Aftenposten/FT
Information reported Thursday.

Sunde stated that the aim of the acquisition is to generate
profits by selling the shares to Scandinavian Airlines SAS, which
has made a bid for Braathens.

Sunde paid around 20 Norwegian kroner per share, while SAS has
offered 35 Norwegian kroner.

The investor admitted that if SAS will not complete the deal, his
company could have to record losses if Braathens enters
liquidation.

Color Group lost several million Norwegian kroner at the end of
the 1990s, when its company Color Air became insolvent.


KVAERNER ASA: Sells Activities to Yukos for $100MM
--------------------------------------------------

Kvaerner ASA, the troubled Anglo-Norwegian engineering and
construction group, said Thursday that it has agreed to sell
Kvaerner Hydrocarbons and Kvaerner Process Technology to Russia's
Yukos Oil, its largest shareholder, for US$100 million.

Yukos Oil has already made a deposit payment of US$5 million.  
The US$45 million balance will be paid to Kvaerner on November
30.    

"Yukos Oil has, by its willingness to accelerate the final
negotiations of this agreement, again made an important
contribution to resolve Kvaerner's financial problems - and its
need for short-term liquidity," Kvaerner President & CEO Krsitian
Siem said.

Completion of the sale is dependent on approval from the group's
lenders, Kvaerner added.

The completion is necessary to secure the Group's immediate
requirement for working capital.

For more information, contact Paul Emberley, Vice President Group
Communications at telephone +44 (0)20 7339 1035 or +44 (0)7768
813090 or paul.emberley@kvaerner.com


STEPSTONE ASA: Hopes to Raise 35MM Euro in Rescue Issue
-------------------------------------------------------

Oslo-based online recruitment agency StepStone hopes to raise 35
million euros through a rescue rights and share issue to rebuild
the business, reports the Financial Times.

According to Ian Cole, director of strategy and corporate
development, the resources will eliminate the cash crisis and
will be enough to take the company into cash-positive territory
in the third quarter of next year.

"We were close to no longer being an ongoing concern."

The group already received commitments for the issue from
GeoCapital, Orkla ASA and Investor AB, totaling 21.8 million
euro. The shareholders said that they were ready to pay a maximum
price of 2.2p per share.

The cash injection, if successful, will be used to restructure
the company's businesses in Denmark, Scandinavia, Germany,
Belgium and Luxembourg.

StepStone is shedding 60% of its staff members and is closing
offices in France, Italy, India, Ireland, Spain, Switzerland and
Portugal. It liquidated its U.K. business earlier this month as
part of a desperate cost-saving strategy.


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


LOT: May Face Insolvency Next Year
----------------------------------

National airline LOT could face insolvency early next year unless
the government's recent capital injection is followed by sweeping
cost cuts, Dow Jones Newswires reported Thursday.

"LOT management must launch a deep restructuring, including
significant cost cuts. Otherwise, the company will go to the
brink of insolvency, and won't be able to pay for fuel. We've got
about two months," Polish Treasury Minister Wieslaw Kaczmarek
said.

LOT's shareholders have decided to accept the government's offer
to inject 400 million zlotys in state-owned shares to
recapitalize the airline.

In the first half of 2001, LOT's net loss widened to 252 million
zloty from a loss of 72 million zloty in the same period last
year.


=========
S P A I N
=========


IBERIA SA: Will Axe 2,500 Jobs
------------------------------

Iberia Lineas Aereas de Espana SA, Spain's largest airline, will
cut its workforce by 2,516 as part of the company's plan to
reduce activities in response to the crisis in the airline
sector, reports Dow Jones Newswires.

The job losses include 1,857 ground staff, 465 cabin crew
personnel, 181 pilots and 13 technicians.

Iberia will discuss with trade unions the detailed staff
reductions.

Iberia plans to reduce costs by 54.09 million euros in 2002 and
by 108.18 million euros in 2003, including the cancellation of
wet lease contracts and the postponement of the purchase of 19
new aircraft.

Without these measures, the company's loss next year would amount
to 280.67 million euros.

Iberia reported a widened net loss of 65.2 million euros in the
first quarter of this year against 47.9 million euros in 2000.


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


SCANDINAVIA ONLINE: Posts Third-Quarter Loss
--------------------------------------------

Scandinavia Online, an Internet portal operator in Sweden,
Norway, Denmark and Finland, said Thursday it has narrowed its
operating loss for the third quarter to 57.1 million Swedish
krona, down from 64.4 million in the second quarter (see
http://www.bankrupt.com/misc/s-ol.pdffor the   
company's interim report).

Including restructuring charges of 18.5 million Swedish krona,
the group's net loss in the third quarter is 61.9 million Swedish
krona.

"We have cut our ongoing operating expenses from a peak of 178.1
million Swedish krona in the fourth quarter of 2000 to 89.7
million Swedish krona in the third quarter 2001," says CEO Birger
Steen.

"Cost reduction efforts in our operations will continue in the
fourth quarter 2001, but, more importantly, in fourth quarter
2001, we see growth in revenues for the first time in 12 months."

For the third quarter, Scandinavia Online's revenues were 32.6
million Swedish krona, a decrease of 11% compared to 36.8 million
Swedish krona in the previous quarter.

Scandinavia Online added that cost reduction efforts in the group
would continue in the fourth quarter in order to secure
profitable operations by next year.

Meanwhile, SOL Denmark will reduce its number of employees from
40 to 21, including a restructuring cost of 8 million Swedish
krona.

For further information, please contact Birger Steen at telephone
+46 709 35 28 18 or birger.steen@scandinaviaonline.se or CFO Anne
Langbraaten at telephone +47 2258 3988, annel@a.sol.no


SONG NETWORKS: Holders Okay Share Issue
---------------------------------------

Stockholders of broadband provider Song Networks Holding AB have
approved the issue of debentures with a maximum of 4 million
detachable warrants to subscribe for new shares.

The Swedish company's board proposed to raise a subordinated loan
with a nominal amount of 400,000 Swedish krona.

According to Dow Jones Newswires' Thursday report, the
debentures' detachable warrants will not include preferential
rights for existing holders and will be subscribed by company
employees.

If the warrants are fully exercised, the company expects share
capital to increase by a maximum of 200,000 Swedish krona.

Song Networks has about 152.4 million shares outstanding.


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


ATLANTIC TELECOM: Cuts Off Customers
------------------------------------

Aberdeen-based Atlantic Telecom cut the telephone service of
about 12,000 of its 21,000 customers after company administrators
PricewaterhouseCoopers failed to sell the entire business as
planned, the Evening News reported.

Customers in Aberdeen, Edinburgh, Glasgow, Paisley and East
Kilbride, Manchester and Oldham were unable to make outgoing
calls, and will only be able to receive incoming calls or make
emergency 999 calls.

Atlantic Telecom did not warn customers before making the service
cut, but the company is now sending letters advising customers to
look for another carrier.

The company went into administration last month and is understood
to owe creditors 100 million pounds. It reportedly has 27 million
pounds in the bank.


BRITISH NUCLEAR: Court Approves Reprocessing Plant Opening
----------------------------------------------------------

Environmental groups, Greenpeace and Friends of the Earth lost
their high court bid to prevent a controversial nuclear fuel
reprocessing plant from opening in northern England.

According to a report from the Financial Times, Justice Collins
ruled that the government had made "no error of law" in approving
the plant built by the state-owned British Nuclear Fuels.

Environmental groups, who warned that plutonium contained within
the recycled fuel could fall into criminal hands and be used to
manufacture crude atomic weapons, said they would take their case
to the Court of Appeal.

BNFL said that the plant would start commercial production in
mid-December.

Last month, BNFL was "technically insolvent" because its
liabilities is going to hit 34 billion pounds, while its balance
sheet only held about 235 million ($342 million) of shareholders
funds.


BRITISH TELECOM: Mm02 Fails to Make Stoxx Index
-------------------------------------------------

MmO2 PLC, the mobile-phone group being spun off from British
Telecommunications PLC, failed to make it onto Dow Jones' Stoxx
50 Index of pan-European blue-chip stocks, Dow Jones Newswires
reported Thursday.

The move had been widely expected, as MmO2's market
capitalization had fallen far short of estimates in the summer.

Stoxx Ltd., a venture of Deutsche Boerse AG, Euronext Paris SA,
SWX Swiss Exchange and Dow Jones & Co., put MmO2's market
capitalization at 10.3 billion euros, with a free float of 100%.


BRITISH TELECOM: Unloads Far East Assets to Cut Debt
----------------------------------------------------

British Telecom gradually weakened its debt burden after it sold
its subsidiary in New Zealand for 126 million pounds.

According to the Friday edition of The Times newspaper, the
telecommunication giant sold Clear Communications to
TelstraSaturn, an associate business of Australia's Telstra.

BT also received the 350 million pounds cash payment from the
sale of its one-third stake in Malaysia's Maxis Communications.

At the end of September, BT's debt burden was 16.5 billion
pounds, but the company is transferring 500 million pounds of
that liability to demerged wireless business mmO2, and expects to
collect another 2.4 billion pounds from the long-delayed sale and
leaseback of its property portfolio, expected to be completed by
the end of the year.


BRITISH TELECOM: Regulator Imposes Fines, New Service Standards
----------------------------------------------------------------

Telecoms regulator Oftel has imposed new service standards and
fines on British Telecom to help open up the telecoms giant's
network to its rivals.

According to the Friday edition of Daily Telegraph, BT will have
to pay a fine of 10 pounds for each day it fails to make a line
available and 80 pounds each day it refuses to grant a competitor
access to its telephone exchanges.

"We wanted to sort this out in April but the other operators
wanted Oftel to intervene instead," a BT spokesman said.


BRITISH TELECOM: Will Replace United Business Media on FTSE  
----------------------------------------------------------------

Wireless telecommunications company mmO2 PLC and BT Group PLC
replaced United Business Media PLC in the Blue-Chip FTSE 100
Index Friday, reports Dow Jones Newswires.

BT Group and mmO2 will be created from the demerger of British
Telecommunications PLC.

United Business Media will move to the FTSE 250 index, the report
added.


EASYNET GROUP: Shares Jump After Marconi Announces Reorganization
------------------------------------------------------------------

Shares of Internet and telephone services provider Easynet Group
Plc jumped 86.5 pence to 262.5p after Marconi Plc, which owns 72%
of the company, said it might sell some of its shares.

Shares of Easynet have slumped 39% since Marconi bought its stake
in June on concern the unprofitable company might sell Easynet
shares to help cut debt.

Marconi said it is talking with bankers to restructure existing
loans.  The company plans to cut its 4.3-billion-pound debt by
selling some of its non-phone equipment assets.


GLOBAL TELESYSTEMS: Commences Restructuring Proceedings
----------------------------------------------------------

Telecom company Global TeleSystems Europe BV has commenced
voluntary, "pre-arranged" reorganization proceedings in the
United States and has initiated similar "surseance" proceedings
in the Netherlands.

Both of these proceedings were initiated to implement KPNQwest
NV's planned acquisition of GTS's Ebone and GTS Central Europe
operating businesses.

Debt to be restructured under the proposed acquisition and
restructuring will be GTS's and GTS Europe's publicly traded bond
debt, while the normal trade debt and obligations will be paid in
full under the proposed plans of reorganization.

The US proceeding involving GTS, Inc. was implemented by
converting the Chapter 7 bankruptcy petition filed previously
against GTS, Inc. into a voluntary Chapter 11 plan of
reorganization.


INVENSYS PLC: Shares Rise Amidst Shake-up Plans
--------------------------------------------------

Shares in Invensys rose 34% to close at 106p on Thursday, after
chief executive Rick Haythornthwaite laid the foundations for a
major shake-up of the debt-laden engineering group, the Financial
Times reported.

Declining to give specific details about restructuring,
Haythornthwaite said the group could spend up to 200 million
pounds to reshape the business.

In the six months to September 30, pre-tax losses mounted to 64
million pounds, while turnover dropped from 3.71 billion to 3.56
billion as sales slowed and the group disposed of some non-core
assets.

Invensys' net debt stood at 3.28 billion at the half year.


MARKS & SPENCER: Regains Lost Market Share
--------------------------------------------------

The U.K.'s largest clothing retailer, Marks & Spencer Plc, is
regaining lost market share in the womenswear and menswear
category.

According to a recent report from Bloomberg, sales from the
womenswear category increased to 15.1% in the 16 weeks ended
October 21, from 14.2% a year earlier, while menswear rose to
12.3% and children's clothes to 8.3%.

Marks & Spencer is exiting international business to focus on
Britain.

The company's shares advanced 8.5 pence, or 2.6%, to 333.5p on
Thursday's trading.


RAILTRACK GROUP: Byers Faces Railtrack Probe
-------------------------------------------------

Transport secretary Stephen Byers, who faced cross-examination by
the Labor-dominated transport committee last week, is set to face
a National Audit Office inquiry into the handling of the
Railtrack affair.

According to a Financial Times report, the NAO will look at
documents and decisions that lead to the collapse of Railtrack in
October.

Unlike commons committees, which rely on submissions and oral
evidence sessions, the NAO has the power to investigate
government departments and the rail regulator, and can demand co-
operation from Byers' department.

Railtrack earlier argued that the company was only insolvent
because the government made it so.


TELEWEST COMMUNICATIONS: Improved EBITDA Lifts Telewest by 30%
----------------------------------------------------------------

Shares in Telewest rose 17p, almost 30%, to 75p during Thursday's
trading after the cable group handed down another quarter of
solid growth, the Times newspaper reported.

Telewest said that its earnings before interest, tax,
depreciation and amortization (ebitda) rose 12% to 83 million
pounds in the three months to September 30, compared with the
June quarter.

Revenue, however, fell slightly to 312 million pounds, while pre-
tax losses fell to 194 million pounds.

The company also warned it could write down some of the 2.8
billion pounds in goodwill on its balance sheet.

Telewest's net debt is now at 4.9 billion pounds, twice its
market capitalization.


VAUXHALL: Will Cease Frontera Production in Spring
--------------------------------------------------

The U.K. operations of Vauxhall, a General Motors subsidiary, is
expected to suffer a fresh blow with the end of production of the
Frontera 4x4 vehicle at its Luton factory next spring, reports
The Times newspaper.

The company is extending its severance package until 2003, a move
that will probably cover the remaining Frontera workers.

Luton produced 35,000 Fronteras last year, and 2,800 from January
to September this year because of poor demand.

The end of the Frontera will leave Luton making only Vivaro vans
through Vauxhall's IBC subsidiary.


XEROX CORPORATION: EU Clears Flextronics Buy
--------------------------------------------

The European Commission cleared under the EU merger regulation
Flextronics International Inc's takeover of Xerox Corp's office
equipment business, reports AFX News.

Flextronics will buy the manufacturing and assembly operations
for Xerox Office Business products in Brazil, Canada, Malaysia,
Mexico, the U.S., Netherlands and U.K.

Previously, Xerox said that it would close its U.K. factory in Mitcheldean
in order to return to profitability.

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

        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.

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