/raid1/www/Hosts/bankrupt/TCREUR_Public/011205.mbx         T R O U B L E D   C O M P A N Y   R E P O R T E R

                           E U R O P E

          Wednesday, December 05, 2001, Vol. 2, No. 237


                            Headlines

* B E L G I U M *

SABENA SA: DAT Investors Will Float Stocks Next Year

* F I N L A N D *

SONERA CORP.: To Roll Out Third-Generation Networks

* G E R M A N Y *

BROKAT AG: Begins Insolvency Proceedings
DAIMLERCHYSLER: Forms North American Subsidiary
DEUTSCHE TELEKOM: Compere Considers Telekom Bid
EM.TV: Divests Assets to Reduce Debt
KINOWELT MEDIEN: Faces Insolvency Petition From ABN Amro
KINOWELT MEDIEN: Awaits Word From Insolvency Court

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

BAAN COMPANY: Goes Into Liquidation
KPN NV: Reveals Credit Facility Conditions
UNITED PAN-EUROPE: Ends Dealings With Microsoft

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

PSINET INC: PSINet Europe Streamlines Operations
SWISSAIR GROUP: Cargo Unit Finds Willing Investors  
SWISSAIR GROUP: Granted Creditor Protection for Six Months

* U N I T E D   K I N G D O M *

ATLANTIC TELECOM: Closure Casualties Demand 1MM Pounds
BRAINSPARK PLC: On the Road to Liquidation
BRITISH POLYTHENE: Sells Last Business for 2MM Pounds
CAMMELL LAIRD: Cancelled From LSE Listing
CORDIANT GROUP: Issues Third Warning, Cuts 400 Jobs
CORUS GROUP: Moody's Puts Baa2 Rating on Downgrade Review
ENRON CORPORATION: Sells Wessex Water
EQUITABLE LIFE: FSA Unveils Insurance Overhaul
INVENSYS PLC: S&P Downgrades Rating to A-3
MARKS & SPENCER: Regulator Clears El Corte Ingles Deal
MARKS & SPENCER: Works Council Okays Galeries Lafayette Takeover
RAILTRACK GROUP: Stagecoach in Franchise Track Offer
XEROX CORPORATION: Board Elects CEO Mulcahy as Chairman


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


SABENA SA: DAT Investors Will Float Stocks Next Year
----------------------------------------------------

Prime Minister Guy Verhofstadt said that investors to Delta Air
Transport, the airline to take over Belgian carrier Sabena SA,
intends to float the new carrier on the stock market in the
middle of next year, the Belgian paper De Tijd reported.

Verhofstadt said it might take several months to measure the
success of the new airline.

It remains unclear regarding how much money the investors plan to
put up for the successor airline, the report added.


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


SONERA CORP.: To Roll Out Third-Generation Networks
---------------------------------------------------

Sonera, an international forerunner in mobile communications and
mobile-based services and applications, said it is committed to
roll out European high-speed third-generation networks, Reuters
reported.

Sonera also indicated the billions of euros in investments it
made last year on licenses could at some point be sold.

"All our 3G investments are financial investments. Only when you
invest in more than 50% of something is it part of your core
strategy," Chief Executive Harri Koponen said in an interview.

"I don't want to send the message that we don't believe in UMTS.
Our strategy is to be an operator in the business, but we have to
look at 3G investments as financial," he added.

In August, heavily indebted Sonera pulled out of its 3G, or
Universal Mobile Telecommunications Standard (UMTS), venture in
Norway.

Sonera has been forced to sell off assets this year to pay down
its 4.5-billion-euro debt and slash staff amid the weakening
global economic conditions.


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


BROKAT AG: Begins Insolvency Proceedings
----------------------------------------

The responsible court in Stuttgart, Germany, has initiated
insolvency proceedings for software company Brokat Technologies
AG Monday, Dow Jones Newswires reported.

Brokat filed for insolvency in late November, through its
insolvency administrator Volker Grub, when its debt-restructuring
talks with bondholders failed.

Standard & Poor's and Moody's Investors Service downgraded
Brokat's ratings to D after the insolvency announcement.


DAIMLERCHYSLER: Forms North American Subsidiary
-----------------------------------------------

DaimlerChrysler AG's U.S. arm Chrysler Financial and Mercedes-
Benz Credit merged to form DaimlerChrysler Services North America
LLC.

According to a Dow Jones Newswires report, the financial services
arm will provide services for its entire line of passenger car
and commercial vehicle products.

Earlier, Chrysler Group posted a 6% decrease in November sales
despite a seven-year, 100,000-mile drive train warranty and other
incentives implemented to lure customers.


DEUTSCHE TELEKOM: Compere Considers Telekom Bid
-----------------------------------------------

Compere Associates, a London-based finance house specializing in
telecoms, is considering a bid for the Deutsche Telekom cable
network, the Financial Times reports, citing Compere founder Phil
Mochan.

The statement comes after fears emerged that Liberty Media of the
US could cancel plans for a 5.5-billion-euro buy of the
telecommunications group's cable assets if the German cartel
office blocks its move.

Mochan expects to pay a similar price for the cable network as
Liberty Media. He declined to reveal the names of the banks and
investors backing it.

Proceeds from the sale are earmarked for reducing Deutsche
Telekom's debt load of 65.2 billion euros.


EM.TV: Divests Assets to Reduce Debt
------------------------------------

EM.TV & Merchandising AG still intends to sell its 16.75% stake
in Formula One holding company SLEC, its Muppets unit and its 45%
stake in TeleMuenchenGruppe (TMG) to reduce debt and generate
liquidity, AFX News reports.

According to EM.TV chairman Werner Klatten, Formula One will be
sold, as it does not fit with the company's core operations of
children's programming and merchandising.

Although TMG is suitable in terms of product portfolio, the 45%
stake is not influential enough, Klatten adds.

The sales process for the Jim Henson Company is proceeding under
US investment house Allan & Co and will be completed by spring
next year.

Corporate finance head Jens Starmann says the proceeds of one
transaction can repay its Junior TV loan.


KINOWELT MEDIEN: Faces Insolvency Petition From ABN Amro
--------------------------------------------------------

The crisis at German film rights group Kinowelt Medien AG has
intensified with ABN Amro Bank NV, one of its major creditors,
submitting a petition for insolvency against the company, the
Suddeutsche Zeitung reports.

ABN Amro, which called in loans of about 51 million euros loans
in late November, will be examining whether Kinowelt was tardy in
making public news of the cancellation.

The courts are likely to accept ABN's application.

Burdened by its indebtedness, Kinowelt revealed a net loss of
309.1 million euros in the first nine months of the year,
compared with a net profit of 8.5 million euros in the same
period in 2000 (See http://www.bankrupt.com/misc/kinowelt3Q.pdf
for the company's interim report).
  
Kinowelt has a loss of 272.2 million euros before interest and
taxes, compared with earnings before interest and taxes of 28.3
million euros the previous year.


KINOWELT MEDIEN: Awaits Word From Insolvency Court
--------------------------------------------------

Kinowelt Medien AG still has not heard from the Munich court
since ABN AMRO Bank NV filed an application to initiate
insolvency proceedings filing against the German media firm, AFX
News reported.

No other creditor bank, except ABN AMRO, has called in its debts,
the news agency added.

Kinowelt's restructuring measures made 300 of its 700 employees
redundant.


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


BAAN COMPANY: Goes Into Liquidation
-----------------------------------

The General Shareholders Meeting of Baan Company NV, a unit of
U.K.-based Invensys Plc, in late November has resolved to put the
software provider into liquidation.

Invensys Administratie BV, a wholly owned subsidiary of Invensys
Plc, was appointed as new and only member of the Management Board
during the meeting following the resignation of all its board
members.

Baan in a statement said that Invensys has the intention to
provide in early 2002 a mechanism that would enable the Baan-
shareholders to receive early payment of an amount equal to the
liquidation distribution of 2.85 euros per share.


KPN NV: Reveals Credit Facility Conditions
------------------------------------------

Following recent press comments, embattled Dutch telecoms
operator Royal KPN NV disclosed details of terms in its November
21 credit facility.

Under the principal terms of the 2.5-billion-euro revolving
credit facility, KPN cannot make acquisitions valued at more than
150 million euros each year and needs approval from its banks to
merge.

ABN Amro, Rothschild and Deutsche Bank are among KPN's bankers.

The group also agreed to meet ebitda levels of 3.1 billion euros
by December 2001, 3.4 billion euros by December 2002, 3.8 billion
euros by December 2003 and 4.4 billion euros by December 2004.

The facility further restricts KPN's net debt levels over the
next three years.

Furthermore, the Dutch company cannot demerge or reorganize its
subsidiaries, such as KPN Mobile, if the changes mean KPN cannot
meet its obligations.

KPN notes that it will apply the net proceeds from the equity
offering to repay debt.


UNITED PAN-EUROPE: Ends Dealings With Microsoft
-----------------------------------------------

Dutch cable company UPC decided to end its cooperation with
Microsoft regarding Internet-enabling software for set-top-boxes
through cable television, the Dutch paper De Telegraaf and
Telecom Paper reported.

UPC's order for Microsoft software was delayed, but now that is
has been delivered, UPC is now rejecting the said goods.

Sources said this is not a quality issue, as UPC does not mainly
depend on Microsoft to introduce interactive cable TV. It also
has an agreement with Liberate Technologies.


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


PSINET INC: PSINet Europe Streamlines Operations
------------------------------------------------

Geneva-based PSINet Europe BV, an independent subsidiary of
PSINet Inc., has decided to streamline its European network.

In-line with PSINet Europe's strategy of continuing to improve
customer service, the company has consolidated its hosting,
customer and network operations and will allocate resources to
its ISO9002 Certified European Technical Center in La Chaux de
Fonds, Switzerland. This follows its investment offering a 24/7,
multi-lingual support service announced in June this year.

PSINet Europe is committed to serving its growing customer base
across the European region, as it continues to drive towards its
ultimate goal of achieving a profitable business model.

With the implementation of this strategy, some positions from the
Netherlands, UK and German locations to Switzerland will be
displased.

PSINet Europe is a leading provider of Internet and IT solutions
offering hosting solutions, global eCommerce infrastructure, end-
to-end IT solutions and a full suite of retail and wholesale
Internet services.


SWISSAIR GROUP: Cargo Unit Finds Willing Investors  
--------------------------------------------------

Swissair Group AG airfreight unit Swisscargo and a group of
private investors have signed a memorandum of understanding aimed
at creating a new company, ensuring the partial continuity of its
operations, Dow Jones Newswires reported.

The investors, led by Branco Weiss, intend to create a global
general sales and service agent, which will supply airfreight
management services to Swisscargo.

The deal involves the "precondition" that Swissair Group's
regional airline Crossair Ltd. will serve as primary customer.

Swisscargo, together with Swissair Group, filed for creditor
protection in October.


SWISSAIR GROUP: Granted Creditor Protection for Six Months
----------------------------------------------------------

A Zurich judge Monday formally granted Swissair Group AG, along
with SAirLines and other units that filed for protection from
creditors in October, protection from creditors for six months,
Dow Jones Newswires reported.

Swissair's provisional estate administrator Karl Wuethrich said
that the group has 170 million Swiss francs in cash on its
accounts, which he considers to be enough to cover expenses.

He added that the brand name, Swissair, is valued at zero.

The provisional status of other Swissair Group units that filed
for creditor protection, such as Swissair Schweizerische
Luftverkehr AG, Flightlease AG, Swisscargo AG and Cargologic AG
is also expected to be made official later this week by a
regional court in Buelach, a town north of Zurich.


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


ATLANTIC TELECOM: Closure Casualties Demand 1MM Pounds
------------------------------------------------------

Representatives of small businesses affected by the closure of
the telephone service of Aberdeen-based Atlantic Telecom are
calling for more government help on top of 500,000 pounds already
promised, the Herald newspaper reports.

The Stop Atlantic Closure Campaign is demanding from the DTI 1
million pounds to help pay for British Telecommunications to take
on customers without requiring them to change their numbers.

The organization insists that last month's 500,000-pound
emergency cash injection from Scottish Executive and Department
of Trade and Industry funding will not do enough to help.

A DTI spokesman said that neither BT nor the government could
justify the 1-million-pound cost of adapting exchanges.

Atlantic Telecom went into administration in October and is
understood to owe creditors 100 million pounds. It reportedly has
27 million pounds in the bank.


BRAINSPARK PLC: On the Road to Liquidation
------------------------------------------

After abandoning its search for a buyer, Internet consultancy
business Brainspark plc admitted Monday that it is considering
going into liquidation.

According to the Times' report yesterday, Brainspark ended talks
with stockbroker and Internet investor Durlacher.

Brainspark said that liquidation could raise between 5 million
pounds to 6 million pounds in funds, which will be returned to
its shareholders.

The company, worth 154 million pounds last year, is now valued at
4.3 million pounds.


BRITISH POLYTHENE: Sells Last Business for 2MM Pounds
-----------------------------------------------------

British Polythene Industries (BPI) sold Nelson Packaging in
Derbyshire to a management buy-out group to reduce the company's
debt of just over 70 million pounds, the Herald newspaper
reported

Tag price for its bag manufacturing business is 2 million pounds.

The Greenock-based packaging group sold most of its U.K. carrier
bag operations to Bunzl, the firm's main customer, for 8.5
million pounds in July.

Nelson Packaging, which employs 90 people, made a small profit on
turnover of 7.9 million pounds last year. It specializes in
plastic bags with strong handles for the off-license trade.


CAMMELL LAIRD: Cancelled From LSE Listing
-----------------------------------------

The securities of ship-repair group Cammell Laird were cancelled
from the London Stock Exchange listing on November.

Securities affected were:

12% Senior Notes due October 15, 2010
(Registered in denominations of 1,000 euros each and integral
multiples of 1,000 euros each)
Regulation S                          (0-216-818)(XS0118724334)
Rule 144A                             (0-213-109)(XS0118726032)
Ordinary Shares of 5p each            (0-059-433)(GB0000594332)

For queries relating to the above, contact Listing Applications
at the FSA on 020 7943 0333 Option 3 and/or Securities Management
at the LSE on 020 7797 1579.

Cammell Laird went into receivership in April after the loss of a
50-million-pound Italian cruise ship contract.


CORDIANT GROUP: Issues Third Warning, Cuts 400 Jobs
---------------------------------------------------

Cordiant Communications Group PLC, the world's ninth-largest
advertising group, issued its third profits warning this year and
said it was axing 400 jobs, the Scotsman newspaper reported.

Cordiant said it now expected annual revenues to fall about 9% in
2001 against last year, compared with the 5% it previously
forecasted.

The recent job cuts, which totals to 1,100 this year, come after
a further downturn in revenues since its last profits warning in
September.

Cordiant has seen its shares underperform the FTSE All Share
index by over 55% in the past 12 months, falling from around 300p
a year or so ago.


CORUS GROUP: Moody's Puts Baa2 Rating on Downgrade Review
---------------------------------------------------------

Moody's Investors Service placed the Baa2 senior unsecured
ratings of Corus Group PLC, the world's largest steel producers,
under review for a possible downgrade, affecting $630 million of
debt securities.

Moody's said the review was triggered by concerns regarding the
impact of a prolonged economic weakening and pricing pressures,
as well as increasing steel imports to the U.K., and declining
manufacturing activity in the country that might further delay a
return to operating profitability and debt reduction for the
company.

Moody's also said it would review the impact of a further delay
in the recovery of the European steel markets and the weaker
pricing environment on the group's operating performance and cash
flows, as well as the group's ability to reduce debt in line with
expectations.


ENRON CORPORATION: Sells Wessex Water
-------------------------------------

U.S. energy trader Enron Corporation, which filed for bankruptcy
on Sunday, is selling its Wessex Water subsidiary, the Sunday
Telegraph reported.

The auction of the West Country water company, the subsidiary
excluded from administration, is already well under way. Enron is
known to have received bid approaches from state-owned German
bank WestLB, Barclays Capital, as well as some trade buyers.

Thames Water, now owned by RWE of Germany, has declared an
interest, and there has been speculation that United Utilities
and Pennon, the water company in the south west of England, may
be keen to take part in a bid.

Enron, which paid 1.4 billion pounds for Wessex in 1998 as part
of an attempt to build a global water business, is thought to be
asking more than 1 billion pounds for the U.K. company.

"The overriding priority is to preserve the valuable parts of the
business and to reduce the cash needs of the business while
seeking to secure the future of certain Enron businesses and its
employees," says Tony Lomas, a partner at Enron Europe
administrator PricewaterhouseCoopers.

Wessex recently announced pre-tax profits of 42.3 million pounds
for the six months to the end of September. It has a regulated
asset base of 1.25 billion pounds.


EQUITABLE LIFE: FSA Unveils Insurance Overhaul
----------------------------------------------

Britain's financial watchdog has unveiled sweeping changes to
insurance regulation after admitting mistakes over mutual life
assurer Equitable Life.

According to Reuters' report, the Financial Services Authority
would deliver smarter insurance regulation that can spot problems
early on and stop them at the very start.

The regulation would toughen up the existing requirements on
solvency and on the responsibilities of senior management, and
would review the standards for company disclosures to ensure
customers, the FSA said.

The move to review insurance regulation came after finding
regulatory failures in the handling of Equitable, which closed to
new business last year and was left with a huge hole in its
finances.


INVENSYS PLC: S&P Downgrades Rating to A-3
------------------------------------------

Standard & Poor's lowered its ratings on software developer
Invensys PLC and its unit Baan Co. NV to A-3 from A-2.

S&P said the outlook is negative although the company's ratings
were removed from CreditWatch negative.

S&P explains that the negative outlook "reflects the lack of
visibility in a fragile trading environment, which may result in
full-year trading for 2002 being below Standard & Poor's previous
expectations... (and) also reflects the scale of the internal
structural issues to be addressed in the group."

Although the group's business portfolio offered solid rescue
plans, S&P finds Invensys' ability to maintain growth in its
industry as weak, foreseeing that internal change will require
more time to take root.


MARKS & SPENCER: Regulator Clears El Corte Ingles Deal
------------------------------------------------------

Marks & Spencer PLC's sale of its nine outlets in Spain to El
Corte Ingles has been cleared by the anti-trust body El Servicio
de Defensa de la Competencia, AFX News reported Monday.

The retail giant operates two stores in Barcelona, four stores in
Madrid, one in Valencia and one in Bilbao.

The market value of all the stores as a group is estimated to
reach 132 million euros.


MARKS & SPENCER: Works Council Okays Galeries Lafayette Takeover
----------------------------------------------------------------

The European works council has approved the planned takeover of
Marks & Spencer's stores in France by department store chain SA
des Galeries Lafayette, AFX News reported.

"The task has been long and difficult but I believe it has borne
fruit. Each employee will have a job. I think I have accomplished
my mission," M&S France head Alain Juillet said.

Under the deal, all 1,650 jobs in the stores will be saved. The
company also wants the stores to cease trading under the M&S
brand by the end of the year.


RAILTRACK GROUP: Stagecoach in Franchise Track Offer
----------------------------------------------------

Stagecoach, one of U.K.'s largest train companies, offers to run
all of the Railtrack Group's operations and offers to buy its
South West Trains (SWT) franchise, This Is London reported
Monday.

The offer will cover the maintenance for trains and
infrastructure under one management structure.

Stagecoach said that in six months, it could be ready to take
over the said plans on a five-year trial basis.

The paper added that this offer would remain as a public-private
partnership where Stagecoach will not bear all the risk for the
infrastructure maintenance.


XEROX CORPORATION: Board Elects CEO Mulcahy as Chairman
-------------------------------------------------------

The board of Xerox has elected Anne Mulcahy, its president and
chief executive, to take the additional position of chairman
effective January 2002, the Financial Times reported.

Mulcahy will replace Paul Allaire, who will be retiring by the
end of the year.

The American photocopier group, which reported its fifth
consecutive quarterly loss in October, has been struggling to
return to profitability amid an SEC investigation over accounting
scandals.

She remains optimistic about turning a profit in the fourth
quarter of this year.

                                     **********

        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
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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.


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