/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/011207.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, December 07, 2001, Vol. 2, No. 239 Headlines * B E L G I U M * CUSTOM SILICON: Completes $25MM Financing FLV FUND: Reschedules EGM for Dec. 27 LERNOUT & HAUSPIE: SpeechWorks Challenges L&H Sale * F R A N C E * EURO DISTRIBUTION: Metro and Altadis Eye EDA VALEO SA: Will Fix or Close New York Plant * G E R M A N Y * DEUTSCHE TELEKOM: France Telecom Buys DT Satellite Rights DEUTSCHE TELEKOM: May Seek New Bidders If Liberty Bid Fails DEUTSCHE TELEKOM: Foresees EBITDA Gain by 2004 WUENSCHE AG: Faces Insolvency Threat * I R E L A N D * EIRCOM PLC: ESOT Nominates New Board Members * N E T H E R L A N D S * KPN NV: Finalizes Social Accord With Unions KPN NV: Investors Subscribe for 60% of Issue KPN NV: Shares Tumble as Cash Call Deadline Nears * N O R W A Y * KVAERNER ASA: Calls for EGM to Vote on Aker Maritime Plan KVAERNER ASA: Will Not Sell Masa-Yards in Near Future * S W I T Z E R L A N D * GRETAG IMAGING: Finance Officer Resigns SULZER MEDICA: Names John Wells as Independent Mediator SWISSAIR GROUP: Faces CHF4BB Claim From Portugal ZURICH FINANCIAL: Will Raise $2BB From Sale of Scudder Investment * U N I T E D K I N G D O M * BRITISH TELECOM: Union Resists Job Cuts in Retail Unit ENRON CORPORATION: PwC to Announce Disposal of European Assets EQUITABLE LIFE: Dentons Faces Legal Threat INVENSYS PLC: Sell-off Plan Boosts Ailing Engineer MARKS & SPENCER: Plans to Launch Loyalty Scheme MILLENNIUM DOME: Quintain in 92-MM-Pound Plan to Redevelop Dome ============= B E L G I U M ============= CUSTOM SILICON: Completes $25MM Financing ----------------------------------------- Despite adverse factors, such as the creditor protection status and downturn in the business, Custom Silicon Configuration Services NV finally succeeded in finding a financing solution. Zaventem-based CS2, which specializes in advanced packaging and test services for semiconductors, announced Wednesday it had successfully finalized negotiations with Luxemburg-based investment company Business 21 sa. Business 21 sa has indeed subscribed a financing facility cum warrants of $25 million issued by CS2 in accordance with the resolution of the September EGM. The financing facility, with duration of 3 years, will bear a nominal interest rate of 7%. The finalization of this financing transaction will allow CS2 to finance the existing and expected short-term cash drains and development of the company. The company is preparing itself for the anticipated recovery in the second half of 2002. For further information contact, Yves De Poorter, Chief Executive Officer of Custom Silicon Configuration Services N.V. at telephone 32 2 713 05 62 / 32 2 720 00 00 or email YDP@cs2.be FLV FUND: Reschedules EGM for Dec. 27 ------------------------------------- Venture capitalist Flanders Language Valley Fund will hold its second extraordinary general shareholders' meeting on December 27 to deliberate and decide on all items on the agenda, regardless of the number of shares represented. At FLV Fund's extraordinary general shareholders' meeting Wednesday, the quorum necessary to deliberate and adopt resolutions was not attained. Only 1.8 million shares out of a total of 20.6 million shares were represented. In the third quarter of 2001, FLV Fund revealed a net accounting loss of US$18.9 million. For more information on the EGM, please contact FLV Fund's Piet Vandermeersch at telephone +32 (0) 57 22 94 30 LERNOUT & HAUSPIE: SpeechWorks Challenges L&H Sale -------------------------------------------------- Lernout & Hauspie Speech Products NV's request to sell its speech and language technology assets is being challenged by unsuccessful bidder SpeechWorks International Inc. A hearing on L&H's sale request began Tuesday in New Jersey, before U.S. Bankruptcy Judge Judith Wizmur, and will resume on December 11. According to a Dow Jones Newswires report, SpeechWorks argued that the auction for L&H's assets violated court-approved bid procedures and will result in the Belgian company getting between $6.3 million and $10 million less for the assets than it would have if the auction had been conducted properly. SpeechWorks added that immediately prior to the end of the auction, it was misinformed about the difference between the value of its bid for the business and technology assets of L&H versus the ScanSoft bid. L&H and some of its assets were sold at the auction in late November, subject to approval by courts in the U.S. and Belgium. L&H, which lost nearly $10 billion in market value last year amid an accounting scandal, filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in 2000. The company is subject to a bankruptcy proceeding in Belgium where the company has one of its headquarters. =========== F R A N C E =========== EURO DISTRIBUTION: Metro and Altadis Eye EDA -------------------------------------------- German group Metro and Franc-Spanish group Altadis have shown interest in buying France's leading snack distributor EDA (Euro Distribution Alimentaire), La Tribune & World Reporter reported. EDA was declared insolvent last week due to the non-payment of a debt of 12.2 million euross. The Paris courts called on French body CDR to explain its position in bringing about the failure of EDA and to propose constructive solutions. VALEO SA: Will Fix or Close New York Plant ------------------------------------------ Valeo SA, Europe's largest publicly traded car parts maker, will either fix its money-losing factory site in New York or close it, Bloomberg reports, citing chief executive Thierry Morin. The Paris-based company says its manufacturing complex that makes windshield wipers and electric motors will lose $70 million this year. It also expects sales in Europe and North America to fall by 10% next year. Earlier this year, Valeo said it is closing or selling 35 of its 170 factories this year and cutting 5,000 jobs. ============= G E R M A N Y ============= DEUTSCHE TELEKOM: France Telecom Buys DT Satellite Rights --------------------------------------------------------- France Telecom has acquired the rights to distribute communications over Inmarsat Ltd's satellite network from German telecommunications group Deutsche Telekom, Reuters reported. No financial details were immediately available. "The deal does not include any of Inmarsat's ground stations," Inmarsat spokesman Dominic Cook said. DEUTSCHE TELEKOM: May Seek New Bidders If Liberty Bid Fails ----------------------------------------------------------- Deutsche Telekom warned it would look for alternative bidders if Liberty Media of the U.S. attempts to renegotiate the 5.5- billion-euro price of the cable television network it agreed to buy, the Financial Times reported. Analysts expect Liberty to ask DT for a lower price tag if the German Cartel Office imposes on the transaction severe conditions such as to launch a telephone and broadband Internet services through its network. DT chief executive Ron Sommer said he would enter talks with potential suitors if they bid a higher price. "If it does not work out, we are prepared to talk to someone else, but we will not give it up for a cheaper price," Sommer said. Earlier this week, British investment group Compere Associates said it could match Liberty's offer of 5.5 billion euros if invited by DT. Proceeds from the sale are earmarked for reducing Deutsche Telekom's debt load of 65.2 billion euros. DEUTSCHE TELEKOM: Foresees EBITDA Gain by 2004 ---------------------------------------------- Deutsche Telekom AG expects EBITDA to rise to 21 billion euros by 2004 on sales increasing to 70 billion euros in the same time frame, AFX News reports, citing chief executive Ron Sommer. Sommer forecast annual double-digit sales growth up to 2004, and 15 billion euros EBITDA on sales of 49 billion euros this year. The German cartel office is currently considering Telekom's planned 5.5 billion euros sale of six of its cable TV regions to Liberty Media Corp. WUENSCHE AG: Faces Insolvency Threat ------------------------------------ Wuensche AG faces danger it will become illiquid and insolvent by the end of the month as it lost half of its base capital with a likely 2001 net loss of around 35 million deutsche marks and necessary write-offs, Dow Jones Newswires reported. The Hamburg-based textile group will soon call a general shareholder meeting to present a restructuring plan. Wuensche has paid no dividends during the last 12 months. The company also reported losses during the previous 12 months. IT last paid a dividend during fiscal year 1995, when it paid dividends of 0.35 per share. ============= I R E L A N D ============= EIRCOM PLC: ESOT Nominates New Board Members -------------------------------------------- The Eircom Employee Share Ownership Trust nominated Con Scanlon and John Conroy to the board of Valentia, the new owners of Eircom, RTE Interactive News reported. Con Scanlon, currently the general secretary of the Communications Workers Union, will be Valentia's deputy chairman. John Conroy is chief executive of Merrion Capital, a stockbroking and corporate finance group. ESOT secured a 29.9% stake in Eircom following the takeover by Valentia, chaired by Tony O'Reilly, in November. Earlier, Dr Philip Nolan was appointed to take over Alfie Kane as chief executive on January 2 next year. He joined other newly appointed board members Jonathan Nelson, Paul Salem, John Hahn, Biswajit Subramanian, Ramez Sousou, Niclas Gabran and Con Scanlon. ===================== N E T H E R L A N D S ===================== KPN NV: Finalizes Social Accord With Unions ------------------------------------------- KPN said Wednesday it has reached a final agreement with trade unions on a broad social accord for the major reorganization that runs until 2004. In mid-November, an agreement in principle was already reached between KPN and Dutch trade unions ABVAKABO FNV, Bond van Telecom Personeel, CFO CNV, CMHF/vhp KPN & TPG and GMV/RMU. The trade unions subsequently consulted with their members and discussed the outcome of this consultation with KPN. Based on the agreement, a number of compulsory redundancies will be reduced by salary cuts. The KPN Board of Management, other top management and staff who retain their jobs, will all take a cut in pay. In addition, KPN and the unions agreed to a collectively bargained wage and labor agreement for the Dutch employees. The unions agreed to freeze wages for the period 2002 and 2003 in exchange for a stock option program open to all personnel. The redundancies will guarantee that KPN can meet its interest and payment obligations until 2004 and beyond. KPN NV: Investors Subscribe for 60% of Issue -------------------------------------------- KPN Telecom's shareholders have subscribed for 60% or three billion euros ($2.67 billion) of the indebted firm's 5-billion- euro rescue share offering, Reuters reported. The subscriptions include 1.7 billion euros from the Dutch state, which owns 35% of the former monopoly, the news agency added. The troubled Dutch telephone company is seeking fresh cash after running up 22.3 billion euros in debts. KPN NV: Shares Tumble as Cash Call Deadline Nears ------------------------------------------------- Shares in Dutch telecom company KPN dropped 6.26% on Tuesday's trading as the deadline for the pricing of its cash call nears, Reuters reported. Pricing of the new shares was due Thursday. Monday's news of strict conditions related to KPN's 2.5-billion- euro credit facility also added pressure to the shares. Under the loan conditions, KPN cannot sell its fixed network, is limited in its acquisitions strategy and has to meet tough core profit targets. =========== N O R W A Y =========== KVAERNER ASA: Calls for EGM to Vote on Aker Maritime Plan --------------------------------------------------------- The board of Kvaerner ASA, an Anglo-Norwegian engineering and construction group, has called for an extraordinary general meeting on December 19 at 3.00 pm in Oslo, AFX News reported. Shareholders will vote on the proposed refinancing and industrial plan put forward by Oslo-based Aker Maritime ASA, which agreed to merge with Kvaerner last week. Earlier, Norway's Den norske Bank and Kreditkassen, the Norwegian arm of Nordea, the Nordic banking group, participated in the negotiations of the rescue plan for Kvaerner, as did Norsk Tillitsmann, the Norwegian bondholders trustee. The solution means that Kvaerner will secure new equity through a Directed Equity Issue, a subsequent Rights Issue, and through the merger of Aker Maritime's core business with Kvaerner Oil & Gas. KVAERNER ASA: Will Not Sell Masa-Yards in Near Future ----------------------------------------------------- Kvaerner ASA's shipyard subsidiary Masa-Yards will not be put up for sale in the foreseeable future, AFX News reports. "The key thing now is to see to it that the shipyard functions," says Kvaerner chairman Kjell Inge Roekke, also chairman of 25% shareholder Aker Maritime ASA. Roekke also believes Masa-Yards is well run and that it has a future even if the market for cruise vessels is somewhat lagging for the moment. ===================== S W I T Z E R L A N D ===================== GRETAG IMAGING: Finance Officer Resigns --------------------------------------- Max Michel, the designated chief financial officer of Gretag Imaging Holding AG, has stepped down from the photo development machinery maker, Dow Jones Newswires reported. Reason for the resignation was not disclosed. The company is in talks for a private placement of the shares to improve liquidity. SULZER MEDICA: Names John Wells as Independent Mediator ------------------------------------------------------- Sulzer Medica AG, Europe's biggest orthopedics device maker, appointed John Wells as mediator between the company, its lawyers, and people suing the company in the U.S. after receiving faulty hip and knee replacements, Dow Jones Newswires reported. In late November, Sulzer Medica and the plaintiffs' lawyers agreed to appoint a third-party mediator in the settlement talks for the class action and to extend until February 1 an injunction preventing individual product liability lawsuits against the company from proceeding. "We're very confident that we, together with Mr. Wells, can come to an agreement with the patients," spokesman Andy Bantel said. SWISSAIR GROUP: Faces CHF4BB Claim From Portugal ------------------------------------------------ Swiss airline Crossair Ltd. and its former parent Swissair Group AG face claims of around 4 billion Swiss francs after the Portuguese government joined others in demanding indemnity payments, Dow Jones Newswires reports. The Portuguese government is claiming 400 million Swiss francs in damages from Swissair after the Swiss carrier pulled out of an agreement with TAP Air Portugal in February, provoking major financial losses for the government. Earlier, former Swissair partners French airlines AOM and Air Liberte, and French company Holco, claimed damages from Crossair, while Swissair's Belgian partner Sabena SA against the Swiss group. More claims from Swissair's former partners are expected, but Swissair Group will hardly be in a position to meet them since the group has been granted protection from creditors. ZURICH FINANCIAL: Will Raise $2BB From Sale of Scudder Investment ----------------------------------------------------------------- Zurich Financial Services is close to achieving its goal of raising over $4 billion through divestments following the sale of Zurich Scudder Investments, the group's investment management operation, to Deutsche Bank. According to a Financial Times report, the embattled Swiss insurance group will raise around $2 billion from the sale of its 80% stake in Zurich Scudder. Zurich Financial is also expected to raise roughly the same amount from next week's initial public offering of Converium, its former reinsurance operation that used to be called Zurich Re. Tim Dawson, of Geneva's Pictet, said that sale was evidence that ZFS was addressing the problems of its high cost base, leveraged balance sheet and its poorly performing businesses. =========================== U N I T E D K I N G D O M =========================== BRITISH TELECOM: Union Resists Job Cuts in Retail Unit ------------------------------------------------------ The communication workers' union will stage a national strike to resist a further round of 3,000 job cuts at the retail division of British Telecom, the Guardian reports. "We will oppose these job cuts very seriously. We are getting seriously fed up with the company. They gain no brownie points by cutting jobs when they should be growing their market share," CWU deputy general secretary Jeannie Drake said. The move comes after BT Retail head Pierre Danon confirmed that the division would shed a total of 13,000 jobs by 2003. Some 9,500 posts have already been shed, with another 3,500 earmarked to go between now and 2003 in an effort to save 850 million pounds. ENRON CORPORATION: PwC to Announce Disposal of European Assets -------------------------------------------------------------- PricewaterhouseCoopers will soon announce future disposals of Enron Europe Ltd.'s key assets and commercial contracts, Dow Jones Newswires reports. Enron Europe was put into administration with PwC last week, shortly before its parent, U.S. energy trader Enron Corp., filed for Chapter 11 bankruptcy protection on Sunday. "The administrators at PricewaterhouseCoopers are currently looking into selling the group's key assets, including the LME- registered metals business, the commodity trading businesses, and the credit derivatives business. Progress is also being made in disposing of key commercial contracts," PwC said in a news release. Enron Direct Ltd., Enron Europe's natural gas and electricity supply subsidiary, was sold late Tuesday to U.K. multi-utility Centrica PLC for 96.4 million pounds. EQUITABLE LIFE: Dentons Faces Legal Threat ------------------------------------------ Denton Wilde Sapte was asked to justify its conduct as Equitable Life lawyers after the life assurer threatened legal action against its former advisers, Legal Week reported. Equitable threatened to sue its former directors and advisers, including Dentons and accountant Ernst & Young, unless they justify their conduct that forced the mutual to close its doors to new business last year. "If we do not receive satisfactory explanations, and if it is cost-effective to do so, we will commence legal proceedings," Equitable wrote in a letter to policyholders. INVENSYS PLC: Sell-off Plan Boosts Ailing Engineer -------------------------------------------------- Shares in Invensys rose 4 3/4p to 103 1/4p early this week on hopes the troubled engineer may raise 700 million pounds from the disposal of its battery technology and controls business, This Is London reported. Invensys said the asset sale would help it reduce its debt of 3.28 billion pounds. Invensys chief executive Rick Haythornthwaite hired Morgan Stanley to sell the group's battery-technology business and JP Morgan to dispose of the flow-control business. In the six months to September 30, the company's pre-tax losses mounted to 64 million pounds, while turnover dropped from 3.71 billion to 3.56 billion as sales slowed. MARKS & SPENCER: Plans to Launch Loyalty Scheme ----------------------------------------------- The beleaguered retail giant Marks & Spencer is planning to launch a branded credit card and loyalty scheme to keep shoppers coming back to its stores, the Guardian newspaper reports. Laurel Powers-Freeling, who joined M&S last month to run the financial services division, is finalizing the plans. Advertising agencies are being briefed about a multi-million-pound marketing push. Trials of the services will start next year, the newspaper adds. MILLENNIUM DOME: Quintain in 92-MM-Pound Plan to Redevelop Dome --------------------------------------------------------------- Property developer Quintain Estates & Development plans to spend up to 92 million pounds over two years developing the Millennium Dome if its consortium's plan for the site is successful, the Guardian reports. Quintain, a partner of Australian-owned Lend Lease to redevelop the Dome and surrounding land, says its bid includes plans for an arena and a "master plan for the regeneration of the Greenwich peninsula". Quintain's intention to go ahead with its plans for the Dome came as Greenwich council gave the signal to proceed for the structure to be used for a massive New Year's Eve party. The Dome closed it doors to the public on New Year's Eve since it received only a little over half the predicted 12 million visitors. ********** 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 * * *