/raid1/www/Hosts/bankrupt/TCREUR_Public/011221.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 21, 2001, Vol. 2, No. 249


                            Headlines

* B E L G I U M *

SABENA SA: Investors Bid EUR1 for DAT Assets

* G E R M A N Y *

DAIMLERCHRYSLER: Chrysler to Post DM5BB Losses in 2001
DEUTSCHE TELEKOM: Latest Write-down Spurs Probe on IPO Documents
DEUTSCHE TELEKOM: Successfully Sells US$1.25BB Asset-backed Bonds
KINOWELT MEDIEN: Files for Insolvency After Talks With ABN Failed
KIRCHGRUPPE: Set to Sell Pay-TV Stake to Raise Cash
KIRCHGRUPPE: Unit Sells Mediaset Stake for EUR120MM
NSE SOFTWARE: Court Dismisses De-listing Petition

* I T A L Y *

ALITALIA SPA: Issues Shares to Raise Cash

* N O R W A Y *

KVAERNER ASA: Resolves Skanska Disputes
KVAERNER ASA: Shareholders Approve Rescue Plan
KVAERNER ASA: Wins $13MM Contracts From Brazil

* P O L A N D *

LOT AIRLINES: Lufthansa Wants LOT in Its Alliance

* S W E D E N *

ICON MEDIALAB: Merges With Lost Boys
ICON MEDIALAB: Shares Suspended in Stockholm

* U N I T E D   K I N G D O M *

BRITISH TELECOM: Moody's Assigns Baa2 Rating to mm02
EQUITABLE LIFE: Treves Tells Critics to Hold Back Views on Deal
MARCONI PLC: To Provide EdisonTel Access Network
P&O PRINCESS: May Consider Carnival Takeover
RAILTRACK GROUP: E&Y Appoints Deutsche Bank as Advisers
RAILTRACK GROUP: Consignia to Pullout From Reeling Rail Industry
THUS PLC: Pays 260MM-Pound Debt to Scottish Power


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


SABENA SA: Investors Bid EUR1 for DAT Assets
--------------------------------------------

Belgian financiers raising money for a new airline after the
downfall of Sabena had bid a symbolic 1 euro for the assets of
Delta Air Transport, a former Sabena unit on which they would
base the airline.

According to a report from Reuters, financiers Etienne Davignon
and Maurice Lippens, recruited by the government to help raise
money for the airline, are in advanced talks with discount
carrier Virgin Express about a possible alliance.

The bid, Reuters added, was based on the condition that the
creditors of one key investor agreed to cancel half of more than
100 million euros that DAT owed the investor, and swap the other
half for a stake in the new airline.

The bid was also contingent on the financiers negotiating
favorable terms with leasing companies for 28 of the 32 passenger
planes flown by DAT.


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


DAIMLERCHRYSLER: Chrysler to Post DM5BB Losses in 2001
------------------------------------------------------

DaimlerChrysler's ailing Chrysler Group in the U.S. will drain
the company of between 10.1 billion and 10.8 billion Deutsche
marks in 2001, Dow Jones Newswires reported, citing Der Spiegel
magazine.

The sum is comprised of a 5.8 million Deutsche marks
restructuring charge and an operating loss of between 4.3 billion
and 5.0 billion Deutsche marks, the news agency added.

In November, the Chrysler unit offered more early retirement for
its employees and suspended matching payments for a company-
sponsored retirement plan.

The early retirement offer is part of Chief Executive Officer  
Dieter Zetsche's plan to turn around the Chrysler Group as sales
figure have fallen despite deep discounts on many of its units.

The plan calls for eliminating nearly 26,000 jobs, closing six or
seven plants and selling unnecessary business units.


DEUTSCHE TELEKOM: Latest Write-down Spurs Probe on IPO Documents
----------------------------------------------------------------

The prosecutor's office in Bonn has launched an investigation on
Deutsche Telekom on suspicion that it overvalued its property
portfolio prior to its 1996 initial public offering.

According to the Financial Times, the move comes at the heels of
a recent announcement made by the telecoms giant that it is
writing down US$413 million from its land holdings for the second
time this year.

In February, the company also slashed US$1.8 billion from said
portfolio in the form of a depreciation charge.  This second
write-down brings down the value of its land-holding to US$3.6
billion.

Lawyers representing shareholders say the write-down confirms
initial assessments that the company was overly optimistic about
its property value when it went public in 1996.

The Financial Times says the probe is currently directed at CEO
Ron Sommer.  


DEUTSCHE TELEKOM: Successfully Sells US$1.25BB Asset-backed Bonds
-----------------------------------------------------------------

Deutsche Telekom's attempt to clean its balance sheet took a
giant leap towards fulfillment when it successfully sold its
first tranche of asset-backed bonds recently.

According to a report by the Telecom Paper, the investment group
IRIS bagged the bonds valued US$1.25 billion. It matures in five
years and will be worth US$2.15 billion by then.  

The company secured the bonds with its customer's fixed-net
telephone bills. ABN Amro Bank and Dresdner Kleinwort Wasserstein
brokered the transaction.

The move is part of the company's plans to clean its balance
sheet and bring down debt levels to US$49.9 billion by end of
2002.


KINOWELT MEDIEN: Files for Insolvency After Talks With ABN Failed
-----------------------------------------------------------------

Kinowelt Medien AG said Wednesday that it and its subsidiary
Kinowelt Lizenzverwertungs GmbH have filed for insolvency
proceedings as a precautionary measure, after talks with ABN AMRO
Bank failed.

In late November, the German unit of ABN Amro Bank NV, one of its
major creditors, submitted a petition for insolvency against
Kinowelt.

The German film rights group, which revealed a net loss of 309.1
million euros in the first nine months of the year (see
http://www.bankrupt.com/misc/kinowelt3Q.pdffor the company's  
interim report), said that both companies would continue to trade
as normal.

Kinowelt added that its remaining subsidiaries and holdings, such
as Kinowelt Home Entertainment GmbH, Kinowelt Filmverleih GmbH,
Kinowelt Filmproduktion GmbH, Atlas Air Film + Media Service GmbH
and the Kinopolis multiplex cinemas are not affected by the
filing.

For inquiries, contact Jorg Lang, Vice President Investor
Relations, at telephone + 49 89-30 796 8103 or via email
IR@kinowelt.de


KIRCHGRUPPE: Set to Sell Pay-TV Stake to Raise Cash
---------------------------------------------------

German entertainment powerhouse KirchGruppe says it is prepared
to sell a substantial stake in its pay-TV business in order to
raise cash, if Rupert Murdoch forces it to buy him out of a 22%
stake in Premiere.

According to a Financial Times report, Murdoch has a put option
of 3.4 billion Deutsche marks that would require Kirch to buy the
stake.

Kirch may have to provide the full sum in cash next October if
British Sky Broadcasting, Murdoch's UK satellite group, triggers
the option.

If it cannot reach a deal with BSkyB, Kirch will look for other
investors.

"We are pursuing potential alternatives, which could be other
partnerships or a restructuring of the business," says Dieter
Hahn, the Kirch executive in charge of running the indebted media
group.

Kirch has debts of 11 to 12 billion Deutsche marks and more than
contingent liabilities of 5 billion Deutsche marks. It aims to
reduce the number of short term loans and dispose of non-core
assets, mainly minority holdings in non-German businesses, to
improve its balance sheet.


KIRCHGRUPPE: Unit Sells Mediaset Stake for EUR120MM
---------------------------------------------------

Kirch unit KirchMedia GmbH & Co KGaA sold its 1.28% stake in
Italian broadcasting group Mediaset s.p.a. in order for it to
focus on the German-speaking market, Dow Jones Newswires
reported.

Price tag for the stake is 120 million euros.

The shares were placed on the open market and JP Morgan arranged
for the transaction.


NSE SOFTWARE: Court Dismisses De-listing Petition
-------------------------------------------------

The Frankfurt regional court ruled on the petition by NSE
Software AG, one of the leading providers of front office-
solutions for the financial industry, for a temporary injunction
against Deutsche Borse AG.

The petition seeks to prevent the stock exchange from applying
the new rules governing the delisting of penny stocks.

The Munich-based company, which in the third quarter of 2001 has
achieved results (Earnings after Interest and Taxes) of minus 1.8
million euro, compared with a loss of 1.4 billion euros in the
second quarter and 6.7 million euros in the first quarter, is
reviewing its options for appealing the courts decision.

For further information, contact Gerhard Inninger, Perchtinger
StraBe 8-10, 81379 Munich, Germany, at telephone +49 (0)
89/74833-600, fax +49 (0) 89/74833-345, or via eMail
gerhard.inninger@nse.de


=========
I T A L Y
=========


ALITALIA SPA: Issues Shares to Raise Cash
-----------------------------------------

Struggling flagship carrier Alitalia SpA is working to raise
between 1.2 billion and 1.4 billion euros by issuing new shares.

The carrier has few options to raise the money it needs.
According to Centrosim analyst Lucio Cannamela, issuing bonds or
convertible bonds would only worsen the carrier's debt position.
A share sale is less risky but it is a question of finding the
right price.

Alitalia's options are limited also because its majority
shareholder, the Italian Treasury, cannot allot more state aid
without the approval from the European Union.

Dow Jones Newswires reported that it is not yet clear whether the
issue will be sold to institutional investors or the general
public.

The airline company has approved the appointment of investment
bank Lazard LLC as adviser to raise capital.


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


KVAERNER ASA: Resolves Skanska Disputes
---------------------------------------

Anglo-Norwegian construction and engineering group Kvaerner ASA
said Wednesday it has reached agreement in principle to settle
all outstanding disputes with Skanska.

The dispute was in relation to the sale of Kvaerner's building
and civil engineering businesses to the Swedish company in the
fourth quarter of 2000.

A detailed agreement will be concluded between the parties by
December 21.


KVAERNER ASA: Shareholders Approve Rescue Plan
----------------------------------------------

Shareholders of Kvaerner, which was pushed to the brink of
bankruptcy last month, have agreed on Wednesday to the rescue
plan that includes a merger with oil and gas services group Aker
Maritime, Reuters reported.

Some small creditors have not yet approved the bailout plan, and
the approval of all is required for the plan's implementation.

Kvaerner will have to raise about 3.5 billion Norwegian crowns in
fresh capital as part of a bailout plan to rescue the loss-making
group.


KVAERNER ASA: Wins $13MM Contracts From Brazil
----------------------------------------------

Kvaerner, the loss-making Anglo-Norwegian engineering and
construction group, said Wednesday has been awarded two deepwater
contracts from Brazil's Petrobras worth a combined US$13 million.

The first contract is for the supply of twelve subsea Xmas Trees
for operation in water depths of 2,000 meters.

The first Tree from the most recent order will be delivered in
July 2002 and will be installed on the East Albacora Field in the
Campos Basin.

The second contract is for the development of a Workover System
to be used for subsea installations in up to 3,000 meters of
water.
  
It consists of riser, terminal head, electro-hydraulic controls,
umbilicals and service line. This system will be used for subsea
installation and well intervention/workover and will cater for
both existing and future Petrobras systems.

The contract, according to Kvaerner, is for the first phase of a
co-operation agreement between them and Petrobras for front-end
engineering and design.
  
For further information, contact Roger Trett, Vice President,
Commercial, Kvaerner Oilfield Products at telephone +44 (0)20
7559 6004 or Marcelo Taulois, President, Kvaerner Oilfield
Products, Brazil: +55 41 341 4592 or Paul Emberley, Vice
President Group Communications at telephone +44 (0)20 7339 1035
or +44 (0)7768 813090 or via email paul.emberley@kvaerner.com


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


LOT AIRLINES: Lufthansa Wants LOT in Its Alliance
-------------------------------------------------

Germany's Deutsche Lufthansa AG has expressed interest in
bringing troubled Polish national air carrier PLL LOT into its
Star Alliance, Reuters reported, citing Poland's treasury
minister Wieslaw Kaczmarek.

Earlier, there have been reports that Lufthansa and British
Airways were eyeing at the stake in LOT, but British Airways Plc
denied any interest after the Polish government said it was
interested. Luftansa declined to comment.

Scandinavian airline group SAS was reported to have also eyed the
LOT stake.

The government is keen to find a new partner for LOT, whose net
loss more than tripled to 252 million zlotys in the first half of
this year compared with the same period of 2000, to guarantee the
national carrier's future after the demise of partner Swissair.

The Star Alliance, owned by government-controlled holding firm
Cintra, includes Singapore Airlines, American United Airlines,
Air Canada and Mexicana Airlines.


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


ICON MEDIALAB: Merges With Lost Boys
------------------------------------

Swedish Icon Medialab International AB said that it and
Amsterdam-based international network Lost Boys N.V. have agreed
to merge yesterday.

A fully underwritten Rights Issue of approximately 180 million
Swedish kronas will secure the financial basis of the merged
company.

The Board of IconMedialab recommends its shareholders to vote in
favor of the proposed business combination at an Extraordinary
General Meeting on January 18.

Icon Medialab said that the merged company expects to generate
positive operating results by mid 2002.

Together, the two companies, which will for the time being  
continue to operate under their own names, create the leading e-
business and new media services company in Europe, and have a
strong position in the USA.

The board of the merged company is proposed to consist of seven
board members. Three board members from Lost Boys, two of the
current board members from IconMedialab and two new independent
board members will be proposed for election by the shareholders
at the EGM.


ICON MEDIALAB: Shares Suspended in Stockholm
--------------------------------------------

Shares of Swedish Internet consultant Icon Medialab AB were
suspended on the Stockholm bourse on Wednesday, Dow Jones
Newswires reported.

Prior to the suspension, Icon Medialab's shares had soared 22%,
to 3.75 Swedish kronas, from the previous close.

Icon Medialab is close to getting new financing that will help
rescue the financially troubled company.


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


BRITISH TELECOM: Moody's Assigns Baa2 Rating to mm02
----------------------------------------------------

Credit ratings agency Moody's Investors Service said on Wednesday
it had assigned a Baa2 rating to the five-billion-euro senior
unsecured European Medium Term Note Program of mmO2 plc, a the
demerged wireless arm of British Telecommunications Plc.

Moody's said that the long term rating reflects the company's
relatively strong market position in the UK, its low initial
financial leverage and corresponding good liquidity risk
insurance.

The rating also factors challenges mmO2 faces in managing its
rapid projected growth in the mobile telecommunications,
particularly in Germany and the Netherlands.

In September, Moody's assigned mmO2 a Baa2 senior unsecured bank
loan rating and also rated its 3.5 billion pound senior unsecured
multicurrency revolving credit facility Baa2.

Meanwhile, international rating agency Fitch said Wednesday it
has assigned a senior unsecured rating of BBB to mmO2 plc.

The new 5-billion-euro Euro Medium Term Note Program has also
been rated BBB.


EQUITABLE LIFE: Treves Tells Critics to Hold Back Views on Deal
---------------------------------------------------------------

Equitable Life Chairman Vanni Treves has appealed to pundits to
reserve their critique on the manner by which the company is
conducting the voting on its compromise deal with policyholders.

Mr. Treves made the appeal after Professor David Blake of the
Pensions Institute at the University of London rapped the process
for lacking "adequate" information about the deal.

"The timing of this paper is extraordinary. It contains some
interesting academic points about the lead up to the problems at
Equitable, but this is not the moment to debate such matters,"
says Mr. Treves.

Prof. Blake had pointed out that the information furnished to
policyholders lacked details such as the number of policyholders
who have left the fund, the current value of the fund, and the
future of the fund.

According to him, these data would greatly aid policyholders in
making up their mind, although he hinted that voting "yes" may be
a wise choice.

Mr. Treves, however, maintains that the company "has provided
policyholders with an enormous amount of information."

"Right now is the time they need to focus on the compromise
scheme," he told the Electronic Telegraph.


MARCONI PLC: To Provide EdisonTel Access Network
------------------------------------------------

Telecom equipment group Marconi, which has been struggling to
reduce its debt burden of more than 3 billion pounds, has reached
a three-year agreement with telecommunications company EdisonTel
SpA to deploy an access network that will help accelerate the
development of EdisonTel's broadband services.

No financial details were released.

As a result of the deal, EdisonTel will be able to provide
digital subscriber line, or DSL, broadband services, such as
voice and high-speed video and data applications, including
multimedia and fast Internet, across Italy.


P&O PRINCESS: May Consider Carnival Takeover
--------------------------------------------

P&O Princess Cruises plc set out a proposed timetable that could
allow shareholders to consider the takeover bid from rival
Carnival Corporation, the Financial Times reported.

Carnival has earlier offered P&O Princess a cash and equity of
$4.6 billion, excluding debt in value, but was rejected by the
third-largest cruise operator in the world because of too many
pre-conditions.

P&O Princess will be holding a meeting for shareholders to vote
on the merger with Royal Caribbean on February 14, 2002. The
timing of the meeting will mean that if Carnival makes an offer
before January 18, there will be enough time to consider the
proposal before the EGM.

According to chief executive Peter Ratcliffe, the timetable will
give time for Carnival to present a credible bid.

P&O Princess has in the past few days made it clear that its
preferred option was to merge with Royal Caribbean, a deal it
believed would offer greater value to shareholders and face fewer
regulatory hurdles.


RAILTRACK GROUP: E&Y Appoints Deutsche Bank as Advisers
-------------------------------------------------------

Ernst & Young LLP, the administrators of U.K. rail infrastructure
company Railtrack PLC have appointed Deutsche Bank AG to advise
on the company's transfer process.

Joint administrator Alan Bloom said, according to a Dow Jones
Newswires report, the appointment of Deutsche Bank will help them
effectively market the company to interested parties.

In October, Railtrack was put into administration by the
government, leaving shareholders without any way to recoup their
investment.


RAILTRACK GROUP: Consignia to Pullout From Reeling Rail Industry
----------------------------------------------------------------

State-owned post office group Consignia is reportedly going to
cut substantially its use of trains to deliver mails next month,
dealing another blow to UK's struggling rail industry, says the
Financial Times.

According to the report, a recent review by Consignia of its
transport strategy has allegedly concluded that "it should opt
instead for more flexible short-term agreements."

Consignia has a 10-year contract worth US$941 million with
freight operator EWS, which is not due for renegotiation until
2006.  

However, the contract also provides that should reliability
decline, Consignia can choose to reduce use of the railway and
consider other radical options like airfreight.

The group currently uses 58 trains a night. Recently, it added
200 trains to keep up with the surge in Christmas posts.  

The report says three routes will be phased out in the next few
weeks.  Accordingly, this move will further stretch limited
railway finances and hamper the government's attempt to move more
freight from road to rail for environmental reasons.


THUS PLC: Pays 260MM-Pound Debt to Scottish Power
-------------------------------------------------

Thus, a provider of voice, data and call center services and
owner of Internet service provider Demon, had bridged its funding
gap and paid off a debt of 260 million pounds to major
shareholder Scottish Power.

According to a report from Reuters, Thus had secured a 90 million
pound bank loan, agreed with Bank of Scotland Plc, TD Securities
and Societe Generale, which would see it through to financial
year 2003/2004.

Scottish Power said it would rescue the telecoms company by
underwriting a share issue worth 275 million pounds.

Thus, which has a strong EBITDA improvement to negative 1.8
million pounds for the first half, up from negative 17.3 million
pounds in the first half of the previous financial year, will use
the funds raised in the share issue to pay off its debts.

In November, Thus said it needed less than 100 million pounds to
close its funding gap.

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