/raid1/www/Hosts/bankrupt/TCREUR_Public/011226.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 26, 2001, Vol. 2, No. 251


                             Headlines

* B E L G I U M *

SABENA SA: Belgian Investors Buy DAT Shares

* F R A N C E *

AIR LIB: Will Not File for Bankruptcy

* G E R M A N Y *

DAIMLERCHRYSLER: EU Cuts State Aid by EUR6.6MM
DEUTSCHE TELEKOM: Disposes of Sprint Stock
KIRCHGRUPPE: Seeks Allies as Debt Balloons to Over $5BB
LOBSTER NETWORK: Company Profile
LTU GROUP: Lufthansa to Monitor Use of State Aid

* I T A L Y *

FIAT SPA: CEO Sees EUR800MM Net Loss for 2001

* N O R W A Y *

KVAERNER ASA: Names Helge Lund as New Chief

* P O L A N D *

ELEKTRIM SA: Seeks 60 Days to Restructure
NETIA HOLDINGS: Gets Default Ratings From Fitch

* R U S S I A *

TORIBANK: Court Completes Receivership

* S W E D E N *

LM ERICSSON: Appeals Tax Authority Decision
LM ERICSSON: Gets $50MM in Mobile Infrastructure Orders

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

SULZER MEDICA: Faces Arbitration Proceedings With Former Parent
SWISSAIR GROUP: Agrees to Sell Swissport to Candover
SWISSAIR GROUP: Lufthansa Shuns Swissair Stake in LOT

* U N I T E D   K I N G D O M *

360NETWORKS: Court Approves Extension of Cash Collateral Order
COLT TELECOM: Completes ISC Rollout
CORUS GROUP: Directors Purchase Shares at 71.5
CORUS GROUP: Will Be Removed From Euronext 100
HUNTINGDON LIFE: Accepts Life Sciences Offer
MARCONI PLC: Sheds 150 Jobs in Optical Division Sale
MARKS & SPENCER: Closes Shop in Mainland Europe
NTL INCORPORATED: Bondholders May Make Debt Plans
PHOTOBITION GROUP: Completes MBO of Display Graphics Operations
XEROX CORPORATION: In Finance Accord With GE Capital


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


SABENA SA: Belgian Investors Buy DAT Shares
-------------------------------------------

Belgian investors gathered in SN Airholding N.V. have acquired
all shares of Delta Air Transport (DAT), the successor of
bankrupt Belgian airline Sabena.

Dow Jones Newswires reported that the investors' bid of one
symbolic euro for the troubled regional airline remains
conditional of a debt restructuring for DAT, as well as of price
rebates for its airplane lease contracts.

If one of those conditions is not fulfilled on January 15, the
contract will be annulled, the news agency added.


===========
F R A N C E
===========


AIR LIB: Will Not File for Bankruptcy
-------------------------------------

The management of troubled French airline Air Lib, which should
have losses of some 92 million euros at the end of this month,
promised its employees that it would not file for bankruptcy.

Holco, a company formed by Air Lib shareholder believes that two
conditions are necessary in order to guarantee the airline's
existence.

The first condition, according to a report from the Le Monde,
consists of consolidating the group financially by reinforcing its
shareholding, injecting equity capital and eventually resorting to a
bond issue.

The second condition is the overriding need to improve the
company's economic performance, which will be achieved through
a total transformation of the structure of company costs.


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


DAIMLERCHRYSLER: EU Cuts State Aid by EUR6.6MM
----------------------------------------------

The European Commission said the German government must reduce
its aid payment for construction of DaimlerChrysler AG's Koelleda
engine by 6.6 million euros.

According to a report from the Interactive Investor, the aid is not
compatible with the EU rules and may not be granted.

The automaker said earlier it might reduce its German work force
by 5,000 to 6,000 next year because its commercial-vehicles
business has been hit by the stalling global economy.


DEUTSCHE TELEKOM: Disposes of Sprint Stock
--------------------------------------------

Deutsche Telekom sold approximately 372,340 shares in Sprint PCS
Group, the wireless unit of Sprint Corp., at $22.9344 per share,
Reuters reported.

Market analysts said the move by Telekom was widely expected as
it said in February that it planned to sell the stake, held since 1994.

Earlier, Telekom sold its first tranche of asset-backed bonds to
investment group IRIS as 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.


KIRCHGRUPPE: Seeks Allies as Debt Balloons to Over $5BB
-------------------------------------------------------

Cash-strapped entertainment powerhouse Kirch is looking for
alternative pay television partners as the group's debt now tops
$5 billion, Reuters reports.

"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, struggling with mounting debts, faces the prospect of
having to pay up millions of extra dollars next year if Rupert
Murdoch's BSkyB and other shareholders exercise options to sell
their stake in the company.

Kirch aims to reduce the number of short term loans and dispose
of non-core assets to improve its balance sheet.


LOBSTER NETWORK: Company Profile
--------------------------------

Name:    Lobster Network Storage AG

Address: Zimmerstrasse 68
          10117 Berlin

Tel:     030 - 896 72 0
Fax:     030 - 896 72 371

Website: http://www.lobster.de
SIC:     Data Storage Service Provider
Employees: 59
Net Loss:     11.1 million Deutsch marks (as of June 2001)
Total Assets: 20 million Deutsche marks
Liabilities:  6.4 million Deutsche marks
Outstanding Shares: 2,062,499 (as of September 30, 2001)

Type of Business: Lobster Network Storage AG is a provider of
data storage and backup solutions and related services.

Trigger Event: Lobster Network, faced with adverse business
conditions, is threatened by a funding gap where its cash is
expected to last until a few weeks from December.

After failing to convince investors to take part in a three
million euro capital increase, Lobster Network in November filed
for insolvency on behalf of its wholly owned subsidiary Lobster
Storage Solutions GmbH, Berlin.

Executive Chairman and CEO:        Thomas Strobl
Chairman of the Supervisory Board: Oliver Borrmann
Deputy Chairman:                   Klaus Krone

Auditors: Charlottenburger
           Treuhand Gesellschaft
           Wirtschaftsprufungsgeselschaft
           Steuerberatungsgesellschaft


LTU GROUP: Lufthansa to Monitor Use of State Aid
------------------------------------------------

German national carrier Deutsche Lufthansa AG will monitor
Lufttransport Unternehmen GmbH (LTU) to ensure that the 120-
million-euro aid extended by the German federal state of North
Rhine Westphalia will not be used for "aggressive pricing" of air
fares, AFX News reports.

The EU earlier authorized the temporary aid to make it possible
to rescue the German charter operator from bankruptcy.

In November, Lufthansa formally filed a complaint with the
European Commission protesting against the state credit
guarantees planned for LTU by the federal state.

LTU found itself in difficulties following the collapse of its
major shareholder, Swissair Group.


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


FIAT SPA: CEO Sees EUR800MM Net Loss for 2001
---------------------------------------------

Fiat SpA CEO Paolo Cantarella sees a net loss this year of an
amount close to the 800 million euros the Italian carmaker planned
to allocate for the restructuring of its auto operations in 2002,
reports AFX News.

The company's cashflow this year deteriorated sharply mainly due
to worsening conditions in Argentina, Brazil and Poland.

Fiat said earlier that it was rescheduling its 7.5-billion-euro debts
as part of a wide-ranging overhaul that includes a 1-billion-euro
rights issue, closures or cutbacks at 18 plants, 2-billion-euro
of disposals and a $2.2 billion convertible bond issue.


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


KVAERNER ASA: Names Helge Lund as New Chief
-------------------------------------------

Loss-making Anglo-Norwegian construction and engineering group
Kvaerner ASA has appointed Helge Lund, who was appointed to the
Board of Kvaerner in November, as its new President & CEO
effective January 1.

Lund succeeds Kristian Siem who has held the position during a
transitional period from the beginning of November.

As President & CEO, Helge Lund will be receiving an annual salary
of 4 million Norwegian krone and a twelve-month salary guarantee.

Prior to his appointment to the Board, he was also Deputy
Chairman of Aker Maritime, which proposed a refinancing and
industrial plan for Kvaerner.

Upon appointment, Lund will invest approximately 5 million
Norwegian krone in Kvaerner shares and will also be offered an
option to buy four times the value of his original investment at
a rate equal to the average price of the shares on the final day
of trading this year.

For more information, contact 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
===========


ELEKTRIM SA: Seeks 60 Days to Restructure
-----------------------------------------

Elektrim has asked creditors for another 60 days to restructure
its 479-million-euro worth of convertible bonds.

According to a report from the Financial Times, Elektrim needed
the time to seek a financial restructuring that would fully
secure the interests of the bondholders.

The Polish telecom and power group plunged into crisis two weeks
ago after bondholders exercised put options forcing the early
redemption of the bonds.

Elektrim's management hopes to persuade bondholders to hold off
on filing bankruptcy claims until the company works out a medium-
term plan to restore its financial health.


NETIA HOLDINGS: Gets Default Ratings From Fitch
-----------------------------------------------

International rating agency Fitch has downgraded the senior
unsecured corporate credit rating of Netia Holdings, Poland's
largest alternative fixed-line telecommunications services
provider, to D from C.

The downgrade follows a default on cross-currency swap
obligations on December 17 and the prospect of default on overdue
interest payments on some of its bonds.

The rating is taken off Rating Watch Negative, where it was first
put in place in August.

The single D rating reflects the agency's estimation that
bondholder recoveries are likely to equate to less than 50% and
its expectation that Netia will undergo a formal revision of its
capital structure.

Netia, listed on the Warsaw Stock Exchange and NASDAQ, said
earlier it would continue its business activities despite
negative financial results.

The company in September reported a loss of 1.87 billion Polish
zlotys, which exceeds the aggregate of the spare capital, the
reserve capital and one-third of the company's 1.74 billion
Polish zlotys share capital.


===========
R U S S I A
===========


TORIBANK: Court Completes Receivership
------------------------------------------

The Moscow City Arbitration Court has completed the receivership
procedures in Toribank, which was declared insolvent in February
2000.

RosBusinessConsulting reported that the Central Bank of Russia
had opposed ending the receivership procedures because
Toribank did not submit some of the documents dealing with the
completion of these procedures for approval.

Toribank has already paid its debts to 441 priority creditors and
to 27 'second-turn' creditors. The debt to the 'fourth-turn'
creditors has been repaid by 58.5%, while the debts to the 932
'fifth-turn' creditors worth over 2.7 billion rubles have not
been repaid.

The total volume of the bank's debts to its creditors is 3.2
billion rubles (about $105.7 million).

Yelena Rebgun is Toribank's receiver.


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


LM ERICSSON: Appeals Tax Authority Decision
-------------------------------------------

LM Ericsson, the largest manufacturer of equipment for mobile
phone networks, will appeal a decision by the Swedish tax
authority to increase its taxable income by 423 million Swedish
kronas for 1999, reports Dow Jones Newswires.

Ericsson's Swedish-based units paid 1.78 billion Swedish kronas
in income taxes for 1999 after deducting foreign taxes.

The telecommunications group made a 5.8 billion Swedish krona
($548.7 million) pre-tax loss in the third quarter.


LM ERICSSON: Gets $50MM in Mobile Infrastructure Orders
-------------------------------------------------------------

L.M. Ericsson Telephone Co. received mobile infrastructure orders
worth $50 million from BSSL, a joint venture between Hong Kong
cellular operator Hutchison Telecom of and India's Essar Group.

Dow Jones Newswires reported that the Swedish telecom equipment
maker would provide the complete core switching network
infrastructure, radio network and microwave equipment to BSSL to
operate GSM services in Karnataka, Andhra Pradesh and Chennai.

Ericsson would also supply a range of value added services.


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


SULZER MEDICA: Faces Arbitration Proceedings With Former Parent
---------------------------------------------------------------

Sulzer Medica AG is facing arbitration proceedings from former
parent, Swiss techonology group Sulzer AG.

According to a Dow Jones Newswires report, the proceedings shall
confirm the legal validity of Sulzer Medica's obligation to
indemnify Sulzer against all expenses and damage claims arising
in relation with Sulzer Medica's medical devices sector.

Sulzer Medica's U.S. unit, Sulzer Orthopaedics Inc., faces more
than a thousand lawsuits in the U.S. in connection with faulty
hip and knee joints. It is likely to pay around $800 million in
damages.

Under a spin-off agreement made in the summer of 2001, Sulzer
Medica had undertaken contractually to indemnify Sulzer AG in the
event that it is also forced to pay damage claims.


SWISSAIR GROUP: Agrees to Sell Swissport to Candover
----------------------------------------------------

Swissair Group, which has been operating under creditor
protection since early October, said that it has reached an
agreement to sell its ground handling services unit Swissport to
Candover, a leading European buyout specialist.

Swissair Group will apply to the court for approval of the
transaction shortly.

Completion of the transaction is subject to a number of other
conditions and is anticipated to close early next year.

The sale of its assets is the sole chance that creditors of the
collapsed Swissair Group will see any return on the more than 12
billion Swiss francs it owes.


SWISSAIR GROUP: Lufthansa Shuns Swissair Stake in LOT
-----------------------------------------------------

Deutsche Lufthansa AG denied rumors that it would acquire the
stake of Swissair AG in Polish airline LOT.

According to a Neue Zurcher Zeitung report, citing a spokeswoman
for the German airline group, Lufthansa was holding negotiations
with LOT over a potential cooperation, but stressed that
Lufthansa had no plans to acquire a stake in the Polish company.

Earlier, the Polish government revealed that Lufthansa had
expressed an interest in the stake held by Swissair.


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


360NETWORKS: Court Approves Extension of Cash Collateral Order
--------------------------------------------------------------

The U.S. Bankruptcy Court for the Southern District of New York
has given the green light to the six-month extension of a cash
collateral order for optical network services provider
360networks.

The decision allows the company to continue operating in the
United States through July 1, 2002.

Canada NewsWire reported that the company's bank lenders and
unsecured creditors' committee also supported the extension of
the order.

360networks and several of its operating subsidiaries voluntarily
filed for protection under the Companies' Creditors Arrangement
Act (CCAA) in the Supreme Court of British Columbia in June this
year.

Concurrently, the company's principal U.S. subsidiary,
360networks (USA) inc., and 22 of its affiliates voluntarily
filed for protection under Chapter 11 of the U.S. Bankruptcy Code
in New York.

Four operating subsidiaries that are part of the 360atlantic
group of companies also voluntarily filed for protection in
Canada in October 2001.

Insolvency proceedings for several subsidiaries of the company
have been instituted in Europe and Asia.


COLT TELECOM: Completes ISC Rollout
-----------------------------------

COLT Telecom Group plc, a leading supplier of business network
and application solutions, has completed the build phase of its
Internet Solution Center (ISC) construction program.

COLT's hosting capability is distributed over 18 centers in 16
cities in 12 countries across Europe offering customers a wide
range of services from basic co-location through to high value
managed and professional services.

"We will be giving even greater emphasis to filling our ISC
capacity with an expanding range of high value managed and
professional services," COLT President and Chief Executive Peter
Manning said.


CORUS GROUP: Directors Purchase Shares at 71.5
----------------------------------------------

Euronext said that Corus Group plc directors have purchased
company shares at 71.5 pence per share on December 20 under the
Corus Group Employee Share Ownership Plan.

Chief executive Tony Pedder and executive director for finance
David Lloyd both purchased 174 shares.

Following this notification, Pedder had a total of 98,794 shares
in the company, while Lloyd had 1,352.


CORUS GROUP: Will Be Removed From Euronext 100
----------------------------------------------

Euronext said that as a result of its quarterly review, Corus
Group, Europe's third-largest steelmaker, would be removed from
the Euronext 100 index on January 2.

Euronext noted the changes are subject to corporate actions.

Corus Group announced earlier it is selling as much as 287.5
million euros ($255.9 million) of bonds convertible into stock to
help repay its debt.


HUNTINGDON LIFE: Accepts Life Sciences Offer
--------------------------------------------

Life Sciences Research, Inc. announced that it has received
acceptances in respect of a total of 255 million Huntingdon Life
Sciences Group plc shares, representing approximately 86.9% of
the existing issued ordinary share capital of the drug testing
company.

Subject to the offer becoming, or being declared, unconditional
in all respects, Huntingdon will apply for the cancellation of
the listing of its ordinary shares in the London Stock Exchange
on January 24.

Huntingdon Life reported in the three months to the end of
September a pre-tax profit, under U.S. accounting rules, of 0.6
million pounds, compared to a 1.7 million loss last time.

HLS's move to the U.S. was prompted by the poor liquidity in the
U.K. shares, following the withdrawal of support from
stockbrokers and marketmakers, who were targeted by animal rights
activists.


MARCONI PLC: Sheds 150 Jobs in Optical Division Sale
----------------------------------------------------

Troubled telecom equipment group Marconi will layoff 150 workers
in Essex and Northamptonshire plants after its optical components
division was sold to Bookham Technologies, BBC News reported.

The Manufacturing, Science and Finance (MSF) union said that
voluntary redundancy would be offered to all workers.

The asset sale was part of Marconi's program to reduce its debt
burden of about 3.5 billion pounds.

The company reported a loss of 5.1 billion pounds during the six
months to September.


MARKS & SPENCER: Closes Shop in Mainland Europe
-----------------------------------------------

High-street retailer Marks & Spencer has closed shop in mainland
Europe after 26 years of trading there, the Guardian newspaper
reported.

The closure of the entire European operation will make 3,350 jobs
redundant.

M&S stores in Germany and Spain already put up the closed sign
for the last time. M&S outlets in France, Belgium, Luxembourg,
the Netherlands and Portugal will follow suit.


NTL INCORPORATED: Bondholders May Make Debt Plans
-------------------------------------------------

European bondholders of NTL Inc. may approach the debt-laden
British cable operator with restructuring proposals if the
company does not address their concerns soon.

According to a Reuters report, the bondholders have teamed up to
protect their interests in any restructuring of the company's $17
billion debt pile.

The bondholders have appointed law firm Cadwalader, Wickersham
and Taft to represent them.

NTL is struggling to increase revenue and sell assets. It
recently raised job cuts to 8,800, froze salaries to its
executives, pared capital spending plans to preserve cash.


PHOTOBITION GROUP: Completes MBO of Display Graphics Operations
---------------------------------------------------------------

Photobition Group PLC, the failed global display graphics
concern, has completed the management buy-out of its core display
graphics businesses in the U.K.

The group's core U.K. display graphics business, renamed Services
Graphics Ltd, was bought by Charlie Reed, Paul Green and Ben Moss
from the administrators Arthur Andersen.

It is not known how many Services Graphics employees will be
absorbed.

The administrators are currently in discussions with interested
buyers of the group's display graphics businesses overseas,
including those situated in Australia, Hong Kong and Japan.

They are also trying to dispose of the group's film storage and
distribution businesses in the U.K., New York, Los Angeles,
Amsterdam and Hong Kong.


XEROX CORPORATION: In Finance Accord With GE Capital
----------------------------------------------------

Xerox Corporation and GE Capital have agreed a framework
agreement for GE Capital's European Equipment Finance to become
the primary equipment-financing provider for Xerox customers in
France and Germany.

According to a report from Business Plus Online, the
implementation of the agreement will strengthen Xerox's financial
position by transitioning equipment financing to third-party
vendors.

Xerox's extensive customer base in France and Germany will also
provide growth in the transaction of GE Capital.

The framework agreement for vendor financing is subject to
regulatory approval.

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.

                                    **********

       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.


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