/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/011231.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Monday, December 31, 2001, Vol. 2, No. 254 Headlines * B E L G I U M * FLV FUND: Stockholders Approve Share Conversion to Euro SABENA SA: High-wire Act for DAT as Court Strips SIC Protection SABENA SA: To Appeal, Lawyer Cites Judge's Wrong Impression * G E R M A N Y * DAIMLERCHRYSLER AG: Mitsubishi Will Add to Group's 2002 Earnings DEUTSCHE TELEKOM: Liberty Maintains EUR5.5 Billion Bid For Assets INTERSHOP COMMUNICATIONS: Shares Shed 11% as Firm Misses Q4 Mark SPAR HANDELS: Dismissed Managers End Suit, Ink Contract Extension * N E T H E R L A N D S * UNITED PAN-EUROPE: Euronext Ejects UPC From Next 150 Index * R U S S I A * JSC SOUTHERN: S&P Rates Local, Foreign Currency Credit CCC+ * S P A I N * FENOSA SA: To Firm up Stake Sale to Red Electrica in Coming Weeks FENOSA SA: Denies Receiving Proposal for Enel-Electra Alliance * S W I T Z E R L A N D * SWISSAIR GROUP: Crossair's Fresh Capital to Exceed CHF2.4 Billion ASCOM AG: Full-year Losses to Exceed CHF100 Million, Say Analysts * U N I T E D K I N G D O M * ENRON CORPORATION: DIP Loan Final Approval Moved to January 30 INDEPENDENT INSURANCE: Creditors Say FSA Immunity Can Be Toppled KVAERNER PLC: Company Profile P&O PRINCESS: Says Royal Caribbean Merger to Net US$100M Savings P&O PRINCESS: Carnival Calls Royal Merger Offer a "Poison Pill" WIGGINS GROUP: Losses Widens to US$18.8M, Needs Cash by Jan. 31 ============= B E L G I U M ============= FLV FUND: Stockholders Approve Share Conversion to Euro ------------------------------------------------------- At the extraordinary general shareholders' meeting of FLV Fund held last week, 3,984,625 shares out of a total of 20,604,495 shares were represented. The shareholders' meeting approved following resolutions: (1) The share capital was converted from BEF5,468,538,625 into EUR135,561,531.51 (2) With a view to compensate for losses incurred, the share capital was decreased with an aggregate amount of EUR63,257,032.91 to bring it from EUR135,561,531.51 to EUR72,304,498.60 (3) The share capital was actually decreased with an aggregate amount of EUR28,022,113.20 in order to bring it from EUR72,304,498.60 to EUR44,282,385.40 in order to allow a refund to shareholders of EUR1.36 per share. The refund will take place in accordance with the Belgian Company Code. FLV Fund shall communicate in due course both the moment on which the funds will be reimbursed, and the formalities that have to be accomplished for the reimbursement of the funds through the Belgian financial press, through the Nasdaq Europe Publication Means and via the website of FLV Fund. (4) Pursuant to the actual capital decrease, the exercise price of the warrants which were created on May 4, 1998 in the framework of a warrant plan, were decreased by EUR1.36 per warrant. (5) The by-laws were adapted in order to reflect the conversion of the share capital into Euro, the formal and actual decrease of the share capital and recent changes in the Belgian Company law. (6) The internal regulation was modified on following points: the definition of the share capital, the fixing of the restructuring costs in the framework of the new business plan (EUR2 million), the reduction of the recurring annual operating costs to maximum EUR3 million and the deletion of the annual donation to FLV VZW. You can find the integral text of the resolutions in the agenda of the notification of the shareholders meeting on www.flvfund.com For more information, contact FLV Fund through Piet Vandermeersch by Phone: +32 (0) 477/57 28 37 SABENA SA: High-wire Act for DAT as Court Strips SIC Protection --------------------------------------------------------------- With the creditor protection of Sabena Interservices Center already history, the resurrection of Sabena through Delta Air Transport now depends on unanimous creditor approval. According to the Financial Times, backers of Sabena's takeoff through Delta Air Transport face an uphill battle in pushing for a refinancing plan to realize the project. Although many believe creditors of Sabena Interservices Center will not force the defunct in-house bank into bankruptcy, DAT's takeoff still remains far from certain. An objection from one creditor is all that is needed to mess up the plan. "The reason why SIC filed for bankruptcy protection is to get the plan approved by majority voting, rather than unanimity to prevent one creditor from holding the entire company to ransom," says an insider privy to SIC's negotiations with creditors. DAT's survival hinges on SIC canceling the carrier's EUR55 million (US$48.7 million) debt and converting a similar amount into a stake of up to 20 percent. A group of investors, who acquired the airline from administrators last week, has made the successful renegotiation of DAT's debt as a precondition for the purchase. They are set to meet on January 15 to decide the carrier's fate. Belgian financier Etienne Davignon, who is heading the group of investors, however, believes SIC creditors will come through for DAT, as it is in their interest to do so. "If they agree to the plan, [the creditors] will get something. If they put DAT into bankruptcy, they get nothing," the Financial Times quoted Mr. Davignon as saying. SABENA SA: To Appeal, Lawyer Cites Judge's Wrong Impression ----------------------------------------------------------- The Brussel court's impression that Sabena Interservice Center is preparing for a sell-off rather than restructuring its debt is wrong, says Sabena lawyer Jean-Marie Nelissen. Mr. Nelissen says the court's decision to lift the bankruptcy protection afforded to Sabena's in-house bank did more harm to creditors than protect their interest. "Her [the judge's] main argument was that the entire scheme was in the interests of DAT, and not in the best interests of SIC. That's not correct, largely because the people who can best judge this are SIC's creditors who already backed the plan," says Mr. Nelissen. The lawyer says he will immediately file an appeal that will question the judge's impressions. His main argument will be the fact that creditors have already agreed on a bankruptcy plan. The bank's creditors number 53 and are owed some EUR180 million (US$159 million). The bank's continued operation will be key to resurrecting Sabena through ex-subsidiary Delta Air Transport. Mr. Nelissen is a member of the Linklaters & Alliance law firm in Brussels. ============= G E R M A N Y ============= DAIMLERCHRYSLER AG: Mitsubishi Will Add to Group's 2002 Earnings ---------------------------------------------------------------- Mitsubishi Motors Corporation's Chief Operating Officer Rolf Eckrodt says Mitsubishi will contribute to DaimlerChrysler AG's profit next year following "drastic cost-cutting" measures. Mitsubishi, whose 37 percent stake is owned by the German carmaker, is expected to break even this year. DEUTSCHE TELEKOM: Liberty Maintains EUR5.5 Billion Bid For Assets ----------------------------------------------------------------- U.S. cable group Liberty Media submitted last week an unchanged proposal of its EUR5.5 billion (US$4.8 billion) buyout of Deutsche Telekom's network infrastructure, says Reuters. According to the report, speculations are rife that the German cartel office will block the buyout, which is seen as anti- competitive. If approved, Liberty Media could end up controlling 60 percent of Germany's cable market. The cartel office has urged Liberty Media to upgrade Deutsche Telekom's infrastructure to support multimedia and telephone applications in order to increase competition in the fixed network industry. Liberty, however, only plans a limited upgrade on Deutsche Telekom's infrastructures. Liberty's proposal includes investing EUR8.3 billion (US$7.3 billion) in the network by 2010. INTERSHOP COMMUNICATIONS: Shares Shed 11% as Firm Misses Q4 Mark ---------------------------------------------------------------- Shares of Software developer Intershop Communications AG shed another 11 percent in the Neuer Market to EUR1.30 last week after warnings that sales cannot meet the company's fourth quarter expectations. According to the Dow Jones Newswires, the slide is considered the biggest decliner on the benchmark Nemax-50 Index, as trading resumed following the Christmas break. The company said two weeks ago that it expects fourth-quarter sales of EUR12-13 million (US$10-11 million) and a loss before interest, tax, depreciation and amortization of EUR8-9 million (US$7-8 million). Actual results, however, showed a 20 percent drop in sales. SES Research analysts Felix Ellmann in Hamburg projects the company's EUR37 million cash to burn up in four to six months. Intershop's stock dropped almost 90 percent this year on account of numerous profit warnings brought by a dramatic decline in information technology spending this year. SPAR HANDELS: Dismissed Managers End Suit, Ink Contract Extension ----------------------------------------------------------------- Former managers Bernd Bonnet, Thomas Weiss and Bernhard Wilken of grocery retail chain Spar Handels AG have ended their suit against the company for their "instant" dismissal in July, Dow Jones Newswires sources say. The Hamburg state court approved the agreement that allowed an extension of the managers' contracts until June 30, 2002. The supermarket chain says no dismissal compensation will be provided. ===================== N E T H E R L A N D S ===================== UNITED PAN-EUROPE: Euronext Ejects UPC From Next 150 Index ---------------------------------------------------------- Euronext removes the Dutch cable TV group United Pan-Europe Communications NV from the Next 150 Index, Telecom paper sources say, following a review the European stock exchange group made recently. After the fourth quarter reweighing of its Next 150 Index, Euronext announced that UPC will be ejected from the said Index because UPC did not meet rules regarding market capitalization weighted price requirements. According to AFX News Thursday, Euronext said the measure follows the decision in November to put UPC shares on the so-called "penalty bench" due to a negative shareholders equity. The change will take effect on January 2, 2002. =========== R U S S I A =========== JSC SOUTHERN: S&P Rates Local, Foreign Currency Credit CCC+ ----------------------------------------------------------- An unfavorable regulatory environment and the low per capita income of its service area has forced Standard & Poor's to assign a CCC+ rating on JSC Southern Telecommunications Co. In a statement, however, the ratings agency clarified that the outlook of the company is stable, owing to its strong market position as the main telecom services provider in the Krasnodar region. In addition, the company's steady progress in modernizing its facilities, like the current installation of fiber-optic links, will no doubt increase revenues. The ratings firm sees the domestic long distance service as a potential growth area. The company's share of the international and long-distance telephony in both business and residential services is about 98 percent. The only setback to the company's economic opportunities is the relatively low economic development of its service area, says the ratings firm. According to the agency, the below-average per capita income in the service area will mean "poor demand for traditional telecom services and poor opportunities for value-added services." Meanwhile, the pressure from the Ministry of Communication and the Ministry of Anti-Monopoly Policy to keep local tariffs low for social reasons is also stunting the company's growth. The CCC+ rating stands for the company's long-term local and foreign currency corporate credit rating, says Standard & Poor's. For more information, contact Michael O'Brien, London (44) 20- 7826-3561; Simon Redmond, London (44) 20-7826-3683 ========= S P A I N ========= FENOSA SA: To Firm up Stake Sale to Red Electrica in Coming Weeks ----------------------------------------------------------------- Union Electrica Fenosa SA announced last week that its plan to sell its stake in Transportadora de Electricidad to Red Electrica de Espana SA will be concluded in a few weeks. In a statement, the company said the divestment of its 69% stake in the Bolivian energy transport group will allow it to reduce debt by EUR135 million (US$119 million). The financial details of the planned divestment were not disclosed. The move is part of the company's plans to focus on core operations, which primarily consist of power generation and distribution. FENOSA SA: Denies Receiving Proposal for Enel-Electra Alliance -------------------------------------------------------------- Spanish power firm Union Electrica Fenosa SA denies reports that its unit Electra de Viesgo will soon be merging with Italy's state-owned Enel SpA. A Fenosa spokesman told AFX News that the company has not yet received any proposal from the Italian energy giant, denying a report by Expansion last week, which cited unnamed sources. According to Expansion, Enel had allegedly approached Banco Santander Central Hispano SA Chairman Emilio Botin presumably to count its support for the merger. The bank owns 10 percent of Fenosa. "SCH has denied Enel having made any proposals to them," the Fenosa spokesman said. Early this year, Fenosa sold some assets to raise EUR1.6 billion (US$1.4 billion) to pay its debts. ===================== S W I T Z E R L A N D ===================== SWISSAIR GROUP: Crossair's Fresh Capital to Exceed CHF2.4 Billion ----------------------------------------------------------------- The fund-raising campaign of Crossair AG, the carrier that will replace now-bankrupt national airline Swissair, is expected to raise over CHF2.4 billion in fresh capital, reports AFX News. As of December 18, Crossair's funds tallied CHF1.993 billion (US$1.2 billion). More than CHF400 million was reportedly added to it last week. Some 39.9 million new Crossair shares are going to be quoted today on the Swiss stock exchange. Meanwhile, existing shares will also be split today at a ratio of 1:5. ASCOM AG: Full-year Losses to Exceed CHF100 Million, Say Analysts ----------------------------------------------------------------- Ascom AG's net loss for the year is expected to balloon to over CHF100 million (US$59.7 million) from last year's CHF25 million (US$14.9 million), reports AFX news citing analysts. CEO Urs Fischer says the company's annual sales should be slightly higher, while it should break even at operating level before exceptional items. He noted that the sale of Ascom's loss-making phone terminal unit cost the group CHF150 million (US$89.6 million). Meanwhile, Mr. Fischer revealed a plan to restructure its energy systems unit at a cost of CHF30 million (US$17.9 million). In addition, he says, another CHF30 million (US$17.9 million) will be set aside from funds this year to realize the company's social plan for some 1,100 workers. Ascom also intends to use CHF280 million (US$167 million) of the funds raised from the sale of its mailing systems unit to reduce its CHF800 million (US$478 million) debt. =========================== U N I T E D K I N G D O M =========================== ENRON CORPORATION: DIP Loan Final Approval Moved to January 30 -------------------------------------------------------------- The date at which the US$1.5 billion financial package for Enron Corp. will be finalized has been pushed back to January 30, reports Dow Jones Newswires. Originally, the date for the approval of the Debtor in Possession (DIP) financing scheme was scheduled for January 7 by Enron's lead banks, J.P. Morgan Chase & Co. and Citigroup. The DIP is critical to Enron's continued operation now that it has filed for Chapter 11 protection, the report says. The banks have so far paid US$250 million of the total package. According to the report, the two banks are still in the process of finding other financial firms to help foot the bill. Some quarters, however, suggest that the banks are just waiting to get a better sense of the value that may be brought into the bankruptcy estate after the company's planned auction next month. Enron has scheduled an auction for some of its trading assets on January 10. Swiss giant UBS AG and Citigroup are among those seen as potential bidders. INDEPENDENT INSURANCE: Creditors Say FSA Immunity Can Be Toppled ---------------------------------------------------------------- Creditors of Independent Insurance Group plc claim they now have a formidable case that can strip the Financial Services Authority of its immunity from suit. According to the Financial Times, the group of creditors, which are also acting on behalf of former policyholders and employees, will lodge the case as early as February. Stephen Alexander, a partner of Class Law, the firm presenting the creditors, says the case will be hinged on the Authority's negligence when it refused to heed the warning from its French counterpart Commission de Controle des Assurances. "If the FSA were advised by proper regulators of serious concerns [about Independent] and did nothing about it, then they are negligent," he said. Mr. Alexander says a European law takes precedence over the Authority's immunity afforded by the Financial Services and Markets Act, which came into force only at the end of November. "We are now satisfied that there is a case to be brought against the FSA on behalf of the creditors," he said. For its part, the Authority says it could not have been negligent as the French authorities never revealed any new information or the existence of any alleged frauds, which may have subsequently brought down the company. "If any action is eventually forthcoming we will vigorously defend ourselves," the authority said in a statement last week. Should this case gain ground, a similar suit, this time by creditors and policyholders of Equitable Life, will likely be lodged, says Mr. Alexander. Independent went into voluntary liquidation in June after it was revealed that it was facing unquantifiable losses stemming from claims that had not been entered into its accounting systems. KVAERNER PLC: Company Profile ----------------------------- Name: Kvaerner PLC Kvaerner House, 68 Hammersmith Road London W14 8YW, England Phone: +44 20 7339 1000 Fax: +44 20 7339 1100 Kvaerner ASA Prof. Kohtsvei 15 1325 Lysaker, Norway Phone: +47 67 51 30 00 Fax: +47 67 51 30 10 Website: http://www.kvaerner.com/ SIC: Engineering and Construction Employees: 35,000 Loss: 4.1B Norwegian kroner (US$448.3B) as of Sept. 2001 Assets: 31.0B Norwegian kroner (US$3.4B) as of Sept. 2001 Liabilities: 28.8B Norewgian kroner (US$3.2B) as of Sept. 2001 Average No. of Shares: 83,735,536 as of Dec. 2000 Type of Business: Kvaerner ASA operates and maintains interest in engineering and construction, Oil & Gas, shipbuilding and the provision of services to the pulp industry. The Group operates in 35 countries within Europe, Africa, Asia and the US. Trigger Event: With 2.3 billion Norwegian kroner of operational and financial assets in total write-downs as of September 2001 and massive losses, the Group is restructuring its operations on a global scale. After divesting its non-core businesses, the company now plans to concentrate on its basic operations, which include Engineering & Construction and Oil & Gas explorations, among others. President & CEO: Helge Lund Acting CFO: Finn Berg Jacobsen Senior VP, Group Communications & IT: Trond Andresen Group Communications England Phone: +44 20 7339 1032 VP, Group Communications: Marit Ytreeide Group Communications Norway Phone: +47 67 51 31 06 Auditor: KPMG UK Head Office 8 Salisbury Square London EC4Y 8BB Tel: +44 20 7311 1000 Fax: +44 20 7311 3311 P&O PRINCESS: Says Royal Caribbean Merger to Net US$100M Savings ---------------------------------------------------------------- The world's third largest cruise company, P&O Princess plc, claims a merger with Royal Caribbean Cruises would generate cost savings of US$100 million a year. This information was contained in a circular issued recently by the British cruise operator to its shareholders, outlining the details of the proposed merger, says the Independent. The company told shareholders that the merger will be good for business as it would combine two high quality fleets. Royal Caribbean is the second largest cruise operator in the world. The company is going to hold a shareholders meeting on February 14 to consider the merger. P&O PRINCESS: Carnival Calls Royal Merger Offer a "Poison Pill" --------------------------------------------------------------- In a bid to discourage P&O Princess shareholders from approving a merger with Royal Caribbean Cruises, American cruise operator Carnival likened it to a "poison pill" that shareholders are ill- advised to take. According to the Financial Times, Carnival maintains that its US$3.2 billion cash-and-share offer is still better than the proposed US$7 billion merger. Citing a 196-page circular outlining the merger, Carnival points out that the transaction could be disadvantageous to P&O because of a US$62.5 million break clause and a US$2 billion joint venture in Southern Europe that will trigger a US$200 million pay-out if it is broken up. The joint venture will operate until January 1, 2003 after which P&O could terminate without penalty, the report says. Shareholders of P&O are expected to decide on the possible merger on February 14. Carnival hopes to convince enough shareholders to reject the plan and take its offer instead. WIGGINS GROUP: Losses Widens to US$18.8M, Needs Cash by Jan. 31 --------------------------------------------------------------- Airport and property developer Wiggins Group says its losses for the year have widened and it needs more money to fund bank facilities falling due next month. Quoting Chief Executive Oliver Iny, the Evening Standard says the company's pre-tax losses in the six months to September amounted to GBP13 million (US$18.8 million). According to the report, the company is now seeking shareholders' approval to borrow more than its GBP40 million (US$57.9 million) credit limit. The company admits that there are other options to borrowing, such as issuing more shares and selling its stakes in airport developments, but these solutions are not reliable and will not, on their own, generate sufficient cash flow. "Continued funding is required to enable the group to meet its liabilities," the company said in a statement recently. It is not clear how much money the company owes. However, a huge amount needs to be prepared by January 31 to pay off several drawn credit facilities, the report says. Early this year, the company revealed that the profits it had declared for the past six years were wrongly stated and that in reality it had been generating losses. There is no dividend for the year, says the company. ********** 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 * * *