/raid1/www/Hosts/bankrupt/TCREUR_Public/020111.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, January 11, 2002, Vol. 3, No. 8


                            Headlines

* F R A N C E *

MOULINEX SA: Brandt Employees Favor Elco Offer
MOULINEX SA: Court to Decide Brandt Buyer Next Week
MOULINEX SA: France Demands Job Protection

* G E R M A N Y *

DAIMLERCHRYSLER: May Miss Financial Target
DEUTSCHE TELEKOM: To Post EUR7BB Net Loss for 2002
M+S ELEKTRONIK: Hamm Steps Down From COO Post
M+S ELEKTRONIK: Two More Subsidiaries File for Insolvency
MAN AG: Shares Rise on Reports of Breakup and Sale
MICROLOGICA AG: Close to Coming Out of Insolvency
TELDAFAX AG: Management Faces Probe for Insolvency Offenses
WASCHBAR UMWELT: Insolvent Company Finds New Owner
WUNSCHE AG: May Withdraw Insolvency Filing

* I T A L Y *

FIAT SPA: EUR1BB Capital Increase Kicks Off Monday

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

KPN NV: Will Lay Off 500 More Jobs
LYCOS EUROPE: Combines French Activities

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

ZURICH FINANCIAL: Ditches Plan to Sell U.S. Unit

* U N I T E D   K I N G D O M *

HUNTINGDON LIFE: Animal Testing Lab Loses U.S. Backer
INVENSYS PLC: Sells Brook Crompton Unit for 17MM Pounds
JUST GROUP: Goes Into Administration
JUST GROUP: Seeks New Bidder
ICELAND GROUP: Outlook Remains Bleak
IOMART GROUP: Jobs Safe After Centrica Deal
RAILTRACK GROUP: Byers Asks WestLB to Bid for Railtrack


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


MOULINEX SA: Brandt Employees Favor Elco Offer
----------------------------------------------

Among the companies that have put in offers for Brandt, its
employees seem to favor the one from Elco of Israel.

La Tribune/FT Information reported that Elco offered to keep
4,195 jobs.

Brandt's staff representatives are most impressed by Elco's
patents, brands and expertise.

Lesquin (refrigerators) in the Nord region was hesitating between
Arcelik and Candy, while Aizenay (microwaves) in the Vendee voted
for Candy.


MOULINEX SA: Court to Announce Brandt Buyer Next Week
-----------------------------------------------------

The Nanterre commercial court will announce the buyer for
white goods supplier Brandt next Tuesday, Dow Jones Newswires
reported.

Bidders for the business comprise Whirlpool of the U.S.,
privately held Italian white goods group Candy, Turkish company
Arcelik-Beko and Israeli rival Elco Holding, as well as a group
of Brandt managers interested in buying one of its plants in
Western France.

Brandt, part of bankrupt French home appliance manufacturer
Moulinex, is an international business but has most of its
operations in France. Its seven factories employ 5,311 people.


MOULINEX SA: France Demands Job Protection
------------------------------------------

The French government has insisted that job protection be
considered in deciding which firm should take over Brandt,
the Financial Times reported.

"My favorite [choice] is the one which can guarantee the most jobs,
but jobs which will last. You mustn't tell us stories. You can save a lot
of jobs on paper but if [you] scrap them two years later, that
it isn't acceptable," industry minister Christian Pierret said.

Turkey's Arcelic-Beko, Italy's Candy, Israel's Elco and Whirlpool
of the U.S. are bidding for Brandt, which went into receivership
in September as part of the collapse of Moulinex SA.

The bidders have recently improved their offers for Brandt, and
the court-appointed administrators are expected to announce the
winner in the coming week.


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


DAIMLERCHRYSLER: May Miss Financial Target
------------------------------------------

Global economic weakness may hinder efforts to meet
DaimlerChrysler AG's 2002 operating profit target of 5.5 billion
to 6.5 billion euros, Dow Jones Newswires reported.

Chief Financial Officer Manfred Gentz said that it would be very
tough to get to those targets as economic developments in
different parts of the world have deteriorated significantly.

Gentz's statement contradicts with that of Chrysler president
Dieter Zetsche, who told the analysts the company is committed to
go for breakeven.

Gentz said he expects Europe's market for heavy trucks to decline
further this year to around 275,000 units, from 310,000 units in
2001.

He repeated that restructuring at the automotive group's other
money-losing division, U.S. trucks arm Freightliner, is on track.


DEUTSCHE TELEKOM: To Post EUR7BB Net Loss for 2002
--------------------------------------------------

Fixed line operator Deutsche Telekom AG is expected to report a
2002 full-year net loss before exceptions of around 7 billion
euros, reports Capital magazine, citing an internal company
report.

The report added that the company would have extraordinary gains
of 9.1 billion euros from cable assets divestment.

A listing of its mobile unit T-Mobile would leave the company
with a post-exceptional net profit of 2.1 billion euros, the
magazine said.

Last year, Telekom sold its shares and asset-backed bonds 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.


M+S ELEKTRONIK: Hamm Steps Down From COO Post
---------------------------------------------

m+s Elektronik AG's Dr. Udo Hamm has resigned as chief operating
officer of the IT services specialist with immediate effect.

The resignation comes amid the insolvency proceedings of m+s
Elektronik's subsidiaries.

In the future, Dr. Hamm will be exclusively responsible as CEO for
PROFI Engineering Systems AG, a subsidiary of m+s Elektronik AG,
the company said in a release on the Frankfurt exchange.

A decision for his succession is expected in the coming week.

For further information please refer to Kerstin Kalajian,
Investor Relations, at telephone 0 60 28 9 44 1554, or via email
Kerstin_Kalajian@mus.de


M+S ELEKTRONIK: Two More Subsidiaries File for Insolvency
---------------------------------------------------------

Insolvent German IT company m+s Elektronik AG is again faced with
uncertainty as two of its subsidiaries filed petition for insolvency.

The manager of cepet Centrum fur Personalberatung und Training
GmbH and of cpo-cepet Centrum fur Personalberatung und Training
Partner-Organisation GmbH, both located in Hanau, filed the
petition in county court Wednesday.

Those petitions became necessary due to the petition for
insolvency of the parent company on December 21. Three
subsidiaries followed suit at the end of December.

Last week, two of the group's subsidiaries, Syscotec Computer
GmbH and M+S Service Verwaltungs-und Beteiligungs GmbH, also
filed for insolvency.

M+S ran into difficulties due to management and organizational
problems during a period of rapid growth, as well as because of
the difficult climate in the sector.

The company is now banking for a major investor to provide
urgently needed capital.


MAN AG: Shares Rise on Reports of Breakup and Sale
--------------------------------------------------

MAN AG shares rose on speculation that the German diversified
machinery manufacturer will be broken up and sold, Bloomberg
reported, citing analysts and traders Wednesday.

The shares rose to 1.25 euros or 4.9% to 26.99 euros, the highest
level since last August.

Because Europe's No. 2 insurer Allianz AG plans to sell its 36%
stake after a new German tax laws are implemented, the Munich-
based group might be split up and the truck business sold off.

The company's business units may be worth more separately than as
a whole, analysts and investors have said.


MICROLOGICA AG: Close to Coming Out of Insolvency
-------------------------------------------------

Micrologica board members and official receiver B.Brinkmann have
brought the German software company closer to coming out of
insolvency.

The insolvency plan, previously called debt settlement, was
admitted by the county court of Reinbek.

B.Brinkmann, according to the company's statement in a release on
the Frankfurt exchange, will present the plan for approval to the
creditors' committee on February 25.

This would mean that Micrologica's insolvency could be repealed
after debt forgiveness at the end of March 2002, following the
expiration of the legal protection periods.

In accordance with the insolvency plan, the creditors would
receive a substantial pay-out quota. The official receiver would
also receive additional shares by founding shareholders.

The company will remain listed on the Neuer Markt at least until
the arbitration board has taken a stance on the November decision
by Deutsche Borse AG to delist the stock in December due to the
company's insolvency.

Should the listing turn out to be impossible, or imprudent, the
company would list its shares on the regulated market.


TELDAFAX AG: Management Faces Probe for Insolvency Offenses
-----------------------------------------------------------

TelDaFax's management board is facing investigation from the
department of public prosecution over possible offenses related
to the company's insolvency.

Suddeutsche Zeitung/FT Information reported that the German
telecommunications company is being examined whether creditors
can bring recourse action, involving a sum of millions.

A spokesman for the investigation department confirms suspicion
of a delayed announcement of insolvency, the report added.


WASCHBAR UMWELT: Insolvent Company Finds New Owner
--------------------------------------------------

Waschbar Umwelt Produkt Versand, which filed for insolvency in
June, will continue to operate after Dutch-based Tridos Bank
acquired the majority of the German ecological mail order
company, Frankfurter Allgemeine Zeitung/FT Information reported.

Under the deal, Waschbar's 120 jobs will be saved. The brand name
Waschbar will be kept but the company will change its name to
Triaz GmbH.

Waschbar currently has about 300,000 customers and it recorded
turnover of 35.8 million euros in 2000. The company expects to
make profits in 2002.


WUNSCHE AG: May Withdraw Insolvency Filing
------------------------------------------

Wunsche AG chairman Gerhard Janetzky said that the fashion group
would decide in the next few days whether or not to withdraw its
application for insolvency.

Handelsblatt reported that the move would follow an agreement
reached between the fashion group and Switzerland's Stone Finance
on outstanding liabilities of Wunsche subsidiary Joop.

Stone Finance averted the withdrawal of the insolvency
application, insisting that Wunsche pay off its liabilities.

In exchange for controlling stake in Wunsche, the Swiss financier
had extended a 2.5 million euro loan to Joop.

The report added that Wunsche's creditors, including Hamburger
Landesbank, intend to waive debt repayments.


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


FIAT SPA: EUR1BB Capital Increase Kicks Off Monday
--------------------------------------------------

Italian car manufacturer Fiat SpA's 1-billion-euro capital
increase begins Monday as the company tries to raise fresh
cash for its restructuring plan.

Dow Jones Newswires reported that the company would issue 65.86
million shares with warrants to current shareholders at 15.5 euro
a share.

Shareholders can receive three new shares for every 25 Fiat
ordinary, savings and preferred shares.

The offer will begin Monday through February 4, while the rights
to buy the shares can be traded on the stock exchange through
February 25.

The warrants priced on January 13 will be attached to the shares
in a one-to-one ratio and will be convertible into ordinary
shares at a ratio of one ordinary share per four warrants in
January 2007.

Those shares will be priced between 30 euros and 35 euros a
share.

While Fiat struggles to keep its main automotive unit profitable
amid a shrinking world market, it is implementing a severe
restructuring plan that involves several plant closures and
termination of Argentina operations.


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


KPN NV: Will Lay Off 500 More Jobs
----------------------------------

Troubled Dutch telecommunications company KPN is going to cut 500
more jobs, Dutch newspaper de Volkskrant reported Wednesday.  The
company's planned layoffs now total 5,300, up from the previously
announced 4,800.

KPN agreed with the unions that the job loss would not exceed 10%
above the announced cuts. However, unions say that it will not
take long before the company hits the planned job cuts of 500.

According to KPN, it is too soon to draw conclusions regarding
dismissals because the firm is still in the process of deliberating
the layoff orders.

On Wednesday, employers of the division Telecommerce received the
first 'pink slips'. Next week, KPN's fixed division Vaste Net
will face redundancy.

The company's dismissal procedures will continue until April.


LYCOS EUROPE: Combines French Activities
----------------------------------------

After the acquisition of Spray and Multimania last year, Dutch
online media company Lycos Europe is executing the last of
several steps to combine all its entities in France.

As a consequence, Lycos France managing director Michel Meyer
will leave the group, while Caramail president Alexandre Roos
will become managing director.

A new management structure will also include Caramail managing
director Orianne Garcia and Caramail chief technology officer
Christophe Schaming.

Jens Uwe Intat will have an active role as President of the Board
of Administration at Lycos France, working closely with the
French management team to help Lycos France ensure a smooth and
efficient transition and to continually benefit from synergies
with the entire Group.

Lycos Europe has initiated a comprehensive restructuring program
to address the current weakness of the overall advertising
market.

At the end of September 30, Lycos Europe revealed a net loss of
38.6 million euros, compared with 30.1 million euros in the year-
ago period.


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


ZURICH FINANCIAL: Ditches Plan to Sell U.S. Unit
------------------------------------------------

Embattled Swiss insurance and money management group Zurich
Financial Services has scrapped plans to sell its U.S. life
insurance business after it failed to get anything near the $1.5
billion it wanted.

According to a Reuters report, Zurich never officially said it
was looking to sell its Zurich Life U.S. business, but its
advisers at Morgan Stanley have been probing potential buyers for
months.

General Electric Co.'s GE Capital unit and British life insurer
Prudential Plc had in December offered between $1 billion and
$1.2 billion, but backed away after Zurich was unwilling to lower
its price.

Disagreements over whether to exclude certain parts of the
business from the deal also hampered sale negotiations, sources
said. As a result, the Zurich-based company has decided to keep
the unit.

Zurich Financial has raised more than $5 billion last year
selling its stake in Zurich Scudder Investments and Baloise, and
spinning off Zurich Re to pay down at least $4 billion in debt.

The company earlier said it expects a full-year net loss of $200
million to $400 million under the International Accounting
Standards.


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


HUNTINGDON LIFE: Animal Testing Lab Loses U.S. Backer
-----------------------------------------------------

Huntingdon Life Sciences has lost a key backer after U.S.-based
Stephens Group, which rescued the drug testing firm with a 22-
million-pound loan, announced it was selling its stock and debt
investments in the group.

The Times newspaper reported that Stephens withdrew its support
to the company by the end of the month as animal rights
protesters threatened to target financial backers until HLS, UK's
leading contract research organization, goes out of business.

Stephens has agreed to sell its debt facility and its 15.5%
equity in HLS to an unnamed group of new investors.

The deal was welcomed by HLS. "The transaction has no impact on
our day-to-day operations or funding. We now have a confirmed
long-term loan through to 2006, the terms of which will remain
the same with a different but equally supportive lender," HLS'
chief operating officer Brian Cass said in a statement.

In October, Huntingdon unveiled plans to move its domicile to the
United States, in a move guaranteeing its backers more privacy,
while maintaining its operations in the UK.

Huntingdon's shares will be delisted in London and will start
trading on Nasdaq's Over the Counter Bulletin Board by the end of
this month.


INVENSYS PLC: Sells Brook Crompton Unit for 17MM Pounds
-------------------------------------------------------

Global automation and controls group Invensys plc sold the
Integral Horsepower Motor (IHP) Division of motor manufacturing
Brook Crompton to Lindeteves-Jacoberg of Singapore for 17 million
pounds.

The consideration includes 10 million pounds to be paid in cash
and 7 million pounds of debt to be transferred with the business.

Brook Crompton manufactures low voltage AC and DC electric
motors.

In the year ending September 30, 2001, Brook Crompton's IHP
Division had sales of 106 million pounds and net assets of 70 million
pounds.

The business has been losing money over recent years and is
currently undergoing a major restructuring program.

The disposal is expected to be completed early this year.

"Brook Crompton has been for sale and reporting through our
Disposal Group since March 2001. This transaction substantially
completes the disposal of the Brook Crompton Group. Whilst this
is a significant discount to net assets, it fairly represents
market value considering its current trading position and its on-
going restructuring cost requirements," Invensys chief executive
Rick Haythornthwaite said.

London-based Invensys operates in all regions of the world
through the Software Systems, Automation Systems, Power Systems
and Control Systems divisions.

With close to 76,000 employees, the group supplies products and
services ranging from advanced control systems, remote
diagnostics and energy management for process plants, factories
and commercial environments to electronic devices and networks
for residential buildings, as well as complete power systems for
the industrial, telecommunications and information technology
sectors.

For information, contact Duncan Bonfield/Jane Hurley at telephone
+44(0) 20 7821 3712


JUST GROUP: Goes Into Administration
------------------------------------

Cash-strapped British children's entertainment firm Just Group
Plc appointed Wednesday KPMG Corporate Recovery as
administrators to allow the company to continue trading.

Reuters reported that the move paves the way for a bid for the
company's rights to the popular television series Butt Ugly
Martians.

Just began to run into trouble in May last year, as it pumped
money into Butt Ugly Martians, but was left with a funding gap
until merchandising revenues from the show came on value.

In 18 months from March 2000, Just spent 21 million pounds
($30 million) from two fund-raisings, as well as its four million
pound overdraft facility.


JUST GROUP: Seeks New Bidder
----------------------------

A major U.S. television and film company has been in talks to buy
Just Group, a source close to the matter told Reuters.

This mystery buyer had held back from making an offer because it
hoped to purchase the business more cheaply from Just
administrators KPMG.

"The board remains confident that the properties owned by Just
Group, including Butt Ugly Martians, have excellent prospects and
are hopeful that new funding can be secured," the company said in
a statement.

In August, Just sacked its co-founder and Chief Executive Wilf
Shorrocks after a disagreement over accounting practices.

Its shares were suspended in November while it talked to
investors about fresh funding.


ICELAND GROUP: Outlook Remains Bleak
------------------------------------

Iceland Group, which issued three profit warnings in 2001, is
unlikely to get back to flat like-for-like sales in its
businesses this month.

According to a Financial Times report, Iceland chief executive
Bill Grimsey said that for the five weeks to January 4, like-for-
like sales at its core food division were down 0.8%.

In the frozen-food part of the business, like-for-like sales were
down 4.2% for the 16 weeks as customers also went down after
promotions were stripped out.

Much of the shortfall in sales was during the week before
Christmas, although seasonal lines sold well, FT added.

At the end of December, net debt of the frozen-food retailer
stood at 425 million pounds, down 70 million pounds on the same
period in 2000.

Iceland chairman Malcolm Walker resigned last year following the
controversial sale of 13.5 million pounds of his own shares in
the company and a collapse in the share price from a high of 346p
in December 2000.


IOMART GROUP: Jobs Safe After Centrica Deal
-------------------------------------------

A total of 40 jobs have been safeguarded after loss-making
Internet and messaging company iomart Group plc sold its
broadband business to Centrica.

Under the 2-million-pound deal, call center staff in Stornoway
and Glasgow will be transferred to the utilities giant.

The deal also includes 2,750 customers in the UK, customer
service facilities and the associated network DSL
infrastructures.

Iomart chief executive Angus MacSween said the sale would remove
"several hundred thousand pounds a month" from the firm's cost
base.

In the year to the end of December 2001, the broadband division
lost 1.9 million pounds.


RAILTRACK GROUP: Byers Asks WestLB to Bid for Railtrack
-------------------------------------------------------

Transport secretary Stephen Byers is urging German bank WestLB to
make an outright bid for the troubled rail network, rather than
collaborate with the government, to entice other bidders to come
forward.

The Guardian in its report said that WestLB will be required to
submit its bid to Ernst & Young, the administrators for
Railtrack.

WestLB's Swiftrail consortium had told the government that it was
prepared to drop its outright bid for Railtrack and instead work
with the government in such a way that the not-for-profit
company, known as CLG, could still be set up.

The WestLB consortium tried to persuade the government that its
offer would have taken Railtrack out of administration faster
than the 12 months now envisaged and would have saved taxpayers'
money with bills for lawyers, accountants and banks.

American-owned financial house Babcock & Brown has raised the
possibility of making an offer.

                                     **********

         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 2002.  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 * * *