/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/020121.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, January 21, 2002, Vol. 3, No. 14 Headlines * C Z E C H R E P U B L I C * CESKA SPORITELNA: Moody's Raises Rating to D+ From D * G E R M A N Y * BANKGESELLSCHAFT BERLIN: To Face New Sale Delay BAYER AG: Shuts Down Brazil Plant DEUTSCHE TELEKOM: Liberty Media Set for DT Takeover DEUTSCHE TELEKOM: Still Faces a Gloomy Outlook MAN AG: Achieves Business Volume Targets for 2001 SCHMIDTBANK GMBH: Consors Unit Shows Signs of Recovery WUNSCHE AG: MPC Holding Saves Wunsche From Insolvency * I T A L Y * ALITALIA SPA: May Fire Workers If Voluntary Cutbacks Fail BLU SPA: May Be Sold in Bits * N E T H E R L A N D S * LYCOS EUROPE: Receives EUR5.2MM in Exchange for Shares * P O L A N D * ELEKTRIM SA: Court Rejects Bankruptcy Filing NETIA HOLDINGS: Telia Cannot Rescue Netia on Warburg Standoff * S L O V A K R E P U B L I C * SLOVENSKA SPORITELNA: Moody's Raises Rating to D- From E+ * S W E D E N * LM ERICSSON: Will Post Annual Loss LM ERICSSON: Wins Messaging Systems Contract With Vodafone * S W I T Z E R L A N D * GRETAG IMAGING: Appoints Reto Welte as New CFO SWISSAIR GROUP: Cargo Unit to Shut Down in March SWISSAIR GROUP: Seco Agrees Compensation for Swissair Workers * U N I T E D K I N G D O M * CLUBHAUS PLC: Shares Carry on Gains as Bidder Ups Stake COOKSON GROUP PLC: Company Profile CORUS GROUP: Foresees Consolidation in Steel Sector JOHN LAING: Posts 117MM-Pound Loss in Construction Unit JOHN LAING: Shares Rise on Trading Statement MARCONI PLC: Rejects 25-BB-Pound Merger Deal NTL INCORPORATED: Seeks Funds From U.S. P&O PRINCESS: Carnival Ups Bid Offer by 11% =========================== C Z E C H R E P U B L I C =========================== CESKA SPORITELNA: Moody's Raises Rating to D+ From D ---------------------------------------------------- Prague-based Ceska sporitelna, a.s., the second-largest Czech bank, has received a ratings upgrade from Moody's Investors Service. The credit ratings agency raised its financial rating to D+ from D, reflecting the good progress of the bank's restructuring since Erste Bank der Oesterreichischen Sparkassen took over. Moody's said that while it expects the bank's development to continue to be positive, further progress, although likely, will be more challenging to achieve. Reflecting this, the outlook for the financial strength rating is now stable. Ceska sporitelna's debt and deposit ratings remain unchanged at Baa1/P-2, underpinned by expected support from Erste Bank. Ceska sporitelna has total assets of 474 billion Czech koruna (13.5 billion euros) at end-September 2001. ============= G E R M A N Y ============= BANKGESELLSCHAFT BERLIN: To Face New Sale Delay ----------------------------------------------- The privatization of Bankgesellschaft Berlin (BGB) may be delayed with the appointment of Social Democratic Party politician Thilo Sarrazin as Berlin's new finance minister, Handelsblatt reported, citing political insiders and people close to the groups who have presented bids. So far, U.S. consortium headed by entrepreneur Christopher Flowers, U.S. participation company Texas Pacific Group, and Germany's public-sector savings banks in conjunction with existing BGB shareholder Norddeutsche Landesbank (NordLB) have presented bids for Berlin's 81% stake in the bank. According to Berlin's current finance minister, Christiane Krajewski, examinations of the three offers have already been carried out at her instigation. It will all be up to her successor to make the decision, she said. The Berlin-based commercial bank collapsed into insolvency due to large-scale real estate transaction discrepancies. It reported in November a loss of 369 million euros for the first nine months of the year due to its underperforming real estate business and stock write-downs. BAYER AG: Shuts Down Brazil Plant --------------------------------- Bayer AG, Germany's third-largest drugmaker, is going to shut down its Latin American engineering plastics plant based in northeastern Brazil by August this year, Dow Jones Newswires reported, citing business daily Valor Economico. Bayer said it is cheaper to import the product from Germany than produce it locally. The move will result in the layoff of 150 workers. Bayer, best known for inventing aspirin, suffered the worst crisis in its 139-year history in August when Baycol, also known as Lipobay, was linked to more than 50 deaths worldwide. The withdrawal of the product cost Bayer 600 million pounds and trapped the company in court actions. Earlier, Bayer said it would sell its three chemical units, Haarmann & Reimer, Rhein Chemie Rheinau and PolymerLatex GmbH & Co KG, to help reduce the company's debt levels to a single-digit billion-euro figure in the medium term. DEUTSCHE TELEKOM: Liberty Media Set for DT Takeover --------------------------------------------------- U.S. cable group Liberty Media Corp. is ready to offer concessions when it enters negotiations at the start of this week with Germany's Federal Cartel Office over the purchase of 60% of Deutsche Telekom's cable-tv network for 5.5 billion euros. According to a Handelsblatt report, Liberty Media has modified its strategy for the technical development of the network in such a way that it can be expected to meet the Cartel Office's requirements. As a further concession, the company decided not to go ahead with plans to acquire a minority stake in Premiere World, the pay-tv arm of German media giant Kirch Group. The Cartel Office will only approve the current strategy if the U.S. group agrees to create greater competition in affiliated markets, such as Internet or telephony, by developing its network, Handelsblatt added. If Liberty's plans are rejected, Deutsche Bank will seek to forge a tie-up of Telecolumbus, Primacom, UPC Deutschland and Bosch Telecom with Deutsche Telekom. DEUTSCHE TELEKOM: Still Faces a Gloomy Outlook ---------------------------------------------- Bonn-based telecom giant Deutsche Telekom AG will stay in the red, not just in 2001, but also for the next couple of years due to the high license fees paid for third-generation UMTS mobile communications frequencies, and acquisitions in the Unites States. According to a report from the Frankfurter Allgemeine, chairman Ron Sommer said that cash-flow and net profits were negative for 2001 due to writeoffs worth 16 billion euros. The group's earnings before interest, taxes, depreciation and amortization (Ebitda) of 15 billion euros ($13 billion) would be reduced by 4.5 billion euros for interest payments alone. After paying out a dividend, totaling 1.8 billion euros, the company will post losses, Sommer added. Since the company does not plan to make any further acquisitions, cash flow is expected to be in the black again at the latest in 2003. MAN AG: Achieves Business Volume Targets for 2001 ------------------------------------------------- The markets responded with relief as struggling Munich-based trucks and engineering group MAN AG said its full-year figures were in line with its volume targets. Orders in hand at the end of 2001 stood at 10.4 billion euros, some 5% below the end-of-2000 level. Sales rose by 11% to 16.2 billion euros, compared with the previous financial year, exceeding the 16 billion-euro mark for the first time. The number of employees has also increased by 939 to 77,543. MAN in 2001 has issued four profit warnings due to falling orders. Its largest division, the trucks business, posted a loss for 2001, following balance-sheet falsification at its UK subsidiary ERF. Division chief Hakan Samuelsson has made it clear that a return to profit in 2002 will be difficult to achieve. SCHMIDTBANK GMBH: Consors Unit Shows Signs of Recovery ------------------------------------------------------ SchmidtBank GmbH subsidiary Consors Discount Broker AG, Europe's leading online brokerage firm, has experienced signs of recovery during the fourth quarter. According to a report from the Financial Times, share trading for Consors rose to 1.7 million in the fourth quarter from 1.39 million in the third. Consors was also attracting new accounts. Some 10,000 customers opened accounts in the fourth quarter including 2,000 in December. The broker has been up for sale since November during the near collapse of its parent company, which was rescued from bankruptcy by a consortium of Germany's largest banks, including HVB, Deutsche Bank, Commerzbank, Dresdner Bank and the Bavarian savings banks. Schmidtbank holds a 65% stake in Consors, estimated to be worth about 13 euros a share, or 400 million euros. The online broker is valued at around 450 million euros, based on its current Neuer Markt capitalization. WUNSCHE AG: MPC Holding Saves Wunsche From Insolvency ----------------------------------------------------- Wunsche AG told the Financial Times that investor MPC Munchmeyer Petersen & Co GmbH (MPC Holding) would provide the Hamburg-based textile company with a capital increase. However, the last minute rescue from insolvency is likely to result in the sale of Wunsche subsidiary Joop GmbH and Cinque, FT added. The application for insolvency, made in December, would be withdrawn as soon as insolvency administrator Hans U Hildebrand gives consent. Wunsche's debts total over 100 million euros. ========= I T A L Y ========= ALITALIA SPA: May Fire Workers If Voluntary Cutbacks Fail --------------------------------------------------------- Rome-based Alitalia SpA may fire workers if unions fail to agree by the end of March to reduced hours, pay cuts and other ways to scale back the workforce at the struggling Italian carrier by 11%. According to a report from Singaporean newspaper The Business Times, Alitalia spokesman Andrea Zannoni said that the airline wants to cut the equivalent of 3,400 jobs, with 900 workers taking early retirement. The remaining 2,500 jobs would be eliminated by reducing employees' working hours and pay or letting temporary and part-time contracts lapse. Alitalia can dismiss workers if unions do not reach an agreement on which measure to take within 75 days, the Times added. Alitalia plans to cut 14% of its workforce, partly by selling three businesses, in a bid to return to profit by 2003. BLU SPA: May Be Sold in Bits ---------------------------- Blu shareholders may sell the Rome-based mobile phone operator in pieces, Reuters reported, citing a company spokesman. Having failed to finalize a third-generation UMTS cellphone network license at an auction in 2000 and with losses mounting as it struggles to gain market share, key Blu shareholders have said they want to sell their stakes. Blu investors include Italian motorway operator Autostrade and British telecoms group BT. The spokesman added that Blu CEO Enrico Casini is expected to decide on the sale procedure by January 28. In December, the shareholders approved a plan to sell unprofitable Blu, which has about 1.7 million customers. ===================== N E T H E R L A N D S ===================== LYCOS EUROPE: Receives EUR5.2MM in Exchange for Shares ------------------------------------------------------ Dutch online media company Lycos Europe NV said it has received 5.21 million euros in cash from Guernsey-based Investor Ltd in exchange for 521,250 of its shares. The exchange deal is part of Lycos' acquisition of Spray Networks NV, in which Investor was a former shareholder, Lycos said. The shares, priced at 10 euros each, constitute the final of four equal tranches of 521,250 shares. The first three tranches, a total of 1.56 million shares, were allotted to Investor Ltd in December 2000, February and August 2001. The shares started trading on the Neuer Markt on January 17. The loss-making company has been initiating a comprehensive restructuring program to address the current weakness of the overall advertising market. It has cut jobs to improve profitability. 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. =========== P O L A N D =========== ELEKTRIM SA: Court Rejects Bankruptcy Filing -------------------------------------------- A Warsaw court has rejected a bankruptcy filing against the telecoms and energy conglomerate Elektrim, the Polish News Bulletin reported. Accepting a motion by the Securities and Exchange Commission (KPWiG), which believes that Elektrim has enough assets to repay its debt, the court further announced the launching of Elektrim's creditor arrangement proceedings. The bankruptcy filing was initiated after Elektrim defaulted on 440 million euros in convertible bonds for December and after earlier proposing a debt rescue plan involving a 40% reduction of the debt and repayment of the rest on a three-year installment term. Waldemar Siwak, Elektrim's acting chief executive, told the court that when arrangement proceedings will start, Elektrim will propose to bond holders more attractive bond redemption terms. The chief added that the company is reviewing moves to include a new share issue, disposals or securing another debt facility. Elektrim's assets are now worth some 3.2 billion zloty. It had some 580 million zloty in cash on the balance sheet, against due liabilities of 2 billion zloty. NETIA HOLDINGS: Telia Cannot Rescue Netia on Warburg Standoff ------------------------------------------------------------- Thomas Lenner, head of investor relations at Polish telecoms company Telia AB, said that Telia is unable to rescue Netia, of which Telia owns 48% stake, due to a stand-off with Warburg Pincus, the AFX News reported. US investment firm Warburg Pincus, which holds 9% of Netia, has a put-option that prevents Telia from increasing its capital in Netia without Warburg's consent or from delisting the company. The agreement, if violated, would result in Telia being forced to pay Warburg $70 million, Lenner explained. Lenner added that Telia has been in talks with Warburg Pincus since last year, but Warburg refused to amend the rules to allow a rescue. ============================= S L O V A K R E P U B L I C ============================= SLOVENSKA SPORITELNA: Moody's Raises Rating to D- From E+ --------------------------------------------------------- Moody's Investors Service said it has upgraded to D- from E+ Slovenska sporitelna's financial strength rating. The rating action reflects the progress of the bank's restructuring since Erste Bank der Oesterreichischen Sparkassen took over. Moody's said that it expects further progress in this process, resulting in a positive outlook for the financial strength rating. The debt and deposit ratings of the Bratislava-based bank remain unchanged at Ba1/NP, reflecting likely support from Erste Bank. Slovenska sporitelna is the largest bank in Slovakia with total assets of 191 billion Slovakia Koruny (4.2 billion euros) at year-end 2000. =========== S W E D E N =========== LM ERICSSON: Will Post Annual Loss ----------------------------------- Stockholm-based telecoms equipment maker Ericsson will report on Friday its first annual loss after a disastrous 2001, Reuters reported. Analysts expect Ericsson, the world's biggest producer of mobile networks and third biggest handset supplier, to report a $2.85 billion pre-tax loss after a $418 million shortfall in the last quarter. To return to the black, Ericsson will lay off about 1,000 people this year. Ericsson's longer-term target is a plus 10% margin, but Chief Executive Kurt Hellstrom said in December that the company may not reach that profitability level until 2004. LM ERICSSON: Wins Messaging Systems Contract With Vodafone ----------------------------------- ---------------------- U.K. mobile giant Vodafone Group plc has awarded mobile phone manufacturer Telefonaktiebolaget LM Ericsson a contract to handle next generation messaging systems. According to a report from This is London, the deal may be worth 400 million pounds in sales over a few years. The move is reported to strengthen Ericsson's ties with the mobile communications operator. Ericsson, which posted a pre-tax loss of 5.8 billion Swedish krona ($548.7 million) in the third quarter of 2001, previously signed a sale-lease back agreement regarding test plant equipment for US$750 million to improve its cash position. ===================== S W I T Z E R L A N D ===================== GRETAG IMAGING: Appoints Reto Welte as New CFO ---------------------------------------------- Swiss photo imaging equipment manufacturer Gretag Imaging Holding AG has appointed Reto Welte as chief financial officer as of April 1. Welte was a former senior manager of Germany's biotechnology company co.don AG. Gretag also announced that Niculae Cantuniar was appointed on Gretag's newly created post of head of marketing and sales in this month. The Regensdorf-based company said earlier it plans to issue around 6 million shares with a nominal value of 10 Swiss francs to improve its balance sheet. In its 2001 first half results, Gretag's debt stood at 413 million Swiss francs, around three times its share capital of 142 million Swiss francs. SWISSAIR GROUP: Cargo Unit to Shut Down in March ------------------------------------------------ Swissair Group's cargo handling unit, Swisscargo, will close down at the end of March when Crossair assumes the role of the country's national carrier. Crossair said that the new airline cannot offer long-haul flights without having a good freight system. It added that a team was working hard to establish the unit. Swisscargo also said that its 153 employees in Switzerland and 287 staff abroad would have their employment contracts cancelled at the end of March, but hoped as many as possible would be taken on by Crossair's new cargo business. Swisscargo, together with Swissair Group, filed for creditor protection in October. SWISSAIR GROUP: Seco Agrees Compensation for Swissair Workers ------------------------------------------------------------- The Swiss Secretariat for Economic Affairs (Seco) has agreed to compensate Swissair employees after the collapse of the national flag carrier last year. The agreement is not only aimed at compensating former Swissair employees, but also at encouraging current employees to do a good job and present a positive face to customers. According to a report from Swissinfo, the money to compensate employees, who were made redundant or took early retirement, will come from funds given to Swissair as part of last year's bailout package. The Swiss government provided Swissair with 600 million Swiss francs ($360 million) in October 2001. The funds were released to keep the airline flying until Crossair's takeover in March. The potential lifeline does have conditions, the report added. It depends on the success of the airline's reduced winter flight program and the implementation of operational cost saving measures. =========================== U N I T E D K I N G D O M =========================== CLUBHAUS PLC: Shares Carry on Gains as Bidder Ups Stake ------------------------------------------------------- Shares of golf course and health club operator Clubhaus PLC extended its recent gains last week on continuing bid speculation that a possible bidder has further raised his stake in the London-based group. The stake hike reports brought Clubhaus shares .25 pence firmer at 6.75, while the FTSE Small Cap index had shed 0.5 points to 2,603.7. A stock exchange note disclosed that Paul Davidson has increased his stake in the company by 5.023 million ordinary shares to 16.5 million, or about over 16% of the golf course group's issued share capital. Clubhaus, however, said that the millionaire had increased his stake in the company to 9.077 million ordinary shares. Davidson's repeated sharebuying suggests that a Financial Times' report regarding his offer bid on Clubhaus may be true. The paper claimed that Davidson has offered 65 million pounds for the company's assets. COOKSON GROUP PLC: Company Profile ---------------------------------- Name: Cookson Group PLC Address: The Adelphi 1-11 John Adam Street London WC2N 6HJ Tel: (020) 7766 4500 Fax: (020) 7747 6600 Web site: http://www.cooksongroup.co.uk SIC: Engineering & Machinery Employees: 21,161 (as of 12/31/00) Total Assets: US$3.4 billion (as of 12/31/00) Total Liabilities: US$2.4 billion (as of 12/31/00) Total Losses: 30.3 million pounds (as of 06/30/01) Outstanding Shares: 728 million shares (as of 06/30/01) Type of Business: Cookson's electronics division manufactures chemicals and equipment used in the production of printed circuit boards and build integrated circuits. Its ceramic manufacturing operations, through its Vesuvius subsidiaries make refractory ceramics and related products for the glass, iron, steel, aluminum, and cement industries. Cookson's precious metals division makes jewelry and dental components and other precision-engineered products from gold and silver Trigger Event: Cookson issued a string of profit warnings in recent months with the downturn in the electronics industry. It has been looking at ways to raise cash as it sets about tackling a large debt burden, which in December stood at around 800 million pounds. Chairman: Bryan H. Nicholson Chief Executive: Stephen L. Howard Finance Director: Dennis H. Millard Bankers: HSBC Bank PLC Financial Advisers: Lazard Bros Stockbrokers: Cazenove , Merrill Lynch International Auditors: KPMG Law Firms: Linklaters & Alliance Financial PR Advisers: Hogarth Last published in TCR-EUR on January 18, 2002 CORUS GROUP: Foresees Consolidation in Steel Sector --------------------------------------------------- Anglo-Dutch steelmaker Corus Group PLC expects a further consolidation in the steel sector with the current structural overcapacity and economic downturn, Financiele Telegraaf reported, citing Corus chief executive Tony Pedder. The CEO said that Corus is willing to discuss the possibility but has no concrete plans yet. Pedder added that the company would focus first to make it healthy. Corus has been selling as much as 287.5 million euros ($255.9 million) of convertible bonds to help repay its debt. JOHN LAING: Posts 117MM-Pound Loss in Construction Unit ------------------------------------------------------- London-based development and construction management company John Laing Plc, after selling its construction business last year, will post a 117-million-pound ($168 million) loss in its records for the year 2001, Bloomberg reported. Finance Director Adrian Ewer in an interview said that the loss brought a one-time charge on the sale of its business. Laing sold the its construction unit last year in order to focus on houses and government-funded projects such as the U.K.'s so- called Private Finance Initiative, where companies take over the building and management of hospitals, schools and other public services. However, John Laing retained liabilities linked to several projects. Laing is now focusing in the transport and accommodation sectors, it said. JOHN LAING: Shares Rise on Trading Statement -------------------------------------------- Despite being the worst performer by far in the FTSE All Share Construction & Building Materials index, J Laing bounced 6p to 156p after saying it sees operating profit of at least 90 million pounds for its 2001 financial year. The Investor's Week reported that the development and construction management company sold a 15% stake in Europistas Concesionaria Espanola SA for 52 million pounds, receiving the final 33 million pounds. The company's net debt stood at 170 million pounds at year-end. It will also post 9 million pounds in one-time losses due to reorganization after selling its construction business. Laing also intends to sell its property unit and expects formal offers from shortlisted bidders in February. Jones Lang LaSalle Inc. will advise Laing regarding the sale. The company expects to announce 2001 earnings March 21. MARCONI PLC: Rejects 25-BB-Pound Merger Deal -------------------------------------------- Troubled British telecom equipment maker Marconi Plc reportedly rejected a merger offer when it was valued at 25 billion pounds, the Financial Times reported. Former finance director John Mayo, who was ousted from Marconi in July last year after the company issued a shock profits warning, told the paper that a bidder had offered 9 pounds per share but the board ignored his recommendation to enter into talks in February 2000. Marconi shares closed at 32.25 pence on Thursday valuing the company at 897 million pounds. The company last week reported more poor results and announced another 4,000 job cuts on top of 9,000 last year. It also announced a buyback of 200 million pounds ($286 million) worth of bonds as it tries to get its finances into shape. NTL INCORPORATED: Seeks Funds From U.S. --------------------------------------- Cable TV operator NTL Incorporated is talking to AOL Time Warner Inc., Liberty Media Corp. and Microsoft Corp. in a bid to bring new investment, the Financial Times reported, citing people familiar with the company. France Telecom SA, one of NTL's biggest investors, has also spoken to Vivendi Universal about investing in NTL. It is eager to fine a new investor because it holds 18% of NTL's equity and $5 billion of convertible bonds. The potential investor would only buy either NTL shares or bonds if the company restructured its $17 billion of debt, the FT said. Bondholders will have to approve a restructuring that could take the form of a debt-for-equity swap, the paper said. The cable company has asked Credit Suisse First Boston to help advise it on a debt restructuring. NTL is struggling to increase revenue after incurring outstanding senior debt of about $9 billion. In December, it raised job cuts to 8,800, froze salaries, pared capital spending plans and changed focus from winning new subscribers to keeping its 3 million current ones to preserve cash. P&O PRINCESS: Carnival Ups Bid Offer by 11% ------------------------------------------- U.S. cruise operator Carnival Corporation raised its takeover offer for P&O Princess Cruises PLC by 11% to 3.5 billion pounds ($5 billion), the Financial Times reported. The improved offer includes 250 pence ($3.58) in cash and 0.1380 Carnival shares for each P&O share. The original offer was 200 pence cash and 0.1361 Carnival share. London-based cruise line P&O Princess, which already plans to merge with Royal Caribbean Cruises Ltd., responded that it would consider Carnival's improved "pre-conditional takeover proposal" and make an announcement in due course. The world's three biggest cruise liners are engaged in a bid battle as they seek cost-cutting alliances to counter a sharp slump in passengers since the September 11 attacks on the United States. P&O's shares closed 2p lower at 409p, giving a market value of 2.8 billion pounds. ************ 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 * * *