/raid1/www/Hosts/bankrupt/TCREUR_Public/020123.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, January 23, 2002, Vol. 3, No. 16


                            Headlines

* F I N L A N D *

SONERA CORP.: Appeals Ban Against LSP Stake Buy

* G E R M A N Y *

BANKGESELLSCHAFT BERLIN: Expects Losses in 2002
BAYER AG: Takes a Second Shot at U.S. Listing
DAIMLERCHRYSLER: To Trade Used Cars in March
LOBSTER NETWORK: Austrian Firm May Buy Lobster

* I R E L A N D *

AER LINGUS: More Pilots to Receive Layoff Notices
EIRCOM PLC: Will Sell Properties Worth EUR100MM to Cut Debts

* I T A L Y *

FIAT SPA: Foresees EUR900MM Savings From Restructuring

* N O R W A Y *

KVAERNER ASA: To Write Off $25.69MM

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

GRETAG IMAGING: Gets CHF40MM Order From Germany
SWISSAIR GROUP: Renaming to Cost SFr1BB

* U N I T E D   K I N G D O M *

ABERDEEN PREFERRED: Shareholders Opt for GBP72.4MM Rescue
CITYREACH INTERNATIONAL: Finds New Partners
CONSIGNIA: In Talks With Union to Avert Strike
ENRON CORPORATION: Denies Sale of Polish Plant
JOHN LAING: Disposes Property Development Business
MARCONI PLC: Mayo Settles 1-MM-Pound Payoff
MARCONI PLC: S&P Cuts Long-term Ratings to B
NTL INCORPORATED: May Breach Bank Covenants
TELEWEST COMMUNICATIONS: Mulls Rights Issue to Cut Debt


=============
F I N L A N D
=============


SONERA CORP.: Appeals Ban Against LSP Stake Buy
-----------------------------------------------

Helsinki-based Sonera Corp., an international forerunner in
mobile communications and mobile-based services and applications,
lodged Monday an appeal to the Supreme Administrative Court
against the Competition Council's December 2001 decision to stop
it from raising its stake in operator Loimaan Seudun Puhelin Oy
by 16.7%.

Sonera said the Competition Council ruling was based on a
complaint by its competitor Suomen 2G Oy and its rival DNA
Finland on account of the decision that the Finnish Competition
Authority had issued in August accepting the acquisition.

Because of this, Sonera finds the Competition Council's decision
to be surprising and unjustified.

"We do not know of an earlier practice that a competitor could
prevent a deal although the seller wants to sell and the buyer
wants to buy," Sonera President & CEO Harri Koponen said.

The Finnish Competition Authority and LSP have also appealed
against the ruling.

Sonera's current holding in LSP is 24.1%, with a total investment
of about 25 million euros.

The company was forced to sell off assets and organize in
November a billion-euro rights issue to pay down debts of around
3.5 billion euros.

In 2000, Sonera's revenues totaled 2.05 billion euros, and profit
before extraordinary items and taxes was 1.86 billion euros.
Sonera employs about 10,500 people.


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


BANKGESELLSCHAFT BERLIN: Expects Losses in 2002
------------------------------------------------

Troubled banking group Bankgesellschaft Berlin will close 2002
with another operating loss, according to a Handelsblatt report.
The Frankfurter Allgemeine Zeitung newspaper said that BGB would
in post an operating loss of up to 250 million euros for the
full-year 2002.

The loss, it said, would be due mainly to risk provisioning
totaling 400 million euros.

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.

However, the privatization of the bank may be delayed with the
appointment of Social Democratic Party politician Thilo Sarrazin
as Berlin's new finance minister.

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: Takes a Second Shot at U.S. Listing
---------------------------------------------

Bayer AG, Germany's third-largest drug maker, is taking another
run at its Wall Street debut, after its original plan of listing
on the world's largest stock exchange in September 2001 had to be
postponed, Frankfurter Allgemeine reported.

The listing had to be pulled from the market last summer under a
barrage of class-action suits that were linked to deaths
worldwide caused by anti-cholesterol drug Baycol.

Bayer Chairman Manfred Schneider will open trading on January 24
by subscribing to the first share.

Bayer said earlier it would sell 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.


DAIMLERCHRYSLER: To Trade Used Cars in March
--------------------------------------------

German-American carmaker DaimlerChrysler AG plans to set up a new
subsidiary to trade in used cars in an attempt to extend the
value-creation chain.

DaimlerChrysler spokesman Peter Maahn told Handelsblatt that the
new unit, to be known as Motormeile, would be set up in March and
would be headquartered near Munich. The new business venture
would sell all marques, not just those of the DaimlerChrysler
group.

DaimlerChrysler issued no details on the number of Motormeile
outlets it plans to set up or the sums that it plans to invest in
the venture.

The company would issue full details in mid-February.

DaimlerChrysler needs cash to turn around its loss-making U.S.
unit Chrysler. Daimler's industrial business had net debts of 4.5
billion euros at the end of September.


LOBSTER NETWORK: Austrian Firm May Buy Lobster
----------------------------------------------

Austrian investment company IPO Board AG, according to a report
from die welt, may acquire Lobster Network Storage AG, the
Berlin-based data storage and backup solutions provider currently
facing payment problems.

IPO Board has been acquiring listed companies facing crises. It
has already involved in a rescue package for fellow German
software company Teamwork.

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.

For further information, contact Kira Baitalskaia at
Zimmerstrasse 68, 10117 Berlin, telephone 030.896.72-0, fax
030.896.72-499, or via e-mail info@lobster.de


=============
I R E L A N D
=============


AER LINGUS: More Pilots to Receive Layoff Notices
-------------------------------------------------

Between 10 and 20 Aer Lingus pilots will receive compulsory
redundancy notice this week as the cash-strapped state airline
prepares for confrontation should pilots not accept the existing
redundancy and early retirement terms, the Irish Times reported
yesterday.

The pilots' union, IMPACT, has recommended that members boycott
information meetings addressed by Aer Lingus chief executive
Willie Walsh.

Walsh said there was no room for 80 surplus pilots. Some 44
trainee pilots have been laid off, although their training has
already cost the company 4.96 million euros.

Walsh also said that the company's target of reducing managers by
40 to 80 has been met, while other restructuring targets to seek
investors are on schedule.

British Airways and venture capital Alchemy Partners already
withdrew their interest in investing in Aer Lingus.

The job cuts are part of the Aer Lingus' rescue plan aimed at
saving 190 million euros and returning the company to
profitability.


EIRCOM PLC: Will Sell Properties Worth EUR100MM to Cut Debts
------------------------------------------------------------

Dublin-based telecom company Eircom will divest up to 100 million
euros in properties to meet its financial obligations to
international banks for the money lent for the recent takeover
led by the Valentia Consortium, the Sunday Business Post
reported.

Included in the property sale is Eircom's training center at
Kimmage in Dublin estimated to value between 8 and 12 million
euros. Hamilton Osborne King is handling the sale of the said
center.

The funds raised from the sale are intended to finance productive
investments, cover redundancy payments and pay off Valentia's
debts.

Irish phone company Valentia Telecommunications Limited, backed
by financier George Soros, Goldman Sachs Group Inc. and
Providence Equity Partners Inc., as well as Irish billionaire Sir
Anthony O'Reilly, took over Eircom last year for around 3 billion
euros.


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


FIAT SPA: Foresees EUR900MM Savings From Restructuring
------------------------------------------------------

Italian car manufacturer Fiat foresees 900 million euros in cost
savings in 2002 from restructuring efforts after achieving cost
cuts estimated at nearly 300 million euros in 2001, AFX News
reported Monday.

The company further forecasts cumulative cost savings of more
than 1.2 billion euros in 2003 and nearly 1.5 billion euros in
2004.

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.

Fiat chief executive Paolo Cantarella met with institutional
shareholders in London early this week to set out the scope of
the restructuring, which includes the disposal of the lighting,  
engine and gearbox parts businesses of its vehicle components  
division, Magneti Marelli.


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


KVAERNER ASA: To Write Off $25.69MM
-----------------------------------

Kvaerner, the Anglo-Norwegian engineering giant that almost went
bust, said Monday it would have to write down 230 million kroner
($25.69 million) at its Oil & Gas business tied to an accounting
error from 1998 to 2000.

The items were recorded in the balance sheet and were not taken
properly to the profit and loss statement when the projects were
completed, Kvaerner said in a statement.

The company expects such costs to have a minor negative effect on
its 2001 annual result. The write-off of the project costs will
not affect liquidity, Kvaerner added.

Kvaerner's auditor at the time was Arthur Andersen. Its auditor
at present is KPMG International.

The Kvaerner Group has annual revenues in excess of $6 billion,
with some 34,000 permanent staff located in more than 30
countries throughout Europe, Africa, Asia and the Americas.

For more information, contact Finn Berg-Jacobsen, acting CFO at
telephone +47 67 51 34 44, or Paul Emberley, Vice President Group
Communications at +44 (0)20 7339 1035 or  +44 (0)7768 813090 or
via e-mail paul.emberley@kvaerner.com


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


GRETAG IMAGING: Gets CHF40MM Order From Germany
-----------------------------------------------

Swiss photo imaging equipment manufacturer Gretag Imaging Holding
AG received an order of between 35 million and 40 million Swiss
francs from Germany-based CeWe Color Holding AG, the Wall Street
Journal reported Monday.

CeWe will buy and install a Gretag product called Lyra, a high-
speed digital photo development system.

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: Renaming to Cost SFr1BB
---------------------------------------

The renaming and rebranding of Swissair Group AG, which filed for
bankruptcy protection in October, will cost the airline around 1
billion Swiss francs, SonntagsZeitung reported citing experts.

Swissair's provisional administrator Karl Wuethrich said that to
keep the Swissair name would already cost 500 million Swiss
francs.

The fear of uncalculable creditor claims lead Crossair, the
carrier that will replace Swissair, to decide against this.

The new Crossair/Swissair name will be announced towards the end
of the month and is reported to reflect the airline's Swiss
origins.


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


ABERDEEN PREFERRED: Shareholders Opt for GBP72.4MM Rescue
---------------------------------------------------------

Shareholders of Aberdeen Preferred Income Trust plc have voted
Monday on the GBP72.4 million rescue package for the London-based
investment trust company, the Electronic Telegraph reported.

The deal will allow the company to pay off about 30 million
pounds of its debt.

Under the deal, a new class of stepped preference shares will be
issued, at 100p each. Ordinary shareholders can receive three
stepped preference shares for every seven ordinary shares they
currently hold.

Existing 2003 zero dividend preference shareholders can also
choose to receive a 2005 zero, plus 29p for every 2003 zero they
hold.

Its shareholders include Phoenix Home Life Mutual Ins with
21.99%, Schroder Inv Mgmt Ltd with 9.21%, Life Assurance Holding
Co with 8.70%, Jupiter Asset Mgmt with 4.62%, Aberdeen Asset Mgrs
Ltd with 3.11%, Legal & General Inv Mgmt with 3.08%, R S Brown
with 2.24%, M J Gilbert with 2.09%, and other directors with
2.79%.

As of September 2001, Aberdeen Preferred Income Trust has current
assets of 130.87 million pounds and current liabilities of 157.04
million pounds.

The company has 1,280 employees as of December.


CITYREACH INTERNATIONAL: Finds New Partners
-------------------------------------------

Local management and a new group of investors recently bought the
Hungarian subsidiary of CityReach International (CRI), an
operator of eight Internet data centers in Europe, Europemedia
reported.

The financial terms of the buyout were not disclosed.

The investors, lead by the venture capital arm of Hungarian
pharmaceutical company Beres Rt, renamed it Dataplex
International.

CRI has invested about $350 million (400 million euros) into
eight collocation centers or telehotels in several European
countries before it went into administration last August. It has
appointed KPMG Corporate Recovery to handle administration of the
company's assets.

CRI is headquartered in London and has offices across Europe and
the U.S. The firm's eight data centers are located in London,
Amsterdam, Budapest, Stockholm, Dublin, Munich, Berlin and Paris.


CONSIGNIA: In Talks With Union to Avert Strike
----------------------------------------------

Union leaders and managers of Consignia, the state-owned post
office group saddled with heavy fixed costs, are in talks to
prevent a national postal strike, BBC News reported yesterday.

The talks come as the union prepares to send out ballot papers,
calling for strike action unless its pay demands are met.

The meeting at the conciliation service ACAS will see the
Communications Workers Union argue for a pay rise of 5% for
140,000 Royal Mail staff.

Consignia has offered a 2% rise if quality of service targets are
met.

Staff at the Royal Mail already face huge uncertainty after
Consignia confirmed to cut 30,000 jobs, or 15% of its workforce.


ENRON CORPORATION: Denies Sale of Polish Plant
----------------------------------------------

John Ambler, spokesman of U.S. energy giant Enron, has denied
reports in Polish media that the company has already committed to
sell its $130 million power and heating plant Elektrocieplownia
Nowa Sarzyna Sp z.o.o (ENS) in southeast Poland.

Enron Poland vice president Krzysztof Olecki backed Ambler's
satement saying, "It's still not for sale, but there have been
potential buyers, even before Enron's troubles."

Olecki declined to name the interested companies.

According to a Warsaw Business Journal report, the fate of ENS
could be decided next month.

ENS provides steam to its neighboring chemical works, Organika-
Sarzyna, and energy for the municipality Nowa Sarzyna. The
facility is one of the first independent gas-fired electricity
plants in the nation, employing just under 50 people.

Enron filed for Chapter 11 bankruptcy filing in U.S. court in
December. Its subsequent collapse, along with revelations that
Enron employees were initially not allowed to sell shares in
retirement plans as the company's stock plummeted from $90 to $1
per share on the day of the filing, are the subject of U.S.
congressional investigations.


JOHN LAING: Disposes Property Development Business
--------------------------------------------------

After selling its construction interests in September last year,
London-based development and construction management company John
Laing Plc will also sell its property development division, the
Independent News reported Monday.

The move will leave the company as a housebuilder and an
infrastructure business working on Private Finance Initiative-
style projects.

"We cannot grow both housing and infrastructure. Strategically we
have to work out what we want to be," Laing finance director
Adrian Ewer said.

Jones Lang LaSalle Inc. will advise Laing on the sale.

Laing has also just been through a refinancing exercise, with a
GBP73 million rights issue, and a management shake-up.

The company said earlier it would post a loss of 117 million
pounds ($168 million) in its records for the year 2001 after
retaining liabilities linked to several projects.

Its net debt stood at 170 million pounds at year-end.


MARCONI PLC: Mayo Settles 1-MM-Pound Payoff
-------------------------------------------

Former Marconi finance director John Mayo, who was paid 600,000
pounds in lieu of notice following his dismissal in July, has
settled his payoff dispute of 1 million pounds with the company
over his pension settlement, the Guardian newspaper reported.

Marconi is said to have been refusing to give the money because
of a disagreement over how much the company owes Mayo.

Unlike former chief executive Lord Simpson, who received 300,000
pounds in compensation for loss of office and future pension
contributions, and chairman Sir Roger Hurn, who waived his
entitlements completely, Mayo has been pressing for a full
payout.

Marconi announced last week another 4,000 job cuts from about
56,000 employees. It also announced a buyback of 200 million
pounds ($286 million) worth of bonds as it tries to get its
finances into shape.


MARCONI PLC: S&P Cuts Long-term Ratings to B
--------------------------------------------

Credit ratings agency Standard & Poor's said Monday it has
downgraded the long-term corporate credit rating of troubled
telecoms equipment company Marconi to B from BB, and the senior
unsecured debt rating on guaranteed subsidiary Marconi Corp. PLC
to B- from B+.

The downgrade, which followed the B2 rating by Moody's Investors
Service on Friday, reflects a very weak operational performance
by Marconi's core communications business.

The London-based company last week said revenue from phone
equipment in the three months ended December 31 fell 37% to 706
million pounds ($1.01 billion), while operating losses (defined
as earnings before interest, taxes, and amortization) stood at
130 million pounds.

Marconi also said it planned to eliminate more jobs as a result
of further weakening market conditions.

Furthermore, the group has 1 billion pounds in available cash and
credit lines of 2.2 billion pounds, drawn at December 2001, to
mature in March 2003 and May 2003.

To maintain the ratings, S&P said that Marconi will have to
refinance its bank loans in the near term, sustain revenue and
orders, and show good progress toward restoring profitability and
cash flow generation in its core communications business.

The company is in talks with lenders, including Barclays Plc, to
extend a loan beyond 2003.


NTL INCORPORATED: May Breach Bank Covenants
-------------------------------------------

Analysts believe that cable-TV operator NTL could be in breach of
some of its banking covenants as early as April, the Financial
Times reported.

The issue will gain added urgency in the second quarter when NTL
becomes faced with more stringent financial targets, or
covenants, set by its banks, which include Barclays, Bank of
Scotland, JP Morgan, Morgan Stanley and Royal Bank of Scotland.

If the company falls short, for example on measures such as
earnings before interest, tax, depreciation and amortization
(ebitda), its lenders could force it to repay loans, unless terms
are renegotiated.

As of September, NTL borrowed 4 billion pounds from its banks.

Next month, NTL will face heavy cash demands when several bond
interest payments become due and the company will have to pay out
$113 million.

NTL is believed to have asked investment bank Credit Suisse First
Boston to advise on possible restructuring of its 12 billion
pounds of debt.

The company will try to raise funds by bringing in one or more
outside shareholders, including AOL Time Warner, Liberty Media
and Microsoft.


TELEWEST COMMUNICATIONS: Mulls Rights Issue to Cut Debt
-------------------------------------------------------

Telewest has held informal talks with institutional shareholders
about launching a rights issue to reduce its 5 billion pounds of
debt, the Guardian reported.

However, the Surrey-based cable operator is thought to be
hesitant to commit itself to the issue of new equity until
conditions in the cable sector improve.

Any rights issue would have to be underwritten by Telewest
shareholders Liberty Media and Microsoft, who between them
control around 48% of the company.

As of November, Telewest's net debt stood at around 4.9 billion
pounds, twice its market capitalization.

                                       **********

          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
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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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