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        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, February 01, 2002, Vol. 3, No. 23


                            Headlines

* B E L G I U M *

CUSTOM SILICON: Fails to Execute Restructuring, Repayment Plan
FLV FUND: Seoul Dismisses Hanvit Bank Claim
SABENA SA: DAT Enters Final Phase of Merger Deal With Virgin

* G E R M A N Y *

DAIMLERCHRYSLER: Chrysler Group Offers Vehicle Discounts
DEUTSCHE TELEKOM: Regulator May Reject Liberty Bid
EM.TV: Divests Three Units to Escape Financial Obligations
KIRCHGRUPPE: Faces GBP467MM Demand From Springer

* I T A L Y *

IPSE 2000: Holders Will Not Freeze Company

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

KPN NV: Has EUR8.8BB Cash on Hand, CFO Says
KPN NV: Will Take Full Control of E-Plus

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

SWISSAIR GROUP: Swiss Exchange Delays De-listing of Bonds

* U N I T E D   K I N G D O M *

BIOGLAN PHARMA: In Rescue Talks With Quintiles Transnational
BROOKE INDUSTRIAL: Calls in Receivers
CONSIGNIA: Government Mum on 3,000 Post Office Closure
NTL INCORPORATED: $92MM Interest Payment Due Today
P&O PRINCESS: Carnival Increases Bid by 100MM Pounds
RICHARDS PLC: Asks HBOS to Appoint Receiver
TINY COMPUTERS: Goes Into Administration With GBP35MM Debt
TINY COMPUTERS: Time Group Buys Tiny for GBP1MM
UK COAL: To Close Oldest Mine, Absorb Losses Due to Rising Costs


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


CUSTOM SILICON: Fails to Execute Restructuring, Repayment Plan
--------------------------------------------------------------

Custom Silicon Configuration Services NV (CS2) was unable to
execute the court-approved Restructuring and Repayment plan due
to the failure of Luxemburg-based investment company Business 21
S.A. to execute the financing agreement and continuing
difficulties in the semiconductor market.

In a statement made in the Nasdaq Europe, Zaventem-based CS2 said
that no money was received under the financing agreement in
December.

Under the deal, Business 21 sa has subscribed a financing
facility cum warrants of $25 million issued by CS2 in accordance
with the resolution of the September EGM. The financing facility,
with duration of 3 years, will bear a nominal interest rate of
7%.

The company has put the financing provider on notice that it is
considering legal action.

Consequently, the board has decided to submit their petition to
request from the Brussels Court of Commerce the withdrawal of the
Restructuring and Repayment plan and consequently the creditor
protection.

For further information, contact Yves De Poorter, Chief Executive
Officer, at telephone 32 2 713 05 62 / 32 2 720 00 00 or via e-
mail YDP@cs2.be


FLV FUND: Seoul Dismisses Hanvit Bank Claim
-------------------------------------------

The Seoul District Court has dismissed FLV Fund Korea's claim
vis-a-vis Hanvit Bank, in which FLV Fund Korea demanded the
repayment of FLV Fund Korea's share capital of US$30 million
collected by Hanvit Bank despite the preliminary injunction
proceedings and the knowledge Hanvit Bank had of the factual and
legal arguments set forth by FLV Fund Korea contesting the
validity of the pledge.

The legal action was instituted early last year at the 23rd Civil
Division by FLV Fund Korea against Hanvit Bank.

In a statement from Nasdaq Europe, venture capitalist Flanders
Language Valley Fund said that the court confirmed FLV Fund
Korea's argument that the establishment of the pledge constitutes
an event equivalent to a transfer of all or important part of
business, and therefore requires a special resolution at the
shareholders meeting.

This had been strongly disputed by Hanvit Bank.

That being the case, the court nevertheless ruled that, in its
opinion, if the shares of a corporation are owned by a single
shareholder, the single shareholder's consent constitutes an
effective substitute for a special resolution at the shareholders
meeting, even if there is no such separate special resolution.

Although there has never been any special shareholders'
resolution or any other decision, approving the entering into of
the pledge between FLV Fund Korea and Hanvit Bank, the court
erroneously concludes that the litigious and disputed transaction
followed the intent of FLV Fund, the sole shareholder of FLV Fund
Korea, and therefore dismisses FLV Fund Korea's claim.

FLV Fund, which posted a net accounting loss of US$18.9 million
during the third quarter of 2001 and net operating loss of US$
17.9 million, instructed its legal advisers to analyze the
judgment and to determine any other appropriate action to
safeguard the interests of FLV Fund.

The close association of FLV with troubled vocal technology
specialist Lernout & Hauspie Speech Products NV has made it
difficult to continue operations.


SABENA SA: DAT Enters Final Phase of Merger Deal With Virgin
------------------------------------------------------------

Sabena's successor airline Delta Air Transport (DAT) and Richard
Branson's Virgin Express will enter the final phase of merger
negotiations as management of both airlines have cleared initial
hurdles.

Belgian daily De Financieel Economische Tijd says a deadline for
a tie-up between the two is recommended before the end of
February.

DAT, the heir to failed Sabena, which declared bankruptcy in
November, has 6,000 employees and flies to 35 destinations.

Virgin Express, a money-loser in recent years, has 800 staff and
flies to 14 cities.

The future airline, which will probably be renamed, is expected
to focus on business fliers in Europe, with five or six new
destinations to be added by April.


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


DAIMLERCHRYSLER: Chrysler Group Offers Vehicle Discounts
--------------------------------------------------------

DaimlerChrysler, parent of Chrysler Group, has introduced vehicle
discounts to as far as $2,500 on some 2002 Chrysler, Jeep and
Dodge vehicles, the FT Investor reported.

The program is effective through February 28.

DaimlerChrysler said earlier it 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.

Shares of the German-American automaker slipped 7 cents to $40.51
after making the move.


DEUTSCHE TELEKOM: Regulator May Reject Liberty Bid
--------------------------------------------------

Germany's Federal Cartel Office signaled it would reject the 5.5-
billion-euro ($4.76 billion) bid of Liberty Media for 60% of the
cable-tv network of Bonn-based telecom giant Deutsche Telekom AG
unless the U.S. group resolves the regulator's remaining concerns
by the end of February.

According to a report from the Wall Street Journal, the regulator
will only approve the current strategy if Liberty Media agrees to
create greater competition in affiliated markets, such as
Internet or telephony, by developing its network.

Deutsche Telekom owns most of Germany's cable infrastructure but
it does not control the retail side of the business.

The failure of the deal would strike a serious blow to Deutsche
Telekom's drive to cut its debt of 65 billion euros to 50 billion
euros this year, and the cable sale is key part of that plan.

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.

London-based investment group Compere Associates has said it
would bid for the cable network if the Liberty acquisition is
blocked.


EM.TV: Divests Three Units to Escape Financial Obligations
----------------------------------------------------------

Troubled media-rights group EM.TV & Merchandising AG has sold its
stakes in production studio TFC Holding GmbH, Tel Aviv-based
Talit.TV & Communications Ltd. and Sweden's Plus Licens AB, Dow
Jones Newswires reported.

EM.TV sold 60% of cartoon production company TFC to shareholders
Michael Schaack and Thomas Walker for a symbolic price of 1 euro.

It also said that it will honor a EUR800,000 loan agreement in
return for a share of the proceeds should Schaack and Walker sell
on their new TFC shares by the end of 2004.

Under the terms of the agreement, Schaack and Walker have waived
their option to sell their 40% in TFC to EM.TV for 6.4 million
euros. They have also taken on a credit guarantee of 2.1 million
euros.

The Munich-based firm sold 50% of Talit for $1.3 million back to
the company. Talit has agreed to buy TV and similar rights worth
$1 million from EM.TV by 2005.

EM.TV sold 50% of Plus Licens to shareholders Peder Tamm and Eva
Braennstroem for an undisclosed symbolic price. In return, the
owners waived a put option that would have forced EM.TV to buy
the remaining 50% for 4.6 million euros.

The German company will get a share of the proceeds should Tamm
and Braennstroem fully or partially sell Plus Licens. The two
firms will maintain business ties.

The agreed divestments, according to chief executive Werner
Klatten, would allow the company to escape having to pay out 13.1
million euros from the shareholding contracts.

Management has also decided to sell the holdings as they have not
met earnings expectations and no longer fit it to its main
business.

EM.TV would take a charge of 9.7 million euros to write down the
value of the assets in its accounts.

Klatten is reorganizing EM.TV after taking over from Thomas
Haffa, whose expansion program brought the company to the brink.

EM.TV stocks has slumped 98% since the tech-stock boom of early
2000.


KIRCHGRUPPE: Faces GBP467MM Demand From Springer
------------------------------------------------

Heavily indebted Munich-based media group Kirch Gruppe faces
another financial woe, as German publisher Axel Springer AG is
demanding 767 million euros (US$661.33 million).

According to a report from the Times newspaper, Axel Springer
proposes to exercise an option to sell its 11.5% stake in free-
to-air television service ProSiebenSat.1Media AG to Kirch at a
pre-arranged price.

The current market value of the stake is just 111 million euros
(US$95.71 million).

The financial health of KirchGruppe has been the subject of
growing concern, as it has emerged that Germany's largest
television broadcaster is shouldering debts of between 11 and 12
billion marks ($5 billion) and a further 5 billion marks in
contingent liabilities.

Earlier this month, Dresdner Bank, which in December had
threatened to call a $404 million loan, agreed to keep the credit
line open until April.


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


IPSE 2000: Holders Will Not Freeze Company
------------------------------------------

Ipse 2000, the cash-strapped third-generation mobile consortium
led by Telefonica Moviles, will not freeze operations, but will
immediately refocus its business plan on 3G services, Dow Jones
Newswires reported, citing chairman Pierluigi Celli.

In a statement, Ipse said its shareholders will keep funding the
company through loans, but did not specify the timing or the
amount.

A freezing of Ipse's operations would mean the consortium would
not meet pledges on the timing of the rollout of its network that
are required in the license contract.

Ipse paid around 2.44 billion euros for the license itself, not
including extra frequencies offered to market newcomers. Some
reports also said the Communications Ministry could sanction
Ipse.

A meeting by Ipse's board of directors in November failed to
yield final approval for the company's business plan, leading to
rumors that it could suspend or even liquidate the project
because of financing difficulties.

Italian newspaper Il Sole 24 Ore reported this week that Ipse
only has enough cash to keep going for a maximum of one month.

Ipse 2000, is owned 45.59% by Telefonica Moviles, 12.55% by the
Finnish operator Sonera, 12% by Atlanet, 10% by Banca di Roma; 5%
by Xera S.p.A.; 5% by Edison-Falck; and 4.8% by Goldenegg, with
the remaining 5% held by other shareholders.


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


KPN NV: Has EUR8.8BB Cash on Hand, CFO Says
-------------------------------------------

Heavily indebted Hague-based telecommunications company Royal KPN
NV currently has 8.8 billion euros in cash on hand, Dow Jones
Newswires reported, citing chief financial officer Maarten
Henderson.

Henderson also estimated that the company's net debt as of
December 31 is 16.5 billion euros.

The estimate is based on KPN's recent EUR5 billion share
offering.


KPN NV: Will Take Full Control of E-Plus
----------------------------------------

Dutch telecommunications company Royal KPN NV said it would
acquire the shares it does not already own in the German mobile-
phone company E-Plus in order to remain in the highly competitive
German telecommunications market.

Under the agreement, KPN, which controls 77.5% of E-Plus, would
issue 234.7 million ordinary shares to BellSouth Corp. of the
U.S. in exchange for BellSouth's 22.51% stake in E-Plus.

After conversion, this represents 9.42% of KPN's 2,491 million
outstanding shares.

As part of the transaction, BellSouth has surrendered its
existing warrant on KPN shares, its rights with regard to KPN
Mobile and its contingent rights pertaining to KPNQwest.

After closing, expected to be in the second quarter of this year,
KPN will have full control of E-Plus.

Currently, KPN has drawn Euro 484 million under a loan facility
provided by BellSouth. This amount is being repaid today.

Upon closing, KPN will assume approximately 2.1 billion euros
BellSouth shareholder loans currently extended to E-Plus by
drawing down on the subordinated loan facility extended to KPN by
BellSouth.

The two parties have agreed on new terms for that loan facility,
providing for a cap at the level of BellSouth's previous
shareholder loans to E-Plus.

With an interest rate fixed at Euribor plus 175 bps, the new
terms also include an accelerated amortization schedule, wherein
516 million euros will be repaid in December 2002, 500 million
euros in October 2003 and approximately 1.1 billion euros on
March 2004.

As a result of the consolidation, KPN's net consolidated debt
will increase by approximately 930 million euros, based on third-
quarter 2001 figures.

The effect on revenues (Jan-Sep 2001) would have been an increase
of 377 million euros (128 million in third-quarter 2001) and an
increase of 60 million euros (38 million in third-quarter 2001))
on Ebitda.


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


SWISSAIR GROUP: Swiss Exchange Delays De-listing of Bonds
---------------------------------------------------------

An appeal board of the SWX Swiss Exchange delayed the scheduled
de-listing of the Swiss franc bonds of Swissair Group AG after
two groups of bondholders filed complaints, Dow Jones Newswires
reported.

The Zurich-based aviation company, which was driven to file for
bankruptcy in October after failed expansion moves, expected its
shares to be de-listed today.

The board's ruling applies to 10 Swiss franc bonds and one
convertible bond of Swissair Group.

In December, the estate administrator of Swissair Group estimated
that bondholders might recoup around 12% of their investment,
while shareholders could lose all.

Swissair Group's financial difficulties were exacerbated by the
U.S. terrorist attacks.


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


BIOGLAN PHARMA: In Rescue Talks With Quintiles Transnational
------------------------------------------------------------

Debt-laden British biotechnology company Bioglan Pharma Plc is in
its final-stage rescue talks with US contract research group
Quintiles Transnational, the Financial Times reported.

Analysts said the Quintiles deal, which could give Quintiles up
to 30% of Bioglan through a share issue, is estimated to be worth
tens of millions of pounds.

Bioglan's problems began in October when Sadler confirmed he had
abandoned the $765 million acquisition of Bristol Myers Squibb's
skincare operations.

Earlier, Bioglan Pharma sold two Danish-based subsidiaries,
United Nordic Pharma A/S and Dansk Laegmiddelforsyning A/S, to
management buy-out vehicle HHR Holdings A/S for 14 million Danish
crowns ($1.6 million).

Bioglan Pharma is in a desperate attempt to stave off bankruptcy,  
as assets stand at 42.9 million pounds and current liabilities  
amount to 57.4 million pounds.

The company still owes 105 million pounds (about $148.5 million)
to a consortium of banks led by Royal Bank of Scotland.

The business is now valued at 7.1 million pounds.


BROOKE INDUSTRIAL: Calls in Receivers
-------------------------------------

Brooke Industrial Holdings PLC, the Sheffield-based engineering
company, called in the receivers Wednesday.

The move, which has put about 1,000 jobs at risk, came after
Brooke admitted it had failed to secure continuing support from
its banker, HSBC.

Brooke non-executive chairman Michael Arnold said that the
company needed about 500,000 pounds of extra cash to keep the
company going.

Trading in Brooke shares was suspended on the Alternative
Investment Market on Tuesday at 6.25p, as the company was forced
to clarify its financial position.

For more information, contact the Brooke Industrial plc by mail:
Shepcote Ln. Sheffield S9 1 QT, United Kingdom, by telephone:
+44-(0)114 249 4222 or by fax: +44-(0)114 249 4223


CONSIGNIA: Government Mum on 3,000 Post Office Closure
------------------------------------------------------

The government has refused to comment on a news report that it
may close 3,000 urban post offices, the AFX News reported.

The Independent newspaper earlier said that up to a third of
Consignia's 9,000 post offices would have to be closed to help
achieve a cost-cutting target of 1.2 billion pounds.

The Department of Trade and Industry and Consignia were unable to
put an exact figure on the number of closures, but industry
sources said between 2,000 and 3,000 branches have been
identified.

Prime Minister Tony Blair's spokesman said the government is
still waiting to receive a strategic plan from Consignia adding
that any restructure would be something to be decided between the
company and its regulator, Postcomm.

Early January, a Consignia plan was leaked which talked of 30,000
job cuts, or 15% of its workforce.

Consignia's poor performance has brought the company to report in
November a fivefold increase in first-half operating losses
accruing to 100 million pounds. It is struggling to slash 1.2
billion pounds ($1.7 billion) from its eight billion pound cost
base in order to restore profitability and become more
competitive.
  
The Consignia board has hired PricewaterhouseCoopers to advise on
the future of the group, while UBS Warburg is advising on the
future of the post office network.


NTL INCORPORATED: $92MM Interest Payment Due Today
--------------------------------------------------

Bondholders of NTL expect to receive their coupon payments today
on four outstanding bonds from the debt-laden cable television
operator, Dow Jones Newswires reported.

According to ING Barings analyst Peter Cuckovic, the interest
coming due today includes $60 million on the 11.5% bonds due
2006, $17 million on the 12.375% bonds due 2008, $10 million on
the Diamond Cable division's 10% bonds due 2008, and $5 million
on Diamond's 9.125% bonds due 2008.

However, analysts said investors should not take for granted that
NTL would pay their $92 million due as the company is raising
funds to restructure its $17 billion debt.

Another $20 million in interest is due on February 15.

Though the company would not officially be in default until a 30-
day grace period expires, non-payment today would trigger more
speculation on a restructuring, and potentially give bondholders
more bargaining power.

NTL is now valued at $110.7 million.


P&O PRINCESS: Carnival Increases Bid by 100MM Pounds
----------------------------------------------------

Carnival Corporation has improved its offer for London-based
cruise operator P&O Princess Cruises to 3.6 billion pounds ($5
billion).

The U.S.-based Carnival, the world's biggest cruise operator,
earlier had a 3.5 billion offer for its British rival.

The improved bid brings it at par with a rival 515 pence per
share bid offered by Royal Caribbean Cruises Ltd. Carnival said
it would now offer 0.2684 Carnival shares for each Princess
share, or offer a partial cash alternative of 250p.

Carnival has also dropped some conditions, including getting the
necessary financing, full access to P&O Princess financial data
and the cancellation of a shareholders' meeting to vote on the
Caribbean deal.

The new offer remains dependent on the approval from U.S. and
European regulators.

In November, Moody's Investors Service downgraded the senior
unsecured debt rating of P&O Princess to Baa3. The action
reflected the expectation of higher combined debt levels
following the company's merger announcement with Royal Caribbean
Cruises.

The world's three biggest cruise liners are engaged in a bid
battle as they seek to cut costs, boost market share and reduce
overcapacity.

Schroder Salomon Smith Barney is advising P&O Princess on the
deal. Goldman, Sachs & Co. and Cazenove & Co. Ltd, which are
regulated in the United Kingdom by the Financial Services
Authority, are acting for Royal Caribbean, while Merrill Lynch &
Co. and UBS Warburg are advising Carnival.


RICHARDS PLC: Asks HBOS to Appoint Receiver
-------------------------------------------

Richards PLC, the Aberdeen-based manufacturer and distributor of
carpets, textile yarn and handkerchiefs, has requested that HBOS
PLC appoint a receiver.

After several months of talks, HBOS concluded that it is not
prepared either to restructure the existing facilities or lend
additional amounts to Richards.

The planning process for the Broadford Works, which has lasted
four years without a definitive result and has prevented the
group from realizing value, as well as the necessity of winding
up the Richards Pension Scheme, were the main reasons for the
company's problems.

Trading has further been adversely affected by the downturn in UK
manufacturing following the September 11 attacks.


TINY COMPUTERS: Goes Into Administration With GBP35MM Debt
----------------------------------------------------------

Surrey-based Tiny Computers, U.K.'s second biggest retail
computer chain, collapsed into administration after being
burdened by debts of more than 35 million pounds.

Andrew Hosking of Grant Thornton, the administrator, said the
company had suffered a 40% decline in sales last year to 200
million pounds.

The demise of Tiny, owned by Swiss-based multimillionaire Roger
Sandiford, comes just three months after it unveiled plans to
open 140 new showrooms and create 450 jobs across Britain.

It is not yet known how many of Tiny's 1,000 employees will face
redundancy.


TINY COMPUTERS: Time Group Buys Tiny for GBP1MM
-----------------------------------------------

Time Group bought larger rival, computer assembler and high
street retailer Tiny Computers, for 1 million pounds in a move
likely to lead to several hundred job losses.

The two companies have been in merger talks for two years but
always failed to reach agreement. Time in December pulled out
after due diligence uncovered a funding gap of 30 million pounds
in Tiny's finances.

Time has 60 retail stores and Tiny just over 140. About a quarter
of the combined portfolio is will likely close as The Computer
World moves into 150 outlets. The Computer World will then offer
3,000 lines, including printers, software and computer
accessories.

The store closures, with reductions in management and
administrative staff, are likely to lead to significant job
losses among the combined workforce of 2,000.

Customers of Tiny will be notified of changes to their warranty
and support services contacts over the next few months.


UK COAL: To Close Oldest Mine, Absorb Losses Due to Rising Costs
----------------------------------------------------------------

UK Coal, the longest running mine operator in Great Britain, sees
huge losses in the horizon, as geological problems and escalating
cost combine to eat up its bottom line.

In an interview with The Guardian, UK Coal deep mines managing
director Alec Galloway admitted the company faces GBP36 million
in losses over the next two years due to ground problems that
makes coal so expensive to mine.  Other estimates place the
company's losses at GBP164 million.

"The problem has not been investment - it's all about geology,"
he told The Guardian.

It is this same problem that's forcing the company to close its
Prince of Wales colliery in Pontefract, the country's oldest and
most consistently productive pit.  Some 500 workers will be
displaced from the colliery, which dates back to 1860.

Most of the coal from this colliery is used for power stations,
including the cluster of Ferrybridge, Eggborough, Drax and Thorp
Marsh.

                                 ***********

      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.

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