/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/020215.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, February 15, 2002, Vol. 3, No. 33 Headlines * G E R M A N Y * BIODATA INFORMATION: Members Step Down From Supervisory Board KIRCHGRUPPE: Deutsche Bank Suggests Kirch Break-up KIRCHGRUPPE: Ecclestone Mulls Buy-back of F1 Rights KIRCHGRUPPE: Seeks Support From Rewe MICROLOGICA AG: Court Vetoes Petition to Suspend De-listing SOFTMATIC AG: Begins Insolvency Proceedings * I R E L A N D * AER LINGUS: Sale Is Put on Hold ELAN CORPORATION: Moody's Cuts Debt Ratings to Baa3 * L U X E M B O U R G * CARRIER1 INTERNATIONAL: Collapses Under Heavy Financial Burden CARRIER1 INTERNATIONAL: Court Appoints E&Y as Administrators * N E T H E R L A N D S * PHARMING GROUP: Shareholders Appoint New Directors * S W E D E N * FRAMFAB AB: Appoints IBM Honcho as New CEO FRAMFAB AB: Posts Profit in the Fourth Quarter * U N I T E D K I N G D O M * BALTIMORE TECHNOLOGIES: Overstates Japanese Revenues by $2.1MM BRITISH AIRWAYS: In Search for New Chairman BRITISH AIRWAYS: Shares Fall 4% on Redundancy News BRITISH AIRWAYS: 5,800 Redundancies Will Be Voluntary CONSIGNIA: Faces Pressure to Cut Costs CORUS GROUP: Reaches Agreement With Unions NTL INCORPORATED: Mum on Telewest Merger ROYAL DOULTON: Ceramic Manufacturer Will Cut 1,000 Jobs TELEWEST COMMUNICATIONS: Falls 23% on Debt Fears THUS PLC: Scottish Power Bares Thus De-merger Details UNIQ PLC: Names Bill Ronald as New Chief ============= G E R M A N Y ============= BIODATA INFORMATION: Members Step Down From Supervisory Board ------------------------------------------------------------- Biodata Information Technology AG, the Lichtenfels-based developer and producer of electronic security applications for communication and computer networks, said Tuesday that the members of its supervisory board have resigned. As a result of the resignation of chairman Hubertus Kestler, Werner Brockhagen and Manfred Piekarski, the insolvency administration of the IT security company initiated at the local court in Korbach the appointment of new supervisory board members. Biodata Information, which reported a consolidated loss of 70 million euros ($60.15 million) in the third quarter of 2001, filed for insolvency at the local court in Korbach in November 20 after talks with potential investors failed. The regular insolvency proceedings of Biodata Information commenced on February 1, with Dr. Westhelle as insolvency administrator. Contact Biodata Information Technology AG, Burg Lichtenfels, 35104 Lichtenfels, Telephone +49 (0) 6454 9120 118 or +49 (0) 6454 9120 132, Fax +49 (0) 6454 9120 180 for more information. KIRCHGRUPPE: Deutsche Bank Suggests Kirch Break-up -------------------------------------------------- Deutsche Bank is proposing to break up Kirch by selling off its stake in Formula One motor racing and its pay-TV business Premiere World, the Wall Street Journal reported. The Frankfurt-based bank wants to sell the Formula One rights to the carmakers, including DaimlerChrysler, while Premiere World would be sold off to US-Australian media magnate Rupert Murdoch, the newspaper said. The restructuring would reduce the troubled media group, which has amassed 5.6 billion euros of debt, to its core commercial television and film rights trading business. Meanwhile, Kirch's other major creditors, HypoVereinsbank, Bayerische Landesbank, Dresdner Bank, JP Morgan and Lehman Brothers, were resisting for a break-up. They prefer a "white knight" solution. Final decision on Kirch's future is expected in two weeks. KIRCHGRUPPE: Ecclestone Mulls Buy-back of F1 Rights --------------------------------------------------- Formula One's billionaire boss Bernie Ecclestone plans to buy back Formula One commercial rights from media empire Kirch Gruppe for 800 million euros, the Wednesday edition of Reuters said, citing a reported from German newspaper Sueddeutsche Zeitung. Ecclestone plans to involve car companies Daimler Chrysler AG and Fiat SpA in Formula One racing once he acquires Kirch's stake, the report added. KirchGruppe holds a 58.3% stake in Formula One commercial rights. EM.TV Merchandising AG holds the remaining 16.7% stake. German politicians and bankers have been working on plans to carve up Kirch's most valuable assets to enable the Munich-based media group manage its 5.6 billion euros of debt, mostly in short-term bank loans, and at least 2.3 billion euros in contingent liabilities due this year. KIRCHGRUPPE: Seeks Support From Rewe ------------------------------------ Kirch Group is looking for support from Cologne-based retail giant Rewe-Gruppe, which holds a 6% stake in the embattled Munich-based media empire, Handelsblatt reported. "If we are in a position to help, then we will do so," says chief executive Hans Reischl, deputy supervisory board chairman of Kirch Media. Reischl stressed that Rewe had neither intended to sell its shares in Kirch Group nor plans to increase its stake. MICROLOGICA AG: Court Vetoes Petition to Suspend De-listing ----------------------------------------------------------- According to an advance decision, the county court of Reinbek has decided that the application by official receiver B.Brinkmann of software company Micrologica AG to suspend the conditions for admission to the Neue Markt will be turned down. According to the company's statement in a release on the Frankfurt exchange, a possible appeal will be decided once the written substantiation of the arbitration becomes available. Bargteheide-based Micrologica will hold a creditor's meeting on February 25 in which an insolvency plan with debt relief will be decided, making Micrologica one of the first companies on the Neue Markt whose insolvency can be ended successfully. For further information, please contact Micrologica AG i.I. Frauke von Benzon/Andreas von Arnim at Bahnhofstrasse 5a 22941 Bargteheide, telephone +49 (0) 4532 403 106, fax +49 (0) 4532 403 199 or via e-mail frauke.vonbenzon@micrologica.de SOFTMATIC AG: Begins Insolvency Proceedings ------------------------------------------- Due to imminent illiquidity, the board of Norderstedt-based software developer Softmatic AG initiated insolvency proceedings at the local court in Norderstedt on Wednesday. Softmatic further announced a change in the supervisory board. Rolf Hubner has resigned from the supervisory board with immediate effect due to personal reasons. In the third quarter of 2001, Softmatic posted a net loss of 8.76 million Deutsche marks ($3.6 million). Current assets stood at 14.69 million Deutsche marks ($6.27 million), with current liabilities of 24.34 million Deutsche marks ($10.71 million). Refer to http://bankrupt.com/misc/softmatic.pdffor the company's interim report. ============= I R E L A N D ============= AER LINGUS: Sale Is Put on Hold ------------------------------- Efforts to sell Aer Lingus, the troubled Irish carrier, have been suspended as the general election approaches. According to a report from the Irish Times newspaper, the Progressive Democrats will release Aer Lingus from state control if it is re-elected. This is taken by sources as an indication that a sale before the election is not feasible. The election is expected in May. The government in December 1999 decided to sell Aer Lingus to the private sector, but that plan was called off last year after a series of strikes. When the company's position worsened, losing 2.5 million euros ($2.15 million) a day after the attacks on the US on September 11, the government moved to sanction a trade sale. Aer Lingus earlier announced to cut 2,000 jobs from its workforce of 6,000 in order to save 190 million euros and return the company to profitability. ELAN CORPORATION: Moody's Cuts Debt Ratings to Baa3 --------------------------------------------------- Moody's Investors Service said Wednesday it has downgraded the senior guaranteed debt ratings of Dublin-based pharmaceutical company Elan Corporation plc to Baa3 from Baa2, and retained the ratings on review for possible further downgrade. The downgrade is based on Moody's expectation that lower earnings, as well as higher capital expenditures will impact Elan's near term cash flow relative to debt. Moody's further believes that the recent US Securities and Exchange Commission investigation into the company's accounting may limit Elan's ability to access new funds to support business development. Moody's said it would continue to review and assess Elan's cash flow generating capabilities and its balance sheet. Elan's top executives and auditor KPMG LLP are facing class action lawsuits in the United States for issuing misleading press releases and using accounting techniques that artificially inflated the company's earnings. The company earlier lost some $9 billion in value as it released a grim 2002 profit warning and accounting concerns. =================== L U X E M B O U R G =================== CARRIER1 INTERNATIONAL: Collapses Under Heavy Financial Burden -------------------------------------------------------------- Pan-European bandwidth provider Carrier1 International S.A. became the latest victim of the heavily indebted sector when it started court proceedings to wind up the company. As of February 5, the company and its subsidiaries had approximately $88.9 million of cash and cash equivalents, restricted cash and available for sale securities. On a stand- alone basis (i.e., unconsolidated), the company had approximately $33.9 million of cash and cash equivalents, restricted cash and available-for-sale securities. Carrier1 said it did not expect to meet the $15.5 million interest payments on its senior euro and dollar notes due today. CARRIER1 INTERNATIONAL: Court Appoints E&Y as Administrators ------------------------------------------------------------ The High Court has appointed Gareth Hughes and Michael Rollings of Ernst & Young LLP as joint administrators of Carrier 1 UK Limited, the wholly owned subsidiary of unprofitable Pan-European bandwidth provider Carrier1 International S.A. Carrier 1 UK Limited sought an order for administration in anticipation that it would allow either the survival of the company and the whole or any part of its undertaking as a going concern, or a more advantageous realization of Carrier 1 UK Limited's assets than would be effected in a winding up. Carrier1 International said Tuesday that it has petitioned the Luxembourg court requesting admission to a gestion controlee (controlled management) proceeding. The company expects that its other subsidiaries will file for similar or insolvency proceedings in their respective jurisdictions this week. Last week, the company suspended its US voice traffic services because some key suppliers refused to continue to provide services without full payment for outstanding invoices or credit support for future voice services. Carrier1 is registered in Luxembourg. Its senior management are in Switzerland and London. For inquiries, contact Ernst & Young at telephone +44 20 7951 4348 ===================== N E T H E R L A N D S ===================== PHARMING GROUP: Shareholders Appoint New Directors -------------------------------------------------- Shareholders of Laiden-based biotechnology company Pharming Group N.V., which have been granted final legal moratorium until July 2002 by the district court in The Hague, have appointed President and Chief Executive Officer Dr. Francis Pinto, Chief Operating Officer Dr. Frank Pieper and Chief Business Officer Dr. Rein Strijker as new members of the Management Board. George Hersbach, who had been President and Chief Executive Officer of the company for the last nine years, will remain associated with Pharming as advisor to the Management Board. The shareholders have also appointed Prof.dr. B.P.Th. Veltman, G. Verhagen R.A. and D.F.M.M. Zaman as members of the board of supervisory director. Meanwhile, the trustee of the legal moratorium, Mr. Muller, said he is confident that the current legal moratorium will be ended such that the creditors will be paid before or around mid-2002. Dr. Pinto's priority will be to manage Pharming's financial situation. He expects the costs to significantly decrease and for revenues to go up. Pharming is also preparing a financing round, which will probably be through the issuance of new shares, to be completed in the next few months. The company further announced that the number of employees has decreased from well over 200 to approximately 50. The number of facilities/locations has decreased from six to three. In the third quarter of 2001, the group posted a net loss of 27.9 million euros on revenues of 10.3 million euros. Its cash position of 11.8 million euros makes the company unable to fund its operations. =========== S W E D E N =========== FRAMFAB AB: Appoints IBM Honcho as New CEO ------------------------------------------ The Board of Framfab, the Internet consultancy company, said Wednesday it has appointed Anders Ekman as new CEO. Ekman joins the company from IBM, where he was Nordic Manager of IT and business consulting within Financial Services. He will take up his new duties no later than April 15, 2002. Last summer, Framfab's current CEO Johan Wall informed the Board of his wish to step down once the goal of restoring profitability in Framfab had been achieved. For more information, contact Tobias B〕ow, Group Communications Manager, at telephone +46 709 73 75 16 or via e-mail at tobias.bulow@framfab.se FRAMFAB AB: Posts Profit in the Fourth Quarter ---------------------------------------------- Internet consultancy Framtidsfabriken AB posted a 2001 fourth- quarter pretax profit of 5 million Swedish kronas, compared with its huge loss of 2.16 billion Swedish kronas in the same period in 2000. The company said net sales were down 58% at 133.9 million Swedish kronas from 318.4 million Swedish kronas. Framfab has divested subsidiaries and stakes to restore profitability, including the entire 15% holding in B2 Bredband Mobil AB and in Dimac AB. =========================== U N I T E D K I N G D O M =========================== BALTIMORE TECHNOLOGIES: Overstates Japanese Revenues by $2.1MM -------------------------------------------------------------- Revenues at the Japanese unit of Hampshire-based information security solutions provider Baltimore Technologies were overstated by about 1.5 million pounds ($2.1 million) over the 18 months to June 2001, the Irish Times reported. A Baltimore spokeswoman said the discrepancies at the Japanese subsidiary were due to signed contracts that had been booked as revenues but which never materialized. According to the report, revenues, operating profits and shareholders funds for the period would be cut by less than 2% after adjusting for the overstatement. Revenue in 2000 would fall by 724,000 to 69.4 million pounds, while in the six months to June 2001, revenue would drop by 735,000 to 38.7 million pounds. The admission of overstated revenues was the second made by the firm in less than a year. In July 2001, Baltimore admitted it had overbooked 5 million pounds in revenues at its Indian, Middle Eastern and African region. This followed an incident when the firm shocked the stock market with two profit warnings in the space of three weeks. Early this month, Baltimore Technologies eased its cash concerns further with the sale of 11,000 shares in its Japanese subsidiary to investment fund CGI for 4.73 million pounds ($6.7 million) in cash. BRITISH AIRWAYS: In Search for New Chairman ------------------------------------------- The British Airways board has brought in headhunters to search for an eventual successor of Lord Marshall after it was pressured by leading institutional shareholders to put up another candidate for chairman. Lord Marshall is due to stand for re-election to the BA board at the shareholder meeting in July when his three-year term expires. According to the Wednesday edition of the Financial Times, British Nuclear Fuels chairman Hugh Collum has been considered. Collum was formerly the chief financial officer of SmithKline Beecham. A group of institutional investors, led by Standard Life Investments, is pushing for a general boardroom retirement age of 70 as part of a reform of corporate governance standards. Martin Broughton, senior non-executive director on the BA board, expects Lord Marshall "being put forward for re-election, being re-elected and staying certainly until he is 70". BRITISH AIRWAYS: Shares Fall 4% on Redundancy News -------------------------------------------------- Shares of British Airways fell 8p to 195p, or 4%, in mid-morning trade after the cash-strapped airlines announced its plans to further cut 5,800 jobs to survive, the Wednesday edition of the Financial Times said. Investors are worried that the restructuring may not prove radical enough and are also concerned about the company's heavy debt burden of more than 6 billion pounds ($8.57 billion). BA chief executive Rod Eddington has ruled out any plans for a rights issue. The company is hoping to avoid forced redundancies as it cuts the headcount at its mainline operation to 43,700 by March 2004, from 56,700 in August last year. The airlines said it would cut its head office and support staff by a third. BA was badly hit by the September 11 catastrophe and the rise of low cost airlines such as easyJet and Ryanair. The airline's debt level is 339 million pounds higher at 6.5 billion pounds, almost three times its market value. BRITISH AIRWAYS: 5,800 Redundancies Will Be Voluntary ----------------------------------------------------- British Airways PLC chief executive Rod Eddington is confident the additional 5,800 job losses announced by the UK flag carrier can be achieved voluntarily. According to an AFX News report, the cash-strapped airline will work with the trade unions to achieve the target. The T&G union, which represents the majority of BA's ground and cabin staff, criticized the new round of job cuts, but said it would work with management. The job losses, part of BA's Future Size and Shape program, will mostly come from the head office and support staff, with a headcount reduction of 36%. The 5,800 jobs will go over two years and result in a total manpower reduction of 13,000 or 23% of BA's workforce of 56,700 in August 2001. CONSIGNIA: Faces Pressure to Cut Costs -------------------------------------- The Post Office, a subsidiary of post office operator Consignia, is under pressure to cut costs by up to 2.4 billion pounds a year, the Times newspaper reported yesterday. Postal regulator Postcomm said that the Post Office had scope to reduce annual expenditure by 30%. The Post Office has already set out plans to cut costs by 1.2 billion pounds, indicating that some 30,000 jobs could go by early next year. According to Postcomm chief executive Martin Stanley, Consignia will be facing financial problems and the government, the company's shareholder, will have to consider what action to take. 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 hired PricewaterhouseCoopers to advise on the future of the group, while UBS Warburg is advising on the future of the post office network. CORUS GROUP: Reaches Agreement With Unions ------------------------------------------ Corus Group, Europe's third-largest steel maker, has reached an agreement with its Dutch unions, covering the next 26 months, Dow Jones Newswires reported. Under the agreement, the steelmaker's Dutch workers will receive a salary increase of 2% this month and another of 0.75% in September 2002. The workers will also receive a one-time payout of 0.5% of their annual wage in January 2003, conditional on the company having an operating profit of at least 22.5 million euros. In February 2003, workers will receive a raise of 1.75% and another raise in September of 1.25%. Workers will receive a wage raise of 0.75% in April 2004. Unions must approve the deal. Earlier this week, Ananova reported that Corus plans to freeze its workers' pay to save cash. The company, which cut thousands of jobs last year, said that the decision would apply to all employees covered by pay reviews due between April this year and March 2003. NTL INCORPORATED: Mum on Telewest Merger ---------------------------------------- An NTL spokesman remained tight-lipped on market rumors that the heavily indebted British cable television operator is merging with rival operator Telewest Communications, AFX News reported. Both cable operators were earlier reported to have knocked down talk of a merger. The Financial Times earlier reported that Telewest shareholder Liberty Media favors a merger if NTL manages to sort out its balance sheet, which is saddled with 12 billion pounds of debt. John Murray, Telewest director of policy and communications, also refused to comment on the speculation. In January, NTL said it was looking at strategic and recapitalization alternatives for its $17 billion debt. The restructuring is expected to include an injection of new capital as well as swapping much of the company's $8 billion of bond debt into equity. NTL has appointed investment banks J.P. Morgan Chase & Co., Credit Suisse First Boston and Morgan Stanley Dean Witter & Co. to handle the talks with holders of its $11.5 billion in junk- rated bonds aimed at trimming the company's debt. ROYAL DOULTON: Ceramic Manufacturer Will Cut 1,000 Jobs ------------------------------------------------------- Loss-making Royal Doulton, the world's largest manufacturer and distributor of ceramic tableware and giftware, will cut 1,000 jobs as part of its latest phase of the restructuring program. Of the job losses, 500 will be UK manufacturing jobs, with the remainder in other areas, mainly in the shop closures. The cuts will reduce staff numbers to 3,500. The Stoke-on-Trent-based group will further reduce costs by closing its factory in Baddeley Green in Staffordshire and transfer production of its Royal Albert range to its site in Indonesia. It will also close up to 100 underperforming retail outlets worldwide. The radical plans follow the company's four years of restructuring. Since the beginning of 1999, overheads have been cut by 16%, stocks by 40% and debt by 43%, employee numbers reduced by 30%. To fund the restructuring, the firm will launch a three-for-one rights issue, priced at 8p per share, which aims to raise 18.9 million pounds. Royal Doulton's restructuring led to the sale of Caithness Glass to Royal Worcester in July for 16.5 million pounds, following on from the earlier sale of Royal Crown Derby to an MBO. TELEWEST COMMUNICATIONS: Falls 23% on Debt Fears ------------------------------------------------ Shares in Surrey-based cable operator Telewest Communications Plc fell 23% to a record low of 20p on Wednesday amid renewed concerns about the company's 4.9 billion pounds ($7 billion) debt pile, the Financial Times reported. While analysts said Telewest has continued to hit operational targets, they argued the company has yet to secure another 125 million pounds. Investment bank Merrill Lynch estimates Telewest's debt would total 5.9 billion pounds by the year-end. As of November, Telewest's net debt stood at around 4.9 billion pounds, twice its market capitalization. THUS PLC: Scottish Power Bares Thus De-merger Details ---------------------------------------------------- Scottish Power PLC has announced details of the proposed demerger of its telecommunications business Thus Group PLC. According to an AFX News report, Scottish Power shareholders will receive between 42 and 53 Thus shares for each 100 Scottish Power shares they hold. The demerger will be effected by way of a special dividend, which will be in addition to and would not affect Scottish Power's normal cash dividends declared quarterly, or its current dividend policy, AFX News adde. Shareholders who retain their demerger entitlement of Thus shares will have the ability to participate in Thus future development. Scottish Power said the demerger, expected to become effective on March 19, would enable it to release the value of its shareholding in Thus and allow Scottish Power's management to focus on its core operations. Thus will use the funds raised in the share issue to pay off its debts. In December, Thus had bridged its funding gap and paid off a debt of 260 million pounds to Scottish Power. UNIQ PLC: Names Bill Ronald as New Chief ---------------------------------------- Pan-European convenience foods group Uniq Plc has appointed Bill Ronald, a European vice-president of Mars, as its new chief executive, the Financial Times reported. Ronald, who will take charge of restoring the group's fortunes, is expected to get a similar pay package as that of previous chief executive Terry Stannard, which included an annual salary of 325,000 pounds, plus performance-related stock options, the FT added. Ronald is expected to join Uniq on February 25. Uniq issued its second profit warning in September as its St Ivel yogurt business continued to be below its expectations. As of that month, Uniq's current assets stood at 385.7 million pounds compared with 476.7 million pounds in the previous year. The company had current liabilities of 319.7 million pounds as of the September 2001 period compared with 574.9 million pounds in 2000. *********** 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. 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