/raid1/www/Hosts/bankrupt/TCREUR_Public/020225.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, February 25, 2002, Vol. 3, No. 39

                             Headlines


* G E R M A N Y *

DEUTSCHE TELEKOM: Bankers Compete Over T-mobile Floatation
KIRCHGRUPPE: KirchMedia, ProSiebenSat.1 Media Revise Merger Plans
KIRCHGRUPPE: Pay-TV Arm to Run Out of Cash Soon, Analysts Say
M+S ELEKTRONIK: Insolvency Proceedings for m+s EDV-Service Begins

* G R E E C E *

OLYMPIC AIRWAYS: Greek Airline Will Cut 2,000 Jobs
OLYMPIC AIRWAYS: Will Seek Private Funds to Survive

* I R E L A N D *

ELAN CORPORATION: Faces Suit for Violation of Securities Law
MARLBOROUGH GROUP: David Hughes at E&Y Prepares Company for Sale

* L U X E M B O U R G *

CARRIER1 INTERNATIONAL: Petitions Court for Bankruptcy

* N O R W A Y *

KVAERNER ASA: Gets $20MM Contract in Brazil

* P O L A N D *

NETIA HOLDINGS: Seeks Court Injunction to Protect U.S. Assets
NETIA HOLDINGS: Summary of Section 304 Injunction Proceeding
NETIA HOLDINGS: To Include Swap Termination in Restructuring Plan

* R U S S I A *

TV6: No Bidders for Rights to Broadcast

* S W E D E N *

LM ERICSSON: Projecting a 5% Operating Margin in 2002

* U N I T E D   K I N G D O M *

COLT TELECOM: Job Cuts Will Follow $361.3MM Fourth-Quarter Loss
ENERGIS PLC: May Default on Bonds as Founder Rejects Backing
ENERGIS PLC: Moody's Cuts Senior Notes Rating to Caa2
ENERGIS PLC: Plans $207MM Capital Expenditure Next Year
ENERGIS PLC: Bonds Fall From 35% of Face Value to 15%
ENRON CORPORATION: Enron Europe HQ Asset Auction Set for Feb. 27
EQUITABLE LIFE: S&P Cuts Counterparty Credit Rating to CC
EQUITABLE LIFE: With-profits Fund Still Exposed to Risks
INVENSYS PLC: Moody's Cuts Long-Term Debt Ratings to Ba1
NTL INCORPORATED: Sells Australian Unit to Macquarie for $439MM
RAILTRACK GROUP: Public Takes Burden as Railtrack Solution Sought



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


DEUTSCHE TELEKOM: Bankers Compete Over T-mobile Floatation
----------------------------------------------------------
Germany's banks are competing to win a position with the
flotation of T-Mobile, the mobile subsidiary of Bonn-based
telecom giant Deutsche Telekom.

According to a Die Welt report, the advertising campaign for the
shares has done little to boost Telekom's share price, which, at
15.50 euros, is just one euro above its all-time low of last
September.

T-Mobile would raise around 10 billion euros, easily dwarfing all
of last year's business.

Deutsche Telekom is aiming to cut its debt of 65 billion euros
($55.8 billion) to 50 billion ($42.9 billion) euros by the end of
this year.

On February 21, the Troubled Company Reporter Europe reported
that Liberty Media Corp is preparing to withdraw from a 5.5
billion euros ($4.8 billion) offer to take over 60% of Deutsche
Telekom's cable-TV network.

The U.S. media group would not seek clearance for the deal if the
Federal Cartel Office does not give its approval on February 28.

At the end of January, the Cartel Office objected to Liberty
Media's bid, stating that the U.S. group would have to upgrade
the network to carry phone calls and high-speed Internet access
in order to get approval for the acquisition.

Liberty made it clear two weeks ago that it was not prepared to
offer any further concessions.


KIRCHGRUPPE: KirchMedia, ProSiebenSat.1 Media Revise Merger Plans
-----------------------------------------------------------------
KirchMedia and ProSiebenSat.1 Media AG have agreed that the
proposed time schedule for the planned merger of the two
companies will be revised.  Both companies remain convinced that
the merger is the most desirable strategy.

ProSiebenSat.1 Media AG's management and supervisory board intend
to propose to its shareholders that preference shares be
converted into voting shares.  This will be proposed at the
Annual General Meeting to be held in May 2002.

KirchMedia intends to present a comprehensive merger plan at the
earliest opportunity.  KirchGruppe says it is currently
implementing a series of actions to improve its overall financial
profile -- to be completed prior to a resolution on the merger.
This includes:

    * a long-term resolution for the ownership structure and
      financing of the pay-TV platform Premiere,

    * a sale of KirchMedia's stake in Spanish free-TV broadcaster
      Telecinco and

    * the disposal of the approximately 40% share held by
      KirchBeteiligungs GmbH & Co. KG in Axel Springer Verlag AG.

The KirchGruppe indicates it has received attractive offers from
financial investors and is currently conducting talks.

Furthermore, the KirchMedia and ProSiebenSat.1 Media AG boards
have mutually agreed that the majority shareholding in the
Formula One motor-racing series owned by KirchBeteiligungs GmbH &
Co. KG shall not be part of the merged company unless a
satisfactory solution is previously reached with the racing teams
and the automobile manufacturers involved. All parties remain
fully committed to take all necessary actions to ensure that the
merged entity will hold investment grade status.


KIRCHGRUPPE: Pay-TV Arm to Run Out of Cash Soon, Analysts Say
-------------------------------------------------------------
Premiere, the pay-television unit of heavily indebted Kirch
Group, is losing 1.5 million euros a day and faces a life-
threatening liquidity bottleneck.  According to a new study by
investment bank WestLB Panmure, the broadcaster's funds could run
out by September 2002.  People close to Kirch Group confirmed on
the released figure, though the group was unwilling to comment.

The losses are arising because the unit is paying inflated prices
for film and sports rights. Between now and 2006, the WestLB
study adds, Premiere has to pay 3 billion euros for film rights,
under long-term contracts signed with the big Hollywood studios.

Many industry players say Premier has to find an investor or it
becomes insolvent.  One obvious candidate would be Rupert
Murdoch's BSkyB, which already owns 22.6%, but the media tycoon
has ruled out last week to take over the business.

Kirch is blaming its pay television business for a large part of
its current financial woes, which are forcing the German company
to restructure and sell valuable assets, including a 40% stake in
publisher Axel Springer Verlag AG and Formula One rights, to meet
billions of dollars of liabilities this year.

The KirchGruppe -- http://www.kirchgruppe.de-- is a leading
company in the international film and television business. It
holds prime market positions in its core business activities of
license trading, free-TV, pay-TV, production, New Media, film
technology and software development. As the central holding
company TaurusHolding manages the group of companies and is
responsible for the operative and strategic areas with its three
subholdings KirchMedia, KirchPayTV and KirchBeteiligung.


M+S ELEKTRONIK: Insolvency Proceedings for m+s EDV-Service Begins
-----------------------------------------------------------------
The insolvency court opened Thursday the insolvency proceedings
of m+s EDV-Service GmbH & Co. KG (Niedernberg), a wholly owned
subsidiary of information technology (IT) service provider m+s
Elektronik AG.

m+s EDV-Service GmbH, together with DGW Datennetze GmbH (Berlin),
DRV Dr. Bohmer GmbH & Co KG and MAINSTOR Service + Distribution
GmbH, petitioned for insolvency on December 28 at the county
court in Aschaffenburg.  m+s EDV-Service Verwaltungs- und
Beteiligungs-GmbH (Niedernberg) and SYSCOTEC Computer GmbH
(Niedernberg) followed suit on January 4.

The insolvency court appointed Dr. Werner Schreiber from the
lawyers Wellensiek Grub & Partner as insolvency administrator.

These petitions became necessary due to the petition for
insolvency of the parent company filed on December 21, 2001, also
in Aschaffenburg.  The filing came after the m+s Elektronik
revealed a widened operating loss during the fiscal year of 36.2
billion euros, from 27.7 billion euros.

Key contacts and a profile of the Company appears in the Friday,
January 25, 2002, edition of the Troubled Company Reporter
Europe.



===========
G R E E C E
===========


OLYMPIC AIRWAYS: Greek Airline Will Cut 2,000 Jobs
--------------------------------------------------
Olympic Airways' will shed 2,000 jobs, or more than a quarter of
its work force, to bolster flying operations of Greece's debt-
ridden airline while spinning off other departments such as
repair, catering and ground handling.

The restructuring announcement is the government's latest effort
to convince investors to buy the airline and is seen as a last,
desperate attempt to avoid bankruptcy. Repeated attempts to sell
the airline have failed.

The job cuts are seen through voluntary departures and early
retirement, and a review of unprofitable routes and work rules.

Analysts now fear that Olympic could become the third European
airline to fold in the last six months, following the failures of
Swissair and Sabena.

Olympic, like all other airlines worldwide, has been hit hard by
a slump in passenger numbers in the wake of the World Trade
Center attacks in September last year


OLYMPIC AIRWAYS: Will Seek Private Funds to Survive
---------------------------------------------------
Olympic Airways, the debt-ridden national airline, will seek 100
to 150 million euros in private investment under its survival
plan, Greek Transport Minister Christos Verelis said Thursday.

In order to create a more attractive-sized unit for potential
buyers, flight activities will be split out from other
departments such as repair, catering and ground handling. The new
airline has two months to find the funds and shape up.

The other activities will either be sold off separately
immediately or within two years after a restructuring.

Olympic's privatization failed after Australian venture capital
firm Integrated Airline Solutions, which was bidding for a 51-65%
stake in the airline, missed the deadline for the necessary
financial guarantees.

Credit Swiss First Boston, which is advising the government on
the sale of Olympic Airways, will continue to seek investors for
the company.



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


ELAN CORPORATION: Faces Suit for Violation of Securities Law
------------------------------------------------------------
Elan Corporation is facing a securities class action lawsuit
pending in the U.S. District Court for the Southern District of
New York.

Law firm Schiffrin & Barroway, on behalf of all investors who
bought Elan Corporation, plc securities between January 2, 2001
and January 29, 2002, claims that the Dublin-based pharmaceutical
company misled shareholders about its business and financial
condition.

The complaint alleges that Elan Corporation and certain of its
officers and directors violated Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated
thereunder.  The complaint further alleges that defendants issued
a series of materially false and misleading statements regarding
the Company's financial condition. As part of their effort to
boost the price of Elan securities, defendants materially
overstated Elan's revenues by creating entities that were
essentially controlled by Elan for research and development.

Elan immediately took back its investment in the form of a
license fee, which it recorded as revenue. In some instances the
joint ventures had no money left for the development of drugs and
Elan ended up lending money to the entity.

After the market closed on January 29, 2002, The Wall Street
Journal described Elan's accounting as a "charade" and quoted a
former SEC accountant as stating that it is like "taking money
out of one pocket and putting it in another." On this news, the
price of Elan's securities dropped from $35.20 to $29.25.

Elan's top executives and auditor KPMG LLP face four other class
action lawsuits in the United States for issuing misleading press
releases and using accounting techniques that artificially
inflated the company's earnings.  Elan denies the underlying
allegations.

The company earlier lost some $9 billion in value as it released
a grim 2002 profit warning and accounting concerns.


MARLBOROUGH GROUP: David Hughes at E&Y Prepares Company for Sale
----------------------------------------------------------------
Allied Irish Bank has appointed David Hughes of Ernst & Young as
receiver of Marlborough International PLC after it emerged that
the recruitment company could no longer continue operations due
to shortage of funds.

After its floatation on the Dublin Stock Exchange in 1997,
Marlborough has spent 38 million euros buying other companies,
mainly in Ireland and Britain. Marlborough has 12 million euros
in liabilities with AIB.

Mr Hughes intends to sell Marlborough International as going
concern.  Contact Mr Hughes at:

                Ernst & Young,
                Harcourt Centre
                Harcourt Street
                Dublin 2
                Republic of Ireland
                Telephone (01) 4750555
                Fax (01)4750599

A downturn in the economy last year hit the group hard and
Marlborough managing director David McKenna attributes the blame
to the fall-off in banking recruitment at its UK subsidiary
Walker Hamill. Mr McKenna said he had tried to sell two UK
companies to divide the group's debt and trade its way out of
crisis.

In 2000, after a planned merger with US firm E-Pawn collapsed
following an FBI investigation into mafia links and securities
fraud at the US company, Marlborough's reputation was bruised.

Marlborough lost 350,000 euros from its online venture
fillthejobs.com. It also took a hit for 3.3 million euros when
its debt collecting systems failed.

The Irish company employs a workforce of 300.



===================
L U X E M B O U R G
===================


CARRIER1 INTERNATIONAL: Petitions Court for Bankruptcy
------------------------------------------------------
Carrier1 International S.A. said Friday it has withdrawn its
application to the Luxembourg court requesting admission to a
gestion controlee (controlled management) proceeding and has
petitioned for bankruptcy with the Luxembourg court.

The Pan-European bandwidth provider had petitioned the Luxembourg
court requesting admission to a gestion controlee proceeding on
February 12.

The Company expects the court to appoint a receiver shortly and
the liquidation of the Company to follow in due course.  As
reported in the edition of the Troubled Company Europe,
Carrier1 anticipated a liquidation of its business and does not
expect there to be any recovery for its shareholders.

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 is registered in Luxembourg.  Its senior management are
in Switzerland and London.

For inquiries, contact Alex Schmid at telephone +44 20 7001 6362,
or via e-mail at alex.schmid@carrier1.com



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


KVAERNER ASA: Gets $20MM Contract in Brazil
-------------------------------------------
Kvaerner, the Anglo-Norwegian engineering, construction and
shipbuilding group that almost went bust, said Friday that its
Pulp & Paper business area has secured a $20 million contract to
supply a new Compact CookingTM Plant for Ripasa S.A. Celulose e
Papel, in the state of Sao Paulo, Brazil.

The scope of the contract implies that Kvaerner Pulping will
supply and take responsibility for the design, fabrication,
construction and services required for the new plant.

With the installation of the new plant, and with the bleach plant
previously ordered from Kvaerner Pulping, Ripasa will have a
state-of-the-art Fiberline, aiming for reduction of operational
costs and production of high quality pulp.

Ripasa S.A. Celulose e Papel is a Brazilian company, organized as
a joint stock corporation for integrated pulp & paper production
from eucalyptus.

Kvaerner staved off bankruptcy in November by agreeing to merge
its Oil & Gas business with rival Aker Maritime. Following the
merger, the Kvaerner Group expects to have revenues in 2002
approaching $6 billion, with some 40,000 permanent staff located
in more than 30 countries throughout Europe, Africa, Asia and the
Americas.

For more information, contact Per-Ake Farnstrand, President of
Kvaerner Pulping AB, Fiberline Division, at telephone +46 54 19
46 14 or Aristides Labigalini, Kvaerner do Brasil Ltda President
at telephone +55 41 341 4501 or via e-mail at
aristides.labigalini@kvaerner.com.br



===========
P O L A N D
===========


NETIA HOLDINGS: Seeks Court Injunction to Protect U.S. Assets
-------------------------------------------------------------
Netia Holdings S.A., Poland's largest alternative provider of
fixed-line telecommunications services, and two of its
subsidiaries, Netia Telekom S.A. and Netia South Sp. z o.o.,
filed petitions to commence cases pursuant to Section 304 of the
United States Bankruptcy Code in the United States Bankruptcy
Court for the Southern District of New York on February 20, 2002.

These petitions are ancillary to arrangement proceedings for
Netia and these two subsidiaries, which were filed in Poland on
the same date. The Bankruptcy Court in New York issued a
temporary restraining order enjoining all persons and entities
from taking actions against Netia's assets and interests in the
United States.

Netia found itself in financial trouble in December when it
defaulted on the 1999 Senior Dollar Notes and 1999 Senior Euro
Notes totaling more than $13.3 million.

The Warsaw-based company again failed to issue payment of $850
million in bonds after a 30-day grace period ended in mid
January.  A week ago, Netia released 2001 figures showing a far
worse than expected consolidated net loss of 11.15 billion zlotys
($274 million) and net debt of 2.86 billion zlotys ($690.59
million).

Netia is the leading alternative fixed-line telecommunications
provider in Poland. Netia provides a broad range of
telecommunications services including voice, data and Internet-
access and commercial network services. Netia's American
Depositary Shares are listed on the Nasdaq National Market
(NTIA), and the Company's ordinary shares are listed on the
Warsaw Stock Exchange. Netia owns, operates and continues to
build a state-of-the-art fiber-optic network that, as at
September 30, 2001, had connected 343,634 active subscriber
lines, including 93,713 business lines. Netia currently provides
voice telephone services in 24 territories throughout Poland,
including in six of Poland's ten largest cities.

DebtTraders reports that Netia Holdings SA's 13.5% bonds due
2009 (NETH09PON2) are trading between 18 and 20. See
http://www.debttraders.com/price.cfm?dt_sec_ticker=NETH09PON2
for real-time bond pricing.


NETIA HOLDINGS: Summary of Section 304 Injunction Proceeding
------------------------------------------------------------
Lead Debtor: Netia Holdings, S.A.
              Ul. Poleczki 13
              Warsaw 02-822
              Poland

Bankruptcy Case No.: 02-10744

Debtor affiliates filing separate Section 304 Petitions:

      Entity                                     Case No.
      ------                                     --------
      Netia South Sp zo.o.                       02-10746
      Netia Telekom Sp. Zo.o.                    02-10745

Section 304 Petition Date: February 20, 2002

Court: Southern District of New York (Manhattan)

Judge: Robert E. Gerber

Petitioners:      Kjell-Ove Blom, Avraham Hochman, Ewa Don-
                   Siemion, Mariusz Piwowarczyk, Mariusz
                   Chmielewski and Dariusz Wojcieszek, as
                   members of the management board of Netia
                   Holdings S.A., Netia Telekom S.A.
                   and Netia South Sp. z o.o., in their capacity
                   as board members

Petitioner's
United States
Counsel:          Marcia L. Goldstein, Esq.
                   Weil Gotshal & Manges
                   767 Fifth Avenue
                   New York, NY 10153
                   Telephone: 212-310-8000
                   Fax: 212-310-8007

Petitioner's
Polish Counsel:   Artur Zawadowski
                   Weil, Gotshal & Manges - P.Rymarz Sp. kom.
                   Warsaw Financial Center
                   ul. Emilii Plater 53
                   00- 113 Warsaw, Poland
                   Telephone: (48 22) 520-4219
                   Fax: (48 22) 520-4001

Ad Hoc
Noteholders'
Committee
Counsel:          Cadwalader, Wickersham and Taft

Counsel to a
"Group of
Holders of the
2000 Notes:"      CMS Cameron McKenna

Indenture
Trustee:          State Street Bank

Indenture
Trustee's
Counsel:          Shipman & Goodwin LLP


NETIA HOLDINGS: To Include Swap Termination in Restructuring Plan
-----------------------------------------------------------------
Netia Holdings S.A. said that, in order to effect its
restructuring plan in due course, the Company issued a fully
revocable guarantee to JPMorgan Chase Bank on February 20
guaranteeing the obligations of its subsidiary, Netia Holdings
III B.V., under the swap termination arrangement previously
negotiated between the two parties.

The guarantee was issued in order to allow JPMorgan to
participate in the restructuring currently being negotiated
between the Company, its bondholders, its shareholders and
certain other creditors on the same basis as the bondholders, for
purposes of Polish law.

The temporary guarantee may be revoked at any time by the Company
and at the direction of the Ad Hoc Committee of bondholders if no
agreement is reached with JPMorgan.



===========
R U S S I A
===========


TV6: No Bidders for Rights to Broadcast
---------------------------------------
So far, no official applications have been submitted for
participation in the tender for TV6's right to broadcast, Russian
Media Minister Mikhail Lesin told reporters last week.

According to RosBusinessConsulting, the minister declined to
comment regarding plans to organize a consortium of leading
businessmen to finance a group of former TV6 journalists'
intention to take part in the tender.

The tender for the right to broadcast on the 6th TV channel is
scheduled on March 27 this year.

As reported in the February 22 edition of the Troubled Company
Reporter, Russian journalists hope that Unified Energy's CEO will
invest between US$10 million and US$50 million to win TV6
network.

LUKoil pension fund unit LUKoil-Garant, which holds a 15% stake
in TV6, initiated the bankruptcy suit against the station.

The Moscow Arbitration Court ruled to liquidate the TV company in
September 27.



===========
S W E D E N
===========


LM ERICSSON: Projecting a 5% Operating Margin in 2002
-----------------------------------------------------
Shares of Telefon AB LM Ericsson were up SEK1.30, or 3.2%, at
SEK42.60 Wednesday last week after the Stockholm-based mobile
telecom manufacturer reaffirmed its outlook for 2002, Dow Jones
Newswires reported.

According to Ericsson chief executive Kurt Hellstroem, his
company aims for an operating margin of at least 5% for 2002,
despite continuing expectations that global sales of mobile
telecom equipment could fall by as much as 10%.

A company spokesman added that Hellstroem was "not promising a
turnaround," but instead emphasizing that sales would rebound as
operators begin deploying their third-generation networks.

As reported in the February 11, 2001, edition of the Troubled
Company Reporter Europe, analysts expect Ericsson's 3G mobile
Internet networks will lose between 10 billion Swedish crowns
($940.8 million) and 15 billion Swedish crowns this year due to
very high development costs.



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


COLT TELECOM: Job Cuts Will Follow $361.3MM Fourth-Quarter Loss
---------------------------------------------------------------
Colt Telecom Group Plc said its net loss for the three months
ended December 31 widened to 253.5 million pounds ($361.3
million), compared with a loss of 19.5 million pounds a year ago
Go to to http://www.colt-telecom.com/for a copy of Colt
Telecom's interim report.

Fourth-quarter revenue rose 2% to 240.8 million pounds from the
year-earlier period, while sales in the three months to December
31 at Colt's wholesale unit fell because some operators either
stopped buying network capacity or went bust.

Colt says it will cut 500 jobs, or 10% of its workforce, and
reduce capital spending to cope with slower revenue growth in
2002.  Chief executive officer Peter Manning says the job cuts
will cost the company 12 million pounds.  Most of the job cuts
will be in the first half of the year, Chief Finance Officer
Lawrence Ingeneri added.

The unprofitable company last year secured 494 million pounds in
funding after a share issue backed by fund manager Fidelity
Investments, its biggest stakeholder.  Colt had 1.3 billion
pounds of cash at the end of the quarter.

Colt operates in countries such as the U.K., France, Germany, the
Netherlands, the Nordic region and Austria, supplying voice and
data services to customers -- including Buckingham Palace.


ENERGIS PLC: May Default on Bonds as Founder Rejects Backing
------------------------------------------------------------
Energis Plc might default on 565 million pounds ($804.8 million)
of bonds after National Grid Group Plc, its founder and biggest
investor (32.6%), refused to inject more money into the
struggling London-based Internet traffic carrier.

Energis is close to collapse after it racked up debt to expand in
Europe. Now it will shed the European units, fire 400 workers to
save 25 million pounds a year and renegotiate bond debt in a bid
to persuade banks to lend the money it needs to survive.

"National Grid won't support it, and unless the banks do, it'll
go bust," Colin Morton of BWD Rensburg said.

However, even if Energis gains the banks' backing, the company
may struggle to sell its European units, Bloomberg reported
citing analysts.

Chief executive officer David Wickham said the company is in
talks with unidentified parties to sell the units and will close
them if they cannot be sold. He declined to say what it would
cost to close them.


ENERGIS PLC: Moody's Cuts Senior Notes Rating to Caa2
-----------------------------------------------------
Credit ratings agency Moody's Investors Service lowered on
Thursday last week Energis Plc's senior implied rating to B3 from
Ba3 and the senior unsecured issuer rating to Caa2 from B2.

At the same time, Moody's downgraded the senior secured bank
facility of Energis Holdings Limited to B2 from Ba2. All ratings
remain under review for further downgrade.

Also affected are the GBP725 million senior secured revolving and
term credit facilities due 2008 to B2 from Ba2, the GBP125.0
million senior unsecured notes due 2009 to Caa2 from B2, the $200
million senior unsecured notes due 2009 to Caa2 from B2, and the
GBP300 million global bonds due 2010 to Caa2 from B2.

Moody's first initiated its review on January 25, 2002 after
Energis said it was unlikely to meet revenue and EBITDA
expectations for the full year ending March 2002.

Energis further stated it might breach covenants made on a 725
million pounds ($1.04 million) credit line in November with
Dresdner Kleinwort Wasserstein, Bank of America and Barclays
Capital, HypoVereinsbank, Royal Bank of Scotland, and WestLB.
Other banks involved in the Energis loan are JP Morgan, BNP
Paribas, CIBC and HSBC.

The recent downgrade came amid Energis' announcement that it does
not expect to be able to make continuing transfers of funds from
Energis Holdings Limited to Energis plc.

As a result, the company has indicated that they are exploring
the possibility of restructuring their bonds at Energis plc.


ENERGIS PLC: Plans $207MM Capital Expenditure Next Year
-------------------------------------------------------
Internet traffic carrier Energis Plc said it planned 145 million
pounds ($207 million) of capital expenditure next year for the
UK.

The move came after Energis said it would sell its loss-making
European operations. The group is retreating from the continent
as it attempts to restore the confidence of its lenders and
shareholders.

According to chief executive David Wickham, the European
businesses would have to be closed if no buyers are found.

Founded in 1993, Energis is an IT services and telecommunications
solutions provider. It is focused on the business marketplace,
offering integrated solutions from a portfolio of data, voice,
connectivity, complex managed hosting and managed application
services. The company has a significant presence in the UK,
Germany, the Netherlands, Switzerland, Ireland and Poland.


ENERGIS PLC: Bonds Fall From 35% of Face Value to 15%
-----------------------------------------------------
Energis' bonds fell from about 35% of face value to 15% as
creditors digested how unstable the financial position was of the
once high-flying telecoms group.

The company expects to breach its banking covenants next month
and that raises the prospect of being unable to keep paying its
bondholders, which would probably result in a debt-for-equity
swap to give them control of the company.

Energis plans to sell its loss-making European operations and cut
a further 400 jobs in its stronger UK business to try to win the
continued support of its banks.


ENRON CORPORATION: Enron Europe HQ Asset Auction Set for Feb. 27
----------------------------------------------------------------
UK auctioneer Bache Treharne and DoveBid, Inc. will be conducting
the auction of Enron Europe Limited's Headquarters assets on
February 27 until March 1 at Enron Europe's headquarters in
Grosvenor Place, London SWI.

The auction will be made on behalf of PricewaterhouseCoopers, the
appointed administrators to wind Enron Europe up after a
financial scandal engulfed U.S. energy trader Enron Corporation
at the end of last year.

Enron Europe will be the largest UK auction in history including
equipment with an original cost over 15 million pounds. The
auction will feature a huge array of sophisticated IT and
telecommunications equipment, luxury quality executive suites and
furniture, catering and health club equipment, and large
quantities of commissioned artwork.

"This is one of the highest profile, and potentially one of the
highest value, auctions that a UK firm has held," Peter Bache of
Bache Treharne said. "The size and scope of the sale is
unprecedented."

The vast majority of items being sold are less than two years
old. Approximately 4,000 flat screen monitors, 3,000 personal
computers, more than 500 servers and 50 plasma screens will be
offered for sale. In addition, quality furniture including the
maple and walnut boardroom and meeting tables, thousands of
workstations, dealing desks and chairs, will be offered for sale.
All together, over nine thousand lots will auctioned in this
three-day worldwide live auction and Webcast.

Further sale details, including an asset listing, descriptions
and digital photographs, are available at Bache Treharne's
website www.bachetreharne.com/enron.html or at DoveBid's Website
at http://www.dovebid.com

For more information about the Enron Europe auction, please
contact Kevin Smyth, Bache Treharne at telephone 0207-405-6655 or
via e-mail at enron@bache-treharne.co.uk


EQUITABLE LIFE: S&P Cuts Counterparty Credit Rating to CC
---------------------------------------------------------
Standard & Poor's Corp said it has cut the counterparty credit
rating of Equitable Life Assurance Society to CC from CCC and
that the rating remains on CreditWatch with negative
implications, where it was placed on September 12.

The lowering of the counterparty credit rating relates to the
imminent selective default by Equitable Life on some of its
contractual obligations to policyholders, notably the guaranteed
annuity rate (GAR) policyholders.

The CreditWatch placement reflects the expectation that the
counterparty credit rating will be revised to 'Selective Default'
when the guaranteed annuity rates are removed and policy value
uplifts applied. The selective default designation does not
directly reflect on the company's ability to meet other,
nonpolicy obligations, S&P noted.

S&P also lowered its insurer financial strength rating on
Equitable Life to CC from CCC and withdrew the rating at the
company's request.


EQUITABLE LIFE: With-profits Fund Still Exposed to Risks
--------------------------------------------------------
Credit rating agency Standard & Poor's warned that the with-
profits fund of Equitable Life will continue to be exposed to
significant risks even though the troubled mutual has recently
secured a compromise over its 1.1 billion pounds guaranteed
annuity rate (GAR) liabilities.

According to S&P, the risks include the roll-up guarantees
inherent in a significant proportion of the in-force book, the
sizeable existing guaranteed benefits, and the risks of
litigation from former members for mis-selling.

Equitable could face further withdrawals after policyholders
receive uplifts next month for approving the compromise. The
with-profits fund fell from 22.3 billion pounds to 18.5 billion
pounds in the second half of last year.

S&P added that the increase in free assets by more than 1 billion
pounds would derive from the release of 1.4 billion pounds of
conservative statutory reserves for the GARs, the release of 270
million pounds of mis-selling provisions relating to the GARs,
and the credit of a further 250 million pounds from HBOS bank,
which last year paid 500 million pounds for Equitable's
operational assets.

This was offset by an increase of 920 million pounds in
guaranteed values under the restructuring scheme.


INVENSYS PLC: Moody's Cuts Long-Term Debt Ratings to Ba1
--------------------------------------------------------
Moody's Investors Service said Friday it has lowered to Ba1 from
Baa3 the long-term debt ratings of Invensys plc and to Not-prime
from Prime-3 the ratings for short-term debt of London's largest
engineering company.

The rating downgrade reflects Invensys' covenant issue and the
continuing reliance on confidence sensitive markets for the
funding of its refinancing needs, Moodys said.

The recent strategy announcement includes a major reorganization
of its business structure with more customer focus, but did
address the near term financing issues only to the extent of
adding business assets to the list of disposals scheduled for
next fiscal year.

The negative rating outlook relates to the covenant pressure in
its major bank facility and the company's substantial refinancing
needs by August 2002.

The current ratings still assume the company to meet the next
covenant compliance test. If the refinancing is completed in
time, Invensys may advance back into the investment grade
category, Moody's added.

Invensys on February 19 announced a new strategy to accelerate a
recovery. The strategy includes the reorganization into the
Production and Energy Management businesses, together accounting
for about two thirds of the previous Invensys group. Most of its
activities in industrial components will be sold. Proceeds from
disposals over the next fiscal year will be dedicated to reduce
debt. Invensys announced no capital measures but an intent to
raise bond debt.

Invensys has been cutting jobs and selling assets to cut its 3
billion pounds of debt, 89% of its market value, on speculation
it may breach loan agreements after posting a first-half loss.

Outstanding loans include a $1.25 billion credit line arranged
two years ago by HSBC Holdings Plc and UBS Warburg that comes due
in 2005.


NTL INCORPORATED: Sells Australian Unit to Macquarie for $439MM
---------------------------------------------------------------
Toll road manager Macquarie Bank Ltd. has agreed to buy for A$850
million ($439 million) the Australian television transmission
unit of NTL Inc., Bloomberg reported.

NTL Australia, which was bought from the Australian government in
1999 for A$650 million, owns and operates a national broadcast
transmission network used by government-owned Australian
Broadcasting Corp. and Special Broadcasting Service, and by
regional TV and media groups.

Under the deal, Australia's only publicly traded investment bank
will pay A$620 million in cash and assume A$230 million of NTL
debt.

Goldman Sachs Group Inc advised NTL in the deal.

In January, the British cable television operator said it was
looking at strategic and recapitalization alternatives for its
$17.5 billion debt.

As reported in the February 21 edition of the Troubled Company
Reporter Europe, 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.


RAILTRACK GROUP: Public Takes Burden as Railtrack Solution Sought
-----------------------------------------------------------------
Taxpayers will have to continue to take on the responsibility for
Railtrack's crumbling platforms and track if a sale of the
troubled rail network operator will be achieved.

Rail regulator Tom Winsor told London's The Times newspaper that
without government's standstill agreement, whereby institutions
sacrifice their rights in return for continuing to be paid
interest on their bonds, prospective buyers were extremely
unlikely to be tempted by Railtrack without a detailed list of
the company's assets.

Mr Winsor added that Railtrack there is a possibility a new buyer
would take a risk, but it is by no means inevitable.

The collapse of Railtrack has so far cost the taxpayer almost 5
billion pounds.

Railtrack PLC, which generated revenues of GBP2.5 billion in the
year ending March 2001, was placed into railway administration in
October 2001 when the government refused to provide further
funding.

                              *********

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.


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