/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/020404.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 Thursday, April 4, 2002, Vol. 3, No. 66 Headlines * G E R M A N Y * COMMERZBANK AG: Rids Itself of Pain in Neck in Cobra Breakup FAIRCHILD DORNIER: Files for Bankruptcy After Boeing Drops Plan KIRCHGRUPPE: Final Rescue Package Could Take 4-6 Weeks to Seal MET@BOX AG: Applies for Change of Segment Listing MUHL PRODUCT: Expects Creditors to Back Plan to Stay in Business PHILIPP HOLZMANN: Banks Dangle More Money to Secure Next 3 Months * I T A L Y * ALITALIA: EUR1.43 Billion Recovery Plan to Face Tough EU Scrutiny * I R E L A N D * ELAN CORPORATION: Notification of Shareholders' Interests * N E T H E R L A N D S * UNITED PAN-EUROPE: Delays Full-year Results Anew, But Q4 Out * N O R W A Y * KVAERNER ASA: Aker Kvaerner Awarded Main Contract in Canada * S W I T Z E R L A N D * ABB LTD.: Takes Steps to Reduce Dependence on Short-term Funding * U N I T E D K I N G D O M * CENES PHARMACEUTICALS: Dissolves Ties With Insolvent Partner COLT TELECOM: Notification of Disposal of Interests INVENSYS PLC: Unit Invests EUR 75MM to Fund Record Growth MG ROVER: Launches Aggressive Cost-saving Scheme on Parts Supply NTL INCORPORATED: S&P Downgrades "B-" Rating to "CCC-" NTL INCORPORATED: Completes Sale of Australian Broadcast Business NTL INCORPORATED: Diamond Bondholders Want Cash, Not Equity RAILTRACK GROUP: Receives GBP 375MM Offer for Tunnel Asset TELEWEST COMMUNICATIONS: S&P Ratings on CreditWatch, Under Review TELEWEST COMMUNICATIONS: Debt-restructuring Imminent TELEWEST COMMUNICATIONS: Travel Group Will Be Sold for GBP70MM ============= G E R M A N Y ============= COMMERZBANK AG: Rids Itself of Pain in Neck in Cobra Breakup ------------------------------------------------------------ Germany's third-biggest bank Commerzbank AG must have heaved a huge sigh of relief recently upon learning that "Cobra" is disbanding. The shareholder group, which shook the country's banking sector due to its "corporate raider" style tactics, gave every indication Tuesday that it's ending a two-year fight to force the bank into a cross-border merger. After acquiring 17% of the bank's stock, the group pressured Commerzbank to do more to improve shareholder value. It also vowed to find a strong partner. "But a year-long search for a strategic partner ended in failure after Commerzbank deepened ties with Assicurazioni, the Italian insurer, in a bid to strengthen its defenses," the Financial Times said Tuesday. Recently, Cobra was also forced to reduce its stake in bank to just under 10% after pressure from the banking regulator Bakred. The paper says Cobra's break-up follows its decision last year to support Klaus Peter Muller, the new Commerzbank chairman, who has launched a cost-cutting program. It also comes in the wake of moves by Munich Re, the world's biggest reinsurer, and WCM, a Frankfurt-based investment group, to take big stakes in Commerzbank, the report says. Cobra is led by Hansgeorg Hofmann, a former investment banker of Dresdner Bank. FAIRCHILD DORNIER: Files for Bankruptcy After Boeing Drops Plan --------------------------------------------------------------- After failing to get Boeing on board last week, German regional aircraft maker Fairchild Dornier has decided to file for bankruptcy. According to Frankfurter Allgemeine Zeitung, the company will still continue its search for a strategic partner and is confident that the business can still recover. Eberhard Braun, who also handled the bankruptcy of Flowtex and Winterling, was appointed preliminary receiver, says the paper. The report says Boeing backed out from an investment plan after Dornier failed to convince the U.S. aircraft manufacturer that its planes would complete Boeing's own range. The company produces 32-to-110-seat aircrafts. The Bavarian state, which for decades has supported Dornier with research grants and guarantees, says it has already initiated talks with relevant parties to ensure that the aircraft-maker had enough cash to continue operations. The report says state-owned Bayerische Landesbank, Hypovereinsbank and the state financing agency Kreditanstalt fur Wiederaufbau are three of the company's biggest lenders. In January, current owners financial investors Clayton, Dubilier & Rice and Allianz Capital Partners had agreed to provide US$870 million. But in light of the current market situation, it recently decided not to hand over the cash until a new financial investor was on board, says the report. Executive Vice President Thomas Brandt, however, says the financing package is still available and can be accessed as soon as a strategic partner is found. He says there had been no break with the company's financial investors. A little more than two years ago, the company also neared insolvency, but weathered it after a change of ownership. KIRCHGRUPPE: Final Rescue Package Could Take 4-6 Weeks to Seal -------------------------------------------------------------- Negotiations to rescue KirchGruppe could take another four to six weeks as investors and creditors failed anew to settle key issues in the final salvage package, says Handelsblatt. The German daily says the meeting last Tuesday ended again without a final resolve as to how the bankruptcy-bound media empire should be saved. According to the paper, disagreement on the details of a EUR150 million bridging loan caused the hitch in the recent meeting. The creditor side allegedly wanted the investors to chip in a little to the badly needed loan. It's unclear just how much of a commitment the investors are prepared to make, says the paper. The rescue efforts have now dragged for weeks. Observers say fine-tuning whatever the investors and creditors have on the table could take as much as 4-6 weeks. The paper says the delay makes the threat of bankruptcy imminent. Insiders say owner Leo Kirch could himself institute insolvency proceedings if a final package is not firmed up soon. Meanwhile, signs are emerging that Rupert Murdoch's News Corp. could be the next manager of Kirch Media, the core rights business of the German media giant. Currently a minority shareholder, Mr. Murdoch appears headed to reign over the main unit as its bargaining power is buoyed by his threat to exercise a "put option" worth EUR1.7 billion this October. Mr. Murdoch owns a 22% stake in Kirch's loss-making pay- television arm Premiere. The option allows him to sell back the stake at a pre-agreed price. MET@BOX AG: Applies for Change of Segment Listing ------------------------------------------------- The board of Hildesheim-based technology company Met@box AG, has decided to apply for a change in listing from trading segment Neuer Markt to Geregelter Markt. Reasons for that step are to be found among others in recent developments in the capital markets but foremost in tremendous cost-savings to be achieved by changing the trading segment. Tradeability of Met@box shares will remain unaffected by this step shares will continue to be traded by the established Securities Identification Numbers. On February 25, 2002, the local court of Hildesheim rejected A petition for insolvency that came from a third party because of contentious receivables, the Frankfurt Stock Exchange said in a press statement. The company says the consolidation process is currently taking further steps to strengthen the dismissal of the petition. For further information, contact Melanie Hoffmann, Management Public & Investor Relations, at telephone 05121/75 33-116; fax 05121/75 33 75, or e-Mail at hoffmann@metabox.de. MUHL PRODUCT: Expects Creditors to Back Plan to Stay in Business ---------------------------------------------------------------- Insolvent Muhl Product & Services AG is confident it can continue operations as a going concern and secure the approval of a restructuring plan from creditors. German daily Handelsblatt says the building supplier does not foresee any hitch to getting creditors' support for the insolvency plan prepared by Deloitte & Touche. The report says it is almost certain that creditor bank Bayerische Landesbank will back the plan. Accordingly, it was the bank's idea to hire the accounting firm and draw a strategic plan even before the company thought of filing for insolvency. "We are expecting to be able to retain 3,000 of our 3,800 jobs," assured CEO Thomas Wolf in an interview with Handelsblatt. Mr. Wolf says his company had been in talks with banks for six months before it filed for insolvency. He expects a breakthrough in the negotiations now that the company has instituted the court proceeding. The insolvency plan only needs a majority vote from creditors to pass. The company is confident that those who want the business to be preserved as a going concern will prevail once the votes are tallied. The plan reportedly calls for new investors. Mr. Wolf says the company has already hired Equinet AG and Corporate Value Associates to find potential investors. Mr. Wolf says he is particularly hopeful about the chances of working with one specific company, which would function as a financial investor and has a funding volume of some EUR300 million at its disposal. The company, who Mr. Wolf refused to name, is based in the area around Munich and would be able to offer restructuring expertise as well as funding, the paper says. The report says a preliminary accord has already been signed between the two companies. By Mr. Wolf's estimates, the amount of capital needed to secure the company's liquidity stands in the lower two-digit millions of euros. The company succumbed to insolvency last week after defaulting on an interest payment for its EUR250 million debt. The company operates in Eastern Germany and has approximately 100,000 clients. It booked EUR700 million in sales revenue last year. It has yet to provide profit-and-loss details, but with restructuring reserves and value adjustments, a net loss of around EUR60 million can be expected, says Handelsblatt. PHILIPP HOLZMANN: Banks Dangle More Money to Secure Next 3 Months ----------------------------------------------------------------- Insolvent Philipp Holzmann received additional money from creditor banks Tuesday, securing its finances at least for the next three months, says the Associated Press. Administrator Ottmar Hermann, who negotiated the loan last week, did not disclose an exact figure, but said it is "a sum in the high two-figure millions" of dollars. He said the loan "gives [the company] the necessary time to plan very carefully the next steps and find pragmatic solutions." The company sought creditor protection on March 21 after failing to make payments on some EUR1.6 billion in loans. Mr. Hermann has three months to determine whether the company will be salvaged or broken up and liquidated. Since the insolvency petition, many potential buyers have expressed interest in its healthier units. The credit granted Tuesday differs from regular loans in that the creditors will be the first to get their money back from the administrator if the company eventually is deemed unviable, the report says. ========= I T A L Y ========= ALITALIA: EUR1.43 Billion Recovery Plan to Face Tough EU Scrutiny ----------------------------------------------------------------- The EUR1.43 billion fund-raising plan unveiled by troubled Italian flag carrier Alitalia SpA could attract close scrutiny from the European Commission, says Dow Jones Newswires. Citing an unnamed expert on aviation regulation, the newswire says the scheme, which will increase the State's 53% stake to 61%, is sure to get closer look from regulators. This is even made imminent considering that the state would buy the shares at 96 cents each, when the offer to regular shareholders is only 37 cents a share. The arrangement could qualify as a second state aid extended to the airline, the expert said. Under EU rules, national flag carriers can only receive one dollop of taxpayer funds. The policy is called "one time, last time," the report says. In 1997, the European Commission authorized a capital injection worth EUR1.42 billion into Alitalia, payable in three installments. Technically, Alitalia is still eligible to receive EUR387 million from the government as part of the 1997 package. But to get the money, it must fulfill strict conditions, including cutting routes, grounding planes and slashing thousands of jobs. The airline had just inked a deal with its union, which only outlines a cut in work hours, not jobs. Still, Alitalia is "confident" the latest cash injection doesn't represent illegal state aid, the report says. ============= I R E L A N D ============= ELAN CORPORATION: Notification of Shareholders' Interests --------------------------------------------------------- The Capital Group Companies, Inc. (CGC) on behalf of its affiliates, including the interest in the relevant share capital indicated in this announcement, notifies that CGC has 34,060,062 ordinary shares in the Irish pharmaceutical firm Elan Corporation plc. The shares total an equivalent of 9.73% of the outstanding shares in issue. Holdings by CG Management Companies and Funds are summarized as follows: Capital Guardian Trust Company 3,740,062.00 1.07% Capital International Limited 1,071,500.00 0.31% Capital International S.A. 220,200.00 0.06% Capital International, Inc. 4,800.00 0.00% Capital Research and Management Company 29,023,500.00 8.29% EuroPacific Growth Fund 16,675,800.00 4.79% The Capital Group Companies, Inc. is a holding company for several subsidiary companies engaged in investment management business. The investment management business is divided into two operational groups, represented by Capital Research and Management Company and Capital Group International, Inc. CRMC is a U.S.-based investment adviser that manages The American Funds Group of mutual funds. CGII is the parent company of five companies that serve as investment managers to various institutional clients around the globe: Capital Guardian Trust Company in the U.S., Capital International, Inc. in the U.S. and Singapore, Capital International Limited in the United Kingdom, Capital International S.A. in Switzerland and Capital International K.K. in Japan. For a more complete description of our organization, please visit our Web site at www.capgroup.com. Neither The Capital Group Companies, Inc. nor any of its affiliates own any shares of your company for its own account. Rather, the shares reported in the notification are owned by accounts under the discretionary investment management of one or more of the investment management companies described above. ===================== N E T H E R L A N D S ===================== UNITED PAN-EUROPE: Delays Full-year Results Anew, But Q4 Out ------------------------------------------------------------ Cash-strapped Dutch cable group United Pan-Europe Communications has again postponed the release of its full-year results, disclosing only the fourth quarter figures early this week. According to the company, the full-year report will be out in two weeks time. It cited the pending completion of the accounting treatment of "certain interest rate cross currency hedging agreements" in the wake of its recent default on public debt as reason for the new delay. The company clarified that these agreements would have no impact on its cash or operating results, but would affect results below the operating level of its balance sheet. The company's fourth quarter results showed that adjusted losses before interest, tax, depreciation, amortization, stock-based compensation, restructuring and impairment charges had narrowed from EUR363 million in 2000 to EUR162 million last year. Revenues increased 38% to EUR1.38 billion. Capital expenditure was EUR897 million, down from EUR1.8 billion in 2000. Average revenue per user increased 16% to EUR12.70, as it signed up 481,000 new users, taking its total to EUR8.38 million, the paper noted. The cable operator also said it had not seen any adverse impact from its financial restructuring and it was continuing to perform ahead of budget in 2002 at an operational level. It said it was in constructive discussions with stakeholders on its restructuring plan, under which EUR6.5 billion of debt and convertible preference shares is being swapped for new equity. In February, the company forecast full-year revenues of EUR1.2 billion in its core business, consolidated capital expenditure within EUR950 million and a loss before interest tax, amortization and depreciation of EUR185 million to EUR195 million, the paper says. =========== N O R W A Y =========== KVAERNER ASA: Aker Kvaerner Awarded Main Contract in Canada ----------------------------------------------------------- Aker Kvaerner, part of the international oil services, engineering and construction, and shipbuilding Group, Kvaerner, today announced that Husky Energy has awarded the joint venture comprising Aker Kvaerner (49%) and its partner Peter Kiewit & Sons Co. (51%), an EPC contract for the complete topside facilities for the White Rose FPSO, offshore Newfoundland, Canada. The contract has a value of approximately US$400 million. The White Rose field will be developed with a production vessel and the contract is regarded as a major milestone in Aker Kvaerner's strategy, for which the Canadian market is a key geographical area. All engineering, procurement and construction activities will be undertaken from the Joint Venture's offices under the name of Aker Maritime Kiewit Contractors (AMKC), in Newfoundland. AMKC is now in the process of expanding its existing facilities in St. John's, Newfoundland. In addition to personnel recruited locally in Newfoundland and elsewhere in Canada, key project staff from Aker Kvaerner's offices in both Norway and Scotland have been mobilised to St. John's to complement the team. The project will start immediately, and the vessel is scheduled to start production in late 2005. Both Aker Kvaerner and Peter Kiewit have a strong profile in the Canadian offshore business after successfully participating in the Hibernia development. Aker Kvaerner regards Canada as an interesting market with long-term prospects. Offshore Canada also imposes much of the same climatic and environmental conditions that are experienced by Aker Kvaerner on projects offshore Northern Europe and elsewhere. The White Rose oilfield is located 350 kilometers east of Newfoundland. Recoverable reserves for the South Avalon pool of the oilfield are estimated at 200-250 million barrels. The field is being developed with a production ship, a so-called FPSO (Floating Production Storage and Offloading unit). For further information regarding this announcement, please contact: CANADA: Harald Gulaker, President, Aker Kvaerner President Canada: +1 709 738 6983 or +1 709 738 6900 or harald.gulaker@akermar.com NORWAY: Torbjorn S. Andersen, Vice President, Corporate Communications, Aker Kvaerner: +47 22 94 53 90 or +47 928 85 542 or torbjorn.andersen@akerkvaerner.com UK: Paul Emberley, Vice President, Group Communications, Kvaerner ASA: +44 (0)20 7339 1035 or +44 (0)7768 813090 or paul.emberley@kvaerner.com Kvaerner group's activities are organized in four core business areas: Oil & Gas, E&C (Engineering & Construction), Pulp & Paper, and Shipbuilding. Following the merger between Aker Maritime and Kvaerner's Oil & Gas business, the Kvaerner Group expects to have revenues in 2002 approaching US$6 billion, with some 40,000 permanent staff located in over 30 countries throughout Europe, Africa, Asia and the Americas. ===================== S W I T Z E R L A N D ===================== ABB LTD.: Takes Steps to Reduce Dependence on Short-term Funding ---------------------------------------------------------------- Cash-strapped ABB Ltd. has confirmed that it will sell its structured finance business, part of its financial-services division, to raise short-term funding for operations. The announcement Tuesday was a complete turnaround from the company's denial last week of rumors pointing to the sale of the unit. The company told Bloomberg that it is now in "advanced talks with a number of parties" and sees the completion of the sale by the third quarter. Citing the company's Web site, the news agency says the unit includes loan and leasing assets worth US$4.3 billion and counts among others Xerox Inc.'s US$362 million Scandinavian leasing portfolio. "It no longer belonged to our core businesses," ABB spokesman Thomas Schmidt in explaining the reason for the sale. Bloomberg says buyers could include banks, Germany's Siemens AG and GE's finance unit, and GE Capital Corp. Buying the ABB unit would give GE, the world's largest company, greater access to customers in Europe's energy industry, the report says. Meanwhile, the company also announced early this week that it is selling US$2 billion in bonds to reduce its dependence on the short-term commercial paper market. The company says terms and conditions of the bond sale, which will also include the sale of securities convertible into ABB's shares, will be published in the second quarter "closer to the launch date." Accordingly, the bond issue will cover the company's 2003 funding requirements, virtually ending its dependence on the volatile short-term capital market for now. "With these steps, ABB is on track with its financing policy," CFO Peter Voser said in a faxed statement to Bloomberg. In separate development, the company said it had already come to terms with a 24-bank syndicate regarding its US$3 billion credit facility that had to be renegotiated following a credit rating downgrade last week. According to Bloomberg, there are indications that some banks may choose to exit the financing arrangement and follow the lead of Credit Lyonnais SA. The bank, which agreed in December to lend $155 million as part of the US$3 billion facility, refused ABB funds when the company requested money last month. Those who will be left in the bank-consortium are also expected to attach conditions on the new loan, the news agency says. Debt will have to be kept below $10.5 billion and earnings must stay four times higher than interest payments, lenders told Bloomberg. Bankers are also expected to demand the doubling of the interest margin they currently charge. =========================== U N I T E D K I N G D O M =========================== CENES PHARMACEUTICALS: Dissolves Ties With Insolvent Partner ------------------------------------------------------------ The termination of the ties between CeNeS Pharmaceuticals Plc and insolvent Bioglan Pharma Plc is already complete, reports AFX News. According to the news agency, the two firms have already agreed to cancel each other's rights in various tie-up agreements, including the existing drug delivery and product development and licensing pacts. In addition, both are now holding talks for the orderly disposal of Bioglan's 8.9 million CeNeS shares. Bioglan is currently being administered by accounting firm Arthur Andersen. COLT TELECOM: Notification of Disposal of Interests --------------------------------------------------- COLT Telecom Group plc, London-based provider of high bandwidth data, internet, voice and advanced telecommunication services, announced Tuesday that following the disposal of 13,579,9901 of 2.5p ordinary shares (less than 1% of total shares issued by COLT) on March 27, the following companies now hold the corresponding shares in the company: BNY Norwich Union Nominees Ltd: 25,970,000 Chase GA Group Nominees Ltd: 30,717,199 CUIM Nominees Ltd: 17,410,961 RBSTB Nominees Ltd: 1,026,876 The total holding following this notification is 75,125,036 or the equivalent of 4.98% of the total shares in issue. For further details regarding this announcement, contact John Doherty at telephone no. 0207 390 3681. INVENSYS PLC: Unit Invests EUR 75MM to Fund Record Growth --------------------------------------------------------- Invensys on Tuesday said that Hansen Transmissions, part of its Development Division, has invested EUR75 million for the construction of a new factory in Lommel, Belgium. Hansen Transmissions, a leading manufacturer of hi-tech gears, will produce state-of-the-art drive systems for large wind turbines in the new factory. The investment in the new factory is a response to a big rise in demand from existing customers and the fact that Hansen's existing factory in Edegem has reached its capacity limits. The wind power market is expected to grow at a rate of 25% per annum over the next 5 years (BTM Control ApS - March 2001). Hansen Transmissions last year had a record high turnover of Euro 95 million, and its customer base represents 50% of the world market. "As we said in our strategy review, the businesses in Invensys' Development Division - including Wind Power (Hansen) - enjoy strong positions in markets with high-growth potential. They represent substantial options for our shareholders through their standalone strategies and will benefit from our support and investment. The Hansen investment is a great opportunity for Invensys to exploit a growth market, and maximise sales returns," said Invensys Chief Executive Rick Haythornthwaite. The Lommel factory will manufacture, assemble and test gear units for large wind turbines. The Hansen drives transform the relative slow rotations into a much higher speed to produce electricity. Invensys plc, the international production technology and energy management group, which specialize in helping companies to improve efficiency, performance and profitability. With close to 76,000 employees, Invensys is headquartered in London, England. Hansen Transmissions manufactures durable drive systems for a broad range of applications in industries that require low noise levels, minimum weight and high reliability (e.g. wind turbines, water treatment, material handling, etc). Hansen Transmissions employees 530 people in Belgium and booked a turnover result of Euro 95 million in 2001, its highest ever. For more details, one may contact Duncan Bonfield at telephone no. +44 20 7821 3712; Pascale Kryzwicki/ Rob Mallows of Invensys plc at telephone no. +44 20 7344 1314. MG ROVER: Launches Aggressive Cost-saving Scheme on Parts Supply ---------------------------------------------------------------- Struggling British carmaker MG Rover is out to cut cost by 20% in its purchasing and supply-chain with its aggressive "Drive" program launched recently. According to the Financial Times, the company has assigned 200 engineers to work with suppliers in reviewing the design and engineering of all component systems. The three-year review will include both parts for current models and those in development for future MG and rover models, the paper says. "The program is aimed at designing cost out, not to cut supplier margins - it is an engineering-led initiative," the company told the paper Tuesday. But the paper says the program is certain to put pressure on suppliers, despite the company's insistence that it affords UK suppliers "opportunity" to win much higher-volume business. Just recently, the company inked a joint manufacturing venture with China Brilliance, the Chinese low-cost automaker. According to the paper, outsourcing cheaper components from China could be very tempting for MG Rover. CEO Kevin Howe, in fact, admitted that there will be a joint sourcing structure and that UK suppliers have got to be competitive, the paper says. The company hopes to cut significantly its annual GBP1 billion spending on parts and components through the program. NTL INCORPORATED: S&P Downgrades "B-" Rating to "CCC-" ------------------------------------------------------ Standard & Poor's has lowered the corporate credit rating of British cable-TV operator NTL Incorporated to "CCC-" from "B-" and gave it a negative outlook "due to liquidity concerns." The ratings agency has not yet released a detailed statement regarding the downgrade, but AFX News said the ratings action reflects concerns that the company may restructure its bonds or default on its debt obligations. NTL INCORPORATED: Completes Sale of Australian Broadcast Business ----------------------------------------------------------------- NTL Incorporated, announced Tuesday that it has completed the previously announced sale of its Australian broadcast business to Macquarie Bank for AUS850 million (US$448 million) in an all cash transaction. The net proceeds from the sale are approximately AUS574 million (US$303 million). As announced on January 31, NTL has appointed Credit Suisse First Boston, JPMorgan and Morgan Stanley to advise on strategic and recapitalization alternatives to strengthen the company's balance sheet and reduce debt. As previously announced, following the New York Stock Exchange's announcement on March 28, 2002 that it had withheld trading of shares of NTL's common stock pending delisting, the Company expects that the shares will commence trading on the Over the Counter Bulletin Board ("OTC BB") in the United States as early as Monday April 1, 2002 and will trade at such time under the new symbol "NTLD". The Company will provide additional information to investors if and when available. NTL, with its affiliates, offer a wide range of communications services to over 20 million homes providing cable telephony and Internet services worldwide. NTL Business has more than GBP500 million in annual revenues and customers include Royal Bank of Scotland, Tesco, Comet, AT&T and Orange. NTL offers a broad range of technologies and resources to provide complete multi-service solutions for businesses from large corporations to local companies. NTL Broadcast has a 47-year history in broadcast TV and radio transmission and helped pioneer the technologies of the digital age. 22 million homes watch ITV, C4 and C5 thanks to NTL's broadcast transmitters. With over 2300 towers and other radio sites across the UK, NTL also provides a full range of wireless solutions for the mobile communications industry. CONTACT: NTL Incorporated US: Media: Steve Lipin / Tim Payne, Brunswick Group +1 212 333 3810 +1 917 853 0848 Analysts: John F. Gregg, Senior Vice President - Chief Financial Officer Bret Richter, Vice President - Corporate Finance and Development +1 212 906 8447 UK: Media: Alison Kirkwood, Media Relations +44 (0) 1256 752 662 / 07788 186 154 Mike Smith / Jonathan Glass, Brunswick Group +44 (0)207 404 5959 Analysts: Nigel Roberts, Group Treasurer +44 (0)207 909 2018 In Australia: Macquarie Bank: Lisa Jamieson, +61 402 001 841 Lisa.jamieson@macquarie.com.au NTL INCORPORATED: Diamond Bondholders Want Cash, Not Equity ----------------------------------------------------------- Bondholders holding notes of Diamond Cable Communications, a unit of troubled NTL Incorporated, do not want any part in a debt-for- equity swap allegedly being planned by the company. According to the Telegraph, this group of bondholders doesn't want anything less than "100 cents on the dollar" for their notes. These bondholders hold US$1.5 billion in debt attached to the East Midlands cable unit acquired by NTL for US$630 million in 1998, the report says. Unlike its battered counterparts attached to the core business, the Diamond bonds have held on to around 75% their value, while NTL Corporate notes have collapsed to more like 25%. The notes are also effectively backed by the asset value of franchises in the region. The paper says the objection of these bondholders to a debt-for- equity swap highlights the difficulty and complexity of pulling off the stunt. But there are indications that NTL is treating the Diamond group separately from the rest. Early this week, the company made the US$19 million interest payment on their notes despite missing a US$100 million due on bonds attached to other units. An NTL spokeswoman has refused to confirm the speculations that indeed Diamond bondholders are treated differently, saying she was "not prepared to say whether this reflects an emerging strategy." RAILTRACK GROUP: Receives GBP 375MM Offer for Tunnel Asset ---------------------------------------------------------- Railtrack Group Plc has received several offers worth GBP375 million for its rights on the Channel Tunnel Rail link, said Bloomberg Tuesday. The paper says London & Continental Railways Ltd. led all bidders with GBP295 million. Network Rail Ltd. also offered GBP80 million to run the line for London & Continental as well as manage its St. Pancras station. The offers follow recent pronouncements that the company intends to raise GBP800 million by selling assets to reimburse shareholders who lost money when the firm's stock stopped trading in October last year. The trading suspension followed the transport ministry's decision to put Railtrack Plc, the train track and station unit, under administration. The link is expected to improve the line linking the U.K. rails with those of continental Europe beginning 2003. The expanded, high-speed line would replace an older line now in use. Railtrack values the asset at GBP400 million. TELEWEST COMMUNICATIONS: S&P Ratings on CreditWatch, Under Review ----------------------------------------------------------------- The "BB-" corporate credit and "B" senior unsecured debt ratings of Telewest Communications Plc are now on Standard & Poor's "CreditWatch" with negative implications, says AFX News. "The CreditWatch placement reflects concerns about Telewest's ability to sustain and grow into its highly geared balance sheet, given the group's current organic growth rates, high cash burn, and weak financial flexibility," S&P explained. The ratings agency said it will review the company's updated business plan before resolving the CreditWatch status in a month's time. The review will focus on the drivers of future EBITDA and free cash flow generation, financial flexibility and strategic options for de-leveraging and/or restructuring its capital structure, S&P said. TELEWEST COMMUNICATIONS: Debt-restructuring Imminent ---------------------------------------------------- With NTL's GBP12 billion debt about to be restructured, many analysts are now looking in the direction of rival Telewest Communications, as it nears the same fate. According to Sharecast, some market observers are not discounting the possibility of a merger between the two troubled cable networks. There are speculations that John Malone, the cable mogul who has already gained significant presence in Europe, may try to fuse the two and restructure them. "My belief is that Telewest will need to restructure and that Liberty Media head John Malone might get Telewest and NTL together. NTL could announce a restructuring in the next three to four months and then Telewest will be the next to follow," Morten Singleton analyst William de Broe told Sharecast. Mr. Malone is said to be deeply involved in the current NTL restructuring efforts. He also owns a quarter of Telewest and therefore likely to be involved in any restructuring move. The role of Mr. Malone in the two cable firms' debt-restructuring is even more underscored by the fact that he has deep pockets and aspires to dominate the European cable market. Recently, he bought into Amsterdam-based United Pan-European Communications with US$5 billion worth of cash and assets when the company had debts of US$8.5 billion, including US$1 billion to Malone. Last year, he sealed a total of nine cable deals in Europe, which has given him a presence in most European cable markets and a position approaching dominance in some, the report says. Telewest faces a convertible loan repayment of GBP293 million set to mature in November next year. Analysts say this obligation will be the catalyst for the firm's restructuring, as it does not have the money to foot the bill. A source told Sharecast that the company is planning to repay the loan owed to Deutsche Telekom with either cash or equity. Observers, however, believe that the equity option is not feasible with the current 14p value of Telewest shares. They believe repaying the loan with equity would dilute the stock too much. At present, Telewest owes various creditors a total of GBP5 billion. TELEWEST COMMUNICATIONS: Travel Group Will Be Sold for GBP70MM -------------------------------------------------------------- USA Networks, Inc., to be renamed USA Interactive upon the close of its pending transaction with Vivendi Universal, S.A., announced Tuesday an agreement to acquire U.K.-based TV Travel Group Ltd. for approximately 100 million USD (GBP70 million) in cash and stock. The current shareholders of TV Travel Group include Barclays Private Equity, Telewest plc, Kuoni ag and Management. TV Travel Group pioneered the concept of a television channel dedicated to selling travel, currently has three TV Travel Shop(TM) channels, two in the United Kingdom and one in Germany. The current management team, led by Stephen Welton, will remain in place and is also expected to oversee USA's forthcoming cable travel network in the United States. TV Travel Shop(TM) is a leader in selling travel via television in the U.K., with gross transaction value of $240 million USD ((pound)165 million) for the fiscal year ended September 30, 2001. Travel is a key component of USA's overall strategy of acquiring and growing companies which offer goods and services via television or the Internet. Through its controlling interests in Expedia, Inc. and Hotel Reservations Network and the pending acquisition of TV Travel Group, USA is a worldwide leader in interactive travel. As previously announced, USA will launch a cable travel network, which will unite two of the most powerful forms of commerce - travel and home shopping. Patterned after TV Travel Shop(TM), it will draw from USA's multiple lines of business in the areas of travel, consumer products and ticketing. "In Europe, TV Travel Group, led by strong management, has demonstrated that it can succeed in selling travel via television," said Jon Miller, President and CEO, USA Information & Services. "This acquisition is complementary to USA's goal of increasing the penetration of electronic commerce into the vast travel space." Stephen Welton head TV Travel Group as chief executive officer. It is expected that the transaction will be completed in the second quarter of this year, subject to customary regulatory approvals. TV Travel Group, founded by Harry Goodman and Denis Strauss, pioneered the world's first transactional TV travel business and is now a leader in its field having created a completely new channel of distribution for the sale of package holidays. The company has grown to include two U.K. channels, TV Travel Shop and TV Travel Shop 2, and TV Travel Shop Germany, which operate 24 hours a day. TV Travel Shop(TM) is distributed in all of the U.K.'s 11 million multi-channel homes, and is the sixth most widely distributed U.K. channel, ranking behind only the five terrestrial channels. Since its inception, TV Travel Shop(TM) has handled over one million passengers in the U.K. alone, making it a leading travel agent in the U.K. TV Travel Shop's average value per booking is $2300 USD ((pound)1600), reflecting strengths in higher-value market segments such as cruising and long haul, as well as the key family segment. TV Travel Group maintains offices in the U.K. at Bromley and London, and Hannover in Germany. The company has approximately 900 employees, including 150 homeworkers. Stephen Welton, an experienced venture capitalist who has also worked closely with a number of travel companies while he was a managing director U.K. of Barclays Private Equity is the Group CEO. Harry Goodman, co- founder of TV Travel Shop, and previously founder of International Leisure Group and Air Europe, is Deputy Chairman. USA Networks, Inc., to be renamed USA Interactive upon the close of its pending transaction with Vivendi Universal, is organized into two groups, the Interactive Group and the Entertainment Group. The Interactive Group consists of Expedia, Inc., HSN (including HSN International and HSN Interactive); Ticketmaster, which operates CitySearch and Match.com; Hotel Reservations Network; Electronic Commerce Solutions; Styleclick; Precision Response Corporation; and will include TV Travel Group upon the close of the USA/TV Travel Group acquisition. The Entertainment Group consists of USA Cable, including USA Network, SCI FI Channel, TRIO, Newsworld International, and Crime; Studios USA, which produces and distributes television programming; and USA Films, which produces and distributes films. On December 17, 2001, USA and Vivendi Universal, S.A. announced a transaction in which USA agreed to contribute its Entertainment Group to a newly formed joint venture to be controlled by Vivendi Universal, S.A. For additional information regarding this announcement, please contact: USA Networks, Inc. Corporate Communications: Ron Sato, 212/314-7254 Investor Relations: Roger Clark/Lauren Rosenfield, 212/314-7400 or TV Travel Group Stephen Welton, +44 208 466 2134 or +44 207 535 1355 ************* 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, Larri-Nil Veloso and Maria Lourdes Reyes, Editors. Copyright 2001. 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 US$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 US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *