/raid1/www/Hosts/bankrupt/TCREUR_Public/020408.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, April 8, 2002, Vol. 3, No. 68


                            Headlines

* B E L G I U M *

SABENA SA: Locked in Talks With Lufthansa Over Catering Service

* G E R M A N Y *

BAYERISCHE LANDESBANK: Moody's to Review "C" Strength Rating
DZ BANK: Kirch's Imminent Bankruptcy Sends Ratings Down to "D+"
EM.TV MERCHANDISING: Acquires 2006 World Cup Merchandising Rights
FAIRCHILD DORNIER: Receives Inquiries From Potential Investors
KIRCHGRUPPE: Banks' Claim on Movie Rights Stands on Shaky Ground
MAN AG: Austerity Measures to Result in Better Figures This Year
SCHNEIDER TECHNOLOGIES: Laser Unit Applies for Insolvency

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

KPN NV: Moves Launch of 3G Mobile Services to 2004 From Mid-2003
KPNQWEST NV: Moody's Cuts Several Ratings Due to Poor Prospects
KPN NV: Turns Down M&A Capital's Offer for EuroWeb Holdings

* P O L A N D *

NETIA HOLDINGS: Shareholders Approve Second Capital Increase

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

4M TECHNOLOGIES: Preliminary Results Show CHF50 Mln Net Loss
ABB LTD.: Searches for More Banks to Hold US$3 BB Credit Line
ABB LTD: Wins US$50 MM Contract for Power Grid Connection in U.S.

* U N I T E D   K I N G D O M *

BRITISH AIRWAYS: Transfers Additional 1,500 Staff to Heathrow HQ
BRITISH TELECOM: CEO's Plan to Focus on Operational Efficiency
CENES PHARMACEUTICALS: Notification of Directors' Shareholdings
CORUS GROUP: Won't Use Huge Pension Fund Savings to Cut Debts
CORUS GROUP: Unions Rap Chair's Pay Hike
ENERGIS PLC: Declares Swiss Wholesale Carrier Business Insolvent
ENERGIS PLC: Sale Talks on German, Dutch Units in "Advance" Stage
ITV DIGITAL: League Wary Over Deloitte's Role in Contract Row
MARCONI PLC: Corporate Grade Now "CC" in S&P's Ratings Board
QUILTER GLOBAL: Chances of Survival Fade With Shares Suspension
STEPSTONE LIMITED: Liquidator to Sell Curricula Vitae Database
THISTLE HOTELS: Shareholders Back GBP600 MM Asset Disposal


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

SABENA SA: Locked in Talks With Lufthansa Over Catering Service
---------------------------------------------------------------

Deutsche Lufthansa AG, which owns the world's largest airline
catering service, is reportedly in advance talks with bankrupt
Sabena SA over the acquisition of its catering unit, says AFX
News.

Citing Boersen Zeitung, the news agency said LSG Sky Chefs and
Sabena Belgian World Alliances SA are expected to seal a deal
before the end of May.  It is not certain how much Sabena tagged
the unit.

The now grounded Belgian airline is currently disposing assets to
help finance its progeny, newly crowned national flag carrier SN
Brussels Airlines.

The new airline recently bragged that it will reach profitability
by the last quarter of this year.


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


BAYERISCHE LANDESBANK: Moody's to Review "C" Strength Rating
------------------------------------------------------------

Moody's Investors Service has put on review the "C" Financial
Strength Rating of Bayerische Landesbank Girozentrale for
possible downgrade due to its exposure to KirchGruppe, the
bankruptcy-bound German media giant.

The ratings agency says the worsening condition at the media
empire and the uncertainty that a rescue plan will be finalized
soon has increased the likelihood that the bank might incur
credit losses.

Moody's says its review "will focus on the magnitude of the
impact on the bank's economic capitalization if losses
materialize."

Accordingly, the review will revolve around those Kirch Group
units that the bank has credit exposures to. Moody's analysis
will also make assumptions about the stressed collateral value of
the bank.

Moody's has maintained the bank's Aaa/P-1 debt and deposit
ratings, citing the support mechanisms of Anstaltslast (a
maintenance obligation) and Gewaehrtraegerhaftung (a statutory
owner's or guarantee obligation), which protect the bank's
creditors, even in the case of a potential deterioration in
intrinsic fundamentals.

Based in Munich, Bayerische Landesbank is Germany's second
largest Landesbank group and had total consolidated assets of
EUR305 billion at year-end 2000.

For more information, contact:

London
Samuel S. Theodore
Managing Director
Financial Institutions Group
Moody's Investors Service Ltd.
44 20 7772 5454

London
Michael Dawson-Kropf
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service Ltd.
44 20 7772 5454


DZ BANK: Kirch's Imminent Bankruptcy Sends Ratings Down to "D+"
---------------------------------------------------------------

The growing risk of a KirchGruppe bankruptcy has prompted Moody's
Investors Service to lower the financial strength rating of
Deutsche Zentral-Genossenschaftsbank AG.

The bank, best known as DZ Bank, is now rated "D+", down from "C-"
due to its "considerable exposure" to the troubled German media
giant.  Moody's has kept the rating on review for further
downgrade.

According to Moody's, the deterioration in the bank's financial
fundamentals is reflected by the fact that it could only
partially cover the significant increase in loan loss provisions
with its modest profits and therefore had to release hidden
reserves, which were already strained after higher loan loss
provisions in 2000.

The ratings agency put the bank on review in November last year
after its announcement that risk provisions for the financial
year 2001 would amount to around EUR500 million. These provisions
were subsequently increased again when the bank presented its
preliminary results for 2001.

Moody's says it will review further the "D+" financial strength
rating, focusing on the level of potential losses due to its
exposure to Kirch and its financial flexibility to cover these
potential losses with its own resources.

In addition, it will also examine whether the level of loan loss
provisions made in 2001 is sufficient to cover any further
deterioration in the bank's asset quality, especially in view of
the economic slowdown in Germany and the growing number of
company defaults.

Moody's, however, maintains the bank's A2/P-1 short and long-term
deposit ratings.  Accordingly, this rating still reflects "the
underlying support relationship that is shared among the German
cooperative banking movement, principally in the form of a
guarantee fund and cooperative guarantee agreement, which
underpin the acceptable cohesiveness within the sector."

Headquartered in Frankfurt, DZ Bank is the sixth largest banking
group in Germany and had pro-forma assets of around EUR360
billion as of June 2001.

For more information, contact:

Samuel S. Theodore
Managing Director
Financial Institutions Group
Moody's Investors Service Ltd.
44 20 7772 5454

London
Michael Dawson-Kropf
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service Ltd.
44 20 7772 5454


EM.TV MERCHANDISING: Acquires 2006 World Cup Merchandising Rights
-----------------------------------------------------------------

Cash-strapped media-rights group EM.TV & Merchandising AG just
can't overcome the temptation to cash in on the most popular
sport in Europe.

The company recently bought the exclusive European merchandising
rights to the 2006 football World Cup that will be held in
Germany, AFX News said late last week.

The report says neither the company nor FIFA Marketing AG, the
promotions arm of the football federation, revealed financial
details of the deal.  The company expects to generate sales
beginning next year.

"The acquisition of these marketing rights is a milestone in the
new direction of company," said EM.TV, which nearly succumbed to
bankruptcy last year.


FAIRCHILD DORNIER: Receives Inquiries From Potential Investors
--------------------------------------------------------------

Insolvent German aircraft maker Fairchild Dornier claims it has
received several expression of interest from potential partners,
buoying its hopes to turnaround business soon.

Company spokesman Robert Stangarone told Dow Jones Newswires last
week that some of the interested parties are offering to take
over part or all of the business.  He did not disclose any names.

The newswire says these potential buyers likely include Boeing
Co., European Aeronautic Defense & Space Co., Brazil's Empresa
Brasileiras de Aeronautica SA and Canada's Bombardier Inc.

Meanwhile, Mr. Stangarone says that the company is set to receive
around US$100 million in fresh loans from its creditors -- HVB
Group AG, Bayerische Landesbank Girozentrale and Kreditanstalt
fuer Wiederaufbau.

He says things are looking bright and one good sign that the
company will recover soon is that no customers have bailed out by
canceling orders.  He says the company has pending orders for
more than 500 planes worth US$11.7 billion.

He says the company plans to cut more jobs, among other measures,
as it mulls ways to restructure itself for the medium- and long-
term. After it decided to slash jobs in the U.S., similar
measures could follow in Europe, he says.

The company is currently 72%-owned by U.S. venture-capital group
Clayton Dubilier Rice and 24%-held by Allianz Capital Partners, a
subsidiary of German insurer Allianz AG.  Management and other
investors own the rest.


KIRCHGRUPPE: Banks' Claim on Movie Rights Stands on Shaky Ground
----------------------------------------------------------------

Which law will prevail over KirchMedia's movie rights holdings
should it succumb to bankruptcy?

Legal experts are divided on the issue, and creditor banks that
hold the rights as collateral to loans are now preparing for a
"long and drawn-out battle," Handelsblatt says.

According to the report, KirchGruppe acquired the rights through
expensive long-term contracts with Hollywood studios.  The
company entered into financing deals with banks to finance the
acquisition with the rights used as collateral.

Under the rights deal, the U.S. studios are to continuously provide
the rights until 2008, but can cut supplying the content if Kirch
is unable to pay.  The contracts were inked under U.S. law.

This is now the problem, the paper says.

Herbert Kloiber, whose Tele Munchen group controls Germany's
largest library of film rights after Kirch, believes U.S. law
will apply in the event of insolvency.

This means, he says, that the rights to the films will
automatically return to the studios, and it's not clear whether
the payments that Kirch has made will be returned.

Lars Westphal at law firm Freshfields Bruckhaus Deringer
disagrees.

He pointed out to the German daily that should Kirch file for
insolvency in Germany, it will be German law that will apply.
This, according to him, will mean that the insolvency
administrator will be able to decide whether he wants to maintain
the rights deals.

The film studios will then be able to demand that the
administrator keep up the payments as they fall due, but if he
fails to do this, all they have is the right to claim damages -
and that will put them in with all the other creditors, Mr.
Westphal says.

Claudia Rinke of Graefe & Partner, on the other hand, told the
paper that there is no clear precedent to follow where there's a
conflict between U.S. law on cancellation of contract and German
law on insolvency.

But whatever the case, it is her opinion that a "clarification
can take years."


MAN AG: Austerity Measures to Result in Better Figures This Year
----------------------------------------------------------------

German automotive conglomerate MAN Nutzfahrzeuge AG is confident
its troubled commercial vehicles division MAN AG will turn in
decent figures this year as a result of cost-saving measures.

The company told Suddeutsche Zeitung recently that the cost-
cutting programs implemented by the company beginning last year
is now paying dividends.  He did not disclose any figure, though.

Some 4,400 jobs out of the 35,000 staff currently connected to
the unit will go this year as part of the austerity program.

The division posted a loss of EUR49 million before tax last year,
but had turnovers of EUR6.7 billion, up by 17.1 percent.


SCHNEIDER TECHNOLOGIES: Laser Unit Applies for Insolvency
---------------------------------------------------------

Insolvency proceedings have started against Schneider Laser
Technologies AG, a unit of similarly situated Schneider
Technologies AG, which filed for creditor protection in January.

According to the Frankfurter Allgemeine Zeitung, a court in Gera,
Germany is presiding over the proceedings.  The business will
continue to operate normally during the pendency of the action.
The German laser developer employs 51 employees in the Turkheim
and Gera area.

Recently, Schneider Electronics AG became also the third unit to
apply for insolvency, the report says.

The parent company says it still has enough orders to keep
operating until May, and many large customers have paid
substantial sums in advance. The downside, however, is: Some 300
out of 650 staff must stay home permanently.


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


KPN NV: Moves Launch of 3G Mobile Services to 2004 From Mid-2003
----------------------------------------------------------------

The 3G licenses of Dutch telecom company KPN N.V. will remain
"white elephants" for much longer now that the company has decided
to delay the launching of services for another year.

Ludolf Rasterhoff, a senior executive, said in a recent company
affair, that the rollout of 3G services will not happen until
2004.  Barely a month ago, the company scheduled it "in the
second half of 2003."

According to the Financial Times, this delay increases further
the mounting pressure on the company to make an early return on
the costly 3G or UMTS licenses.

KPN paid EUR9 billion for the licenses in Netherlands, Germany
and Belgium.  These expensive purchases were one of the major
factors that led KPN to incur EUR23 billion debts that almost
crippled it last year.

The company says it will not launch its UMTS network until it had
enough subscribers in its "i-mode" service, a high-speed
Internet-enabled system.  Mr. Rasterhoff says KPN is banking on
such subscribers to switch to UMTS in time.

The company forecasts one million "i-mode" users by 2003. It
expects 100,000 Dutch customers and 400,000-600,000 in Germany
this year. It has 13.7 million mobile customers in total, the
paper says.

KPN expects average revenues per customer per month to rise by
EUR6-EUR8 and calculates that could mean EUR100 million in
additional revenues next year.


KPNQWEST NV: Moody's Cuts Several Ratings Due to Poor Prospects
---------------------------------------------------------------

Moody's Investors Service is increasingly wary of KPNQwest N.V.'s
future due to the weakening of its core operating market and
financial flexibility.

The ratings agency lowered several key credit grades of the
company last week, reflecting its uneasiness and concern over the
negative outlook of the business.

Moody's says the ratings action follows the company's recent
downwardly revised financial guidance and reflects Moody's
heightened concerns that the telecoms slump will adversely impact
KPNQwest's ability to grow operating cash flows in-line with
Moody's previous expectations and to a level that provides
adequate bank facility covenant headroom.

The ratings agency says the continuing deterioration of the
company core retail as well as the whole telecom market places
pressure on management to achieve operating cash flow targets to
support its sizeable debt service requirements.

In addition, Moody's also expects an acceleration in synergy
targets in order to maintain adequate headroom within its bank
facility covenants.

"Moody's recognizes that KPNQwest has identified some EUR600
million of synergies but the ability of management to adequately
compensate for any shortfall in core cash flows remains
uncertain," the ratings agency says.

Moody's also underscored the "extremely limited" financial
flexibility of the company highlighted by its continued
dependence to its bank facility.

"If the company fails to maintain access to the bank facility,
the outcome is likely to prompt a re-evaluation of the strategy
and a possible restructuring of the balance sheet," Moody's said.

The recent ratings action concludes Moody's review that commenced
on March 22, 2002. The action affected approximately US$1.8
billion of debt securities.  These are now KPNQwest's new
ratings:

Senior Implied Rating to Caa1 from B1

Senior Unsecured Rating to Caa3 from B3

EUR340 million 7.125% Eurobonds due 2009 to Caa3 from B3

EUR500 million 8.875% Eurobonds due 2008 to Caa3 from B3

US$ 450 million 8.125% Global bonds due 2009 to Caa3 from B3

EUR210 million 10% Convertible Notes due 2012 assigned at Caa3

For more information, contact:

London
Eric de Bodard
Managing Director
European Corporate Finance
Moody's Investors Service Ltd.
44 20 7772 5454


London
Michael West
VP - Senior Credit Officer
European Corporate Finance
Moody's Investors Service Ltd.
44 20 7772 5454


KPN NV: Turns Down M&A Capital's Offer for EuroWeb Holdings
-----------------------------------------------------------

Royal KPN N.V., a Dutch telecom operator, declined a
revised offer by M&A Capital Ltd. to acquire its stake in EuroWeb
International Corp. for US$3 a share in cash.

Dow Jones Newswires, citing a press release Thursday, said Royal
KPN re-affirmed its previous reasons for the rejection.

KPN said it did not receive sufficient evidence that M&A can
finance its offer and there was no evidence that a subsequent
proposed merger with M&A would be approved by EuroWeb's board.

In March, Royal KPN rejected a bid by M&A Capital to buy its
stake in EuroWeb for US$2.50 a share in cash.

Through Amtel Hanges Internet Kommunikacio Magarorszag Kft., a
Hungarian company, M&A made the offer. Peter Klenner, founder and
former chief executive of EuroWeb also owns M&A and Amtel.


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


NETIA HOLDINGS: Shareholders Approve Second Capital Increase
------------------------------------------------------------

Netia Holdings S.A. announced Thursday that shareholders recently
approved an amendment to the company's corporate statute
concerning a conditional increase of its share capital.

The shareholders, during a recent extraordinary general meeting,
also authorized Netia's Management Board to issue warrants in
connection with its debt restructuring.

As previously announced by Netia, the resolutions adopted on
April 4 include, among other things:

     (1) a conditional increase of the Company's share capital by
         up to PLN 83,222,437 (through the issuance of ordinary
         bearer series "J" and "K" shares) with the aim of
         facilitating the issuance of warrants to existing
         shareholders (up to 64,848,652 of series "J" shares),
         and

     (2) a stock option plan for Netia's key employees (up to
         18,373,785 of series "K" shares).

In accordance with the terms of the Restructuring Agreement,
dated March 5, 2002, the Company may not allocate more than 5% of
its post-restructuring share capital, before the issuance of
warrants, to this stock option plan.

Contact:
Netia
Anna Kuchnio (IR)
+48-22-330-2061
Jolanta Ciesielska (Media)
+48-22-330-2407
or
Taylor Rafferty, London
Jeff Zelkowitz, +44-(0)20-7936-0400
or
Taylor Rafferty, New York
Andrew Saunders, 212/889-4350


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


4M TECHNOLOGIES: Preliminary Results Show CHF50 Mln Net Loss
------------------------------------------------------------

Swiss compact machinery manufacturer 4M Technologies SA revealed
its unaudited results Thursday recording a 2001 net loss of CHF49.9
million, compared to the CHF72.5 million net loss a year earlier.

The company's sales slipped to CHF31.5 million, down from
CHF116.7 million a year ago.

Meanwhile, the company says one of the investors participating in
the company's restructuring plan approved to extend a convertible
loan of CHF10 million, 4M Technologies said.

4M filed for creditor's protection in September last year after
absorbing huge losses due to the sharp downturn in the technology
sector.

The company's preliminary 2001 results as of December 31, 2002
may be viewed at: http://bankrupt.com/misc/4M2001.pdf.


ABB LTD.: Searches for More Banks to Hold US$3 BB Credit Line
--------------------------------------------------------------

Swiss-Swedish engineering group ABB Ltd. is still shopping for
more banks to join the three banks that decided last week to
maintain a US$3 billion credit line, the Guardian says.

The report says the search for additional partners, however, will
not be done by the company directly, but by Barclays, Citibank
and CSFB -- the three banks that are now holding the line.

Originally, a syndicate of 24 banks established the funding
facility in December last year. A series of ratings downgrade by
Moody's in recent weeks led to the renegotiation of the credit
line last week.  Now only three banks remain.

According to the paper, the cancellation of the credit line would
have forced the company to pay by April 16 the US$3 billion
facility.  The company was forced to call in the credit two weeks
ago after failing to get money from its commercial papers.

Meanwhile, the group says the plan to sell a structured finance
unit and the success of a US$2 billion bond issue are not pre-
conditions in the renegotiated facility.

An ABB spokesman clarified last week that the company's business
model and terms for the new facility were the driving force
behind the successful renegotiation of the credit line.

But despite the successful turnout of the renegotiation, Standard
& Poor's is still keeping the company on "CreditWatch" due to the
remaining challenges up ahead for the firm.

"It is a positive event for the short term but for the medium and
longer term there remains a number of challenges," S&P said.

The ratings agency said ABB still has to face the concomitant
hurdles in carrying out a bond issue and selling assets.


ABB LTD: Wins US$50 MM Contract for Power Grid Connection in U.S.
-----------------------------------------------------------------

ABB, the global power and automation technology group based in
Zurich, has won a US$50 million order to install a new high-
voltage direct current (HVDC) transmission system between the
eastern and western power grids of the U.S.

Under the terms of the contract, ABB will design, build and
install the system connecting the two grids, as part of a joint
project between two US utilities: Basin Electric Power
Cooperative of Bismarck, North Dakota, and Black Hills Power of
Rapid City, South Dakota.

For more information, contact:

ABB Corporate Communications, Zurich
Media Relations:
Thomas Schmidt
Tel: +41 43 317 64 92
Fax: +41 43 317 79 58
media.relations@ch.abb.com

or

ABB Investor Relations
Switzerland: Tel: +41 43 317 38 04
Sweden: Tel: +46 21 32 57 19
USA Tel: +1 203 750 77 43
investor.relations@ch.abb.com


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


BRITISH AIRWAYS: Transfers Additional 1,500 Staff to Heathrow HQ
----------------------------------------------------------------

British Airways intends to transfer an additional 1,500 of its
personnel to its head office near Heathrow airport, as called for
by a property disposal program that plans to raise more than
GBP80 million, The Times said last week.

Despite earlier reports that BA's passenger numbers fell in
March, the airline has put another raft of sites up for sale.

BA plans to dispose properties in west London and Sussex, as well
as sites in Tokyo and New York, which are already on the market.

Phil Hogg, BA's head of property, estimated BA will raise GBP80
million from the divestment, but it will mean relocating staff to
Waterside, which will bring the HQ workforce to 4,250.


BRITISH TELECOM: CEO's Plan to Focus on Operational Efficiency
--------------------------------------------------------------

Analysts are not expecting any surprises or fireworks at the
scheduled disclosure this week of Ben Verwaayen's plan for
British Telecom.

Observers say the plan, at the very least, will reiterate Mr.
Verwaayen's emphasis on broadband, fast Internet services, and
operational efficiency.

"We're likely to get more of a flavor of Mr. Verwaayen's
management style and see the company target key efficiency
ratios, such as the number of lines per employee," SG Securities
telecoms analyst Jim McCafferty told the Telegraph.

The Financial Times, for its part, says Mr. Verwaayen is likely
to delve heavily into his strategy for BT Ignite, the group's
business services division that is presently trying to achieve
breakeven by March next year.

The unit, which consumes GBP400 million a year, has been
speculated on as a likely target of cost-cutting measures due to
its lackluster performance, so far.

BT Ignite maintains a 35,000-mile network linking 290 cities
across Europe.  Its entry into mainland Europe was predicated by
an anticipation of strong growth in data and Internet traffic. As
it turned out, however, demand has been disappointing, making
this unit the major reason why the group is hemorrhaging cash.

The group reported EBITDA losses of GBP94 million in the nine
months to December last year.  Already, there are plans to cut
several jobs in Germany.  These cuts are seen as an attempt to
placate investors who are asking the company to withdraw from
continental Europe.

In addition to his strategy for BT Ignite, Mr. Verwaayen is also
expected to announce a much stronger focus on large corporate
clients with less emphasis on small and medium-sized enterprises,
where business acquisition costs are much higher.


CENES PHARMACEUTICALS: Notification of Directors' Shareholdings
---------------------------------------------------------------

CeNeS Pharmaceuticals, the Cambridge-based drug manufacturer
announced that Bioglan Pharma plc's entire holding of
approximately 8.9 million ordinary shares of 10p each in CeNeS
has been placed by the company's brokers with certain
institutional investors, a director of the company and a former
director of the company at 5p per ordinary share.

As a result, A. G. Goodman, a director of the company and Dr D.
J. Roach, a former director of the company, Wednesday informed
CeNeS that the following notifiable purchases of ordinary shares
took place on April 3, 2002:

      Number of Ordinary    % interest           Number
        Shares purchased  after purchase  interest after purchase

A.G. Goodman   1,000,000        7.08               12,034,404*
Dr D.J. Roach  1,000,000        7.20               12,224,789*
ATM              982,933        5.08                8,638,176

Note: *8,638,176 of these Ordinary Shares are held by ATM Global
Investments Limited (ATM), a company controlled by A.G. Goodman
and Dr D.J. Roach.

In addition, A.G. Goodman's and Dr D.J. Roach's interest also
includes a non-beneficial holding of 1,500,000 Ordinary Shares
held by a pension fund of which A.G. Goodman and Dr D.J. Roach
are trustees.

Additional information concerning this announcement may be
obtained by contacting Neil Clark of CeNeS Pharmaceuticals plc at
telephone no.  01223 266 466.


CORUS GROUP: Won't Use Huge Pension Fund Savings to Cut Debts
-------------------------------------------------------------

British steel group Corus says it will not use an expected GBP865
million pensions surplus next year to narrow down its debts.

"We have no intention at the moment to use the surplus directly
and do not envisage a scenario where we would need to, although
it may result in decreased contributions," the group says.

The group discovered the savings after using the controversial
accounting standards that many other companies in Britain believe
would lead to huge deficits.  The company does not intend to use
the new rules until next year.

The new standards force companies to show changes in the market
value of their pensions funds as they happen rather than
smoothing them out over years, and then record any substantial
differences in their balance sheets.

The GBP865 million surplus would have been generated at the end
of 2001 had the rules been in effect.

The Financial Times says the total surplus is actually GBP1.7
billion, but includes deferred tax liabilities and non-
recoverable money.

The pension fund, which is based on relatively conservative
assumptions, has also benefited from being underweight in
equities at time when companies have been hit by the fall in
world stock markets, the paper says.

Corus says it has no plans to raid the pensions surplus directly,
despite debts of GBP1.6 billion and a market capitalization less
than one quarter of the fund's total value of GBP11.3 billion.

But the report says in theory companies can raid such funds, but
need to use more conservative valuations of the potential surplus
and must usually negotiate any changes with the independent
trustees of the fund.


CORUS GROUP: Unions Rap Chair's Pay Hike
-----------------------------------------

Unions of steel-maker Corus Group are outraged at the recent
revelation that its chairman received a 130% increase in his
basic pay last year, the same year the company made 6,000
employees redundant.

"His pay increase is utterly indefensible.  I thought we had seen
the last of the fat cats in this country but Sir Brian is
determined to hang on by his claws," said a spokesman for the
ISTC union.

According to The Times, Sir Brian Moffat saw his basic pay soar
to GBP558,846 in 2001. But Corus defended this increase, citing
Mr. Moffat's dual role of chairman and CEO for eight months,
before appointing Tony Pedder last year.  The company says Mr.
Moffat will take a pay cut this year.

"It is absolutely disgusting that at a time when our members were
being thrown on to the streets, the executives had their noses in
the troughs," the ISTC spokesman said.

The GMB general workers union has also called on Mr. Moffat to
return his pay rise to the company, the paper says.

Corus recently told its 26,000 employees, most of whom are based
in poor industrial regions of the UK and The Netherlands, that
their pay would be frozen for at least the next 12 months as the
company struggles to reduce its losses further.  At the end of
last year, these losses stood at GBP460 million, the paper says.


ENERGIS PLC: Declares Swiss Wholesale Carrier Business Insolvent
----------------------------------------------------------------

Cash-strapped telecoms group Energis Plc announced last week that
it is closing its Zurich-based wholesale division and taking it
to court to be declared insolvent.

The company told the Telegraph last week that it had taken the
decision "in the interest of preserving cash resources" given
that the unit required "significant funding."

The Swiss unit has 128 staff.  It is currently connected to
around 150 carriers and Internet Service Providers.

The company, currently buried under the weight of a GBP1.1
billion debt, did not disclose the costs or savings from the
unit's wind up.


ENERGIS PLC: Sale Talks on German, Dutch Units in "Advance" Stage
-----------------------------------------------------------------

Troubled pan-European telecommunications services provider
Energis Plc is reportedly in advanced negotiations with buyers for
its units in Germany and The Netherlands, says Total Telecom.

The sale, which has been widely rumored for some time, is one
of the key measures being adopted by the company to weather a
financial turbulence triggered by a default last month.

The company did not identify the potential buyers, but rumors are
rife that U.K. rival Colt Telecom is allegedly one of them.  The
latter has refused to comment on the speculations, the report
says.

The online paper says Energis NV, formerly EnerTel, has a 1,200-
km fiber optic network linking all large Dutch towns and around
290 customers.  Energis claims the unit can offer services to 98%
of Dutch businesses.

The German unit Energis Ision, on the other hand, focuses on Web
hosting and Internet services and has an SDH fiber optic network
that spans some 5,677 km in length and a hosting space of around
3,568 square meters across Germany, and 32 POPs. It employed 850
staff as of August 2001, Total Telecom says.

In the six months ending June 30, 2001, Energis Ision had revenue
of EUR57.7 million of which 59% came from Web hosting. The
overall gross margin of the operations was 51.2%. The reported
EBITDA loss for the period was EUR10.5 million, the report says.

Energis defaulted on a GBP13.7 million-interest payment due March
15 on its GBP300 million 9.125% senior notes, which mature in
2010.

Observers say the company has to cut its debts significantly and
look for money to pay bond interest payment due on June 15 on its
GBP125 million 9.50% senior notes due June 15, 2009, and on its
US$200 million 9.75% senior notes due June 15, 2009.


ITV DIGITAL: League Wary Over Deloitte's Role in Contract Row
-------------------------------------------------------------

The English Football League plans to petition the High Court to
appoint a second administrator for ITV Digital, citing "conflict
of interest" that may arise due to Deloitte & Touche's close ties
with soccer clubs.

According to David Buchler, who is advising the League, Deloitte
acts as auditor and adviser to several soccer clubs.  In
addition, it also publishes an annual review of football finance,
considered as essential reading in the football industry and has
considerable influence in the sport.

Deloitte was appointed administrator of ITV Digital, which is now
embroiled in a legal dispute with the League, as the digital-TV
only wants to pay GBP50 million of the GBP178.5 million it still
owes the league in a three-year television rights contract.

"There are clear conflicts with its appointment as
administrator," an unnamed League insider told the Financial
Times.

But Deloitte denies there is any conflict.

"We wouldn't have taken on the work if we thought there was a
problem," the accounting firm told the paper.

The League is threatening to bring a GBP500 million suit against
individual directors of Carlton and Granada over their refusal to
honor ITV Digital's debts should negotiations over how much the
company should pay fail.


MARCONI PLC: Corporate Grade Now "CC" in S&P's Ratings Board
------------------------------------------------------------

Stricken communications equipment group Marconi Plc suffered
another downgrade on its credit rating, this time involving its
long-term corporate credit grade, says AFX News.

The rating, which is underscored by a negative outlook, was
lowered to "CC" from "B-" due to the risk that the company will
default on its debt obligations in the current financial year.
All ratings of the company are now out of CreditWatch, where they
were placed on March 22, the report says.

"Given Marconi's trend of cash consumption over the past few
quarters, reduced financial flexibility following the last round
of asset disposals, and strong dependence on bank support to
continue running its business, the company's short-term funding
position is deemed extremely weak," Standard & Poor's said.

Barely a month ago, Moody's Investors Service also sent Marconi's
ratings tumbling down five rungs from "B2" to "Ca" following the
termination of its talks with banks over additional financing.


QUILTER GLOBAL: Chances of Survival Fade With Shares Suspension
---------------------------------------------------------------

The horizon looks even bleaker for insolvent Quilter Global
Enhanced Income split capital investment trust after it sought
the suspension of its shares last week, says the Telegraph.

There is still no clear indication what this move would mean to
shareholders, but analysts believe the planned reconstruction of
the trust has become even more daunting, if not impossible, says
the report.

The trust is now talking with creditors, including banks, as the
gap between its mid-market valuation of GBP26 million and its
bank debt of GBP22.2 million narrows. It suspended its dividend
in September last year, the report says.

"The situation is not very encouraging because the company is
insolvent, so at the moment there are no assets attributable to
geared ordinary [shareholders] and assets attributable to
convertibles are very small," says Derek Larcombe of Morgan
Stanley Quilter, which manages the trust.

Mr. Larcombe told the paper the trust had been trying to switch
its convertible shares to income shares, which would rank as
equities and would solve the problem of being insolvent.

He says initially shareholders gave their nod to the
reconstruction, but later on took it back after learning that the
plan would involve an injection of GBP12.5 million into the fund.

The report says hopes of reconstructing the structure of the
trust is fast fading because its asset values had deteriorated
too far.

John Newlands, of stockbroker Williams de Broe, explained to the
Telegraph that the trust, which was launched in May 2000, was
"essentially a fund of funds investing principally in the splits
market, launched at a time when the FTSE was over 6,300 points".

"It is a geared capital structure investing in geared capital
structures. It is going to be difficult if not impossible to
reconstruct this. I think anything that is left would have to go
to the convertible holders. It is looking fairly black for them,"
he said.


STEPSTONE LIMITED: Liquidator to Sell Curricula Vitae Database
--------------------------------------------------------------

Liquidators of bankrupt online recruiter Stepstone Limited are
peddling the company's vast database of curricula vitae to raise
cash to pay creditors, reports the Telegraph.

The database, which comes in two CDs, contains 225,850 e-mail
addresses, 170,000 curricula vitae, nearly 4,000 customer details
and 1,211 customer account histories.

Company liquidator BDO Stoy Hayward says his firm has taken legal
advice regarding the sale and finds no hitch with the Data
Protection laws of Britain.

In an interview with the Telegraph, Reuben Cohen, of James Owen &
Co, which specializes in selling assets of insolvent companies,
said the database was for sale to anyone, including foreign
buyers. He added: "We have checked with our solicitors and they
say it is OK."

When asked if he had spoken to the Information Commissioner's
office, which oversees the Data Protection laws or if people
listed in the database had been informed, he said: "When people
joined Stepstone they agreed to allow their CVs to be distributed
to anyone. There is nothing wrong here."


THISTLE HOTELS: Shareholders Back GBP600 MM Asset Disposal
----------------------------------------------------------

Shareholders of Thistle Hotels Plc approved last week the sale of
31 regional and six London hotels to Gamma Four Ltd, AFX News
says.

Accordingly, the GBP600 million-worth sale received unanimous
backing during the extraordinary general meeting Thursday.

In its March 15 issue, the Troubled Company Reporter-Europe said
the sale was meant to gain operating flexibility, amid the slump
in the tourism industry caused by the foot-and-mouth scare and
the global economic slowdown triggered by the September 11
incident.

The sale leaves Thistle with only 16 out of its 56 hotels in the
United Kingdom.  The six London hotels involved in the deal
include Thistle Lancaster Gate, Thistle Bloomsbury, Hendon Hall,
Cannizaro House, Thistle Kensington Park and Thistle Kensington
Palace.

All are four-star rated hotels and have a combined capacity of
1,268 rooms.

                                  ***********

      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.


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