/raid1/www/Hosts/bankrupt/TCREUR_Public/020416.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

             Tuesday, April 16, 2002, Vol. 3, No. 74


                            Headlines

* G E R M A N Y *

CEYONIQ AG: Software Management Provider Files for Insolvency
CEYONIQ AG: Company Profile
DEUTSCHE TELEKOM: Jan-Feb Postings Show Increase in Debt
KIRCHGRUPPE: Hidden Obligations to Compromise Rescue Efforts
MOBILCOM AG: France Telecom, Banks to Revise Takeover Agreement

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

KPN NV: CEO Belies Expansion Plans in German Mobile Phone Market
UNITED PAN-EUROPE: 2001 Losses Higher, Andersen Doubts Viability

* P O L A N D *

ELEKTRIM SA: British Bidders Cry Foul, Want New Assessment

* S W E D E N *

LUCENT TECHNOLOGIES: To Cut 5,000 More Jobs Than Earlier Planned

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

ABB LTD: Finance Unit Could End up Either With GE or Siemens
DIGIPLEX: Internet Hotel Operator Files for Receivership

* U N I T E D   K I N G D O M *

BEDE PLC: FY2001 Sales Increase by 35%, Expects 2002 Sales Rise
BEDE PLC: Company Profile
BRITANNIC PLC: Royal London Near Deal With Troubled Rival
ENERGIS PLC: CSFB Rescue Plans Spur Takeover Speculations
EQUITABLE LIFE: Absence of Bonus Notice Makes Investors Uneasy
ITV DIGITAL: Buyers Start Positioning Themselves for Key Assets
ITV DIGITAL: League Demands End to ITV's Digital Tax Break
MARCONI PLC: Railtrack to Collect GBP20 Million Easynet Option
MG ROVER: To Report Improved Loss Figures for 2001
NTL INCORPORATED: Debt-for-Equity Deal With Bondholders Sealed
RAILTRACK PLC: Gov't Writes Off GBP 150MM Tax on Payout Package
RAILTRACK GROUP: Could Be Sued Next Month for Paddington Crash


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


CEYONIQ AG: Software Management Provider Files for Insolvency
-------------------------------------------------------------

Ceyoniq AG, formerly CE Computer Equipment AG, initiated
receivership at the proper local court in Germany on April 12,
2002, a company statement said.

Advocat Dr. Hartmut Stange, Bielefeld was appointed as
preliminary receiver.

CEYONIQ, Inc., a wholly owned subsidiary of CEYONIQ AG located in
Herndon, Virginia and formed in January 2001, will not be
affected by the insolvency announcement.

David E. MacWhorter, president and CEO of CEYONIQ, Inc. with
reference to the insolvency announcement of its German parent
company stated, "We regret that we've been unable to achieve all
of the potential offered by the business combination of the
German and American operations. The number of German companies
filing for insolvency soared last year with more than 32,000
firms affected. Their economy has already been hit by a series of
high-profile companies that have filed for insolvency this year."


CEYONIQ AG: Company Profile
---------------------------  

Name:    Ceyoniq ag
         Winterstrasse 49
         D-33649 Bielefeld, Germany     

Phone:   +49-521-93-18-01
Fax:     +49-521-93-18-111
       
Website: http://www.us.ceyoniq.com/

SIC:         Software Developer and Consultancy Services
Employees:   967
Net Loss:    EUR90.4 million
Total Assets: EUR274.9 million
Total Liabilities: EUR117.0 million US$103.1 million

Type of Business:  Ceyonig AG provides innovative content life
cycle management and solutions integration services on a global
scale.

Trigger Event:  In January 2001, Ceyoniq AG acquired TREEV Inc.
(now Ceyoniq Inc., USA) in order to expand its sales coverage in
the U.S.A.

Ceyoniq Inc., USA and Insiders Information Management AG,
Kaiserslautern (another subsidiary), were reduced by one-time
write-downs in the amount of EUR60.0 million.

Chairman: Uwe Swientek
Chief Financial Officer: Thomas Wenzke
Auditors:  PriceWaterhouseCoopers

No. of Shares in Issue:  25.2 million


DEUTSCHE TELEKOM: Jan-Feb Postings Show Increase in Debt
--------------------------------------------------------

Deutsche Telekom AG's net debt level rose to EUR63.1 billion from
EUR62.1 billion by February 28 this year, AFX News sources say.

The rise in the first two months was attributed to a payment to
the Federal Pension service. Aside from that, payment delays at
its US unit Voicestream further contributed to this effect.

According to the report, the German telecom group's EBITDA
climbed 4% to EUR2.43 billion, the Financial Times Deutschland
said citing an internal document of the company.

The German telecom operator intends to cut its debt levels to
below EUR50 billion by 2003. The figures reported excludes the
EUR4.6 billion payment for the purchase of DaimlerChrylser AG's
stake in services group Debis, which was announced in January.

According to the report, Deutsche Telekom's sales in January and
February increased 16% at EUR8.38 billion, while its net loss
rose to EUR1.01 billion from EUR0.33 billion due to UMTS license-
related write-downs.


KIRCHGRUPPE: Hidden Obligations to Compromise Rescue Efforts
------------------------------------------------------------

Speculations that the Kirch media empire has many undeclared
liabilities have been proven correct recently with the discovery
of a EUR150-million-plus deal involving Leo Kirch's son.

According to the Financial Times, banks and minority investors
were reportedly appalled over the discovery that Mr. Kirch
provided Thomas Kirch money to fund the growth of his main
investments.

The discovery is likely to compromise the rescue efforts of banks
and minority shareholders.  Already, they are entertaining doubts
of whether the proposed EUR800 million capital increase would be
enough to cover other hidden liabilities.

The paper says it is not clear what will become of the rescue
negotiations.  It is certain, however, that the new development
has caused it to take several steps backwards.

This is not the first disappointment for KirchMedia shareholders,
though.  The news that Thomas Haffa, former chairman of EMTV, had
a EUR90 million put option allowing him to sell his remaining
shares in EMTV to KirchMedia this summer also shocked
shareholders and creditors last Easter.


MOBILCOM AG: France Telecom, Banks to Revise Takeover Agreement
---------------------------------------------------------------

France Telecom is reportedly re-drafting its deal with creditor
banks of MobilCom, this time in preparation for a full takeover
bid for the German subsidiary, reports Reuters.

The change in plans is allegedly due to rumors that German
regulators will invalidate France Telecom's previous agreement
with Deutsche Bank, ABN Amro, Societe Generale and Merrill Lynch.

The original plan called for the banks to buy the stake of
MobilCom founder and CEO Gerhard Schmid on behalf of France
Telecom.  The French telco will then buy the stakes from the
banks at a later date.

The arrangement was conceived in order for France Telecom to get
around a law that forces entities holding more than 30% of a
German company to table a bid for the entire business.  The
French company can't afford to assume MobilCom's debts at the
moment as it is currently under pressure to slash its own debts.

France Telecom currently controls 28.5% of MobilCom.  It arranged
the deal with the banks to get rid of Mr. Schmid, with whom the
French telco has a long-standing disagreement over strategies and
policies.  The CEO is willing to sell his entire 49% stake in the
firm.

Citing an unnamed source, Reuters says the new plan will still
involve the banks, which will now put a full tender offer.  
France Telecom, however, must buy out the shares after two or
three years.

A full takeover, based on the value of the Schmid buyout, would
turn the plan into a one billion euro (US$880 million) bid for
MobilCom, the report says.  

There's still no official word from France Telecom and the banks
confirming the modification on their plan.


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


KPN NV: CEO Belies Expansion Plans in German Mobile Phone Market
----------------------------------------------------------------

Restructuring Dutch telecom operator KPN NV won't be raising any
outside financing this year, dashing the firm's hopes of a credit
rating upgrade next year.

CEO Ad Scheepbouwer told AFX News recently that only a takeover
bid would force the company to raise cash from partners.  The
company has no plans of acquiring any company this year, setting
its sights instead on reducing debts and improving cash flow.

Mr. Scheepbouwer expects a better rating from Standard & Poor's
and Moody's next year as a result of this policy.  The two
ratings agencies currently find the company's business "stable."

The chief's pronouncement contradicts earlier reports that the
company is looking to buy a rival in the German mobile phone
market in order to secure its hold on third place.  

According to the Financial Times last week, KPN allegedly wants
to increase its 13-14% stake in the market to 25%.  There are
currently six players in the German market.


UNITED PAN-EUROPE: 2001 Losses Higher, Andersen Doubts Viability
----------------------------------------------------------------

Dutch cable-TV operator United Pan-Europe Communications reported
Friday a net loss of EUR4.4 billion in 2001, leading its auditor
to doubt "its ability to continue as a going concern."

The Financial Times says Andersen, in a 10-K filing with the US
Securities and Exchange Commission, pointed out that the "net
capital deficiency" of the company has cast doubts on its
viability.

The company's consolidated balance sheet showed liabilities
rising to EUR11.16 billion at December 31 2001, from EUR9.62
billion a year earlier. Cash and equivalents fell by almost a
half from EUR1.69 billion to EUR855 million, the paper says.

The net loss for 2001 was also more than double the EUR2 billion
deficit reported in 2000.  UPC explained that the difference was
due to a one-time EUR1.5 billion write-down of its fixed assets,
based on a re-evaluation undertaken as part of a previously
announced strategic review.

Nonetheless, the company said that it was in "constructive
discussion with stakeholders" about a re-capitalization.


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


ELEKTRIM SA: British Bidders Cry Foul, Want New Assessment
----------------------------------------------------------

Elliott Advisors and Centaurus Alpha Master Fund are calling for
an independent body to look into the bids for Elektrim's mobile
telephony assets after the company turned down its offer.

According to Reuters, the two U.K.-based funds are shocked that
the heavily indebted company favored the much lower bid of its
rival, which is at least GBP50 million less.

"Elliott and Centaurus were shocked to learn that Elektrim's
management intends to pursue the reported (rival) bid by BRE
Bank, one of Elektrim's controlling shareholders," a joint
statement released by the two firms read.

The two British funds offered last week to buy the company's
mobile phone stakes for GBP450 million.  The bid rivals that of
BRE Bank, which also last week wrestled control of Elektrim's
supervisory board in cooperation with Vivendi Universal.

The two allies in the board now are reportedly dead set on
awarding the telco assets to a BRE-led group.


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


LUCENT TECHNOLOGIES: To Cut 5,000 More Jobs Than Earlier Planned
----------------------------------------------------------------
    
Heavily indebted telecom equipment maker Lucent Technologies will
cut 5,000 more jobs than earlier projected by the end of June,
reports Reuters.

Citing an unnamed insider, the news outfit says the company is
now eyeing a 50,000 - not 55,000 - workforce by mid-year.  

"It's not like a whole new program of restructuring. It's a lot
of little snips that will get the company (staff) to more like
50,000 by the end of June," the source told Reuters.

But analysts believe the cut is not enough.  They say 10,000 to
15,000 more redundancies are needed for the company to reach the
breakeven platform.

"We've been saying and continue to say the company needs to take
down more staffing levels," Salomon Smith Barney analyst Alex
Henderson told Reuters. "I don't think paring 5,000 people is
enough."

He said from the 55,000-job level, Lucent needs to cut another
10,000 to 15,000 positions, and the additional 5,000 would not be
enough to get Lucent to the breakeven point.

The company had 62,000 employees at the end of last year, and had
previously said it planned to reduce that count to under 55,000
by the end of June.


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


ABB LTD: Finance Unit Could End up Either With GE or Siemens
------------------------------------------------------------

The race to get ABB Ltd.'s financial services unit is down to two
contenders -- General Electric and Siemens.

Citing people involved in the negotiations, the Financial Times
says GE Capital and Siemens are the only ones poised to take home
the division, which analysts say is worth US$450 million.

GE Capital has not denied looking for acquisition opportunities,
especially one that will increase its leasing portfolio in
Europe.  

Siemens' financial services arm, on the other hand, reported
assets of EUR9 billion at the end of last year, giving it enough
cash to assemble a viable bid.

The ABB division provides debt financing in the form of leasing
and lending to ABB and third-party customers.  At an analyst
presentation last year, ABB said the unit had a loan and lease
portfolio of US$4.3 billion and debts of US$3.3 billion by the
end of September.

Despite its seemingly solid financial framework, the division
remains a headache, as it is the biggest user of ABB's short-term
liquidity.  The Swiss engineering firm hopes to sell the business
by the third quarter of this year.

The company recently re-negotiated a US$3 billion credit facility
with banks and promised to reduce its US$4.1 billion debt by at
least US$1.5 billion through asset disposals.


DIGIPLEX: Internet Hotel Operator Files for Receivership
--------------------------------------------------------

The pan-European Internet hotel operator formerly based in Zurich
is poised to file for receivership, online news group Private
Equity reported last week.

DigiPlex is registered in Luxembourg but has its main office in
London. Similar plans are expected to follow shortly in Digiplex
units in other countries.

DigiPlex is facing a cash crisis after local reports said it has
used up majority of its finances.

Nick Edwards and Nick Dargan of professional services firm
Deloitte and Touche have been appointed as receivers in the UK,
the Financial Times reports.

Over the past two years, the firm has received over EUR380
million in funding from various private equity backers including
The Carlyle Group, Goldman Sachs and Deutsche Bank.

Digiplex received its recent most recent funding in May last year
with EUR55 million in third round financing from The Carlyle
Group and Providence Equity Partners.

The Internet hotel operator's crisis is attributed to the
company's failure to secure funding in the midst of a general
downturn in the Internet hosting sector at the height of the
technological boom.

Geir Ramleth, founder of U.S. Internet service provider Genuity,
also founded Digiplex in 1999 intending to establish to roll-out
internet co-location facilities in 22 cities around Europe.
However, the company was only able to establish operations in
London, Frankfurt, Geneva, Milan, Munich and Oslo.

Carlyle is understood to have a 32.5% stake in Digiplex, followed
by Providence Equity Partners with under 30% in ownership.


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


BEDE PLC: FY2001 Sales Increase by 35%, Expects 2002 Sales Rise
---------------------------------------------------------------

Bede PLC, manufacturer of specialist x-ray instruments and
associated software, records a 35% increase in sales for the year
to December to GBP6.584 million from GBP4.868 million a year
earlier, AFX News reports.

The company further expects a significant increase in sales
during 2002. However, the said sales would increase only if the
current signs of an economic recovery continue so that the
prospect backlog may be converted to confirmed orders.

Bede posted a pretax loss of GBP429,000 while its loss per share
widened to 1.2 pence from 1.1 pence. No dividend was declared
from 1997 to the year 2001.

Bede's confirmed order booking of GBP1.8 million at the end of
2001 stands lesser compared with GBP2.5 million at the end of
2000. This confirmed GBP1.8 million booking excludes 3 Fab300
tool orders with value of about US$2.7 million.


BEDE PLC: Company Profile
-------------------------  

Name:       Bede plc
            Bowburn South Industrial Estate
            Bowburn
            Co Durham
            DH6 5AD, United Kingdom

Phone:      (0191) 332 4700
Fax:        (0191) 332 4801
Email :     info@bede.co.uk
Website:    http://www.bede.co.uk/

SIC:        X-ray Instruments Manufacturer
Employees:  46  
Net Loss:   GBP 400,000/US$ 600,000 (12-31/01)   
Total Assets: GBP16.8 million/US$24.1 million (12-31-00)  
Total Liabilities: GBP1.7 million/US$2.4 million (12-31-00)

Type of Business:  Bede plc is engaged in the designs and
manufacture of specialist X-ray instruments and associated
software used to characterize the nature and quality of an
advanced material.

Trigger Event: The general economic downturn and severe recession
in the semiconductor market contributed to the company's poor
performance. The company did not grant dividends since 1997.

In January, the company issued a profit warning that earnings for
2001 will fall slightly short of market expectations. For the
year to December 31, 2000, Bede posted a pre-tax loss of
GBP127,000.

Chief Executive Officer: Dr N Loxley  
Finance Director: D J Hall

Bankers:  Barclays Bank PLC
Financial Advisers:  Williams de Broe PLC
Stockbrokers:  Williams de Broe PLC
Auditors:  Grant Thornton
Law Firms:  Ward Hadaway
Financial PR Advisers: Buchanan Communications  

No. of Shares in Issue: 28.9 million  


BRITANNIC PLC: Royal London Near Deal With Troubled Rival
---------------------------------------------------------

Britain's second-largest mutual life insurer Royal London is
going to acquire the debt-ridden Britannic Plc in a sale that
could fetch GBP1.9 billion, says Times Online.

The paper says Royal and Britannic have been in talks for over
two weeks now and are reportedly on the verge of sealing a deal.  
The discussion, accordingly, ensued after Britannic Chairman
Harold Cottam put up the "for sale" sign five weeks ago.

Bankers, interviewed by the Telegraph, say the cost of combining
operations would be around GBP100 million to GBP150 million.  
Analysts say Royal is a natural bidder because its market
coincides with that of Britannic -- the middle- to lower-income
strata.  In addition, both also use the same distribution
methods.

The Times Online says, aside from Royal, Aegon, Allianz and GE
Capital are also believed to be eyeing Britannic.  The Telegraph
says the main attraction of the troubled insurer is Britannic
Asset Management, the highly rated fund manager.

Britannic recently reported pre-tax profits of GBP145.4 million
in 2001, down by GBP30 million from a year ago, Times Online
says.

The company sells life and health insurance, pension plans
(including the individual savings accounts, or ISAs that replaced
the failed personal equity plans, or PEPs) and other financial
services products to individuals in the U.K.


ENERGIS PLC: CSFB Rescue Plans Spur Takeover Speculations
---------------------------------------------------------

Credit Suisse First Boston appears headed to take home Energis
Plc after it was learned over the weekend that it has launched a
two-pronged approach to rescue the stricken telecommunications
group.

The U.S. bank, a substantial bondholder, had earlier called for a
debt-for-equity swap in which it would absorb the full cost of
the equity injection needed to resuscitate the company.  

On Sunday, however, the paper also learned that the bank's
private equity arm is assembling a takeover bid.  Observers
believe the U.K. business of Energis alone could fetch GBP1
billion.  

Energis owes banks about GBP600 million and bondholders GBP565
million.  

The paper says the bank's only challengers to its bid are Apax
Partners, Permira, Kohlberg Kravis Roberts, and Carlyle Group.


EQUITABLE LIFE: Absence of Bonus Notice Makes Investors Uneasy
--------------------------------------------------------------

Advisers of Equitable Life policyholders recently rapped the
society for failing to announce this year's with-profits bonus
rates, which have fueled speculation that it won't pay at all.

In an interview with the Telegraph, Philip Rose said many
customers are worried over the absence of any notice regarding
the payout, which is usually released at the end of March.  Mr.
Rose is CEO of retirement specialist Wentworth Rose.

"The society is refusing to make a declaration this year, perhaps
hoping it will slip by unnoticed. Many policyholders are viewing
this as a failure to act transparently and keep them informed.
They are worried it is a sign it is unable to pay out anything
from its with-profits fund at all.

"It is possible Equitable Life will declare it is paying 0pc
annual bonuses, which would be appalling and is counter to the
whole concept of with-profits funds," Mr. Rose told the
Telegraph.

An Equitable spokesman, however, clarified that the announcement
will be made in June this year.

"It has been a rather exceptional year for Equitable Life and
that is why the announcement has been pushed back," the spokesman
said.

The company will hold an annual meeting on May 27.


ITV DIGITAL: Buyers Start Positioning Themselves for Key Assets
---------------------------------------------------------------

Potential buyers have begun lining up for some of ITV Digital's
key assets, as the debt-laden pay-TV nears liquidation, reports
The Observer.

Accordingly, the BBC is eyeing the firm's broadcasting rights on
the Football League playoffs and the Worthington Cup final, while
Channel 5 is reportedly interested in the Nationwide League
rights.  BSkyB, on the other hand, is allegedly poised to snatch
ITV's subscriber database and call center.

A Channel 5 spokesman confirmed that the company is "looking at
the situation" at ITV, but refused to say whether an offer has
already been made to Deloitte & Touche, ITV's administrator.

Administrator Nick Dargon was due in court yesterday to give an
update on the negotiations with the Football League.  As of press
time, no word about what transpired during the hearing has come
out.

Earlier reports, however, suggested that Mr. Dargon had only two
options -- to keep the company going or liquidate it.  The former
would entail additional funding from Carlton and Granada, ITV's
co-owners.  Both have previously ruled out more cash aid.


ITV DIGITAL: League Demands End to ITV's Digital Tax Break
----------------------------------------------------------

The Football League will work to have the "tax exemptions"
Carlton and Granada presently enjoy suspended they shut down ITV
Digital and fail to honor their broadcasting contract.

According to the Independent, the co-owners of the debt-laden
pay-TV could end up losing more than the GBP180 million it still
owes the League on the three-year contract.  

According to estimates from the broker Numis, Granada stands to
make GBP227 million between this year and the end of 2004 from
the tax break, while Carlton is in line for a GBP148 million
bonus over the same time.

The tax exemption is given to broadcasters whose channels are
available in digital households, whether or not the picture is
received through their own distribution network.  ITV is
available on BSkyB; hence, the network makes money for every
household that takes Sky.

"We want the Government to pressure Carlton and Granada to meet
this contract. We're not asking for a government bailout. We say
that the digital dividend should be taken away from ITV if they
don't honor this contract and close the service," a League
insider told the paper.

Last week, the League rejected the GBP60 million improved offer
of ITV Digital.  Administrator Deloitte & Touche appeared before
the High Court yesterday to present an update on the row with the
League, and may have perhaps suggested the liquidation of the
company.

Details on the hearing were unavailable as of press time.


MARCONI PLC: Railtrack to Collect GBP20 Million Easynet Option
--------------------------------------------------------------

Marconi Plc faces yet another blow on its finances, as Railtrack
Group plans to sue it for failing to honor a "put option" worth
GBP20 million, says Ananova.

The option is connected to Railtrack's 3% holdings in Easynet, an
Internet service provider where Marconi holds the 72% controlling
stake.  The option was exercised in February.

The report says Marconi refused to honor the option because the
stakes are now worth just GBP3 million.

A Railtrack spokesperson, however, said that the company is still
talking with Marconi, hoping "to resolve this issue amicably."

Her Marconi counterpart, however, said the troubled telecom
equipment maker "will file a defense and counter suit against
Railtrack over a separate issue."

Marconi is currently negotiating some GBP3 billion worth of debts
with creditors.  The cash-strapped firm had also recently raised
GBP1.5 billion from asset disposals.


MG ROVER: To Report Improved Loss Figures for 2001
---------------------------------------------------

Carmaker MG Rover will report an improved full-year result in
2001 -- in terms of losses, that is.

According to the Financial Times, the company will report losses
of less than US$170 million for 2001, a "sharp improvement on the
US$254 million deficit reported for 2000."  The paper did not
mention whether the company will turn in a profit or not.

The report adds that the company also recently completed a new
credit line worth GBP73 million, which it could use to finance
the development of its internal fleet cars and demonstrator
models.

The paper says the new business plan of the company helped
persuade lenders at HBOS and First National Motor Finances, part
of Abbey National group, to sign the new financing schemes.

BMW abandoned the company in March 2000 with huge debts.


NTL INCORPORATED: Debt-for-Equity Deal With Bondholders Sealed
--------------------------------------------------------------

NTL Incorporated and its bondholders have reportedly reached a
deal regarding the write-off of some US$11 billion worth of bonds
in exchange for 95% equity of the restructured company.

According to Bloomberg, an announcement about the deal could be
made as early as Wednesday.  The deal has been rumored for weeks
now, although no official word from the company has come out
confirming it.

Insiders told the news agency that the agreement necessitates the
filing for Chapter 11 bankruptcy in the United States.  The
petition is needed to protect the company from "rogue" creditors
that could force it into liquidation.

The company has racked up US$18 billion in debts due to the
buying spree of founder and CEO Barclay Knapp and the failure of
its TV, phone and Internet services to meet company revenue and
demand expectations.  NTL reported a US$12.8 billion loss in the
quarter ended Dec. 31 as it wrote down the value of assets by
US$11.6 billion.

NTL was the only U.K. pay-TV supplier to lose customers last
year, shedding 2.1% of its cable-TV subscribers, even as the
market increased 5.8% to 10.5 million, the news outfit says.

Bondholders that reportedly negotiated the debt-equity exchange
include Angelo, Gordon & Co., Franklin Resources Inc., Huff & Co.
and Appaloosa Investment Ltd.  These bondholders were reportedly
behind the company's deliberate default on a $96 million interest
payment on April 1.  UBS Warburg is advising them.


RAILTRACK PLC: Gov't Writes Off GBP 150MM Tax on Payout Package
---------------------------------------------------------------

The government is waiving some GBP150 million in taxes due on the
GBP500 million-package that will allow Railtrack Plc to exit
administration ahead of schedule, says The Observer.

The move is seen as an additional sweetener so that small
shareholders will call off a planned lawsuit against Transport
Minister Stephen Byers, the paper says.

Normally, compensation packages like this would be treated as a
gift and therefore subject to a 30% tax.  But with the waiver,
shareholders can now receive 250 pence for each of their share
tax-free.

It is expected that many members of parliament will deplore the
plan.  Earlier, several MPs criticized Mr. Byers for deciding to
use public money to rescue the train and tracks firm from
administration.  Mr. Byers had promise a solution without public
fund intervention.

As it turned out, however, Network Rail, the government-backed
bidder for the company, has offered a half-billion-pound
compensation package of which GBP300 million will come from the
treasury.

Meanwhile, the report says the government is set to invite UBS
Warburg, West LB, Barclays Capital and Royal Bank of Scotland
this week to bid to be part of a syndicate that will extend a
GBP9 billion bridging loan to finance Network Rail's plans and
get Railtrack out of administration quickly.  The Strategic Rail
Authority will guarantee the credit.


RAILTRACK GROUP: Could Be Sued Next Month for Paddington Crash
--------------------------------------------------------------

Railtrack Group could be facing a multi-million suit in a month's
time in relation to the Paddington rail disaster in October 1999,
reports The Observer.

The Crown Prosecution Service is currently considering the
opinion of law professor Celia Wells of Cardiff University,
suggesting that the company is liable for corporate manslaughter.

According to Ms. Wells, the Prosecution Service misinterpreted
key elements of the corporate manslaughter law, when it decided
to drop the charges against Railtrack.

The paper says the Prosecution Service confirmed over the weekend
that it is reconsidering its decision and will come out with an
assessment in a month's time.

The move follows intense pressure from families of the victims
who earlier threatened to seek a judicial review on the decision.  
The accident killed 31 individuals and injured 500 others.

The Paddington crash was caused by an inexperienced driver
failing to see a red signal at a complicated crossing in glaring
sunlight, the report says.

Signal 109 had been passed at danger eight times in the six years
before the crash.  An inquiry detailed a catalogue of mistakes
and oversights leading to the disaster, and singled out Railtrack
as the main culprit for its repeated failure to improve
visibility of signal 109, the red light.

                                    ***********

       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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