/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/020516.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, May 16, 2002, Vol. 3, No. 96 Headlines ********* * F R A N C E * ALCATEL: Worsening Slump in Telecom Sector Causes Moody's Review * G E R M A N Y * BANKGESELLSCHAFT BERLIN: Sale of Czech Bank Holding Progressing DEUTSCHE TELEKOM: Chancellor Pleads Support for Maligned Chief DEUTSCHE TELEKOM: To Divest Holdings in Southeast Asia GERLING KONZERN: Plans to Save EUR70 Million in Rationalization GONTARD & METALLBANK: Gives Notice of Over-indebtedness KINOWELT MEDIEN: VCL Film Willing to Help, But Not Thru Takeover KIRGHRUPPE: Deutsche Bank to Sell Springer Stake This Year MOBILCOM AG: Dispute With France Telecom Tagged for Huge Losses TAURUS HOLDING: To Declare Insolvency Soon Due to BSkyB Cash Call TAURUS HOLDING: Sells 23% Stake in Constantin Film to Highlight * I R E L A N D * AIB: Allotment of Shares in Lieu of Cash Dividend DATALEX PLC: Announces Q1 Results Ending March 31, 2002 * N E T H E R L A N D S * VERSATEL TELECOM: Announces Adjustment to Exchange Ratio for ADS * N O R W A Y * KVAERNER ASA: Leading Shareholders Propose Flatgard as Director * S W E D E N * LM ERICSSON: Rights Not Underwritten, Could Be Sold at a Discount * U N I T E D K I N G D O M * BIG FOOD: Notification of Shareholders' Interests CENES PHARMACEUTICALS: Updates on Progress of Product Trial CENES PHARMACEUTICALS: Potential Treatment for Schizophrenia COLT TELECOM: Notification of Cancellation of Certain Notes COOKSON GROUP: Notification of Major Interests in Shares EIDOS PLC: Releases Twelve-Month Results Ending March 31, 2002 NTL INCORPORATED: 'Vultures' Own Juicy DIP Loan in Rare Move RAILTRACK PLC: Response to Health and Safety Exec Probe VIATEL INC.: To Focus on European Unit After Exit From Chapter 11 =========== F R A N C E =========== ALCATEL: Worsening Slump in Telecom Sector Causes Moody's Review ---------------------------------------------------------------- Indications that giant European telecom operators will cut further capital expenditures have forced Moody's Investors Service to put Alcatel Tuesday on review for possible downgrade. Affected ratings are the French telecom equipment maker's Baa2 and Prime-2 ratings for long- and short-term debt, respectively. Approximately EUR5.7 billion of debt securities are covered by the review. "The rating agency will focus on the potential depth and length of the current weakness in the telecom equipment markets as derived from the investment plans of the operators and the scale and progress of Alcatel's cost saving measures relative to its projected revenue profile," Moody's said in explaining the review coverage. The company noted the company's earlier success during the initial dip in orders, managing to hold on to more than EUR4.6 billion cash and equivalents. "In its analysis, Moody's will seek to assess the future pattern of cash usage until Alcatel reaches cash flow break-even and the extent of non-operating sources of cash available to maintain its financial flexibility," the ratings agency said in a statement. Based in Paris, France, Alcatel had sales of EUR25 billion in fiscal year 2001 and is one of the world's leaders in providing advanced solutions for telecommunication systems and equipment. For more information, contact: Frankfurt Juergen Berblinger Managing Director European Corporates Moody's Deutschland GmbH +49 69 707 30 700 Frankfurt Wolfgang Draack Senior Vice President European Corporates Moody's Deutschland GmbH +49 69 707 30 700 ============= G E R M A N Y ============= BANKGESELLSCHAFT BERLIN: Sale of Czech Bank Holding Progressing --------------------------------------------------------------- The sale of Bankgesellschaft Berlin's 85.15% stake in Zivnostenska, the oldest bank in Czech Republic, is reportedly gaining momentum and has attracted some of the industry's big wigs. According to the Prague Business Journal, Italian banks Sanpaolo- IMI and Unicredito Italiano, HVB Bank, GE Capital Bank and Volksbank are among those taking interest in the stake. It is uncertain, though, whether Zivnostenska will be sold separately from the German parent, which is itself on the block, the paper says. Zivnostenska is a medium-sized retail and corporate bank. DEUTSCHE TELEKOM: Chancellor Pleads Support for Maligned Chief -------------------------------------------------------------- Embattled Deutsche Telekom CEO Ron Sommer has gained an ally in German Chancellor Gerhard Schroeder, who on Tuesday said he still backs the man who started the shareholder culture boom in the country. At present, Mr. Sommer is the most hated man in Germany due to the poor performance of Deutsche Telekom shares. It is the most widely held stocks in Germany, says Reuters. "One must have the courage to resist the concerns of the small shareholders and to tell them: 'Friends, there is no reason to replace this man, he has worked well'," the chancellor, who is seeking a fresh mandate, was quoted by Reuters as saying. The company's stocks have lost 20% over the past month and dived to an all-time low of EUR12.02 Monday. It has since rebounded on improving sentiment towards the whole sector. Speculations have been going on that Mr. Sommer is on the way out, given the trend in the industry where many top executives have already stepped down. There are talks that the German government is also getting impatient with the chief, especially with the slow progress of the firm's debt-reduction plan. But the chancellor's remarks completely debunked the speculations. Mr. Schroeder said he is confident the company will weather the storm. "I plead for fairness and a realistic valuation for Telekom. In an international comparison, Telekom is well positioned and has the best chance to get out of these problems," the chancellor said. Mr. Sommer is credited for the equity boom in Germany, which spread like wildfire after he took over the former state monopoly and floated it in 1996. He is well regarded for his effort to make the company more cost-conscious and service-oriented. Oddly, the company is currently buried under a EUR67 billion debt-pile. DEUTSCHE TELEKOM: To Divest Holdings in Southeast Asia ------------------------------------------------------ Debt-laden Deutsche Telekom will step back from its exposure in the Southeast Asian telecom sector to focus in core European and U.S. markets, says sources close to the German incumbent. According to Reuters, the telecom giant holds 25% in Indonesia's second largest mobile phone group PT Satelindo, 16% in Malaysia's TRI Celcom and 22.1% in Globe Telecom Inc. in the Philippines. "The mobile phone business in Southeast Asia is not a central part of Telekom's activities," a person familiar with the situation told the news outfit. The stakes will be sold within the medium term. GERLING KONZERN: Plans to Save EUR70 Million in Rationalization --------------------------------------------------------------- Struggling insurance group Gerling Konzern will implement a series of rationalization measures to prepare itself for a new major shareholder and turn around the business that had been badly hit by claims related to the terrorist attacks last year. The company announced Tuesday that it had already reached agreement with its work council to cut 1,250 jobs over the next two years, says Handelsblatt. It is expected that the industrial insurance and reinsurance units of the group will suffer the biggest cutbacks, as it accounted for the severest loss, with ratios of 122% and 112%, respectively in 2000. With a record loss of EUR500 million, the reinsurance unit is responsible for Gerling's current crisis, says the German daily. Gerling will also sell its subsidiary in South Africa and close representations in Mexico, Korea and Taiwan. It will focus more its industrial insurance division on European customers. In sum, the company hopes to save EUR70 million from these measures. Alongside Allianz AG, Gerling is Germany's leading industrial insurer. Its two shareholders are Rolf Gerling with a stake of 65.5% and Deutsche Bank with 34.5%. GONTARD & METALLBANK: Gives Notice of Over-indebtedness ------------------------------------------------------- Gontard & MetallBank AG gave notice Tuesday of over-indebtedness, pursuant to section 46b of the German Banking Act to the German Federal Financial Services Supervisory Authority (Bundesanstalt fur Finanzdienstleistungsaufsicht /BAFin). In line with the provisions of the German Banking Act, the BAFin will examine whether to initiate insolvency proceedings and, if necessary, file an application for such proceedings with the Frankfurt District Court (Amtsgericht Frankfurt am Main). Following an ad-hoc disclosure published on May 3, 2002, in which Gontard & MetallBank AG had announced that it would issue a notice pursuant to section 92 (1) of the German Stock Corporation Act (giving notice of losses amounting to 50% of the issued share capital), on May 6, 2002 the BAFin took measures pursuant to section 46a (1) of the German Banking Act by issuing a temporary ban on sales and payments by the bank. Although this moratorium was designed to allow Gontard & MetallBank AG to continue the restructuring process it had embarked upon, with a view to restoring orderly and profitable business operations, it had material negative consequences for the bank. These included forced closeouts as a result of the bank's inability to settle pending foreign exchange forward transactions, involving significant risks, and the shift of major securities deposit account holdings to third-party banks. At the same time, the bank had to bear the on-going costs of its operations. The moratorium also prompted two investors, who had indicated a serious interest in acquiring a majority stake in Gontard & MetallBank AG, to abort the negotiations. Gontard & MetallBank AG is a member of the Joint Fund for Securing Customer Deposits (Einlagensicherungsfonds) operated by the Association of German Banks, and of the German Banks Compensation Fund (Entschadigungseinrichtung deutscher Banken GmbH). Together, these institutions protect deposits up to an aggregate amount of EUR 12.09 million per depositor. Aggregate customer deposits with Gontard & MetallBank AG amount to approx. EUR 800 million. Contact: Gontard & MetallBank AG - Investor Relations - Nicolas Lissner - Phone: +49 (69) 71908-210 - E-mail: info@gmag.de http://www.Gontard-MetallBank.com. KINOWELT MEDIEN: VCL Film Willing to Help, But Not Thru Takeover ---------------------------------------------------------------- Munich-based film licensing group Kinowelt has found an ally in VCL Film + Medien, which recently expressed interest in helping the company conclude its insolvency procedure. It is not yet clear what form of help VCL will extend Kinowelt, but it certainly won't involve a takeover, says Borsen-Zeitung/FT Information Accordingly, VCL finds the troubled rival attractive due to its strong relationship with a bank, which could secure its finances. Rescue options could involve a merger between VCL, Kinowelt, and a third partner, the report says. VCL reported a deficit of EUR72.5 million last year, but is poised to have a positive EBIT this year. Also slumping, VCL believes it has already hit bottom, as shown by the reduction of its bank liabilities, now only EUR7 million. KIRGHRUPPE: Deutsche Bank to Sell Springer Stake This Year ---------------------------------------------------------- Deutsche Bank is not keen on waiting another two to three years before getting back its money and will sell the 40% stake of Kirch in publishing giant Axel Springer within the year. According to Handelsblatt, sources close to the bank say that a secondary placement with institutional and private investors will be made in the second half. The bank is just waiting for Springer's half-year figures before making the move. Several institutional investors have allegedly expressed support for the transaction, indicating that the restriction on the ownership transfer is not a concern. The shares are registered, which means it can only be transferred with the issuing company's consent. But Deutsche Bank points out that such a handicap is not a big issue since other prominent German blue chips like Allianz or Munich Re are also registered. The placement, however, needs the concurrence of Bayerische Landesbank, JP Morgan Chase and Lehman Brothers, which hold a secondary lien on the Springer shares. Observers believe it is unlikely the trio will oppose Deutsche. MOBILCOM AG: Dispute With France Telecom Tagged for Huge Losses --------------------------------------------------------------- Ailing German telecoms group MobilCom AG reported early this week EUR120.7 million losses before interest, taxes, depreciations and amortizations, a big jump from only EUR34.8 million in the year- ago period, says Handelsblatt. The blamed the ongoing spat between France Telecom and CEO Gerhard Schmidt over investments in UMTS or third-generation mobile network as one of the main reasons for the poor figures. A sale of Mr. Schmidt's 40% stake in the company remains uncertain, as France Telecom is still exploring ways to handle the transaction without having to consolidate the German firm's obligations with its already ballooning debt-pile. Accordingly, there are three options currently being considered: a full or a partial takeover, or a collapse of the German company. Handelsblatt sources say there are many people in France Telecom who want Mobilcom to go bust. The French giant denies taking this position. "The performance of Mobilcom's mobile operations is a disaster," Frank Rothauge, analyst at Sal. Oppenheim, told Handelsblatt. BHF-Bank analysts Werner Stablein, for his part, says MobilCom's dispute with the French incumbent caused uncertainty and weakened customer and investor confidence in the company. TAURUS HOLDING: To Declare Insolvency Soon Due to BSkyB Cash Call ----------------------------------------------------------------- KirchGruppe parent holding company Taurus Holding GmbH confirmed Monday that it will declare insolvency "in the short term" as a result of the recent move by BSkyB to call in its EUR1.7 billion investment in KirchPayTV. Early this week, the British broadcaster announced that it is exercising the buy-back option against Kirch on its 22% stake in KirchPayTV, which filed for insolvency last week. This option was supposed to be exercisable only in October, but BSkyb claims special circumstances have now afforded it the right to exercise the option early. With the impending demise of Taurus, only Kirch Beteiligungs GmbH remains the only core unit not yet threatened by insolvency, says Handelsblatt. This unit controls the shareholdings in motor- racing series Formula One, publisher Axel Springer Verlag AG and film production company Constantin Film AG. Meanwhile, the German daily has learned that KirchMedia and pay- TV unit Premiere can only meet part of its contract with the German soccer league Bundesliga. Instead of paying EUR360 million and EUR460 million for the 2002/03 and 2003/04 seasons, respectively, the pair will only pay EUR290 million per season. It is not yet clear how this development have been received by member clubs, but people privy to the negotiations say the two sides have started to move closer, though "considerable differences" in position remain. TAURUS HOLDING: Sells 23% Stake in Constantin Film to Highlight --------------------------------------------------------------- Taurus Holding GmbH, the parent holding company of ailing KirchGruppe, sent its 23% stake in Constantin Film AG to Highlight Communications AG for EUR29.3 million in cash and shares, reports Bloomberg. This marks the first time that any of KirchGruppe's unit was able to dispose of assets since two of its core subsidiaries instituted insolvency proceedings recently. Taurus Holding is expected to file for bankruptcy protection soon, the report says. The Switzerland-based buyer has yet to meet with management and major shareholders of Constantin, but it plans to implement cost- saving measures, a statement released by Highlight through the Frankfurt stock exchange said. The Constantin stake is actually owned by Kirch Beteiligungs GmbH, the same unit that holds a 40% stake in publisher Axel Springer Verlag AG and a majority of Formula One car racing. ============= I R E L A N D ============= AIB: Allotment of Shares in Lieu of Cash Dividend ------------------------------------------------- Allied Irish Banks, plc http://www.aibgroup.comhas applied to the Irish and London Stock Exchanges and to the UK Listing Authority to list 4,552,960 new ordinary shares of nominal value EUR0.32 each, fully paid, in connection with the Bank's Dividend Reinvestment Plan. The following are the relevant details: Dividend: Second Interim Dividend, Year ended 31 December, 2001. Dividend Amount: EUR 28.40c per share. Price per share: EUR 12.99 per share (calculated, in accordance with the Rules of the Dividend Reinvestment Plan, as the average of the middle-market quotations of the Bank's shares on the Irish Stock Exchange for the five days commencing February 27, 2002). DATALEX PLC: Announces Q1 Results Ending March 31, 2002 ------------------------------------------------------- Datalex plc www.datalex.com, leading provider of technology solutions for the global travel industry, announces first quarter results for the three months ended March 31, 2002. Neil Beck, Chief Executive Officer, commented: "This quarter has benefited from the full impact of our 2001 cost reduction program. This has resulted in improved margins and a 30% reduction in our operating loss for the quarter, which was in line with our business plan. The remainder of this year will be challenging, but we are gratified by the increased activity in the travel sector and we remain confident that Datalex is well positioned to capitalize on the improving market conditions that we have seen unfolding since the beginning of 2002." First Quarter 2002 Results Total revenues for Q1 of US$5.6 million, an increase of 3% quarter on quarter (Q4 2001: US$5.5 million). Increased gross margin for Q1 of 23% from 14% in Q4 2001, before non-cash share compensation charges. Services gross margin for Q1 was 5% from 2% in Q4 2001. A further decrease in net operating loss in Q1 to US$3.9 million (Q4 2001: US$5.6 million), excluding non-cash share compensation, exceptional items and amortization costs. Reduction in operating expenses to US$5.2 million from US$9.2 million in Q1 2001, before non-cash share compensation charges and amortization costs. An improvement in adjusted loss per share to US $0.06 (Q4 2001 - US$0.09) A strong net cash balance at March 31, 2002 of US$46.3 million. Strong revenue streams maintained with customers such as American Airlines, Worldspan, Air Canada, Aer Lingus, Amtrak and Singapore Airlines. New agreements signed with American Trans Air, Siemens Mobile Travel Solutions and PT Garuda Indonesia. Datalex is a leading provider of technology solutions for the global travel industry. Founded in 1985, the company is headquartered in Dublin, Ireland, and maintains offices throughout the world: Europe (Amsterdam, Frankfurt, Paris, Manchester); USA (Atlanta, Petaluma, Minneapolis); and Asia- Pacific (Melbourne, Singapore). To view the company's latest balance sheet and profit and loss statements, refer to: http://www.datalex.com/news/may1402.asp Contact Information: Analyst and Investor Inquires: Ciaran McNally Group Financial Controller Telephone: +353 1 839 1787 ciaran.mcnally@datalex.ie Press Inquires: David Smith Corporate Communications Telephone: +1 770 255 2400 david.smith@datalex.com Irish Press Inquires: Conor Dempsey Slattery PR Telephone: +353 1 661 4055 cdempsey@slatterypr.ie ===================== N E T H E R L A N D S ===================== VERSATEL TELECOM: Announces Adjustment to Exchange Ratio for ADS ---------------------------------------------------------------- Versatel Telecom International N.V. http://www.versatel.comon its Tuesday's press statement announced that it has adjusted the exchange ratio of its American Depositary Shares (ADS) to its ordinary shares. Effective May 15, 2002, the ratio has changed from 1 ADS: 1 ordinary share to 1 ADS: 12 ordinary shares. This change has been instituted in order to comply with the continued listing requirements of the Nasdaq National Market. This adjustment will have no impact on Versatel's ordinary shares or their listing and trading on Euronext Amsterdam. Versatel Telecom International N.V. is based in Amsterdam, and is a competitive communications network operator and a leading alternative to the former monopoly telecommunications carriers in our target market of the Benelux and northwest Germany. Founded in October 1995, the Company holds full telecommunications licenses in The Netherlands, Belgium and Germany and has over 79,000 business customers and 1,267 employees. Versatel operates a facilities-based local access broadband network that uses the latest network technologies to provide business customers with high bandwidth voice, data and Internet services. Versatel is a publicly traded company on Euronext Amsterdam and the Nasdaq National Market under the symbol "VRSA". Contacts: AJ Sauer Manager, Investor Relations and Corporate Development Versatel Nederland B.V. Tel: +31-20-750-1231 E-mail: aj.sauer@versatel.nl Anoeska van Leeuwen Director Corporate Communications Versatel Nederland B.V. Tel: 020-750.13.22 E-mail: anoeska.vanleeuwen@versatel.nl =========== N O R W A Y =========== KVAERNER ASA: Leading Shareholders Propose Flatgard as Director --------------------------------------------------------------- The nomination committee of Kvaerner ASA, the international oil services and products, engineering and construction, and shipbuilding Group, has proposed Bjorn Flatgard as a new member of the Company's Board. The proposal has been put forward after soundings were taken among Kvaerner's leading shareholders. "The nomination committee has made a point of proposing a director with industrial competence, international experience and integrity, and who moreover, will attend to the interests of all Kvaerner's shareholders," said Ragnhild M Wiborg, the committee head. "Having contacted the leading shareholders, both institutional and industrial, the nomination committee made an overall assessment and unanimously decided to propose Bjorn Flatgard as the new member of the Board." The election of a new director took place at Kvaerner's Annual General Meeting on May 15. The vacancy on the Board arose in December 2001 when Helge Lund, having been appointed Chief Executive Officer of Kvaerner ASA, decided to resign from his seat on the Board. Bjorn Flatgard is Chief Executive Officer of Elopak AS. He has an engineering degree from the Norwegian Institute of Technology, and an MBA from the Norwegian School of Management. For further information regarding Kvaerner ASA http://www.kvaerner.com/group/,contact: Ragnhild M Wiborg, Head of the Nomination Committee: +47 22 01 02 27 =========== S W E D E N =========== LM ERICSSON: Rights Not Underwritten, Could Be Sold at a Discount ----------------------------------------------------------------- The SEK30 billion rights issue of Telefon AB LM Ericsson is not underwritten, reflecting the dire condition of the telecom sector, reports Reuters. The news outfit says this will likely force the company to offer the rights at a deep discount to attract investors. The company did not state why the transaction is not underwritten, in a preliminary prospectus filed Monday before the U.S. Securities and Exchange Commission. The same prospectus also left out the price and the number of shares to be issued, saying the terms would be set nearer to the also unspecified subscription period. Normally, transactions like this are backed by underwriters -- financial institutions that charge a fee for taking the risk of buying the shares and selling them on to investors -- the report says. "From the perspective of trying to market this to investors, it's clearly a lot easier if it is underwritten, so that someone is saying to you: 'We are prepared to take this on, even if you are not'. So it certainly leaves them at a bit of a disadvantage," JP Morgan analyst Rohit Goel told Reuters. While it may not be true, some still suggest that financial institutions themselves may have begged off from this transaction due to the weak condition of the telecom sector. "I think no one dares to underwrite the share issue in this volatile telecoms market and Ericsson would probably have had to pay a lot for that," a Swedish analyst told Reuters. At the moment, it is not clear what Ericsson needs the proceeds for. "In the short-term, the proceeds ... will be held as cash and invested in investment-grade, interest bearing securities and drawn upon as required for the purpose of retiring debt and for general corporate purposes," Ericsson said in its prospectus. Last month, however, CEO Kurt Hellstrom said the money could also be used for acquisitions in an expected market consolidation. Ericsson expects to net SEK29.7 billion from the transaction, after fees of SEK300 million. The initial review of the registration statement by the SEC usually takes a month and could be followed by four to eight weeks of discussions between the SEC, Ericsson, its lawyers and auditors before the review is complete, says Reuters. The Swedish company is currently saddled by a SEK25 billion net debt and does not expect to return to black until sometime in 2003, following its first annual loss last year. The company, which has already suffered a ratings downgrade from Standard & Poor's and Moody's Investor Service, expects further cuts this year, which could limit its access to funding, boost interest costs and trigger early payment of some of its outstanding debts. In Moody's ratings board, the company carries a grade of Baa2, while in Standard & Poor's, the company stands with a BBB+ rating and a negative outlook. =========================== U N I T E D K I N G D O M =========================== BIG FOOD: Notification of Shareholders' Interests ------------------------------------------------- Big Food Group plc (the Company) http://www.iceland.co.uk,UK's frozen food retail chain, announced Monday that Morley Fund Management Limited (a subsidiary of CGNU plc) said it has 26,546,206 shares in the Company. This gives CGNU group a total percentage interest of 7.74% shares of the total shares issued by Big Food Group. On behalf of CGNU, Morley Fund Management Fund Ltd.'s interests in Big Food shares are summarized as follows: Registered Holders Number of Shares Held BNY Norwich Union Nominees Ltd 6,907,351 (Material) Chase GA Group Nominees Ltd 10,704,477 (Material) CUIM Nominee Ltd 8,934,378 (Material) CENES PHARMACEUTICALS: Updates on Progress of Product Trial ----------------------------------------------------------- CeNeS Pharmaceuticals plc announced Wednesday postive interim results from Phase II trials of CNS 5161 for neuropathic pain. Results from a single cohort of 10 patients with neuropathic pain have demonstrated that a 0.25mg infusion of CNS 5161, administered intravenously over 6 hours, gave statistically significant pain relief. The drug was also well tolerated by the patients. These data support the earlier Phase I study which showed CNS 5161 given intravenously at a dose of 0.5mg produced relief to a cold pain stimulus given to 16 healthy male volunteers. This positive data supports CeNeS' plan to continue with a second Phase II multicentre, dose escalating proof-of-concept study designed to identify the lowest dose of CNS 5161 that establishes pain relief in neuropathic pain patients and the levels of the drug in blood plasma that are associated with this effect. The higher doses investigated will establish the side effect profile of CNS 5161 and the potential therapeutic window for the use of CNS 5161 in neuropathic pain. CNS 5161 in development for the treatment of neuropathic pain complements CeNeS' portfolio of products in clinical development for the treatment of moderate to severe pain. Update on the M6G clinical program In its business venture with Elan Corporation plc, CeNeS continues the development of morphine-6-glucuronide (M6G), CeNeS's lead candidate for the treatment of moderate to severe pain. As part of a co-ordinated European and North American clinical program, CeNeS is currently carrying out a Phase II study of M6G in patients following hip replacement surgery to investigate the effect of timing of administration of M6G in order to optimise pain control during the immediate post-operative period. Results of this study are anticipated to be available later in Q3 2002. Following the successful completion of the Phase II program M6G is expected to enter Phase III trials for the treatment of post-operative pain in 2003. The collaboration with Elan is also developing M6G with Elan's Medipad subcutaneous drug delivery device for the treatment of chronic pain. CeNeS has commenced Phase I clinical studies in healthy volunteers to investigate the bioavailability of M6G from subcutaneous administration as preliminary studies in this program. Neil Clark, Chief Operating Officer and Financial Director of CeNeS, commented: "We are excited by the results from the CNS 5161 Phase II study in neuropathic pain. We are also pleased with the progress of M6G, our leading clinical candidate for the treatment of post- operative and chronic pain. Further ongoing development of these compounds gives us the opportunity to generate significant value for our shareholders." For more information, please contact: CeNeS Pharmaceuticals plc Alan Goodman Dr Douglas Pretsell Tel: +44 (0)1223 266466 Fax: +44 (0)1223 266467 Noonan Russo Presence EURO RSCG Veronica Sellar Neil Clark Tel: +44 (0)20 7726 4452 Fax: +44 (0)20 7726 4453 CENES PHARMACEUTICALS: Potential Treatment for Schizophrenia ------------------------------------------------------------ CeNeS Pharmaceuticals plc http://www.cenes.com,the Cambridge- based manufacturing group, Tuesday noted recent press coverage on the identification of a risk gene for schizophrenia that has implications for its pre-clinical candidate rhGGF2, which is a recombinant version of the protein coded by that gene. An international team of researchers led by Hans Moises at the University of Kiel, Germany, announced on March 27 that genetic markers on both sides of the neuregulin-1 gene on the short arm of chromosome 8 revealed a highly significant association with schizophrenia. The protein products of this gene are growth factors involved in the normal growth of the brain, which seems to be disrupted in humans with schizophrenia. The study suggests that there is a neuregulin deficiency in schizophrenia, which could be treated with products of the neuregulin-1 gene such as GGF2. Dr Irving Gottesman of the University of Minnesota, a leading expert in schizophrenia and part of the international team, commented: "The neuregulin finding shows the postulated connection between the 2 major theories of schizophrenia, the genetic and the neurodevelopmental hypotheses" rhGGF2, a recombinant version of GGF2, is currently in late stage pre-clinical trials for multiple sclerosis. Cambridge Neuroscience, which was acquired by CeNeS in December 2000, and Bayer originally developed the growth factor. CeNeS would like to clarify its ownership position and make it clear that CeNeS alone now owns the rights and all intellectual property related to the compound. CeNeS is currently reviewing partnering opportunities to exploit the full therapeutic potential of this candidate. Neil Clark, Chief Operating Officer and Financial Director of CeNeS, commented: "CeNeS has been keeping abreast of the interesting developments being made in the involvement of the neuregulin-1 gene in schizophrenia. We are discussing the future development of our neuregulin-1 related intellectual property in the potential treatment of CNS disorders with interested parties." CeNeS is a biopharmaceutical company specializing in the development and commercialization of drugs for CNS disorders and pain control. The company currently markets four products, and has research and development assets targeting pain, schizophrenia, addiction, sleep disorders and multiple sclerosis. In addition it has a range of platform technologies including AutoPatchTM its unique automated patch clamping technology. The group is based in Cambridge, England. COLT TELECOM: Notification of Cancellation of Certain Notes ----------------------------------------------------------- COLT Telecom Group plc http://www.colt-telecom.comsaid through a press statement Monday, further to its notification of October 9, 2001 and following the purchase of certain bonds by COLT Telecom Finance Limited, the bonds purchased had now been cancelled. Details of the further cancellations are given below. US$ 19.25 Million accreted principal amount of our US$ 314 Million 12% Senior Discount Notes due December 2006; DEM 1.8 Million face amount of our DEM 150 Million 8.875% Senior Notes due November 2007; DEM 40.187 Million face amount of our DEM 600 Million 7.625% Senior Notes due July 2008; EUR 19.75 Million face amount of our EUR 320 Million 7.625% Senior Notes due December 2009; GBP 3.0 Million face amount of our GBP 50 Million 10.125% Senior Notes due November 2007; DEM 5.0 Million accreted principal amount of our DEM 600 Million 2% Senior Convertible Notes due August 2005; EUR 10.0 Million accreted principal amount of our EUR 295 Million 2% Senior Convertible Notes due March 2006; EUR 22.0 Million accreted principal amount of our EUR 368 Million 2% Senior Convertible Notes due December 2006; and EUR 17.0 Million accreted principal amount of our EUR 402.5 Million 2% Senior Convertible Notes due April 2007. COLT Telecom Group plc is a leading European provider of business communication services. COLT has over 13,000 directly connected network services and eBusiness customers and has high bandwidth local networks in 32 European cities in thirteen countries supported by a series of Internet Solution Centers and inter- linked by a 15,000 route kilometer high capacity fibre-optic long distance network. COLT Telecom Group plc is listed on the London Stock Exchange (CTM.L) and Nasdaq (COLT). Information about COLT and its products and services can be found on the web at www.colt.net For further information, contact: John Doherty Director Investor Relations email: jdoherty@colt.net Telephone: +44 20 7390 3681 COOKSON GROUP: Notification of Major Interests in Shares -------------------------------------------------------- Cookson Group http://www.cooksongroup.co.uk/, the London-based metals and mining company, said that Franklin Resources, Inc., on behalf of its affiliates now holds 53,380,323 ordinary 50p shares issued by Cookson. This gives Franklin Resources a total percentage holding of 7.34% of all shares of stocks issued by the international materials technology group. A summary of Franklin Resources, Inc.'s affiliate companies shareholdings are listed as follows: Bankers Trust Company (220,981 shares) Bank of New York Nominees (141,690 shares) Chase Nominees Limited (39,022,854 shares) Citibank (70,000 shares) Clydesdale Bank (1,912,010 shares) Deutsche Bank AG (150,372 shares) Merrill Lynch (2,296,001 shares) Royal Trust Corp of Canada (8,705,814 shares) State Street (860,601 shares) For further information, contact: Alan Wallwork, the assistant company secretary at Cookson Group plc; telephone: 020 7766 4537. EIDOS PLC: Releases Twelve-Month Results Ending March 31, 2002 -------------------------------------------------------------- Eidos plc http://www.eidos.com/,one of the world's leading publishers and developers of entertainment software, announces its results for the twelve months ended March 31, 2002. Financial Highlights For the twelve months ended: March 31 March 31 2002 2001 Turnover (Note 1) GBP 120.3MM GBP164.2MM* Total operating loss before goodwill (7.2)MM (23.3)MM* EBITDA (4.8)MM* (20.9)MM* Exceptionals 4.4MM (54.1)MM Loss per share before goodwill (Note 2) (1.6)p (70.5)p * Pre exceptional items Notes: 1. The 2001 comparative for Turnover has been restated by o3.8 million for the change in treatment of certain co-operative advertising expenses that occurred in the period. 2. The 2001 comparatives for earnings per share have been restated for the Rights Issue that occurred during the current period, in accordance with FRS14 - Earnings per share. Business Highlights * Twenty titles released in the period, with four selling in excess of 350,000 units * Gross margin pre exceptional charges increased 9.3% to 59.5% from 50.2% * Total operating losses pre goodwill and exceptional charges reduced by 69.2% * Operating expenses pre goodwill and exceptional charges reduced by 24.8% * GBP50.6 million cash at March 31 gives stability and flexibility to capitalize on growth opportunities * PlayStation 2 exclusivity deal for 'Lara Croft Tomb Raider: The Angel of Darkness' announced * John van Kuffeler appointed as Non-Executive Chairman, following the period end. Ian Livingstone becomes Creative Director. Contact Information: Mike McGarvey Eidos plc, Chief Executive Officer Telephone: 020 8636 3000 Jonathan Glass/ Patrick Handley Brunswick Telephone: 020 7404 5959 Brian Schaffer/Chris Plunkett Brainerd Telephone: 001 212 986 6667 NTL INCORPORATED: 'Vultures' Own Juicy DIP Loan in Rare Move ------------------------------------------------------------ In an unusual move, distressed-debt buyers are providing the majority of the US$670.8 million debtor-in-possession loan to NTL Incorporated, the British cable operator under Chapter 11 creditor protection in the U.S. According to experts interviewed by The Deal, the arrangement is "completely unheard of" because banks usually pick up the tab for DIPs above US$50 million. "It's an odd situation," Harvard Business School professor and bankruptcy consultant Stuart Gilson told The Deal in an interview. It may be odd indeed, but to Angelo Gordon & Co., Appaloosa Investment Ltd. and money managers such as Franklin Resources Inc., the deal is just too sweet to pass up. The loan carries a hefty interest rate and juicy fees. Initially, NTL will pay 11% interest for the first three months. It will increase by one percentage point every three months thereafter up to 18%. The DIP will expire by December 1, but can be extended if a reorganization plan for NTL isn't confirmed by then. "There is a view that the company is worth a tremendous amount of money. This would be a pretty attractive investment for some guys," says Chris Donnelly, director of research at Standard & Poor's PMD, when interviewed by The Deal. Angelo Gordon, Appaloosa, Franklin Resources and others will provide the US$500 million portion of the facility, while NTL (Delaware) Inc. will provide the remaining US$170.796 million. The loan will be released in three tranches. The first installment is worth US$229 million and will be provided by the distressed-debt buyers. The NTL unit will then release its US$170.8 million portion after the DIP. "If NTL draws down the maximum from both facilities, it can then access a remaining US$271 million deferred draw loan the vultures are providing," The Deal says. Aside from the hefty interest rate, the "vultures" (as they are called by The Deal) will receive US$1 million for making the commitment and an additional US$1 million once the DIP receives final approval. These DIP lenders will be subordinate to NTL's pre-petition lenders Morgan Stanley and J.P. Morgan Chase & Co., the online paper says. NTL is scheduled to present for approval the DIP package to Judge Allan Gropper in Manhattan on June 5. It will be the second largest DIP loan next to Kmart Corp.'s US$2 billion, says The Deal. The company expects to conclude bankruptcy proceedings before the end of the year. Brad Scheler of Fried Frank Harris Shriver & Jacobson and UBS Warburg is representing the bondholders in the procedure, while Skadden, Arps, Slate, Meagher & Flom LLP stands for NTL. Credit Suisse First Boston, J.P. Morgan and Morgan Stanley are also involved in NTL's restructuring, so is Westfield, N.J.-based Kane Reece Associates Inc., which has acted as the firm's financial adviser since filing for Chapter 11 protection on May 8. The proceeding is pending before the U.S. Bankruptcy Court for the Southern District of New York. RAILTRACK PLC: Response to Health and Safety Exec Probe ------------------------------------------------------- Railtrack http://www.railtrack.co.uk/welcomed Tuesday the Health and Safety Executive's investigation into the incident at Potters Bar that happened on May 10, 2002. The rail operator said it will work in co-operation with the HSE and other industry bodies to ensure exhaustive investigations into this tragedy. Railtrack Chief Executive John Armitt said: "This was a terrible accident, for which we must identify the causes. Although we know how it happened we don't know why it happened. That is why the investigations are so important. We must find the answers and act on them." VIATEL INC.: To Focus on European Unit After Exit From Chapter 11 ----------------------------------------------------------------- Pan-European carrier Viatel is expected to exit from Chapter 11 bankruptcy in the U.S. with the approval of its reorganization plan by 97% of creditors recently, says Total Telecom. A hearing is scheduled for May 21 in the U.S. Bankruptcy Court for the District of Delaware, during which time the final voting report will be presented. If confirmed by the court, the plan could be implemented as early as June. The plan gives unsecured creditors of Viatel Inc. and its U.S. subsidiaries pro-rata share of the 10,560,000 shares in new Bermuda holding company, Viatel Holding (Bermuda) Limited, the industry paper says. This new company will be valued US$80 million and will be debt- free. It does not, however, expect a full recovery before 2006, as it projects a cash shortfall of US$12.8 million in 2004-2005. The company filed for creditor protection in the U.S. in May last year, with debts of about US$2.1 billion. Its European operations, mostly based in the United Kingdom, similar went into administration in June. NTL eventually snapped up the U.K. unit for GBP15 million, and the U.K. residential and SME business was acquired by Telco Global Communications, the paper says. Viatel tried to auction some of its assets in July, but bids did not reach the firm's desired figures, forcing it to reconsider its options. Since then, the company has maintained that it would focus on its core European network, which spans 8,700 kilometer and links 39 cities in Western Europe. Its workforce has been cut to fewer than 80 staff, the paper says. *********** 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. 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