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/raid1/www/Hosts/bankrupt/TCREUR_Public/020620.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, June 20, 2002, Vol. 3, No. 121 Headlines * F I N L A N D * SONERA CORPORATION: Will Sell EUR200 Million Portal to Yahoo! * F R A N C E * PECHERIES DE FECAMP: Fishing Firm Shipped to Leading Rival SIF * G E R M A N Y * ADS SYSTEM: Evaluates Potential Insolvency, Investor Talks Begin DEUTSCHE TELEKOM: Junks Stock Option for Board, Mid-executives ELECTRONIC VON A-Z: Buys Second Ticket to Bankruptcy Court FAIRCHILD DORNIER: Bombardier Leaves Rival Teetering on the Brink KIRCHMEDIA: WAZ Gruppe Quits Race, Calls Plan to Buy Firm Unwise TELESENSKSCL AG: Files Application for Insolvency Proceedings * I T A L Y * FIAT SPA: Gets EUR1.5 BB Bonus for Agreeing to Italenergia Option * N E T H E R L A N D S * KPNQWEST NV: Alcatel Affirms Full Support for Troubled Client KPNQWEST NV: Warns of Switch-off Due to Breach in Payment Pledge VERSATEL: Will Begin Creditor Protection Procedure * P O L A N D * NETIA HOLDINGS: Results of Ordinary Shareholders' Meeting NETIA HOLDINGS: Changes Within Netia Holdings' Supervisory Board * S P A I N * JAZZTEL PLC: Postpones Possible Merger Plans After Restructuring * S W E D E N * LM ERICSSON: Comments to Moody's Downgrade Action LM ERICSSON: Wins US$ 135MM Contracts for GSM Project in China * U N I T E D K I N G D O M * BIG FOOD: Food Retail Chain Announces Completion of Refinancing DESIGNER ROOM: Hires Begbies Traynor to Sell Entire Business ENERGIS PLC: Permira Bows Out, Debt-for-Equity Likely, Says Mole INDIGO VISION: Latest Report Card Shows Widening Pre-tax Losses INDIGO VISION: Summary of Results - Nine Months to April 30, 2002 INDIGO VISION: Signs Licensing Agreement on Motion Detection Tech IPC MEDIA: IPC Connect Invests in Market-Leading Publishing Team SCIPHER PLC: Announces Summary of Terms on Sale, Leaseback Deal TELEWEST COMMUNICATIONS: Bondholders Seek to Foil John Malone ============= F I N L A N D ============= SONERA CORPORATION: Will Sell EUR200 Million Portal to Yahoo! ------------------------------------------------------------- Sonera and Yahoo! are allegedly close to signing a deal that will initially give the latter a 30% stake in Zed, the wireless portal of the Swedish telecom provider, Telecom Paper said. Citing The Wall Street Journal, the industry paper said Yahoo! is also reserving a right to take over the entire business, provided certain revenue targets are met. Although the two have not yet reached a definitive agreement, sources say the deal is virtually sealed because talks with other interested parties have not yet reached the stage as advanced as Yahoo! The Wall Street Journal estimates Zed to be worth EUR200 million. =========== F R A N C E =========== PECHERIES DE FECAMP: Fishing Firm Shipped to Leading Rival SIF -------------------------------------------------------------- The commercial court of Le Havre awarded troubled French fish company Pecheries de Fecamp to SIF, the third-largest fish processor in the country, La Tribune reported Tuesday. The report did not state how much SIF paid for the company, which succumbed into involuntary liquidation on May 2. The buyer pledges to continue the company's herring, cod and salmon smoking activities and retain 170 of 380 Pecheries employees. SIF is based in the port of Boulogne (Pas-de-Calais) and owns six production sites that employ a total of 970 workers. ============= G E R M A N Y ============= ADS SYSTEM: Evaluates Potential Insolvency, Investor Talks Begin ---------------------------------------------------------------- After the negotiations with the banks of ADS System AG -- http://www.ads.de-- about additional financing for the turnaround plan of the company led to non expected and non- satisfactory results, the board is re-evaluation the future financial situation with a focus on potential insolvency. The company in now looking for an investor to finance the turn- around. Alternatively ADS is working on a solution to be taken over by an international Group within the networking sector as a strategic option. ADS's principal activity is the provision of networking services. This ranges from planning and implementation through training, maintenance and other networking services. The group's key financial figures for 2001 may be viewed at: a) income statement http://bankrupt.com/misc/05650829inc.pdf b) balance sheet http://bankrupt.com/misc/05650829p1.pdf; http://bankrupt.com/misc/05650829p2.pdf Contact Information: Investor Relations Steinmuehlstr. 26 61352 Bad Homburg Telephone: +49-6172-288-280 Fax: +49-6172-288-405 Email: ir@ads.de DEUTSCHE TELEKOM: Junks Stock Option for Board, Mid-executives -------------------------------------------------------------- Deutsche Telecom has decided to scrap a plan to give board members stock options this year, a move seen by many as nothing but an attempt to assuage investors' growing discontent over executive remunerations. Industry paper Total Telecom says the board members were supposed to be entitled to buy 1.7 million of shares this year. The company also cut by half the 6.5 million option earmarked for middle management. Last month, senior executives were hissed and booed during the company's shareholder meeting over the 90% hike in board compensation to EUR17.4 million in 2001. Shareholders questioned the payout in view of the company's losses of EUR3.5 billion and the continued dip of share value. Shares of the former phone monopoly are the most widely held in Germany. Some 3 million Germans have already lost more than EUR40 billion in investments due to the 45% drop of share value this year, the industry paper says. The government, which still controls 43% of the company, reiterates its support for CEO Ron Sommer, despite the election in September. Edmund Stoiber, who is challenging incumbent Chancellor Gerhard Schroeder, has criticized the policies in the company and the open support of the government for it. Hitting out the pay rise, Mr. Stoiber said on Tuesday he was upset that managers earning millions of euros preached that belts had to be tightened. "This does not fit into our society," he told party-mates during a conference in Frankfurt. Finance Minister Hans Eichel, however, said the current government is fully behind Mr. Sommer. "Sommer's position is by no means in question," Mr. Eichel said at a business conference in Berlin, adding that he welcomed the board's move to scrap the share option plan. Total Telecom says the company granted its board and 3,000 executives last year options to buy 8.2 million shares at a price of EUR30, 20% above last year's average share price. The options can be exercised from next year until 2011. ELECTRONIC VON A-Z: Buys Second Ticket to Bankruptcy Court ---------------------------------------------------------- Electronics retail chain Electronic von A-Z admitted Monday that it filed its second insolvency petition a week and a half ago, Frankfurter Allgemeine Zeitung says. The German daily says Rolf Rattunde was appointed interim administrator of the retailer, which owns 18 stores in Berlin, Brandenburg and Saxony and employs a staff of 230. The company claims it has no debts because it stopped getting credits since its last insolvency. The report did not state the reason for the second trip to the bankruptcy court. FAIRCHILD DORNIER: Bombardier Leaves Rival Teetering on the Brink ----------------------------------------------------------------- The final nail on the coffin of Fairchild Dornier may have been hammered down. Leading regional plane-maker Bombardier has backed out from a previously reported plan to assume development of Fairchild's 728 Jet model. This 70-seat plane was earlier thought to complement the fleet of the Canadian manufacturer. Insolvency administrator Eberhard Braun confirmed the news ahead of a "terse statement" released by Bombardier affirming the decision, said German daily Handelsblatt Tuesday. According to the Canadian rival, the 728 project did not meet conditions for an investment. But insiders say Bombardier dropped the plan after suppliers rebuffed its request for a 20% discount. The move surprised workers because all indications prior to Bombardier's announcement had pointed positively to a merger. Two weeks ago Troubled Company Reporter-Europe said that signs of a possible takeover by the Canadian plane-maker were becoming clearer. Citing Handelsblatt, TCR-Europe said suppliers of Fairchild had already been informed to continue operations because the plane- maker's site in the Bavarian town of Oberpfaffenhofen will continue work on the 70 to 100-seater plane project. But despite the positive indicators at the time, some industry observers still cautioned that a Bombardier rescue was not yet a sure deal. They based their apprehension on Bombardier's reputation as a tough negotiating partner. "Bombardier will very coldly decide whether production will pay off at the site," said one industry insider. Fairchild has already spent two years and more than US$1 billion with its partners in developing the 728 Jet, which was originally due to enter service in 2003, Handelsblatt says. This project is deemed by many as the company's best chance of surviving its present financial crisis. It just needs US$400 million in additional investments to be finished, said Mr. Braun. The administrator, however, said that another party is still interested in the 728 project. Citing information from Fairchild's works council, Handelsblatt said the company in question is Italy's Alenia. U.S. aviation giant Boeing has already rejected participation in the 728 Jet, saying it is not viable. Fairchild employs 3,600 workers in the Oberpfaffenhofen complex. Some 12,000 more, working for suppliers like MAN Technologie, Liebherr and Diehl Avionik, are expected to similarly suffer if the company were to stop operating. Mr. Braun told Handelsblatt Tuesday that with the opening of insolvency proceedings at the start of July, Fairchild would be split up and up to 1,200 workers, one third of the German total, will likely lose their jobs. KIRCHMEDIA: WAZ Gruppe Quits Race, Calls Plan to Buy Firm Unwise ---------------------------------------------------------------- Commerzbank, leader of a consortium planning to buy KirchMedia, is now looking for another partner after German WAZ Gruppe decided to back out of the plan, says AFX News. The bank said it regretted the decision, but vowed to continue the project. It is not clear, though, whether Columbia TriStar, the other member of the consortium, is similarly reconsidering its participation. But if it is any indication, Sony Corp. CEO Nobuyuki Idei last week told Handelsblatt that he regards the deal as an "interesting matter." The German publisher told the Financial Times Deutschland, in a separate report, that its examination of the risks and opportunities had led it to believe that buying the company at the moment would not be a prudent investment. It was earlier reported that this Commerzbank-led group is looking to offer just below EUR2 billion for the assets of KirchMedia, which include Europe's largest film library and a 52% stake in ProSiebenSat.1, Germany's No.1 free-TV network. Another consortium, known to be led by publishing giants Axel Springer Verlag, Heinrich Bauer Verlag and a still-unnamed bank, just recently entered the race. TELESENSKSCL AG: Files Application for Insolvency Proceedings ------------------------------------------------------------- The Executive Board of TelesensKSCL AG -- http://www.TelesensKSCL.com-- has filed an application for insolvency proceedings with regard to the assets of the company, the IT group announced in a statement to the press Tuesday. Telephone-billing firm TelesensKSCL AG lost EUR245 million last year on turnover of only EUR82 million, said Borsen-Zeitung citing the firm's delayed annual report. The company only had EUR58.6 million losses the year before. The German daily did not provide additional details, but preliminary results estimated earlier liabilities of EUR69 million and share capital of only EUR66 million. Headquartered in Cologne, Germany, the company was formed two years ago when Germany's Telesens paid GBP135 million to takeover Edinburgh-based KSCL. In March, the company lowered its projected revenue target for the year from EUR85 million to EUR75 million. Last month, the company announced that it had sold its Billing Components activities to senior staff through a management buyout. Contact Information: Nina von Moltke Investor Relations TelesensKSCL AG, Global Solutions Ferdinand-Porsche-Strasse 1, 51149 Koln EMail: investor@telesenskscl.com Telephone: +49 2203 91 28 888 Fax: +49 2203 91 28 150 ========= I T A L Y ========= FIAT SPA: Gets EUR1.5 BB Bonus for Agreeing to Italenergia Option ----------------------------------------------------------------- Debt-strapped Fiat SpA will get a EUR1.5 billion loan from a consortium led by Citigroup in exchange for agreeing to a put option to sell its entire stake in Italenergia by 2005. The option obliges Electricit, de France, which currently controls 18% of the Italian power firm, to buy Fiat's remaining 24.6% stake three years from now. This option also acts as the collateral for the Citigroup loan. The loan enabled Fiat to raise more than EUR2 billion from its recent disposal of a 14% stake in the power firm. The disposal of this stake to three creditor banks earned the industrial group EUR576 million, the Financial Times says. Italenergia owns Edison, Italy's No.2 power generator. The banks that recently acquired Fiat's 14% holding are Sanpaolo IMI SpA, Banca di Roma SpA and IntesaBci SpA. Citing Bloomberg, Troubled Company Reporter-Europe said last week that the sale of the stake is a setback for Fiat, which had earlier planned to expand into power generation, an industry that is increasingly being opened to competition. Fiat teamed up with the three banks, Electricite de France and financier Romain Zaleski to buy Edison SpA a year ago for more than EUR8 billion. These shareholders are planning to merge Italenergia and Edison, which together has net debts of EUR13.5 billion, TCR-Europe said. The shareholders have pledged to lend Italenergia EUR1 billion, and the company will raise another EUR1 billion by selling new shares in an IPO to effect the merger. Edison is selling EUR2 billion in bonds, the report said. This stake sale is part of Fiat's plan to raise EUR2 billion this year by disposing of assets. It is also part of the conditions set by creditor banks in exchange for agreeing to refinance a EUR3 billion short-term loan. ===================== N E T H E R L A N D S ===================== KPNQWEST NV: Alcatel Affirms Full Support for Troubled Client ------------------------------------------------------------- French equipment maker Alcatel denies reports that it is pressuring cash-strapped KPNQwest to pay up EUR15 million of an estimated EUR100 million outstanding due. "Contrary to recent press reports, Alcatel, in the interest of both companies, provides support to KPNQwest and its clients. Alcatel is in close talks with the bankruptcy administrator of KPNQwest to agree on the financial conditions that will allow Alcatel to continue to support this operation," an unnamed Alcatel spokesman was recently quoted by Total Telecom as saying. Earlier, unconfirmed reports claimed that Alcatel had threatened to close a network of KPNQwest, which is apparently under its controls, if the payment was not made by Tuesday night. A standstill agreement with suppliers is one of the reasons why the company is still operating. The other is the pledge by clients to settle outstanding dues. KPNQWEST NV: Warns of Switch-off Due to Breach in Payment Pledge ---------------------------------------------------------------- KPNQwest has renewed its threat of shutting down its network after some clients who had promised last week to settle their accounts failed to deliver on their pledges, says Total Telecom. Trustees vowed to turn-off the firm's European data communications facilities at noon yesterday, if clients further delayed payment of their outstanding dues. It was still unknown whether this switch-off was eventually carried out as of press time. "It is likely that this will lead to disruptions in the network in the immediate future and eventually to a complete close down of the network. It is recommended that the customers of KPNQwest put adequate contingency plans in place," a statement by liquidators released Tuesday said. Last week, a planned shutdown was averted after the company received most of the EUR20-25 million needed to keep the network running. Trustees warned, though, they would not hesitate shutting down operations at any time if it appeared there was not enough money to meet obligations. The company must find buyers for part or whole of its business before the end of this month to keep its extensive data-carrying network up. VERSATEL: Will Begin Creditor Protection Procedure -------------------------------------------------- Versatel Telecom International N.V. announced Wednesday that in order to accelerate its financial restructuring it has voluntarily, and with the full support of a majority of its bondholders, commenced a suspension of payments proceeding in The Netherlands in respect of the holding company, Versatel Telecom International N.V. It will also be commencing a corresponding Chapter 11 proceeding in the United States. These proceedings do not involve Versatel's operating subsidiaries, employees, suppliers and operating assets, thereby ensuring normal service continuity for Versatel's customers. The decision to implement the financial restructuring through these proceedings is fully supported by bondholders, including the bondholder committee, who collectively own over 65 percent of initial principal amount of Versatel's outstanding high yield and convertible notes. This support represents a substantial increase over the 33 percent that was announced in March 2002. This additional support is the result of a proactive bondholder initiative and indicates strong support for the restructuring amongst Versatel's bondholders. Versatel also announced on June 19 that it has obtained a commitment for a Eur 150 million credit facility that, subject to certain customary conditions, will be available to the company upon successful completion of its financial restructuring. Versatel believes that the availability of this credit facility will fully fund its business plan, as well as add financial and operating flexibility for the future. In addition, Versatel announced that it will generate positive adjusted EBITDA in the second quarter of 2002, two quarters ahead of its prior guidance and that it expects full year adjusted EBITDA to exceed its prior guidance that it would be between breakeven and EUR 5 million. Akkoord and Chapter 11 Proceedings The principal purpose of the financial restructuring is to eliminate all of Versatel Telecom International N.V.'s outstanding debt and associated interest expense. In order to accelerate the financial restructuring, Versatel and a majority of its bondholders have chosen to complete the restructuring by means of a voluntary pre-arranged composition, known as an Akkoord, in a suspension of payments proceeding in The Netherlands, and a Chapter 11 proceeding in the United States in respect of the holding company, Versatel Telecom International N.V. These proceedings will have no material impact on any of Versatel's operating subsidiaries, customers, employees or trade creditors. As a first step in this process, Versatel Telecom International N.V. filed with the Dutch court and will be filing with the US court for suspension of payments and protection from its creditors, which consist almost entirely of holders of its Bonds. In taking this decision, Versatel is supported by a large majority of its bondholders and is convinced that it is in the best interest of all its stakeholders to restructure its debt as quickly as possible and avoid further delays in starting the formal process. In connection with the commencement of these proceedings, Versatel will be withdrawing its registered exchange offer. No changes in network availability or customer services Both Dutch and U.S. restructuring legislation permit companies to restructure their debts without jeopardizing their operations by reaching agreement with the requisite majority of their creditors. The Dutch and U.S. court proceedings involve only Versatel Telecom International N.V., the holding company for the group. The court proceedings do not involve any of the operating subsidiaries that hold substantially all of the fixed assets and contracts relating to the group's employees, suppliers and customers. As a result, these court proceedings will not impact any service or obligation to customers, suppliers, employees or other existing creditors, each of whom have relationships with Versatel's operating subsidiaries and not with the holding company. In addition, Versatel would like to emphasize that during and after the restructuring there will be no changes in the availability or quality of its network. Full Support of Bondholders Versatel continues to receive strong support from the Committee and other bondholders who have also agreed to support this restructuring. As a result, bondholders owning over 65 % of Versatel's Bonds have agreed to fully support the financial restructuring. During the court proceedings, Versatel will seek votes from all bondholders in favor of the restructuring. Given the current level of bondholder support, the company does not foresee difficulties in obtaining sufficient votes. The restructuring provides that all bondholders will receive cash and shares in the company (equivalent to 80 percent of the company's post restructuring share capital) in exchange for the cancellation of all of the Bonds. In addition, the restructuring provides that Versatel's existing shareholders will retain a 20 % interest in the company and receive warrants, at no cost to them, exercisable during the two- year period following the restructuring, to purchase an additional 4 % of the company's shares at a price of Eur 1.50 per share. Versatel's current shareholders gave their approval for the issuance of the new shares and the new warrants at the last Annual General Shareholders Meeting, which was held on May 2, 2002. EUR 150 Million Credit Facility Upon completion of the restructuring, Versatel will emerge as a debt-free company in a substantially stronger financial and operating position. The extraordinary gain from the early retirement of the Bonds will create a substantially positive net equity position for the company, which will alleviate the strafbankje, or "penalty bench", position of Versatel's shares on Euronext. In addition, subject to customary conditions and the successful completion of the restructuring, GE Capital has agreed to provide Versatel with a EUR 150 million credit facility. After successful completion of the restructuring, Versatel's cash balance, excluding the credit facility, will provide it with sufficient funding until at least the beginning of the second quarter of 2003. An initial amount of EUR 50 million under the credit facility is available immediately following the completion of the restructuring, with the remaining EUR 100 million subject to financial performance. Given its previously announced funding gap of less than Eur 50 million, Versatel believes that the credit facility will fully fund the company's business plan and operations. EBITDA Positive Versatel is pleased to announce that in the second quarter of 2002 it will generate positive adjusted EBITDA (earnings before interest, tax, depreciation and amortization) for the first time in the company's history and two quarters ahead of prior guidance and that it expects full year adjusted EBITDA to exceed its prior guidance that it would be between breakeven and EUR 5 million. Profitability and cash flow generation continue to be the main focus of management and this is a major step towards generating positive free cash flow. The improvement in EBITDA is driven mainly by Versatel's ability to leverage its dense local asset base, its focus on customer profitability and targeted sales growth and the cost savings achieved from its organizational restructuring in 2001. Timing Versatel anticipates that the Akkoord proceeding in the Dutch Courts and the Chapter 11 proceeding in the US courts will be completed by the end of September 2002. =========== P O L A N D =========== NETIA HOLDINGS: Results of Ordinary Shareholders' Meeting --------------------------------------------------------- Netia Holdings S.A., Poland's largest alternative provider of fixed-line telecommunications services, announced Tuesday that its Ordinary Shareholders' Meeting on June 18, 2002: (i) approved the Management Board's report and financial statements for the 2001 financial year, (ii) appointed PricewaterhouseCoopers Sp. zo.o. as its expert auditor to examine the financial statements for the 2002 financial year, (iii) approved the remuneration granted in 2001 and later to members of the Supervisory Board and (iv) re-adopted certain shareholders' resolutions from the March 12, 2002 Extraordinary General Shareholders' Meeting. Netia re-adopted the resolutions regarding the issuance of series "H" shares, previously adopted by the Extraordinary General Shareholders' Meeting on March 12, 2002 in connection with the Company's ongoing restructuring. Pursuant to Polish law, a resolution increasing the Company's share capital may not be filed with the registry court later than six months after its adoption. Re-adoption of these resolutions therefore extends the time during which the share capital increase can be registered. Arrangement proceedings in connection with Netia's restructuring were opened in Poland on May 15, 2002. Contact Information: Netia, Warsaw 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 NETIA HOLDINGS: Changes Within Netia Holdings' Supervisory Board ---------------------------------------------------------------- Netia Holdings S.A., announced Tuesday that it was notified by Telia AB that Hans Tuvehjelm, Business and Investment Development Director in Telia's International Provider Area, was appointed as a member of Netia's Supervisory Board on behalf of Telia, effective June 17, 2002, in accordance with the company's statutes. Hans Tuvehjelm has replaced Lars Rydin, who was released by Telia from this post. ========= S P A I N ========= JAZZTEL PLC: Postpones Possible Merger Plans After Restructuring ---------------------------------------------------------------- In relation to the information published recently in the media regarding the state of the negotiations for a possible transaction between Jazztel and Uni2, JAZZTEL wishes to clarify that, pursuant to the ECR release distributed on April 16, 2002, it has postponed discussions with operators regarding potential combinations until the restructuring process is completed. No progress has been made since that date for a possible transaction with Uni2, the Madrid-based telecom group announced Tuesday. Despite the foregoing, and as communicated in the referred ECR release, the company continues to believe in consolidation opportunities among fixed line operators in Spain and Portugal and has the clear intention to participate in the consolidation process after the restructuring process has been accomplished. =========== S W E D E N =========== LM ERICSSON: Comments to Moody's Downgrade Action ------------------------------------------------- Moody's Investors Service, Inc. announced Monday that it has downgraded the long-term credit rating of Ericsson from Baa2 to Baa3. Moody's has maintained its credit review of Ericsson pending successful conclusion of its planned rights offering. Credit agencies have been systematically lowering their ratings for the communication equipment industry for some time. This decision is seen as related to their view on the industry in general and with no consequence for Ericsson's leadership position in the market. Ericsson remains one of the most liquid and strongly capitalized companies in the industry and is fully committed to maintaining a very conservative financial profile. Contact Information: Maria Bernstrom Director Investor Relations Corporate Communications, Ericsson Telephone: +46 8 719 5340 Email: maria.bernstrom@lme.ericsson.se LM ERICSSON: Wins US$ 135MM Contracts for GSM Project in China -------------------------------------------------------------- Ericsson -- http://www.ericsson.com/-- and Shandong Mobile Communication Company (SDMCC) have signed contracts for the Phase 9 expansion of SDMCC's GSM network. Ericsson will provide equipment, software and services in the expansion, the Stockholm-based telecom equipment maker announced Tuesday. Under the contracts, Ericsson will provide equipment including Mobile Switching Center (MSC), Base Station Controller (BSC), Base Transceiver Stations (BTS), Home Location Register (HLR), Transit MSC (TSC), as well as software upgrading and customer services. In this expansion, Ericsson will deploy rural network solutions to perfect the network coverage in rural and low traffic areas to meet the particular requirements of SDMCC. In order to extend SDMCC's radio network coverage with the most cost-effective construction of base stations, Ericsson will provide high-power base stations RBS2206, RBS2202 CDU-A plus with Tower Mounted Amplifier (TMA), as well as high-power Micro Base Transceiver Station MAXITE. Combined with Ericsson's advanced function software feature, the packaged rural solutions will enable SDMCC to further optimize the network quality of voice services for its users in low- traffic area. A series of service contracts were also signed covering GSM and GPRS network optimization, remote consulting, hardware repair/replacement and education. Equipment is being supplied by Ericsson's two largest joint ventures in China, Beijing Ericsson Mobile Communications Company Ltd. and Nanjing Ericsson Panda Communications Company Ltd. Delivery will start in late June, and the projects will be completed in November. SDMCC's GSM network will after the expansion reach the capacity of more than 12 million subscribers. "Phase 9 is one of our largest expansion projects ever. SDMCC is committed to providing its customers with high quality network and services. We have had a strategic relationship with Ericsson since 1995 and chose them because of their outstanding products, quality services, and the win-win partnership between us," commented Mr. Liu Aili, General Manager of SDMCC at the signing ceremony. "As the sole system supplier of SDMCC's GSM 900 network, we are pleased that SDMCC has again chosen Ericsson as a strategic business partner. The expansion grounds the provision of the next generation GPRS service and increases the coverage capability throughout the province. With Ericsson's leading position in wireless technology and services, I believe Ericsson will have a continuous co-operation with SDMCC," said Mr. Jan Malm, President of Ericsson (China) Company Ltd. Ericsson China has nearly 4,500 employees, 26 offices across the country, 9 joint ventures and 4 wholly owned companies that provide a full arrange of communications solutions and services. Contact Information: Ericsson Kathy Egan Telephone: 212/685-4030 Email: Pressrelations@ericsson.com or Glenn Sapadin Telephone: 212/685-4030 Email: Investor.relations@ericsson.com =========================== U N I T E D K I N G D O M =========================== BIG FOOD: Food Retail Chain Announces Completion of Refinancing --------------------------------------------------------------- The Big Food Group plc announced Monday that it has successfully implemented its refinancing proposals which were developed to support the Group's business plan. The strategy involved reducing and refinancing the Group's senior debt facilities from previous levels. There are three components to the refinancing: -Firstly, a sale and leaseback of properties which has raised approximately GBP129.3 million. -Secondly, a ten-year high yield bond, which raised gross proceeds of GBP150 million at an interest rate of 9.75%. -Finally, a five-year senior credit facility of GBP300 million with its banking syndicate, led by Barclays Capital and The Royal Bank of Scotland plc. The total expenses of all these transactions were approximately GBP15 million. Bill Grimsey heads the London-based frozen food chain as Chief Executive. DESIGNER ROOM: Hires Begbies Traynor to Sell Entire Business ------------------------------------------------------------ The U.K.'s third-leading discount designer chain, Designer Room Ltd, has commissioned Begbies Traynor as administrator, tasked with selling its business as a going concern, just-style.com reported Tuesday. The company, which generates turnover of GBP33 million a year, has just closed 18 of its 46 outlets. Employing 490 workers, the chain sells designer labels including Elle, DKNY, Jasper Conran, KLASS and Versace. The administrator believes the company has a sound business concept and is well positioned within the growing discount designer fashion market. The company's only problem is a lack of external investment to sustain its rapid expansion, a statement by the corporate recovery specialist explained. ENERGIS PLC: Permira Bows Out, Debt-for-Equity Likely, Says Mole ---------------------------------------------------------------- Bondholders urging management to prefer a debt-for-equity swap may yet get their wish. According to AFX News, Permira, one of the venture capitalists alleged to have joined two others to bid for the troubled telecom provider, has backed out from the plan. This leaves Apax Partners and Carlyle Group the burden of raising the GBP690 million that the consortium is reportedly willing to spend for the acquisition. "As a result, the balance is shifting in favor of a debt-for- equity swap," an unnamed source privy to the matter told AFX News. Shareholders urged management during an extraordinary meeting Friday to opt for the swap rather than sell the company to the private equity groups for a pittance. Bondholders are owed a total of EUR500 million. It is still unclear what portion of equity will they end up with after the swap. INDIGO VISION: Latest Report Card Shows Widening Pre-tax Losses --------------------------------------------------------------- Stocks of digital video firm IndigoVision took another beating in the market, suffering a 10% drop and bringing to 30% the dive since a week ago, says the Scotsman. Shares closed 82.5p last Monday, down 8.5p that day. The paper says the drop was triggered by the company's anemic performance during the last nine months to April this year. Pre-tax losses widened to GBP6.4 million from GBP4 million during the same period last year. The company, however, claims the losses were broadly in line with market expectations. The company, which has not earned a profit since 1997 based on balance sheets posted at Hemscott.net, said revenue rose by 60% to a record GBP1.8 million and gross profit margin rose from 52% to 67% during the nine-month period. Chairman Lord Young, however, remains upbeat about the company's prospects: "The first nine months has seen a substantial strengthening of the business with further licensing deals, a growing partner program, a 605 increase in revenues and, importantly, a doubling of licensing and related revenues. "We expect the current year as a whole to show a similar level of revenue growth, and operating losses to be broadly in line with market expectations," he said Meanwhile, the company disclosed that it had signed a second licensing deal with the U.S. Space and Naval Warfare Systems Center for its technology that provides a high-resolution video link between military robots and their operators. The center will use the innovation to equip robots with motion detectors, the Scotsman says. The company, however, clarified that it will gradually veer away from these licensing deals and would, instead, design and sell its own chips. The paper says the decision is a strategic U-turn from the company's previous approach of licensing technology to more established manufacturers. INDIGO VISION: Summary of Results - Nine Months to April 30, 2002 ----------------------------------------------------------------- Nine month financial highlights: * Revenues up 60% to record GBP1.8 million * Licensing income more than doubled to a record GBP1.1 million * Licensing income now 59% of revenues * Gross profit margin 67%, up from 52% last year * Loss before tax of GBP6.6 million * Net cash of GBP26.0 million Third quarter operational highlights: * Two new license agreements concluded in quarter * Further license with Spawar announced today * Significant progress with Networked Video Recorder (NVR) sales in quarter 3 * Five new patent applications filed * Platform shipments continue at high levels experienced in first half * Licensed customer product shipments exceed IndigoVision product shipments by a record 50% * Partner program further expanded to 18 Oliver Vellacott, Chief Executive Officer, said: "We are pleased to be reporting continuing strong growth. Today's further licence agreement with the US Space and Warfare Agency is a tremendous endorsement of our product quality and technology lead." Contact Information: IndigoVision Oliver Vellacott, CEO Alan Bennie, CFO Telephone: 0131 475 7200 INDIGO VISION: Signs Licensing Agreement on Motion Detection Tech ----------------------------------------------------------------- The live networked video technology group IndigoVision announced Monday that it has signed an additional license with the Space and Naval Warfare Systems Center San Diego (SSC San Diego) to deliver its advanced motion detection technology for homeland security and mobile robot applications. This announcement follows an initial license deal signed in March, which enabled SSC San Diego to incorporate miniaturized versions of IndigoVision's live networked video cameras into defence applications. IndigoVision has customised its motion detection technology for the development of tactical surveillance and security applications to support military mission execution and force protection. This new licence enhances the existing VideoBridge-enabled robots used by SSC San Diego by enabling them to detect motion outdoors. IndigoVision's technology greatly reduces error rates and false alarms with sophisticated filtering. Cameras can be pre-programmed to override changes in light and natural weather, as well as subtleties like tide and tree movements. Robin Laird, head of the Adaptive Systems Branch commented: "IndigoVision's products provide the flexibility to offer video, two-way audio, triggers and motion detection over a wireless network in a miniature package the size of a credit card. Its sophisticated motion detection, fast event retrieval and smooth integration with existing security systems greatly reduce costs and development time". The VideoBridge motion sensors will alert guards at a central station and mobile guards with wireless devices to then dispatch robots. The robots can then relay further images and interact using two-way audio. SSC San Diego has already deployed VideoBridge-enabled robots to patrol military warehouses, and were most recently used as part of the search and rescue operation at Ground Zero in New York City. IPC MEDIA: IPC Connect Invests in Market-Leading Publishing Team ---------------------------------------------------------------- IPC Connect announced last week the restructuring of its publishing team with the appointment of four publishers focused on the individual sub-sectors in which the market-leading company operates: Classic, Mature, Easy Entertainment and Celebrity. Reporting to publishing director Sandy Gale: Oswin Grady is appointed publisher of twin sister pillar brands Woman & Woman's Own. Moving from publisher of Woman's Weekly, Oswin has recently covered the publisher role for Woman & Woman's Own whilst Allison Greenfield was on secondment to the IPC Strategic Planning team. This well-deserved appointment reflects Oswin's significant contribution to the development of these brands during this time as well as his continued input into Connect's ongoing outstanding business performance. Sally Hogg is appointed publisher of Connect's market-leading mature brand Woman's Weekly. Sally, who joins from Redwood, has extensive publishing experience and has been invaluable over the last six months whilst on placement as publisher of Woman's Weekly & Chat. Her Australian background has added another dimension to Woman's Weekly's strong performance in Australia, and she has been focused on driving significant revenue through the brand's highly successful Specials program. As a result of the restructuring, Connect is also looking to appoint a publisher for its fun-loving Easy Entertainment title, Chat. In the short term, the role will be covered by Sally Hogg. Reporting to publishing director Sarah Fisher: Andrew Kirkland joins as publisher of Now - the U.K.'s biggest- selling celebrity weekly. Currently IPC SouthBank's group circulation manager within IPC's distributor Marketforce, Andrew is uniquely equipped for this fast-paced challenging role. Prior to his position with SouthBank, he was circulation manager with Connect, which gives him a massive head start in understanding the dynamics of the celebrity market. His huge energy and focus on getting results will be highly beneficial in helping Now accelerate its growth still further. In addition, focused on Connect's presence within the Teen sector: Lynsey Bushell is appointed assistant publisher with specific responsibility for Mizz. Lynsey also joins from Marketforce where she was senior circulation executive for the Connect brands. Lynsey clearly understands the Mizz consumer and the unique publishing dynamics of the fiercely competitive Teen sector, making her ideally placed to take the title onto its next stage of development. SCIPHER PLC: Announces Summary of Terms on Sale, Leaseback Deal --------------------------------------------------------------- Scipher plc -- www.scipher.com --, the technology development and licensing company, announced Wedensday that it has exchanged contracts with U.S. pension fund clients of PRICOA Property Investment Management and Hines Air Property for the sale and leaseback of its headquarters building in Hayes for a gross cash consideration of approximately GBP16.9 million. Completion is expected in early July 2002. Out of the gross cash consideration of GBP16.9 million, deductions will be made for a contractual payment of GBP1.4 million due to EMI Group plc as part of a profit sharing agreement entered into at the time of the purchase of the building, and GBP0.4 million of transaction costs. The net proceeds of GBP15.1 million will be applied to repay loans of GBP6.6 million secured on the property, with the remainder of GBP8.5 million being used to repay bank loans and fund a retention of GBP1.8 million to be held by the purchasers, with the balance being placed on deposit for future use within Scipher's business. The purchasers have paid a deposit of GBP1.7 million on exchange of contracts into an escrow account. This, together with the balance of the purchase price of GBP 13.4 million, excluding the retention, will be released to Scipher upon completion. The GBP1.8 million retention will be held by the purchasers and released back to Scipher after five years. Under the terms of the sale and leaseback, Scipher will enter into leasing arrangements on the premises with initial annual rental payments of GBP1.4 million, partially offset by rental income from sub-tenants of GBP0.4 million. The assets disposed of have a book value of GBP11.1 million giving rise to a profit on disposal. The transaction will therefore increase Scipher's net asset value. Dr Ken Gray, Chairman of Scipher commented: 'We are delighted to have signed this agreement with PRICOA's clients and Hines. This completes the process started in December 2000 when the HQ building was purchased to avoid moving and disrupting a major part of the company. The cash resources delivered through this transaction, together with the company's existing bank facilities, provide Scipher with much increased financial headroom and the flexibility to make additional investments in Scipher's core areas of expertise.' Scipher purchased the headquarters building in December 2000 for a total consideration of GBP10.5m. At that time, the acquisition of the purpose-designed research and development and office building eliminated the significant cost and disruption that would have otherwise occurred in relocating to alternative premises. The property, which was built in 1984, provides approximately 90,000 ft2 (8,361 m2) of office and research and development accommodation. Scipher has entered into a 20 year lease on approximately 65,000 ft2 and a 5 year lease on 25,000 ft2. The rent equates to approximately GBP18 per ft2 overall. There is a fixed minimum increase at the first rent review equivalent to 3 per cent. per annum compound. The purchasers will hold a retention from the purchase price equivalent to 18 months' rent and in turn the passing rent will be reduced to GBP15.60 per ft2 during this period. Scipher were advised in respect of this transaction by Cyril Leonard and Osborne Clark, while Jones Lang LaSalle and Herbert Smith acted for the purchasers. Scipher plc is the largest technology development and licensing company of its type in Europe. Scipher delivers value from intellectual property (IP) in two principal ways: * It commercialises patent-protected products developed by its own R&D resources, through licensing or sale to high-growth markets around the world. * Using its extensive expertise in IP management it creates value from clients' IP assets by providing a complete licence revenue generating service. Scipher's impressive portfolio of advanced technology products and know-how covers the markets for Secure Identification, 3D Sound, Displays, Communications and Sensors. 60% of Scipher's revenues are earned outside the UK in over 50 countries. Scipher is backed by more than 70 years in advanced R&D including developments of such historic importance as stereo recording, television broadcasting and the medical CT scanner, which won a Nobel Prize for its inventor. Scipher's continuing tradition of technological achievement has been recognised most recently by the 2001 MacRobert award, the highest U.K. accolade for innovation, awarded for Scipher's outstanding 3D Sound technology. Scipher is traded on the London Stock Exchange. Hines is a privately owned real estate firm involved in developing, acquiring, leasing and managing real estate, as well as providing extensive global investment management and advisory services. The Hines -- www.Hines.com -- portfolio of projects completed and underway includes more than 680 properties representing 217 million square feet of office, mixed-use, industrial, retail and residential properties, as well as large, master-planned communities and land developments. With offices in 76 U.S. cities and 11 foreign countries, and assets in excess of US$10 billion, Hines is one of the largest real estate organizations in the world. TELEWEST COMMUNICATIONS: Bondholders Seek to Foil John Malone ------------------------------------------------------------- A committee of bondholders, who had previously called for a meeting with management to discuss debt-restructuring strategies, sounded anew its call for an audience, this time to prevent media tycoon John Malone from taking over the company. Last week, Liberty Media, the investment arm of Mr. Malone, tendered an offer to increase his share of the company's US$4.2 billion bonds in issue to 20%, ostensibly to better position him in a debt-for-equity swap. The committee, according to The Guardian, believes the offer seriously undervalues the company. They want to sit down with management to outline terms of any financial restructuring, presumably to prevent Mr. Malone from taking greater control of the cable firm. The paper says Telewest will offer its own recommendation on Mr. Malone's tender next week. *********** 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, Maria Lourdes Reyes, Jean Claire Dy, Editors. Copyright 2002. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *