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/raid1/www/Hosts/bankrupt/TCREUR_Public/020717.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 Wednesday, July 17, 2002, Vol. 3, No. 140 Headlines * F R A N C E * VIVENDI UNIVERSAL: Vivendi Reject CFO Hanezzo's Resignation ALCATEL: S&P Cuts Ratings to 'BB+/B' After Profit Warning ALCATEL: Wins Major Contract for SBC Broadband Project ALCATEL: Provides Prioritization, Switch Management Solutions * G E R M A N Y * SER SYSTEMS: Investors Sue SER Systems for Embezzlement WUNSCHE AG: Tax Office Withdraws Tax Bill Sent to Wunsche's Joop DEUTSCHE TELEKOM: Gov't Says Sommer Must Go, Eyes Tenzer as CEO BABCOCK BORSIG: Wyser-Pratte Pledges Support on HDW Sale Reversal BABCOCK BORSIG: SPX Obtains Right to Acquire Balcke Cooling KIRCH GRUPPE: TaurusMedia Technik Files for Insolvency * N E T H E R L A N D S * KPNQWEST NV: Interoute Acquires Ebone Assets From Insolvent Units * P O L A N D * DAEWOO-FSO: Daewoo and Rover Bargains Over NSC's Future ELEKTRIM SA: Prolongs Exclusivity for BRE Bank, Eastbridge NETIA HOLDINGS: Subsidiaries File for Composition Proceedings * S W E D E N * FRAMFAB AB: Sluggish European Market Affect Earnings * U N I T E D K I N G D O M * ASW Holdings: Will Be De-listed on FTSE Listing BNFL PLC: Hugh Collum Re-appointed as Chairman of BNFL BIOCOMPATIBLES INTERNATIONAL: Notice of Major Interest in Shares CORDIANT COMMUNICATIONS: Notice of Major Interest in Shares INVENSYS PLC: Notification of Major Interests in Shares MOTHERCARE PLC: Announces CEO Departure, Fall in Sales MOTHERCARE PLC: Company Profile MOTHERCARE PLC: Disclosure of Major Interest in Shares RAILTRACK PLC: Notice of Meeting 9.125% Bonds Due 2006 RAILTRACK PLC: Notice on GBP 350.0 MM, 5.875% Bonds Due 2009 UK COAL: Barnsley Projects Get GBP 6,000 Cash Boost ENERGIS PLC: In Advanced Talks With Creditors on Sale of U.K. Biz WORLDCOM: Banks File Lawsuit vs. WorldCom WORLDCOM, INC: FCC Chief Powell Will Allow WorldCom Takeover UK COAL: Selby Mines Close With 5,000 Job Losses REPSOL YPF: S&P Warns Repsol of Possible Downgrades =========== F R A N C E =========== VIVENDI UNIVERSAL: Vivendi Reject CFO Hanezzo's Resignation ------------------------------------------------------------ Troubled company Vivendi Universal recently rejected the resignation of chief financial officer Guillaume Hannezo due to confusion over the company's accounts, a report from AFX News said. The company said that its new chairman Jean-Rene Fourtou needs Mr. Hanezzo's help to understand the state of the company's accounts, the news outfit reported. It is said that Mr. Hanezzo is the brain behind many of the complicated financial maneuvers executed during former chairman Jean-Marie Messier's reign. Such maneuvers led to investors panicking over the company's real financial situation, particularly on how much debt burden it carries, the news outfit said. According to AFX, Mr. Hanezzo responded to the news by saying " (he) will continue to work constructively with the new management for as long as they believe (he) can contribute." Last Friday, Vivendi denied reports that Mr. Hanezzo had already left the company, the news outfit said. ALCATEL: S&P Cuts Ratings to 'BB+/B' After Profit Warning --------------------------------------------------------- France-based telecommunications equipment provider Alcatel's long-term corporate credit and senior unsecured debt ratings has been downgraded to 'BB+/B' from triple-'B', after the company released its profit warning, Standard & Poor's said. The credit rating agency also lowered Alcatel's short-term corporate credit and commercial paper ratings on Alcatel to single-'B' from 'A-3'. All ratings were removed from CreditWatch, where they were placed on April 30, 2002 (long-term ratings) and June 26, 2002 (short- term ratings). The outlook is negative. Standard & Poor's Europe director Leandro de Torres Zabala said "The downgrade reflects a further deterioration of market conditions within the telecom equipment industry, beyond previous expectations, and the continuing lack of trading visibility." "Furthermore, Standard & Poor's expects that market conditions in the telecom equipment industry will continue to deteriorate during 2002, and will remain very weak for at least the first half of 2003," Mr. Zabala added. The credit rating agency observed, "Alcatel's recent profits warning is a consequence of the continuing slump in demand in the global telecom equipment industry. Of particular concern is the severe fall in sales in the optics segment (down 41% in the first quarter of 2002 compared with the same quarter in 2001) due to overcapacities in the long-haul networks market in the U.S., Latin America, Asia, and, to a lesser extent, Europe, as well as to the lack of new orders in submarine networks. Revenues in carrier networking also fell sharply (down 26%), due to intense competition and price erosion in conventional fixed- line telephony and the fall in capital expenditure in broadband networking. Alcatel is addressing these strong operating pressures by implementing additional restructuring initiatives aiming at breakeven at quarterly sales levels of EUR4.5 billion (USD4.4 billion) at the end of 2002 and less than EUR4 billion on average for 2003." In addition, the credit rating agency said it "expects that Alcatel will continue making operating losses (defined as earnings before interests and taxes) and reporting negative funds from operations (cash flow before working capital adjustments), at least in the near term. Standard & Poor's also said "Alcatel is also expected to continue generating positive operating cash flows (cash flows after working capital adjustments) in the near term through working capital unwinding, as working capital levels continue to fall with revenues. Nevertheless, working capital is a finite source of cash." Furthermore, Standard & Poor's observed that "at June 30, 2002, Alcatel's liquidity was adequate, with cash on hand of more than EUR4 billion and an undrawn bank facility of EUR2.07 billion. The bank facility and the EUR1.1 billion securitization fund include financial covenants that are adequately met at present. Alcatel also has listed participations with a market value of EUR1.4 billion (as at June 30, 2002), of which about EUR1.1 billion, corresponding to the participation in Thales S.A. (A-/Stable/A- 2), could be seen as restricted assets until June 2003 under a shareholders agreement. " "Alcatel estimates cash restructuring costs of EUR1 billion in 2002. In addition, the maturity of Alcatel's EUR5.6 billion gross debt is satisfactory, with EUR200 million maturing in the next 12 months and a further EUR1 billion over the next 24 months. Although Alcatel has material noncore assets for disposal, liquidity levels and headroom under the covenants of the bank facility and the securitization fund could erode over time in a stressed scenario if market conditions continue to deteriorate," S&P said. "The equipment industry continues to deteriorate severely and provides very limited forward trading visibility. Although Alcatel is realigning its cost base to the new, lower level of revenues, this provides only short-term comfort for the company and the ratings," S&P said. Lastly, S&P said, "both the timing and the extent of present market conditions continue to be highly uncertain and beyond the company's control. The current ratings factor in expectations that Alcatel will continue to maintain an adequate liquidity position at all times, including sufficient headroom under covenants of the bank facility and of the securitization fund." ALCATEL: Wins Major Contract for SBC Broadband Project ------------------------------------------------------ Alcatel and SBC Communications Inc., a global communications and digital subscriber line (DSL) service provider in North America, have reached a multi-year, multi-million dollar agreement to deploy the Alcatel 7340 Fiber-to-the-User (FTTU) solution for residential customers in SBC Pacific Bell's Mission Bay project in San Francisco, Alcatel announced in its press statement Monday. Using Alcatel's 7340 FTTU solution SBC's network will have the capability to deliver to consumers voice, data, and video services over an all optical network including emerging high bandwidth services like High Definition TV (HDTV). The Alcatel 7340 delivers high quality voice, interactive video supporting hundreds of analog and digital channels, and Internet access at much higher speeds than traditional dial-up modems. Alcatel and SBC are working to define a network architecture that supports current DSL Internet access service and makes way for FTTU technology, which offers additional solutions for SBC's small business and home office customers. "Alcatel is leveraging its strengths in broadband access to help support SBC's next generation of broadband services," said Lee Doyle, group vice president, Network Infrastructure, IDC. "This announcement represents a step forward in the nascent development of U.S. fiber-based customer services." This FTTU deployment in Mission Bay is the most recent in a series of significant contract extensions SBC has awarded Alcatel. These contracts are for the Alcatel 7300 ASAM for central-office based DSL service delivery; Litespan next generation digital loop carrier neighborhood gateways, with integrated DSL capabilities; and multiservice, multiprotocol data networking platforms including both the Alcatel 7670 Routing Switch Platform and Alcatel 7470 Multiservice Platform. "SBC's proven relationship with Alcatel, a leader in broadband access, has enabled SBC to deliver access services more quickly, more broadly and more profitably than other alternatives," said Ross Ireland, senior executive vice president of SBC. "Our goal in working with Alcatel is to ensure our broadband offerings continue to be unparalleled across North America." "Alcatel is committed to helping SBC provide its customers with the best broadband service available," said Mike Quigley, CEO of Alcatel USA. "Working together, we will bring the distinct advantages of Fiber to the User and DSL Internet access to the growing number of homes and businesses fortunate enough to be SBC customers." Alcatel designs, develops and builds innovative and competitive communications networks, enabling carriers, service providers and enterprises to deliver any type of content, such as voice, data and multimedia, to any type of consumer. Relying on its leading and comprehensive products and solutions portfolio, stretching from end-to-end optical infrastructures, fixed and mobile networks to broadband access, Alcatel's customers can focus on optimizing their service offerings and revenue streams. With sales of EUR 25 billion in 2001 and 99,000 employees, Alcatel operates in more than 130 countries. For more information relating to the Alcatel 7340 FTTU solution, www.alcatel.com/fttu ALCATEL: Provides Prioritization, Switch Management Solutions ------------------------------------------------------------- Alcatel announced Monday new capabilities to its OmniVista network management solution set including a powerful tool called PolicyView with "One Touch QoS" that provides comprehensive control and drastic simplification of quality of service (QoS) features. This new release of OmniVista coincides with the release of WebView, a web-based manager for easy configuration of Alcatel's new OmniSwitch family. The new capabilities will go a long way in solving manageability complexities. PolicyView with "OneTouch QoS" is one of the most unique QoS configuration tools on the market today. Building on its legacy of unmatched QoS features, Alcatel has taken the lead in addressing the overwhelming market demand for easier to use QoS tools. Users can now configure QoS policies across multiple Alcatel switches, eliminating complex switch-by-switch configurations. For example, users need only to select a sub network of phones via their Internet Protocol (IP) address and click on "apply" to insure that all voice communications to and from the phones have the necessary bandwidth. "One of the reasons that we originally selected Alcatel's OmniVista was for its PolicyView with OneTouch QoS feature, which allows for easy configuration of QoS policies across the network," said Willis Marti, associate director of computing and information services at Texas A&M University. "With the new OmniVista platform, we are able to manage the whole network as a network, rather than a collection of devices, thus saving us a lot of time by eliminating the need for switch-by-switch configurations." PolicyView with "OneTouch QoS" is supplemented by an expert mode which gives users full control over defining QoS based on any combination of IP addresses, MAC addresses, well known TCP/UDP port numbers and VLAN groups, as well as defining validation times for when the policy is in effect. Full DiffServ, TOS and 802.1p QoS parameters are supported. "Alcatel continues to evolve its OmniVista platform to meet the growing demands of network management," said Tere' Bracco, Director IT Infrastructure, Current Analysis. "With these enhancements, Alcatel further demonstrates its ongoing efforts to develop a comprehensive converged platform that reduces the complexities normally associated with network management." New enhancements to OmniVista also include topological features that give users the ability to see the layouts of both physical and logical networks, and an application that allows users to monitor various statistics across multiple devices at a time. Significant enhancements have also been made to the event manager, including full filtering based on Boolean logic as well as color coding that gives the status of devices and sub networks based on logical topological views. "Building on our network management strategy, Alcatel's PolicyView with 'OneTouch QoS' is a significant addition to OmniVista for the simplification of network management," said Joelle Gauthier, Alcatel vice president of network infrastructure marketing. "The addition of PolicyView OneTouch QoS makes it significantly easier for users to configure QoS across multiple devices for time critical applications such as Voice over IP, saving time and money." In addition to Alcatel's PolicyView with "OneTouch QoS", a fully functional web-based manager called WebView is included on Alcatel's OmniSwitch family. Unlike many web based management systems, WebView provides full coverage of Command Line Interface (CLI) access, which makes it more intuitive and easier to configure complex operations that take multiple CLI commands, such as router configuration. Additionally, WebView makes it possible to configure switches without having to look up CLI commands. WebView is easily launched from the OmniVista environment by simply clicking on the Alcatel OmniSwitch device in any of the OmniVista windows. Providing a seamless management interface, OmniVista, PolicyView with 'OneTouch QoS' and WebView are all designed with the same interfaces, making it easy for users to navigate through network-wide applications in OmniVista, while also drilling down to devices with WebView. Alcatel OmniVista 2000 is available worldwide this month. Core applications start at USD4,500, PolicyView with "OneTouch QoS" starts at USD12,500, and various element managers start at USD500. About the Omni family of convergence-ready network solutions Alcatel delivers standards-based IP communications solutions to meets the needs of enterprises converging voice and data networks. Based on a robust client/server UNIX architecture, the Alcatel OmniPCX 4400 scales from 50 to 50,000 users offering a rich set of enterprise-level telephony features from a range of legacy and IP telephones as well as powerful, integrated applications, such as messaging, mobility and multi-media contact centers that can be centralized or distributed over many locations. Alcatel Omni-family of network infrastructure equipment and security appliances provide the network foundation that supports the quality of service, security, and management requirements of highly available networks. ============= G E R M A N Y ============= SER SYSTEMS: Investors Sue SER Systems for Embezzlement ------------------------------------------------------- Offices and private quarters of insolvent SER Solutions, Inc., the provider of knowledge-enabled software was searched by police and public prosecutors last Thursday, a report from Suddeutsche Zeitung and the Financial Times said. The association of German retail investors had sued the company for embezzlement and the delayed application for insolvency proceedings, the papers said. The investors had filed a case against 14 current and former executives of the company. Its former chairman Mr. Gert Reinhardt is suspected of transferring company funds amounting to EUR67 million to a KES Acquisitions, a US company owned by SER Systems' former finance director Carl Mergele, the papers reported. Mr Reinhardt, after stepping down as chairman on the 28th of June this year is rumored to have fled abroad. He had earlier claimed that he is currently staying at his second home in the UK, the papers said. Earlier the Troubled Company Reported had reported that on June 12, SER agreed to the sale of its US operations. But the said deal emerged uncertain as SER later requested that the buyer advance its payment. The said buyer refused to pay the advance. Subsequently, SER System AG was forced to file for insolvency in July after failed talks with creditor banks and because one of its investors decided to withdraw financial support effective July 15, 2002, the TCR said. SER was delisted from the German growth segment in April after being traded on its Nemax-50 blue-chip index until June 2001. SER booked -EUR 149 million in losses last year with sales of EUR 163 million. WUNSCHE AG: Tax Office Withdraws Tax Bill Sent to Wunsche's Joop ----------------------------------------------------------------- Germany's tax office decided last week to immediately remove a tax bill, which has been sent to Joop GmbH, a subsidiary of the textile group Wunsche AG, reports from Die Welt and the Financial Times said. According to the papers, the tax bills were seen as the cause for the failure of a rescue plan for the insolvent Wunsche group. The plan was proposed by the financial holding company Munchmeyer Petersen & Co GmbH (MPC), which was planning to acquire Wunsche. In addition, the tax bills would have costs a total of EUR37 million until 2014, the papers said. It is said that MPC has criticized the company's former management for it failure to provide information regarding the tax position, the papers reported. MPC said that if the information would have been revealed earlier, it could have negotiated with the tax office, the papers said. Late in March, the Troubled Company Reported had learned that Wunsche AG re-filed its insolvency petition after talks with Handels-und Finanzholding Munchmeyer Petersen & Co GmbH (MPC). The company blamed the tax demand against fashion subsidiary Joop! GmbH and the disappointing performance of fashion brand Cinque for the failure of the talks. The taxes in arrears have already amounted to EUR37 million. The company said the taxes were owed by former owner Wolfgang Joop, as the notification of tax alterations covered the 1990-1991 dues of the subsidiary. The fashion firm had explained the subsidiary only came under its control in 1998 therefore the tax due was owed by former shareholders. MPC came to Wunsche's rescue in January, offering a timely capital increase and forcing the cancellation of the company's insolvency petition. But MPC later said the risks of investing in Wunsche had been "simply too high." Wunsche AG started insolvency proceedings against Wunsche at the end of May. The group's subsidiaries are now slowly being sold off. In related news, the group's fashion subsidiary Cinque filed for insolvency in April after failing to distance itself from Wunsche's woes. Cinque was the first to declare insolvency among Wunsche's subsidiaries. It also suffered from the cancellation of credit agreements with suppliers. DEUTSCHE TELEKOM: Gov't Says Sommer Must Go, Eyes Tenzer as CEO --------------------------------------------------------------- Deutsche Telekom shares dove a day before a boardroom meeting is expected to decide the fate of chief executive officer Ron Sommer, BBC News said. This came after reports that German government Chancellor Gerhard Schroeder expressed that he wants Mr. Gerd Tenzer replaced Mr. Sommer. Chancellor Schroeder owns 43% of Deutsche Telekom, news agency said. Investors have blamed Mr. Sommers for the increasing debts and a huge slump in the German company's stock value, BBC said. The news agency reported that the center-left government has decided that Mr. Sommer should go amid the upcoming national elections as well as the increasing anger of shareholders, the news agency said. Mr. Sommer is said to be the brain behind Deutsche Telekom's privatization in 1996. After which, he launched an extensive strategy of international expansion resulting in debts and stock market jitters that led company's shares plunging to just one tenth of their peak value, two years ago, the news agency said. However, Chancellor Schroeder quest for a successor to Mr. Sommer's throne has been met with difficulty since most big name industrialists have shied away from the position, BBC said. BBC reported that the government has chosen Mr. Tenzer as a prospective candidate. It will seek support from supervisory board regarding Mr. Tenzer's possible appointment. Meanwhile, Deutsche Telekom's staff expressed consternation over "attempts to turn the firm into a political football," the news agency said. BABCOCK BORSIG: Wyser-Pratte Pledges Support on HDW Sale Reversal ----------------------------------------------------------------- Wyser-Pratte Management Co. Inc (WPM) announced Monday that it will cooperate fully with Helmut Schmitz, the recently appointed administrator overseeing the Babcock Borsig (BBX-GR) reorganization process, in efforts to rescind the sale of 25% of shipbuilding subsidiary HDW to One Equity Partners (OEP). The sale had been previously blocked by the regional Court of Duisburg, Germany, which upheld two separate injunctions against the sale of HDW shares to OEP, an investment arm of Bank One or any other buyer. Babcock subsequently filed for insolvency in early July. Shareholders represented by WPM have been fighting an ongoing court battle with Babcock and former CEO Klaus Lederer to have the sale rescinded and blocked. The Duisburg court ruled in June that the sale is subject to approval of Babcock shareholders under what is referred to in Germany as the Holzmuller principle. "Mr. Schmitz is correct in reviewing rescission of the HDW deal and we will do everything we can to support that determination," said WPM President, Guy Wyser-Pratte. "We will offer any assistance we can to Mr. Schmitz and new Babcock CEO Horst Piepenburg to further reorganize Babcock to fully protect both employees and shareholders," he added. WPM has called the HDW transaction a travesty and has urged that all of the details surrounding Babcock's perils be fully reviewed. "Babcock is a viable firm with a reconstituted controlling interest in HDW and is capable of generating significant value for both employees and shareholders of Babcock. This reconstituted Babcock ought to have the ability to fairly and efficiently plan for its future without self-dealing executives and conflicted parties picking over the remains," concluded Wyser-Pratte. In a separate matter, Wyser-Pratte said it would encourage the German SEC to review trading records of executives and affiliates of Babcock to determine whether advance knowledge of the proposed HDW/OEP sale and its financial impact on Babcock was improperly used. "These may be matters of interest to German regulators," said WPM attorney Dr. Thomas Heidel, with the firm of Meilicke Hoffmann & Partner in Bonn, Germany. WPM is a Manhattan based investment fund manager. Contact Guy Wyser-Pratte or Kurt Schacht@ Wyser-Pratte & Co. 212-495 5350. Meilicke Hoffman is a law firm based in Bonn, Germany. Contact Thomas Heidel at 49 228 72 54321 Contact Information: Wyser-Pratte & Co. Guy Wyser-Pratte or Kurt Schacht Telephone: 212/495-5350 or Meilicke Hoffmann Thomas Heidel Telephone: 49 228 72 54321 BABCOCK BORSIG: SPX Obtains Right to Acquire Balcke Cooling ----------------------------------------------------------- SPX Corporation announced Monday that it has obtained the exclusive right to acquire certain assets and subsidiaries of the Balcke Cooling Products Group from Babcock Borsig AG. Balcke Cooling Products has annual revenues of over USD245 million and is a leader in the design, manufacture and marketing of dry and wet cooling system products in the power, chemical, petro chemical and process industries on a global basis. The business operates under the Balcke, Balcke-Duerr and Ceramic Cooling Tower brands. Upon completion of the acquisition, Balcke would become part of SPX's Marley Cooling Technologies business. The parties have agreed to move aggressively towards an expedited closing date, which is subject to the final completion of due diligence and the approval of appropriate regulatory entities. John B. Blystone, Chairman, President and CEO of SPX Corporation said, "The acquisition of Balcke Cooling Products would fit perfectly with our strategy of creating a global platform in the cooling system market. The company's products complement our existing cooling system portfolio and provide us with new capabilities in dry cooling technology. In addition, the acquisition also provides access to an expanded customer base throughout Europe and Asia." Marley Cooling Technologies, based in Overland Park, Kansas, designs and manufactures cooling towers for the power generation, industrial, refrigeration, and HVAC markets worldwide. SPX Corporation is a global provider of technical products and systems, industrial products and services, flow technology and service solutions. The Internet address for SPX Corporation's home page is www.spx.com. KIRCH GRUPPE: TaurusMedia Technik Files for Insolvency ------------------------------------------------------ Kirch Group's technical services unit TaurusMedia Technik GmbH, has filed for insolvency on Monday, according to the Munich district court, Dow Jones said. TaurusMedia has appointed Mr. Michael Jaffe as insolvency administrator. Mr. Jaffe also acts as the administrator of KirchMedia, which started insolvency proceedings in June, the news agency said. TaurusMedia holds a library of over 2 million films and provides production and post-production services for the film industry. It is a unit of Kirch's media rights trading unit KirchMedia GmbH, Dow Jones said. ===================== N E T H E R L A N D S ===================== KPNQWEST NV: Interoute Acquires Ebone Assets From Insolvent Units ----------------------------------------------------------------- Interoute, operator of fibre-optic networks in Europe, has purchased the principle assets of KPNQwest's Ebone network. The move dramatically increases Interoute's network reach, and propels Interoute into the first rank of European telecommunication providers. Under the terms of the agreement with KPNQwest's Dublin-based receivers, McStay Luby, Interoute gains full ownership and control of high-capacity metropolitan area networks (MANs) in eight major European cities including Paris, Frankfurt, Madrid, Zurich, London, Vienna, Milan and Amsterdam. Interoute has also acquired backbone infrastructure connecting Munich to Vienna, Turin to Milan, and Frankfurt to Strasbourg. The financial terms of the deal were not disclosed. "Acquiring Ebone's assets not only provides us with an opportunity to accelerate our strategy of deepening our network presence and connectivity in key European cities, but also enhances our ability to provide value added network services and solutions," said James Kinsella, Executive Chairman, Interoute. "It also allows us to continue to support customers still using the Ebone network infrastructure". Founded in 1995, Interoute (www.interoute.com) is a pan-European telecommunications company with established operations in 9 European countries (Austria, Belgium, France, Germany, Italy, Netherlands, Spain, Switzerland and the UK). Interoute's fibre-optic network connects 45 cities in 9 countries throughout Europe. The company also operates MANs in Amsterdam, Frankfurt, London, Madrid, Milan, Paris, Rome, Zurich and Vienna. Its product portfolio includes optical network services (dark fibre, wavelengths, SDH and co-location), Internet services (Internet access and managed application hosting), MPLS VPNs and communications services (carrier services and business communications). Customers include other carriers, network operators, Internet and application service providers, and e-commerce companies. A privately held company, Interoute is owned by a number of internationally based shareholders, the largest and major shareholder being the Sandoz Family Foundation (www.sandozfondation.ch), one of the world's largest private family foundations. Contact Information: Trylon Communications (for Interoute) Harrison G. Wise Telephone: +1 212-725-2295 Email: harrisonw@tryloncommunications.com =========== P O L A N D =========== DAEWOO-FSO: Daewoo and Rover Bargains Over NSC's Future -------------------------------------------------------- Troubled carmaker Daewoo-FSO's creditors have decided on the division of shares in the New Small Company (NSC) to be created from the assets of the company, the Warsaw Business Journal said. But doubts about the planned entry of Britain's MG Rover as an investor in the NSC have emerged. Daewoo-FSO's South Korean shareholder, Daewoo Motor Co. is said to doubtful on allowing Rover in, saying Daewoo Motor said a debt-free NSC will not need an investor at all, the paper said. On the other hand, Daewoo-FSO's said: no Rover, no NSC, the paper said. But Rover is also currently haggling as it wants to make a joint- venture in NSC rather than acquire a stake in it. It also demands government guarantees, the paper said. ELEKTRIM SA: Prolongs Exclusivity for BRE Bank, Eastbridge ---------------------------------------------------------- The Management Board of Elektrim S.A. announces that on July 15, 2002, the agreement dated May 12, 2002 executed between Elektrim S.A., BRE Bank S.A. and Eastbridge NV has been amended. Pursuant to the above agreement, the consortium of BRE Bank S.A. and Eastbridge NV were granted exclusivity right to negotiations relating to the transfer by Elektrim S.A. of 49% of shares in Elektrim Telekomunikacja Sp. z o.o. and 49% of shares in Carcom Warszawa Sp. z o.o. and one share in Polska Telefonia Cyfrowa sp. z o.o. The Exclusivity Agreement has been prolonged until August 15, 2002. All other provisions of the agreement remain unchanged. NETIA HOLDINGS: Subsidiaries File for Composition Proceedings ------------------------------------------------------------- Netia Holdings S.A., Poland's largest alternative provider of fixed-line telecommunications services, announced Monday that on July 12, 2002, three of its subsidiaries, Netia Holdings B.V. (BV I), Netia Holdings II B.V. (BV II) and Netia Holdings III B.V. (BV III), each filed applications with the Court in Amsterdam, the Netherlands, in order to restructure the obligations owed under the high yield notes issued by BV I and BV II and under a cross-currency swap agreement executed by BV III. As requested in the applications, the Court in Amsterdam granted on July 12, 2002 provisional payment suspensions on the repayment of obligations of BV I, BV II and BV III, respectively. The composition plans presented by BV I, BV II and BV III to the Court in Amsterdam include canceling the obligations under the high yield notes and the swap agreement in exchange for issuing new notes with a total value of EUR 50 million, to be issued by BV I. The last day for filing of claims against each of BV I, BV II and BV III in the Dutch proceedings is August 1, 2002. Contact Information: Netia Holdings SA Anna Kuchnio Investor Relations Telephone: +48-22-330-2061 =========== S W E D E N =========== FRAMFAB AB: Sluggish European Market Affect Earnings ---------------------------------------------------- The company's report for the first quarter stated that, "Due to the uncertain market situation, the future is difficult to forecast. It is currently difficult to predict whether the second quarter revenue will exceed the first quarter." Framfab's European market remained slow in the second quarter. Given the current state of the economy, clients are often on hold - either postponing or dividing up the implementation of new projects. Although Framfab kept all of its clients and current contracts during the period, and even attracted new clients, sales were approximately SEK 20 million lower than in the first quarter. The revenue decline will fully impact earnings. Framfab's cash flow improved from SEK -17 million in the first quarter to approximately SEK -8 million in the second quarter. The company's liquid funds totaled approximately SEK 89 million at the close of the second quarter. As a result of the sluggish market and lower revenue, Framfab has instituted measures to reduce costs, including cutting back its workforce by approximately 45. The lower costs will impact earnings somewhat in the third quarter and have a full impact in the fourth quarter. The January-June interim report will be released on August 21, 2002. Formerly known as Framtidsfabriken AB, tge Company was established in 1995. Framfab provides consulting services and business solutions based on Internet technology. The company's clients are manufacturing, internet sales and internet marketing, service, payment and delivery companies. The group operates in Denmark, France, Germany, the Netherlands and Sweden. The company is quoted on the O list of the Stockholm Stock Exchange (ticker symbol FTID). For more information, please visit www.framfab.com. During the quarter of January to March 2002, Framfab posted USD 0.9 million in net loss. On the same period, the company recorded USD 33.5 million in net assets and USD 15.7 million in liabilities. Contact Information: Framfab AB STOCKHOLM SE-114 84 SWEDEN +46 8 54525800 +46 8 202808 Sven Skarendahl Executive Chairman of the Board Telephone: +46 8 41 00 10 00 Email: sven.skarendahl@framfab.se Anders Ekman CEO Telephone: +46 8 41 00 10 00 Email: anders.ekman@framfab.se Christian Luiga CFO Telephone: +46 8 41 00 10 00 Email: christian.luiga@framfab.se =========================== U N I T E D K I N G D O M =========================== ASW Holdings: Will Be De-listed on FTSE Listing ---------------------------------------------- Appointment of Administrative Receivers Changes in FTSE Indices July 15, 2002 Following the suspension and appointment of administrative receivers for ASW Holdings PLC (UK), in accordance with the ground rules, FTSE announces the following changes: INDEX CHANGE EFFECTIVE FROM START OF TRADING FTSE All-Small ASW Holdings PLC (0001638) will be deleted at 0p. 07-17-02 FTSE Fledgling ASW Holdings PLC will be deleted at 0p. 07-17-02 BNFL PLC: Hugh Collum Re-appointed as Chairman of BNFL ------------------------------------------------------ Secretary of State for Trade and Industry Patricia Hewitt confirmed Monday the re-appointment of Hugh Collum as Chairman of BNFL, the power group announced on July 15. Mr Collum's current term of appointment expires on September 30, 2002. He is to be appointed for a further term of two years with effect from October 1, 2002. BNFL Chairman Hugh Collum said: "We have made good progress over the last three years however there remains much to be done to re- establish BNFL. I am pleased to be able to continue supporting Norman Askew, our Chief Executive, in the excellent work he is doing to re-shape BNFL." Ms Hewitt said: "I am delighted that Hugh has agreed to remain at the helm of BNFL for a further period and I am grateful to him for his hard work since he became Chairman in October 1999. "Hugh has rebuilt the board and steered the company through difficult times. The recent re-structuring should position the company well to meet the challenges of the new arrangements for handling the nuclear legacy which I announced last November." Mr Collum's fee will increase from GBP150 000 - the figure set in 1999 - to GBP165 000 a year with effect from 1 October 2002. He will be re-appointed for a period of two years, subject to earlier termination on six months' notice by either party. He holds no other Ministerial appointments and has not undertaken any political activity in the last five years. He also holds non- executive directorships on the boards of Safeway plc, Whitehead Mann Group plc and Celltech Group plc. BIOCOMPATIBLES INTERNATIONAL: Notice of Major Interest in Shares ---------------------------------------------------------------- On July 15, 2002, J O Hambro Capital Management Limited (JOHCM), ORYX International Growth Fund Limited (ORYX) and North Atlantic Smaller Companies Investment Trust PLC (NASCIT) submitted a concert party notification, pursuant to Section 204 of the Companies Act 1985. At that time, JOHCM confirmed that it was interested in 7,120,000 Ordinary 5p shares of Biocompatibles International Plc, whilst NASCIT confirmed that it was interested in 2,500,000 shares, and ORYX confirmed its interest in 750,000 shares. These amounts represent 4.98%, 1.75% and 0.52% of the total issued share capital of the Company respectively. These shares are held as follows: HSBC Global Custody London Limited 750,000 Bank of New York Nominees Limited 2,500,000 Nutraco Nominees Limited 620,000 Goldman Sachs International TNA 2,400,000 Goldman Sachs International THO 1,200,000 Goldman Sachs International THT 400,000 Goldman Sachs International TEU 2,500,000 TOTAL 10,370,000 shares = 7.26% CORDIANT COMMUNICATIONS: Notice of Major Interest in Shares ----------------------------------------------------------- Cordiant was notified on July 15, 2002 that Morley Fund Management Ltd, a subsidiary of Aviva plc (formerly CGNU plc) has a holding of 32,752,795 Ordinary shares representing 8.00% of the issued share capital of the Company. INVENSYS PLC: Notification of Major Interests in Shares ------------------------------------------------------- Name of company: Invensys plc Name of shareholder with major interest: Brandes Investment Partners The registered holders of the shares in which Brandes Investment Partners has an interest are approximately 575 custodian banks unaffiliated with Brandes Class of security: Ordinary shares of 25p each Date of transaction: June 28, 2002 Date company informed: July 15, 2002 Total holding following this notification: 485,131,884 Total percentage holding after this notification: 13.9% Invensys plc's core business involves production technology and energy management. The group specializes in helping customers improve their performance and profitability across a focused span of industries. Its Production Management Division provides market-leading expertise and technology to customers in the oil, gas and chemicals sector; in power generation; food, beverage and personal healthcare; and in discrete and hybrid manufacturing. The group's Energy Management Division ensures the safe and efficient use of energy and natural resources, through innovative solutions for utilities; operators of industrial, commercial and residential buildings; equipment manufacturers; and all enterprises that depend on a high-quality, continuous power supply. The company also serves the specialized Rail Systems, Wind Power and Power Components markets. On March 2002, Invensys reported unaudited GBP939 million in losses. On the same period, the industrial group revealed GBP6.5 billion in assets and GBP 5.4 billion in liabilities. MOTHERCARE PLC: Announces CEO Departure, Fall in Sales ----------------------------------------------------- Total sales for the Group in the 14 weeks ending July 12, 2002 are 2.7% down on the year with U.K. like-for-like sales down 3.1%. Gross margins are 0.5% down on the same period compared to last year. In the first quarter ending June 21, 2002, Mothercare expected to make a loss before tax, with distribution costs GBP4.3 million higher than last year. However, worse than anticipated trading has caused this loss in the first quarter to be higher than expected at GBP5.4 million (2001: profit before tax of GBP2.3 million). Since late May, anticipated improvements in Clothing sales have not been achieved, particularly in the high street stores. This, together with the additional markdowns necessary to clear surplus stocks, has significantly affected performance. These trends have continued and although increases in distribution costs will, as previously announced, ease in the second quarter, the Company expects that the remainder of the first half will continue to be loss making. Actions have already been taken to address the situation and these are expected to have a positive impact on the second half of the year. The downward trend in distribution costs will continue in the third quarter and in the fourth quarter distribution costs will be lower than last year. Now that the warehouses are operating effectively, availability of the new autumn ranges will be much improved on last year, when they were severely impacted by the warehouse failure of August 2001. A further trading update will be issued on October 15, 2002 following the end of the first half of the year. Chris Martin, Chief Executive, is leaving the Company with immediate effect. The search for his successor has already begun. Mark McMenemy, Finance Director, will take on the responsibilities of Chief Executive until the new appointment is made. The Board of Mothercare is pleased to announce that Ian Peacock will be joining the board as a non-executive director on August 1, 2002 and will become non-executive Chairman later this year. Ian is non-executive Chairman of MFI Furniture Group Plc, having previously held senior positions in the City. Contact Information: Gwen Gober Mothercare plc Telephone: 01923 206233 MOTHERCARE PLC: Company Profile ------------------------------- Name: Mothercare plc Cherry Tree Road Watford Hertfordshire WD24 6SH United Kingdom Telephone: (01923) 241 000 Fax: (01923) 240 944 Website: http://www.mothercare.com SIC: Retailing Employees: 5,198 Net Loss: GBP0.1 million (Q1 2002) Total Assets: GBP196.2 million(Q1 2002) Total Liabilities: GBP70.8 million (Q1 2002) Type of Business: Mothercare PLC, formerly known as Storehouse plc, supplies retail clothing, homeware products and nursery equipment. Products include, clothing, home & travel and Toys. Trigger Event: After a third profit warning in a period of nine months, Chris Martin, the group's chief executive has quit. The retailer warned worse-than-anticipated trading has caused its pretax loss in the first quarter to be higher than expected at GBP5.4 million, against a profit of GBP2.3 million as compared to last year's results. In 2000, the group posted 389 million in pre tax losses. Chairman: A K P Smith Chief Executive/Finance Director: M McMenemy Bankers: HSBC Bank PLC Financial Advisers: Merrill Lynch, Schroder Salomon Smith Barney Stockbrokers: Cazenove Auditors: Arthur Andersen Law Firms: Eversheds, DLA Financial PR Advisers: Brunswick No. of Shares in issue: 70.69 million 50p Ordinary shares Major Shareholders: Prudential PLC 13.00% Mothercare Employee Trust 4.98% Legal & General Inv Mgmt 3.67% Other Dirs 0.34% MOTHERCARE PLC: Disclosure of Major Interest in Shares ------------------------------------------------------ Mothercare plc announced Monday they have been advised by M&G Investment Management Limited that with effect from July 12, 2002, Prudential plc and certain of its subsidiary companies have a notifiable interest in 10,594,898 Mothercare plc Ordinary 50p shares being 14.98% of the issued share capital. The previously notified Interest of Prudential plc was in respect of 9,191,593 Ordinary 50p shares comprising 13.00% of the issued share capital. The Notifiable interest of Prudential plc is as follows: Registered Holder Holding Chase Nominees 42,000 Clydesdale Bank Noms. Ltd MGA 1,652,245 Clydesdale Bank Noms. Ltd MGG 5,989,817 Clydesdale Bank Noms. Ltd MGIN 100,000 Clydesdale Bank Noms. Ltd MGT 8,416 Henderson Nominees Ltd 368 Nortrust Nominees Ltd 122,849 PRUCLT HSBC GIS NOM(UK) PAC AC 2,443,323 PRUCLT HSBC GIS NOM(UK) PPL AC 233,047 Prudential Holborn Pensions LTD 2,833 TOTAL 10,594,898 or 14.98% The M&G Group Limited holding within the total holding of Prudential plc disclosed above amounts to 10,469,216 or 14.81% (previously 9,065,911 or 12.82%) RAILTRACK PLC: Notice of Meeting 9.125% Bonds Due 2006 ------------------------------------------------------ Proposals for modification of redemption and other provisions of the GBP 135,531,000 9.125% bonds due 2006 issued by Railtrack plc (in railway administration) and notice of meeting of bondholders to be held on August 7, 2002. RAILTRACK PLC: Notice on GBP 350.0 MM, 5.875% Bonds Due 2009 ------------------------------------------------------------ Proposals for modification of redemption and other provisions of the GBP 350,000,000 5.875 % bonds due 2009 issued by Railtrack plc (in railway administration) and notice of meeting of bondholders will be held on August 7, 2002. UK COAL: Barnsley Projects Get GBP 6,000 Cash Boost --------------------------------------------------- More than GBP6,000 has been awarded by UK COAL in a second round of grants to help community projects in the Barnsley area, The payments are being made from a GBP45,000 Community Trust Fund set up by Britain's biggest coal producer who are managing one of the largest land clean-up operations in the region near the former Grimethorpe Colliery site. More than GBP 11,600 of the current fund has so far been allocated to 14 projects, the latest awards being: GBP2,138 for the erection of fencing in Cadwell Close; GBP2,072 for four new seats for the streets of Brierley; GBP447 for uniforms and protective clothing for Grimethorpe St John Ambulance; GBP350 for travelling expenses to enable Grimethorpe Millenium Majorettes to attend displays; GBP800 for Cudworth & West Green Community Partnership for the purchase of materials for training; GBP450 to Grimethorpe Miners Welfare Cricket club for equipment: and GBP350 to the Valley Community Centre for tables and chairs. Previous awards of over GBP3,500 were made for the erection of fences at the Pinfold allotments and to Willowgarth, Ladywood, Milefield, Brierley and Shafton schools for environmental improvements. The restoration of the Ferry Moor site, being funded by the recovery of coal from seams lying close to the surface, is progressing well. UK COAL is seeking a variation from the existing planning consent to extract a further 80,000 tons of coal from the site, which, if approved, will inject a further GBP40,000 into the Community Trust Fund. Says Area Planning Manager Mark Johnson: "We are delighted to make these awards, and in addition to restoring the land and improving the environment, helping fund local organizations which are an important part of the community." Further awards froth the UK COAL Community Trust Fund will be made in about three months' time. ENERGIS PLC: In Advanced Talks With Creditors on Sale of U.K. Biz ----------------------------------------------------------------- Energis PLC notes the commentary in the weekend press with regard to its recapitalization plans. Discussions are at an advanced stage with Energis' bank and bondholder representatives, which if concluded, would result in the U.K. business being sold to and recapitalized by a company set up for this purpose. We will issue a further announcement as soon as the outcome is clear. Contact Information: Gavin Partington Energis Plc Telephone: + 44 (0) 207 206 5555 WORLDCOM: Banks File Lawsuit vs. WorldCom ----------------------------------------- Banks of Worldcom Inc. will take the company to court accusing it of defrauding them of nearly USD2.5 billion, in a move that could lead the company to bankruptcy, a report obtained from the Telegraph said. The group of banks, which include Deutsche Bank and ABN Amro, are going to argue their case at a hearing in New York, the paper said. The lawsuit comes after talks between the banks and WorldCom failed regarding a financial injection, the Telegraph said. Citing the court papers filed by the banks, the Telegraph said that the lenders claim that WorldCom allegedly failed to tell the banks the real financial situation of the company. WorldCom even assured the banks on May 20 that its first quarter 2002 financial statement showed a "fair picture." According to the court papers, the telecom company also told lenders that it intends " to draw down the entire USD2.65 billion in a single borrowing," five days before, the paper said. Subsequently, WorldCom announced on June 25 in a press release that it had accounting discrepancies amounting to EUR4 billion. The court papers add that if the banks were aware of the company's real financial condition, they would not have allowed the loan, the paper said. The Telegraph further reports that the latest lawsuit would eventually force WorldCom to file for bankruptcy seeking protection from its creditors. WorldCom is said to have hired investment bank Lazards to prepare for imminent bankruptcy filing. The banks had offered to put up more cash if WorldCom would agree to pledge its assets as security for the existing facility. But this move would have to face the dissent of WorldCom bondholders, the paper said. It the banks would fail in the lawsuit, they would be forced to write down the value of their loans while the unsecured USD2.65 billion facility would be treated equally among bondholders, the paper reported. JP Morgan Chase and Citigroup are the two banks that did not participate in the filing of the lawsuits. Citigroup is said to have resigned from the steering committee of the banks' strategy, the Telegraph said. WORLDCOM, INC: FCC Chief Powell Will Allow WorldCom Takeover -------------------------------------------------------------- Federal Communications Commission (FCC) chairman Michael Powell said Monday implied that he could permit a take over of WorldCom by any local telecommunications company, report from the Times said. The daily said that if WorldCom would merge with a large regional phone company, it would "virtually recreate the monopoly of AT&T before 1984 when the US equivalent of British Telecom was broken up. The break-up of AT&T created many local U.S. telephone companies known as Baby Bells." "There are plenty of doctrines in antitrust and competition policy that would take into consideration the duress and state of the market. If a Bell company brought a deal to us, that would certainly be part of the consideration," Mr. Powell added. The daily reports that considering the industry's condition, Mr. Powell said he would have to think of radical moves to ensure that the phone and internet services of WorldCom's 20 million customers would not be jeopardized. The FCC chief also commented that the White House should give billions of dollars of federal contracts to WorldCom instead of walking out of existing contracts, the Times said. UK COAL: Selby Mines Close With 5,000 Job Losses ------------------------------------------------- UK Coal will release a statement regarding the closure of its Selby mines in South Yorkshire, Britain's biggest coalfield, resulting in 5,000 job losses, news from the Guardian said. The Guardian said the company's three remaining mines at Selby have lost GBP90 million over the last three years. The company said it failed to look for ways to stem these losses. The National Union of Minerworkers was reported to have refused invitations to attend a meeting last night because they claimed they were not consulted regarding Selby's future, the paper said. "We will be working with coalfield MPs and trade unions to see what we can do to reverse this appalling decision," said national chair of Coalfield Communities Campaign Bill Flanagan. The company have refused to comment but confirmed it planned a statement and had invited the NUM to a meeting, the paper said. UK Coal has 2,000 workers at the Riccall, Stillingfleet and Wistow pits. But 3,000 jobs rely on the mines, the paper said. The British mining company, which was formerly named RJB Mining have bought most of the English pits on privatization. It has long complained of Selby's uselessness since it has been affected by the falling price of coal in the world market, the paper said. UK Coal's shareholders have since urged the company to let go of commercial mines and focus on land development at its old sites, the paper reported. The company is said to shut down the Prince of Wales mine in west Yorkshire next month, as well as the Clipstone colliery in Nottinghamshire early next year, the Guardian said. The company's decision to close the Selby mines met dissent from NUM who sees the closure an absurdity since there are enough coals in the mines to last for 40 years. But financial analysts said the company can no longer afford to run its facilities especially now when government subsidies have been drained, the paper said. REPSOL YPF: S&P Warns Repsol of Possible Downgrades --------------------------------------------------- Repsol YPF has been warned by U.S. credit rating agency Standard & Poor's of possible further downgrades amidst the uncertainty of Argentina's political and economic climate, a report from El Pais and Financial Times said. S&P further said the Spanish petroleum company still runs the risk of a downgrade even though its liquidity status has improved after the public offering for 65% of Enagas and the sale of 23% stake in Gas Natural, the report said. The ratings agency added that the probable application of export tariffs, downward pressure on gas prices, and, the possible nationalization of YPF, are the factors that the Repsol YPF has to face, the report said. *********** 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 and 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 USUSD575 per half-year, delivered via e-mail. 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