/raid1/www/Hosts/bankrupt/TCREUR_Public/020820.mbx             T R O U B L E D   C O M P A N Y   R E P O R T E R

                             E U R O P E

                 Tuesday, August 20, 2002, Vol. 3, No. 164


                              Headlines

* F R A N C E *

FRANCE TELECOM: Orange Pioneers in Per-Second Billing
VIVENDI UNIVERSAL: Swisscom Has No Interest in Cegetel Stake  
VIVENDI UNIVERSAL: CEO Confirms Cegetel to Pay EUR 987MM in 2003

* G E R M A N Y *

ADAM OPEL: Auto Maker May Post Narrower Losses - Handelsblatt
BABCOCK BORSIG: Says Die Welt Allegations Are Incorrect
DEUTSCHE TELECOM: Debt Reduction Signals VoiceStream Sale
MOBILCOM AG: Will Terminate Contract With Consultants to Cut Cost
PHILIP HOLZMANN: Bilfinger Backs Out of JA Jones's Sale  
PHOTO PORST: Kodak and Ringfoto Will Buy Photo Porst's Brands
PREMIERE WORLD: Strikes Deal With Vivendi Universal
SACHSENRING GMBH: Magna Interested in Parts of Sachsenring
SILICON VISION: Sensor Chips Manufacturer Files for Insolvency

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

GETRONICS NV: Moody's Reviews Baa3 Rating for Possible Downgrade

* P O L A N D *

NETIA HOLDINGS: Creditors Meet to Accept Composition Plans

* U N I T E D   K I N G D O M *

CORDIANT: CEO Bungey Will Appoint David Hearn as CFO
ENERGIS PLC: Secures Continued Operations of Dutch Arm
INVENSYS PLC: Sells Sensor Business to Honeywell for US$394 MM
LASTMINUTE.COM PLC: Issues Notice of 10.74% Interest in Shares
MARCONI: Debt-laden Telecom Equipment Maker is Set to Liquidate
ROYAL & SUN ALLIANCE: Moody's Puts RSA Ratings Under Review


===========
F R A N C E
===========


FRANCE TELECOM: Orange Pioneers in Per-Second Billing
-----------------------------------------------------
Orange has become the first wireless operator in France to introduce per
second billing, France telecom says.

As of September 15, all Orange customers will benefit from per-
second billing at no extra charge. The minimum one minute charge
is also being eliminated for all "forfaits Orange" service plans
and for the one-hour talk plan with a "Compte Mobile"

This move underscores Orange's proactive commitment to meeting
customers' expectations by ensuring maximum transparency and
clarity for rates, and by applying per-second billing to all
customers.  Orange has eliminated the minimum first minute charge
for all plans. The price of these service plans remains the same,
and free consultation of voice mail and other services is also
maintained.

The following changes take effect on September 15, 2002:

--- For all "forfaits Orange" service plans, domestic calls to
fixed and wireless numbers and to WAP will be billed on a per
second basis, right from the first second. This also applies to
calls that exceed inclusive talk time. Calls that are not
included in talk plans (special numbers, international calls and
calls from outside France) are billed per second after a minimum
charge for the first minute.

--- For "Compte Mobile" one-hour talk plans, all calls are billed
per second as of the first second of inclusive talk time. Calls
beyond the inclusive time with a "Compte Mobile" plan are billed
per second after a minimum charge for the first minute.

--- "Mobicarte" (prepaid) and "Compte Mobile" with subscriptions'
customers benefit from per second billing after a minimum charge
for the first minute.

The new rates are accompanied by several other new measures:

- For calls to SFR and Bouygues Telecom mobiles, there is an
additional charge of 0.002 euro per second.

- Reduced rates for calls to Orange mobiles beyond inclusive talk
time or with Mobicarte plans will no longer apply. The cost of
calls beyond the 15 hours of inclusive talk time will be charged
at 0.18 euro per minute (including VAT), with per second billing.

Calls to Orange voice mail or to check remaining minutes remain
free of charge, as well as other free services including caller
ID, call wait/call hold and automatic message call return.

Customers with "Mobicarte" plans or older service plans such as
Ola can benefit from per second billing as of the first second by
switching to a "forfait Orange" talk time plan (with 2 to 15
hours of inclusive call time per month), or by subscribing to a
one hour "Compte Mobile" plan. There is no charge for this change
and customers keep their phone number. The switch can be made
simply by calling the Orange customer service desk.

Orange is informing customers of the change to per second billing
through multiple channels. In addition to personalized mailings
or SMS messages for Mobicarte customers, a toll-free number (from
Orange mobiles or fixed phones) is available : 0 800 27 27 27.

Complete information is also posted on the orange.fr WAP portal,
as well as on the http://www.orange.frand http://www.orange-
entreprises.com websites.


VIVENDI UNIVERSAL: Swisscom Has No Interest in Cegetel Stake  
------------------------------------------------------------
Carsten Schloter, Swisscom Mobile's chief executive, says the
company is not interested in acquiring a stake in Cegetel, the
telecom arm of Vivendi.

According to Carsten's invertiew with 24 Heures daily, "It
doesn't interest us because Vodafone (Group PLC) is already a
Cegetel partner. It would therefore be purely a financial
investment and we wouldn't want to be a financial instrument for
Vodafone."

Swisscom Mobile is a subsidiary of Swisscom AG. Vodafone has a 25%
stake in Swisscom Mobile and a 15 % stake in Cegetel, AFX News
reports.  Vivendi Univeral owns 44 % of Cegetel, BT Group PLC
owns 25 % and SBC Communications has 15 %, the paper adds.


VIVENDI UNIVERSAL: CEO Confirms Cegetel to Pay EUR 987MM in 2003
----------------------------------------------------------------
Cegetel Chief Executive Philippe Germond confirms Vivendi
Universal SA's Groupe Cegetel, the French telephone-network
operator, expects to pay its 987 million euros (US$972 million) of
debt by April next year, Le Figaro reports.

Vivendi Universal shares fell 42 % in the past three days on
concern Europe's largest media company may run out of funds and
EUR 12 million losses. The Paris-based company is selling assets
to raise cash and pay off debt, the paper says.

Vivendi has the right to buy any stake its partners in Cegetel
may sell, which they would be able to do after a shareholders
agreement ends on Sept. 23, the French paper cites the group's
CEO as saying.


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


ADAM OPEL: Auto Maker May Post Narrower Losses - Handelsblatt
-------------------------------------------------------------
Struggling car manufacturer Adam Opel AG, the German subsidiary
of General Motors Corp., is expected to post operating losses of
around 400 million euros in 2002, Handelsblatt sources say.

This new forecast, which is significantly below the 500 million
euros as initially forecasted, is based on the group's sales
figures for the first seven months of the year on incoming orders
expected for the remainder of the year, the German paper reports.
Last year, Opel posted an operating loss of 674 million euros.

The group's chief executive Carl-Peter Forster has said he does
not expect to see a real improvement in sales until next year,
the German news outfit reports.

In Germany and in other countries, the GM subsidiary has suffered
declines in unit sales of as much as 20% at times, the news
agency adds.

Forster has said he expects to see a return to profit in the
second half of next year. This, he has said, is to be achieved
through the launch of new, more marketable models.

According to the Troubled Company reporter in January, the German
group's cost-cutting measures initiated as part of the company's
"Olympia" restructuring program are now starting to take effect.


BABCOCK BORSIG: Says Die Welt's Allegations Are Incorrect
------------------------------------------------------------------
Die Welt's allegation that Horst Piepenburg, chairman of the
Babcock Borsig AG management board, has confirmed
new asbestos lawsuits in the U.S. is false.

According to the German engineering group, there are no lawsuits
pending against Babcock Borsig AG, nor have impending suits been
announced.

All claims put forward by asbestos victims in the U.S. are being
directly passed on to the American corporation of Ashland Oil -
the previous owner of the BBCC undertaking.

The company had submitted a full indemnity statement on finalization
of the agreement. Last Friday, 9 August 2002, David Hausrath, the
chief legal officer of Ashland Oil, confirmed the fact at a news
conference that Ashland Oil would completely exonerate the BBCC
given recourse being made by asbestos victims.

As a result, the allegation made in "Die Welt" newspaper that the
American Babcock subsidiary BBCC was threatened with insolvency
is invalid. The BBCC is a healthy company.

Horst Piepenburg neither literally nor analogously used the
quotation referring to the asbestos difficulties that the "Die
Welt" had suggested.  


DEUTSCHE TELECOM: Debt Reduction Signals VoiceStream Sale
---------------------------------------------------------
Deutsche Telekom's plans to cut its net debt to EUR50 billion by
the end of next year, apparently a mark that the company will pursue
a partial or outright sale of its U.S. mobile arm Voice-Stream,
according to analysts, a report from the Financial Times says.  

The paper adds that the debt reduction plan made by appointed
interim chief executive Helmut Sihler, came before the much-
awaited release of Deutsche Telekom's second-quarter results due
next Wednesday.

Analysts say that it is possible that the company could resort to
the sale of VoiceStream and if there is "slippage on group
earnings before interest, tax and depreciation, they will also
need a rights issue," the paper says.

Moreover, Deutsche Telekom is said to have asked Goldman Sachs,
Deutsche Bank and JP Morgan to study offers for VoiceStream,
though no final decision is expected before November, the paper
says.

Chairman of the supervisory board Hans-Dietrich Winkhaus and Mr.
Sihler are not expected to report any progress on finding a
permanent successor to former CEO Mr. Ron Sommer, who was ousted
from the position last month, the paper adds.

It is said that the politically sensitive appointment will be
made after the September 22 national election.

The announcement on Wednesday will focus on Mr. Sihler's cost-
cutting plans and the company's operating performance, both of
which will play a crucial role in determining the group's ability
to meet its debt reduction goals, the paper says.

First-half earnings before interest, tax, depreciation and
amortization will reach about EUR5 billion at T-Com, the fixed-
line business, in line with the same period last year, and EUR2.4
billion at T-Mobile, a year-on-year increase of EUR1 billion.


MOBILCOM AG: Will Terminate Contract With Consultants to Cut Cost
-----------------------------------------------------------------
Beleaguered mobile telecommunications company MobilCom will
terminate contracts with consultants by the end of the month to
reduce cost, a report according to the Financial Times
Deutschland and FT Information says.

The contracts with consultants are worth an eight-figure sum, the
papers add. The consultant's duties will be taken over by
internal staff.

Earlier, MobilCom hired consultants to speed up the development
of its UMTS (3G) operations. The consultancy fees were calculated
at sums of up to 40 million euros per month.  

MobilCom showed an operating loss of 70 million euros from its
core area of business, mobile telephony, in the second quarter of
200, compared with a loss of 21.5 million euros in the first quarter.

The news agencies say that publication of the half-year
figures originally scheduled for Tuesday was postponed.  An
announcement is expected soon, however.


PHILIP HOLZMANN: Bilfinger Backs Out of JA Jones's Sale  
-------------------------------------------------------
The sale of JA Jones, Phillip Holzmann AG's U.S. unit, does not
face danger following Bilfinger Berger AG's refusal to buy the
business, said the company's insolvency administrator Ottmar
Hermann, a report from AFX News says.

AFX adds, Mr. Hermann expressed he believed that the unit would
find a buyer in the coming weeks but did not elaborate on the
matter. JA Jones has attracted companies from the U.S., Asia and
France. It is expected that a contract will be signed by mid-
September.

JA Jones posted sales of USD3.3 billion in 2001, the news outfit
reports.


PHOTO PORST: Kodak and Ringfoto Will Buy Photo Porst's Brands
-------------------------------------------------------------
Insolvent German photographic store chain and subsidiary of
PixelNet AG, Photo Porst is selling the rights to brand Photo
Porst to the German group Ringfoto, while the rights of brand
name Konigsbild are to be sold to U.S.-based Eastman Kodak, the
Financial Times Deutschland reports.

The paper says Kodak and Ringfoto are set to announce their
offers to Photo Porst franchisees soon. The franchisees will buy
the photographic equipment via Ringfoto and co-operate with Kodak
in the development of images.

Photo Porst handles an estimated 400 franchisees and own 200
outlets. The insolvency administrator is in continued
negotiations with interested buyers of the 200 stores, the paper
reports.

In June 24 this year, the Troubled Company Reporter said that the
company, a 100% subsidiary of PixelNet AG, had initiated
insolvency proceedings with the District Court at Nuremberg due
to threatening illiquidity.

Meanwhile, Photo Porst's parent company PixelNet AG appointed a
temporary insolvency trustee that would focus on seeking a
solution that will allow jobs to be preserved and suppliers and
customer relations to be maintained. The new board was tasked to
look into the possible effect of Photo Porst's insolvency in
PixelNet's finances, the TCR reported.

On July 1, after detailed examination of the business
and financial situation, PixelNet AG's management and board
resorted to entering insolvency proceeding with the District
Court, the TCR said.

PixelNet said that its move was necessary because its subsidiary
Photo Porst AG filed a petition for insolvency due to the threat
of illiquidity, making it difficult for the company to repay
loans to the parent company. PixelNet was then faced with a
possible a debt default, the TCR reported.

The group has also resorted to the closures of its Tiefenbach
operations due to current restructuring measures.


PREMIERE WORLD: Strikes Deal With Vivendi Universal
---------------------------------------------------
KirchMedia's pay-TV arm, Premiere took a step further to getting
its supply of Hollywood blockbusters for its programming
schedule, a report from the Handelsblatt says.

Sources say that Premiere has closed a long-term deal with the
film subsidiary of Franco-U.S. media giant Vivendi Universal, the
paper says.

The agreement is another essential move to guaranteeing
Premiere's future without Kirch Media. It is the first time that
group chief Georg Kofler has sealed a contract with a film studio
directly without having to make the expensive detour via the now
insolvent parent company, the paper adds.

Vivendi Universal is considered as the third film studio to set a
deal with Premiere. Paramount studio is also on the way with
completing an agreement with Premiere, the paper says.

Premiere's deal with Universal marks an end of years of disputes
over the supply of movies to Premiere. However, Universal is seen
to still pursue its legal action against Premiere's parent,
KirchMedia, the paper says.

A search for new investors for Premiere is still ongoing with
investment bank Morgan Stanley taking responsibility. In 2000,
the pay-TV arm booked a net loss of EUR1.02 billion and is seen
to report a profit return before 2004, the Handelsblatt says.


SACHSENRING GMBH: Magna Interested in Parts of Sachsenring
----------------------------------------------------------
Canadian group Magna International may acquire parts of insolvent
German automotive components maker, Sachsenring Fahrzeugtechnik
GmbH, a report from Financial Times Deutscheland says.  

Magna Steyr, the Austrian-based European subsidiary of Canadian
group Magna has expressed interest in the modules division of
Sachsenring, among other activities, the paper adds.

Sachsenring Fahrzeugtechnik GmbH, Zqichau (SFG) is one of the
leading German suppliers to the automotive industry. The company
is divided into the product areas of vehicle technology, special
protection
vehicles and commercial vehicles.

SFC has modern production installations and a plant site of
around 235,000 sq meters with excellent infractsructure and
logistics.

In the growth segment of armour-plated special protection
vehicles, SFG can be seen as the technically leading independent
manufacturer.

The annual turnover for 2001 was around EUR 180 million (7.2%
commercial vehicles, 92.8% vehicle technology and special
protection vehicles).

SFC employs around 680 employees.

The main production site of the company in Zwickau
(Germany/Federal State of Saxony) lies in a region, which is home
to Volkswagen, BMW, Porsche, DaimlerChrysler, Opel and Skoda with
a radius of 250 kms, with a combined production output of more
than one million vehicles per annum.

Provided the company continues to operate successfully, the
government of the Federal State of Saxony will, in the future,
continue to provide significant assistance for both research and
development as well as investments into production at SFG.

Contact Information:

Dr Bruno M. Kubler
Temporary Insolvency Administrator
Loschwitzer Str. 3, D-01309 Dresden
Email: kuebler@kuebler-gbr.de


SILICON VISION: Sensor Chips Manufacturer Files for Insolvency
--------------------------------------------------------------
The Executive Board of Silicon Vision AG, a manufacturer of image
sensor chips in Moritzburg near Dresden, announced to its
shareholders Friday that it has filed for insolvency at the
competent district court.

The Executive Board was forced to take this step since, following
an adjustment of the business plan, the banking consortium  
(under the leadership of HypoVereinsbank) was no longer prepared
to make available the originally promised additional funds to
keep business operations running.

The insolvency application was filed as a result of inability to
pay, but the company is not subject to excessive indebtedness.
The Executive Board of Silicon Vision AG aims to develop a viable
continuation concept, given that the global market opportunities
for the products manufactured by the company continue to be
evaluated positively.


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


GETRONICS NV: Moody's Reviews Baa3 Rating for Possible Downgrade
----------------------------------------------------------------
Getronic's Baa3 senior debt ratings and Ba1 ratings for its
subordinated convertible bonds was placed by Moody's Investors
Service under review for possible downgrade, a report from the
rating agency says.

The rating agency says the "rating review was triggered by a
revised outlook for no growth 2002 in the key service business, a
market recovery not before mid-2003, and increasing challenges to
implement cost base adjustments so that cash generation will
likely remain low."

In addition Moody's observes that "in spite of significantly
declining revenues in the first half 2002, Getronics has been
able to maintain profit margins, due to a favorable shift in mix
towards the more lucrative service business and cost savings from
capacity reductions. Cash flow benefited from a cut of
discretionary capital spending and sales of financial assets to
keep cash consumption at seasonally low level. With about EUR 270
million in cash balances and EUR 200 million headroom under its
revolving credit facility and at current performance lying
comfortably within its financial covenants, Getronics is well
prepared to meet medium-term liquidity needs before EUR 480
million debt maturities come due in April 2004."

Moody's adds that its "review will focus on management's response
to the current order deferrals and reductions in ICT budgets in
Getronics core customer industries, financial services, telecom,
manufacturing and transportation industries."

The rating agency will examine the "the extent of Getronics'
restructuring needs, cost involved in the process, and the
timetable for a return to solid operating margins. And it will
also review Getronic's sources for debt reduction be it from
operating cash flow - management expects a positive operating
cash flow after working capital - or disposals of non-core
assets."

Getronics, headquartered in Amsterdam, The Netherlands, is a
leading network integration and software services company. In the
first half 2002 the company generated revenues of about EUR1.8
billion.


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


NETIA HOLDINGS: Creditors Meet to Accept Composition Plans
----------------------------------------------------------
Netia Holdings S.A., Poland's largest alternative provider of
fixed-line telecommunications services, today announced that the
creditors' meeting to accept the composition plans of its three
Dutch subsidiaries, Netia Holdings B.V., Netia Holdings II B.V.
and Netia Holdings III B.V., were opened Thursday.

In consideration of the timing of arrangement proceedings in
Poland and in order to obtain confirmation with respect to tax
matters relating to the restructuring, the court adjourned the
meeting and scheduled the creditors' vote on the composition
plans for the companies for August 30, 2002.

The verification hearings in the Netherlands have been
provisionally fixed by the court for September 11, 2002.


Contact Information:          
Netia
Investor Relations
Anna Kuchnio
Telephone: +48-22-330-2061


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


CORDIANT: CEO Bungey Will Appoint David Hearn as CFO
----------------------------------------------------
Cordiant Communications' chief executive Michael Bungey plans
to appoint David Hearn, chairman and chief executive of the group's
main advertising arm in New York, to be chief operating officer,
a report from AFX News says.

The move is seen as a calculated effort to offset criticisms
made by aggressive investors Julian Treger and Brian Myerson, who
head fund management group Active Value, the news outfit says.

Active Value last week increased its stake in Cordiant to 9%. The
group will for an extraordinary general meeiting (EGM)
of shareholders to lobby for changes at Cordiant, AFX reports.


ENERGIS PLC: Secures Continued Operations of Dutch Arm
------------------------------------------------------
The operations of the troubled U.K.-based supplier of telecom and
internet services Energis have been secured, the Telecompaper
reports.

The unit, which has reverted to its original name, Enertel
(Netherlands), announced that investment firm Greenfield Capital
Partners will take over its activities for an undisclosed amount.

The takeover will bring job cuts within the approximately three
hundred employees in Netherlands. The expected reorganization
that will follow the redundancy is intended to cut cost. The
management of the Dutch unit intends to achieve profits in 2003.

In February, UK based Energis started a drastic reorganization
and put the Dutch subsidiary for sale. Energis, now Enertel,
supplies services for the business market, the paper says.


INVENSYS PLC: Sells Sensor Business to Honeywell for US$394 MM
--------------------------------------------------------------
Invensys plc, the international production technology and energy
management Group, announces that it has agreed to sell its
Invensys Sensor Systems business to Honeywell, a diversified
technology and manufacturing leader, for a net cash consideration
of US$394m, representing gross consideration of US$415 million
less certain retained liabilities and certain transaction costs.

The sale proceeds will be used by Invensys to continue to reduce
its level of indebtedness.

Invensys Sensor Systems is a leading global supplier of sensors
and controls used in a range of industries including the vehicle,
appliance, office automation, medical, aerospace and HVAC
industries. For the twelve months ending March 31, 2002, the
business generated revenues of US$251m and operating profit of
US$36m.

Net assets, which are the subject of the transaction, are valued
at approximately US$135m.  Goodwill written off to reserves
relating to historic acquisitions for the Sensor Systems business
amounts to approximately US$205m.

The sale of Sensor Systems is consistent with Invensys previously
stated objectives to divest non-core assets as part of its
overall plan to improve capital strength and increase strategic
focus. The transaction is subject to customary regulatory
approvals and is expected to complete by the end of September
2002.

Rick Haythornthwaite, CEO of Invensys, said:

"We identified Sensor Systems as a non-core business during our
strategy review. We are pleased with the speed at which we have
achieved this divestiture, which brings proceeds to date on our
disposal program to over GBP 900 million.

"The disposal process for the other non-core businesses remains
on track for completion before our financial year end, as does
our target for total proceeds from our disposal program of at
least GBP1.5 billion."

Invensys Sensor Systems is a leading global supplier of sensors
and controls used across many industries including the on and
off-road vehicle, appliance, office automation, medical,
aerospace and HVAC industries. The business also supplies related
components, such as lighting and handle bar controls, for the
off-road vehicle sector.

Invensys Sensor Systems has 2,700 employees and operates 13
manufacturing facilities in 6 countries (US, UK, Mexico, St.
Lucia, the Czech Republic and China).

Invensys plc is a global leader in production technology and
energy management. The Group helps customers to improve their
performance and profitability using innovative services and
technologies and a deep understanding of their industries and
applications.

Management businesses work closely with customers in order to
drive up performance of their production assets, maximise their
return on investments in production technologies and remove cost
and cash from their whole supply chain. The Division includes
Foxboro, Wonderware, Triconex, APV, Eurotherm and Baan. These
businesses address process and batch industries - including the
oil, gas and chemicals, food, beverage and personal healthcare -
and the discrete and hybrid manufacturing sectors.

Our Energy Management businesses work with clients involved in
the supply, measurement and consumption of energy and water, to
reduce costs and waste and improve the efficiency, reliability
and security of power supply. The Division includes Energy
Management Solutions, Appliance Controls, Climate Controls,
Energy Services, Metering Systems, Powerware and Home Control
Systems. These businesses focus on markets connected with power
and energy infrastructure for industrial, commercial and
residential buildings.

We also serve the specialized rail, windpower and electronic
Manufacturing (power components) markets through Invensys Rail
Systems, Hansen Transmissions and Lambda respectively in our
Development Division.

Honeywell is a US$24-billion diversified technology and
manufacturing leader, serving customers worldwide with aerospace
products and services; control technologies for buildings, homes
and industry; automotive products; specialty chemicals; fibres;
plastics; and electronic and advanced materials. Honeywell
employs approximately 115,000 people in 95 countries and is
traded on the New York Stock Exchange under the symbol HON, as
well as on the London, Chicago and Pacific stock exchanges.

Contact Information:

Duncan Bonfield
Telephone: +44 (0) 20 7821 3529


LASTMINUTE.COM PLC: Issues Notice of 10.74% Interest in Shares
--------------------------------------------------------------
the travel service website operator lastminute.com plc announces
that it has received notification from Schroders Investment
Management Limited that on August 14, 2002 the total notifiable
interest of Schroders Investment Management Limited and certain
of its subsidiary and affiliated companies, also comprising the
notifiable interest of Schroders plc, in the ordinary shares of
the Company is now 22,167,321, being 10.74% of the issued share
capital.

Percentage holdings have been calculated using an issued share
capital of 206,381,544 ordinary shares.


MARCONI: Debt-laden Telecom Equipment Maker is Set to Liquidate
----------------------------------------------------------------
U.K.-based telephone equipment maker Marconi Plc is on the verge
of voluntary liquidation after it receives a stock market listing
for wholly owned subsidiary Marconi Corp., which owns the assets,
debt and cash of the business, a report from the Telegraph says.

The new listed company's shares will be distributed to creditor
banks, owed GBP2.3 billion and bondholders, who are owed a
further GBP1.7 billion, the paper says.

In addition, Marconi's shareholders will get 1% of the new
company, the paper says.

Talks came to a standstill over how much of the company GBP1.3
billion should be retained at the company and how much should be
given to creditors, the paper adds.

Marconi shares plunged 30% Sunday following the Financial Times
report saying investors may get 1% of the company's shares after
it refinances debt, the paper reports.

Meanwhile, Marconi is expected to sign a refinancing deal with
creditors owed GBP4 billion this week, that will return the group
to a stable financial footing. The company has been in
negotiations with lenders for over 10 months in an effort to
refinance its net debt, which accumulated to USD8 billion after a
failed acquisition spree, the paper says.


ROYAL & SUN ALLIANCE: Moody's Puts RSA Ratings Under Review
-----------------------------------------------------------
Royal & Sun Alliance Insurance Group's rating was put under
review for possible downgrade by Moody's Investors Service,
showing concerns over the group's capacity to maintain its
capital position in order for it to continue to benefit from
strongly improving general insurance markets, a report from the
rating agency says.

Moody's noted that "Royal & Sun Alliance Insurance Group ("RSA")
is a multi-national insurance organisation with a focus on the
provision of non-life insurance in the U.K., U.S., Australasia,
Europe and Canada. In recent years, the group has declared its
intention to concentrate mainly on non-life insurance, and the
recent closure of the U.K. life funds to new business is evidence
of this shift.

In addition, the group stated last year that it was to undertake
a series of focussed asset disposals, with the aim of providing
sufficient capital for the Group to continue to expand its core
non-life insurance business. This process has seen the sale of
several Group assets (notably the asset management and group
risks businesses) which, together with capital to be released as
a result of the closure of the U.K. life funds, should reach the
Group's previously stated capital raising objective."

However, Moody's observes that, "like many of its peers, RSA has
been affected by the recent downturn in equity markets, such that
further capital is likely to be required to offset market-related
losses. Furthermore, RSA expects to benefit from the continued
strong non-life markets by writing higher levels of premium next
year, which also requires further capital."

In addition, Moody's says it "expects the Group to require
additional capital in the short-term to ensure business growth.
It recognizes that a number of options open to the Group, such as
further asset sales, changes in business and asset mix,
reinsurance and fresh equity capital, may enable such capital
targets to be reached."

But given the currently unstable environment, Moody's says, "that
some uncertainty exists around the amount and accessibility of
some of the potential capital-raising options. "

Moreover, Moody's adds, "that although the underlying operating
performance of the Group is improving, some key operational areas
are still under-performing. Its review will therefore focus on
the ability of the Group to raise sufficient capital to ensure
profitable business growth, without reducing the Group's
financial flexibility."

Royal & Sun Alliance Insurance Group plc, headquartered in
London, England, had total assets of GBP66.7 billion as of June
30, 2002.

                                     ***********

         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 US$575 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each. For subscription information,
contact Christopher Beard at 240/629-3300.


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