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/raid1/www/Hosts/bankrupt/TCREUR_Public/020822.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, August 22, 2002, Vol. 3, No. 166 Headlines * D E N M A R K * TBI: S&P Cuts Ratings to BBB; Subsidiaries Still on Neg Watch * F R A N C E * KALISTO: Delisted From Paris Nouveau After Liquidation VIVENDI UNIVERSAL: Revives Sale of Politically Sensitive Asset INTEGRA: Genuity Withdraws Financial Support From Integra INTEGRA: Decides to Suspend Share From Trading VIVENDI UNIVERSAL: Issues Statement With Vodafone on Vizzavi FRANCE TELECOM: Will Sell Casema to Liberty Media * G E R M A N Y * DEUTSCHE TELEKOM: Liberty Consortium Bids for DT's TV Business BABCOCK BORSIG: Gets EUR60 Million Contract Despite Parent's Woes CENIT AG: Reveals Six-Month Figures 2002 DEUTSCHE TELECOM: Won't Write Down Cellphone Assets * I R E L A N D * ELAN CORPORATION: Contingent Value Rights Subject to Delisting ELAN CORPORATION: Armen Says SEC Probe Found No Improprieties ELAN CORPORATION: Shareholders Reject Plan to Issue New Equity * N E T H E R L A N D S * KPN NV: Reports USD9.33 BB in Asset Write Downs * U N I T E D K I N G D O M * ANTISOMA PLC: Will Finish Phase III Study of Cancer Drug in 2004 RAILTRACK PLC: Railtrack Group Sells SPACIA for GBP17 MM EQUITABLE LIFE: Gov't Delays Release of Inquiry Results to 2003 LASTMINUTE.COM PLC: Notice on 3.17% Holdings UK COAL PLC: Notice of 3.2% Holdings BIOCOMPATIBLES INTERNATIONAL: Notice on 3% Interest in Shares AMELCA PLC: Receiver Sends Home Half of Milk Factory Workers MARCONI PLC: Finance Director Stands to Lose Job COOKSON GROUP PLC: Announces Rights Issue Update KINGFISHER PLC: Files Castorama Minority Offer ============= D E N M A R K ============= TBI: S&P Cuts Ratings to BBB; Subsidiaries Still on Neg Watch ------------------------------------------------------------- Following its annual review, Standard & Poor's Ratings Services announces it lowered its long-term counterpart credit and insurer financial strength ratings on Denmark-based reinsurer Tryg- Baltica, international forsikringsselskab A/S (TBi DK) and its wholly owned, U.K.-based insurance subsidiary Tryg-Baltica International (UK) Ltd. (TBi UK) (collectively TBi) to triple-'B' from triple-'B'-plus. The ratings on TBi DK and TBi UK remain on CreditWatch with negative implications, pending completion of the acquisition by Tryg I Danmark smba (TiD) of Nordea's general insurance activities (TG), which include TBi. The ratings were placed on CreditWatch with negative implications on June 20, 2002, following the announcement by TBi's ultimate parent, Nordea (core entities of the group are rated A+/Stable/A- 1), that it had signed a letter of intent regarding the sale of 100% of its general insurance business to TiD. At the same time, Standard & Poor's revised its CreditWatch implications on related, Denmark-based entity Dansk Kautionsforsikrings - A/S (DK) to negative from developing. The CreditWatch revision reflects the fact that although Standard & Poor's considers the risk of noncompletion of the sale and recapitalization of the TG group to be low, the transaction is still subject to certain conditions. "The rating actions follow a review of each rated subsidiary and the impact of the proposed sale of TG on the activities of TG's operating entities," said Standard & Poor's credit analyst Tatiana Grineva. Following completion of the sale, TBi, a reinsurance and specialty insurance group, and DK, a bond insurer, together with other TG companies that are currently not rated, will become wholly owned subsidiaries of Tryg General Insurance Holding A/S, which will be wholly owned by TiD, a foundation with a limited liability, based in Denmark. The downgrade of TBi DK and TBi UK reflects the significant growth in premium volumes during 2001, at a time when it was not fully clear that pricing adequacy had returned to all lines of business written. Nevertheless, the ratings on both TBi DK and TBi UK remain underpinned by strong--albeit declining--risk-based capitalization (following the growth in 2001), and the prospective benefit that both companies will receive from improving premium rate conditions in the reinsurance and specialty lines insurance sectors. On July 2, 2002, TBi's capital position was strengthened by the injection of Danish krone (Dkr) 250 million ($32.9 million), to finance the transfer of the marine book of business from another part of TG and the premium growth at both TBi DK and TBi UK during 2001. As a result of the capital injection, TBi's capital adequacy ratio reached 151% according to Standard & Poor's risk- based capital model. The capital adequacy ratio is influenced by the existence of reinsurance arrangements with former shareholders covering adverse reserve developments on 2000 and previous years in respect of TBi UK business. TBi DK's operating performance over the cycle is considered good, with a seven-year average combined ratio and ROR of 105.5% and 3.9%, respectively. This steady operating performance, along with TBi DK's status as TG's reinsurer, provides the basis for TBi DK to be considered as a strategically important subsidiary within the TG group. Conversely, TBi UK's operating performance has been marginal in recent years, with a seven-year average combined ratio and ROR of 119% and 1.2%, respectively. Although TG management remains committed to TBi UK in the medium term, continued support of the subsidiary will depend on the extent of the turnaround in its operating performance in the next few years. The ratings on DK remain underpinned by the company's very strong capitalization, with an exceptionally strong capital adequacy ratio of more than 300% at Dec. 31, 2001; very strong operating performance, with a five-year average inverse loss ratio of 21%, a five-year average inverse combined ratio of 13.8%, and a seven- year average ROR of more than 70%; and strong business position, with an unrivaled market share of approximately 60% in Denmark. These strengths are offset by the challenging risk profile of bond insurance, the relatively small size of the Danish market, DK's limited diversification, and its reliance on key personnel. It is expected that capital will be maintained at a very robust level--with a capital adequacy ratio of more than 300%--and grow proportionally to the exposures undertaken. Standard & Poor's therefore expects that only profits will be distributed by DK to its parent. Based on a normalized performance (excluding termination of contracts) and claims projections for 2002-2004, the combined ratio is not expected to rise to more than 70%, but ROR is expected to drop substantially from its extremely strong level, although it will remain at more than 50%. DK is expected to remain the dominant surety insurer in Danish bond insurance markets. Standard & Poor's expects that the sale of TG to TiD and the various regulatory approvals will be completed toward the end of the third quarter of 2002. At the same time as the sale is completed, Standard & Poor's expects that the group will raise EUR150 million of new equity or qualifying hybrid capital to provide capital to finance growth in the newly spun off business. The new owners are expected to facilitate the capital-raising exercise. In the meantime, although Standard & Poor's considers that the risk of noncompletion of the sale and recapitalization of the group is low, all the ratings remain on CreditWatch with negative implications to reflect the fact that the transaction is still subject to certain conditions. "Once the transaction is completed, it is expected that the ratings on all subsidiaries will be affirmed and a stable outlook assigned. This is with the exception of TBi UK, which is likely to be assigned a negative outlook to reflect the longer term uncertainty regarding the company's ability to turn around its performance and group management's commitment to TBi UK," said Ms. Grineva. =========== F R A N C E =========== KALISTO: Delisted From Paris Nouveau After Liquidation ------------------------------------------------------ Paris Nouveau Marche delisted video games company Kalisto on Monday, the Financial Times Information reported Tuesday. The company has been in liquidation since May 27, The company started operations in 1990, joining the stock market in 1999. In April, consulting group Deminor expressed doubts on the company's accounting, in particular the sale of a license to a Swiss company in 1999, which was listed as worth US$7 million (EUR7.9 million). The consulting group, acting in behalf 150 Kalisto shareholders, said the EUR16.4 million revenues, bannered by the company when it joined the stock market in 1999, was doubtful at best. The group also questioned the due diligence exercises made by French bank Credit Lyonnais since Kalisto's flotation, Troubled Company Reporter-Europe, said. Weighed down by debts of about EUR50.31 million, the company declared bankruptcy on February 8 this year. Before the filing, the French stock market watchdog Commission des Operation de Borse had also refused approval of its refinancing plan. The plan, according to the February 12 issue of TCR-Europe, outlined the swapping of most of its EUR25 million debt into convertible bonds and loans and raising EUR15 million in additional funding from U.S. investment fund Global Emerging Market. Kalisto, an international company with 270 employees, reported revenues of FRF19 million in 2000, almost 10 times lower than it had forecast, TCR-Europe said. VIVENDI UNIVERSAL: Revives Sale of Politically Sensitive Asset -------------------------------------------------------------- Vivendi Universal is courting another political backlash in attempting once again to sell Express-Expansion, its stable of flagship magazines, the Financial Times said Tuesday. This time, however, the French media giant may not have any choice but to consummate the deal, given its dire financial health, the paper said. In 1997, an attempt to sell the unit met strong resistance from the Socialists, who were in power at the time. The party opposed the sale to France's Dassault arms group, which controls Le Figaro, the national center-right daily newspaper. The Socialists had favored the left-leaning newspaper Le Monde. With the government now controlled by the center-rightists, the sale has more chances of getting through, although the Socialists are expected to once again scuttle the plan, the paper said. The report says Dassault is still a likely buyer, but Le Monde will not bid this time. Express-Expansion owns 16 magazines, among them, L'Express, one of France's leading news magazines, and L'Expansion, a monthly economic and financial affairs magazine. The two are considered the French equivalent of Time and Newsweek of the U.S. The paper says the sale of Express-Expansion is not part of the publicly announced disposal program of the company. Vivendi, for its part, has kept mum over speculations that it is secretly peddling the asset. At any rate, the company would have more reason now to deal the asset considering its current cash crisis, the paper said. But if the experience of ex-CEO Jean Marie Messier would be any indication, newly appointed chief Jean-Rene Fourtou should expect a politicized sale process. During his time, Mr. Marie Messier, in describing the political backlash, said: "Never have I come under such pressure. Never have I received so many calls to influence my decision. One press baron said: 'If you don't sell us L'Express we'll be against you for 20 years. And we'll bring you down.' A politician said: 'If you sell them L'Express, there will be blood on the walls'." INTEGRA: Genuity Withdraws Financial Support From Integra ---------------------------------------------------------- U.S. company Genuity recently announced that it is withdrawing financial support from its French web hosting subsidiary Integra, after Genuity was refused backing from its U.S. parent Verizon, a report from Les Echos and the Financial Times says. Genuity is aware of the possibility that Integra may declare bankruptcy now that the French company has revealed a negative profit margin of EUR2 million last year, the paper says. The papers report that Integra blames its financial woes European businesses that are hesitant to invest in IT. The company also considers as one factor the shutdown of professional services divisions in Germany, Spain and the Netherlands, which has cost the group 6.4 million and resulted in the loss of 192 jobs. Integra revealed a net loss of 124 million last year, which was attributed to goodwill write-downs of 4.5 million for its Dutch and Italian units. The group has written-off 27 million worth of loans to units in Germany, Spain and Denmark and sold its Finnish unit at a loss, the papers say. The company's net loss of 124m in 2001 can also be attributed to goodwill write-downs of 4.5m for its Dutch and Italian units. Loans to subsidiaries in Germany, Spain and Denmark worth 27m were also written off, and the group's Finnish unit was sold at a loss, the papers add. INTEGRA: Decides to Suspend Share From Trading ---------------------------------------------- After discussions with the Commission des Operations de Bourse and with Euronext Paris SA , Integra S.A, decided to request the suspension of trading in Integra S.A shares listed on the Nouveau March, (code : 007293), On August 14, 2002, Integra S.A. announced that Genuity Inc, its mother company, which hold 93% of Genuity's share capital, had decided to cease funding Integra S.A. Integra S.A. notes that discussions with Genuity Inc. to meet its short term financing commitments have not yielded an agreement. Integra S.A. continues to explore any alternative solution in order to ensure its immediate future, including proposals from external investors. Failing an agreement within the next few days, Integra S.A will have to file a petition for bankruptcy. Contact Information: Fredrik Tangeraas Integra Telephone: +33 (0)1.58.04.21 00 VIVENDI UNIVERSAL: Issues Statement With Vodafone on Vizzavi ----------------------------------------------------------- The following announcement was issued jointly by Vodafone and Vivendi Universal regarding the status of their joint venture company Vizzavi: "Vodafone Group Plc and Vivendi Universal confirm that they are in discussions concerning the future shareholding structure of their joint venture company, Vizzavi. These discussions may lead to an offer by Vodafone to acquire all or a part of Vivendi's shareholding in Vizzavi. "However, as a result of these discussions, certain filings are being made with competition authorities in various territories. This does not indicate the conclusion of any discussions currently taking place, and no further comment will be made by either party unless and until such a conclusion is reached." Contact Information: Vivendi Universal Investor Relations Paris Laura Martin Telephone: 917/378-5705 Laurence Daniel Telephone: +33 (1).71.71.1233 New York Anita Larsen Telephone: + (1) 212/572-1118 Mia Carbonell Telephone: + (1) 212/572-7556 New York Eileen McLaughlin Telephone: +(1) 212/572-8961 FRANCE TELECOM: Will Sell Casema to Liberty Media -------------------------------------------------- Liberty Media Corporation (NYSE: L, LMC.B) announced that it has signed a definitive agreement with France Telecom for the acquisition of Dutch cable operator N.V. Casema. With this acquisition Liberty Media will further strengthen its footprint in the European cable market. Under the terms of the agreement, Liberty Media will acquire 100% of Casema for euro 750 million in cash. Liberty Media expects to finance the transaction with a combination of cash and new bank financing. Closing of the transaction, which is expected in the fourth quarter of 2002, is subject to regulatory approval from The Netherlands Competition Authority (NMa), and other customary closing conditions. Casema is the third largest cable operator in The Netherlands with 1.5 million homes passed by its cable network. Casema's network presence is concentrated in key cities in The Netherlands, including The Hague, Utrecht and Breda. Casema provides both analog and digital video services as well as broadband Internet access services to residential customers. Through its deployed national fiber network, Casema also offers voice and data services to the business market. "Liberty Media is acquiring Casema at a time when Casema is set to benefit from its past investments and its future strategy. Casema's network is substantially upgraded and the launch of advanced services is well underway. We expect that Casema, with its 1.4 million revenue generating units, will further benefit from the scale Liberty Media already possesses in Europe," said Robert R. Bennett, President and CEO of Liberty Media. Liberty Media intends to work closely with the existing management team led by Henk de Goede, a well recognized cable pioneer in The Netherlands, to enhance Casema's future financial and operating flexibility as well as to strengthen its near and long term business strategy. The acquisition has the support of the management and the works council of Casema. Liberty Media Corporation owns interests in a broad range of video programming, broadband distribution, interactive technology services and communications businesses. Liberty Media and its affiliated companies operate in the United States, Europe, South America and Asia with some of the world's most recognized and respected brands, including Encore, STARZ!, Discovery, USA, QVC, Court TV and Sprint PCS. ============= G E R M A N Y ============= DEUTSCHE TELEKOM: Liberty Consortium Bids for DT's TV Business -------------------------------------------------------------- A consortium, led by Liberty Media with private equity investors Blackstone Partners and New York-based Apollo, was formed in a move to bid for Deutsche Telekom's cable television business, which Liberty failed to purchase this year, the Financial Times says. The consortium has been short-listed for the second round of the auction being conducted by NM Rothschild. Final bids from the six bidders on the shortlist are will be revealed on September 30, the paper says. An offer at least 2.5 billion is expected from the bidders. The anticipated offer is less than the 5.5 billion Liberty Media offered for Deutsche Telekom's six regional cable companies before the German Cartel Office blocked its bid in February, the paper adds. The paper further reports that other investors on the shortlist include Goldman Sachs and Primera team, Providence Equity together with Apax Partners and London-based CVC Capital Partners with Warburg Pincus. Hicks Muse Tate & Furst and BC Partners are bidding individually. Earlier, bidders have privately complained about the lack of available funding for leveraged cable deals. They said only 1.7 billion of senior debt could be generated. But many have planned of exploring complex securitization scenarios allowing them to produce around 3 billion, the Financial Times says. BABCOCK BORSIG: Gets EUR60 Million Contract Despite Parent's Woes ----------------------------------------------------------------- Employees of Babcock Borsig Espana recently heaved a huge sigh of relief with the signing of an agreement with Duro Felguera concerning a project for Spanish electricity group Endesa. Expansion/FT Information on Tuesday said the pact reached with Duro will bring in EUR60 million into the purse of Babcock Borsig Espana. Duro is constructing two combined cycle power plants for Endesa in Son Reus (Mallorca) and Barranco de Tirajana (Gran Canaria). The deal signed with Babcock Borsig subcontracts the engineering, design and management of the thermal cycle project of both power stations, and the manufacture of pressure tubes and valves, the report says. "It is hoped that the agreement will ease the difficulties caused by the decision of German group Babcock Borsig to file for protection from its creditors," the paper says. Last month, Troubled Company Reporter-Europe, citing El Pais, warned that the bankruptcy of the German parent could scuttle the Endesa project. The paper said insolvency would bring back the uncertainty that for a while now has defined the Spanish unit's future. Less than a year ago, anxiety hit workers, as the difficult privatization process cast doubts on their job security. Babcock Borsig bought the Spanish subsidiary eight months ago for EUR45 million, promising to invest EUR135.23 million and not to lay off employees for a period of five years. Insiders now claim that the German parent never intended to invest that amount. CENIT AG: Reveals Six-Month Figures 2002 ---------------------------------------- CENIT AG Systemhaus (http://www.cenit.de.)reaffirms its original estimates for the current financial year. Based on our performance in the first six months of 2002, we are well on track to achieving positive consolidated earnings for the full financial year. 6 Months 2002 6 Months 2001 Variance in million Euro in million Euro in % Sales 45,88 62,54 26,6 Gross Profit 26,45 35,7 25,9 EBITDA 0,56 -2,18 125,7 EBIT -0,70 -4,99 86 EBT -0,93 -5,5 83,1 EPS basic in Euro -0,19 -1,35 85,9 EPS diluted in Euro -0,19 -1,28 85,2 Employees 590 885 33,3 The first six months of 2002 continue to be affected by the strained economic climate. Nevertheless, CENIT recorded incoming orders worth EUR 32.5 million. For the subsidiaries, business also turned out positive, meeting our expectations. Around 78% of consolidated revenues within the CENIT Group is generated in Germany. Here, revenues for the first six months of the 2002 financial year amounted to EUR 35.9 million. Gross profit stood a EUR 20.2 million. EBITDA amounted to EUR 0.75 million in Germany. A strong second quarter in Germany proved to be a key contributor within this respect. In Germany, EBIT for the first six months stood at minus EUR 0.1 million. CENIT Schweiz AG generated revenues of EUR 1.09 million, with an EBIT of minus EUR 0.16 million. Spring Technologies/CENIT France posted revenues of EUR 9.28 million and a slightly below-par EBIT result of minus EUR 0.23 million. Our sales office CENIT North America recorded revenues of EUR 0.44 million and positive earnings before interest and taxes of EUR 0.12 million. CENIT AG's Cash Flow from operating activities amounted to EUR 4.28 million. At the end of the period under review, cash and cash equivalents were EUR 1.48 million. Staff costs for the Group fell by 28% relative to the previous year. Costs developed in accordance with our financial planning, and were reduced by 29% compared to 2001. DEUTSCHE TELECOM: Won't Write Down Cellphone Assets ---------------------------------------------------- Deutsche Telekom will not detail any major write downs on its cell phone assets when it reveals its first-half figures, an article from the Handelsblatt says. However, there is a possibility that DT could withdraw from the U.S. market. The German telecom giant had proposed a merger of its U.S. wireless unit VoiceStream with fellow U.S. company Cingular Wireless, with Cingular to be the majority shareholder, the news outfit says. DT insiders say talks were being held with Cingular Wireless and AT&T Wireless Services Inc. VoiceStream and AT&T Wireless held talks earlier this summer. The two companies failed to agree on terms but it is reported that both parties are currently holding talks, the news outfit adds. Deutsche Telekom's share price still rose in Tuesday's trading, the Handelsblatt says. ============= I R E L A N D ============= ELAN CORPORATION: Contingent Value Rights Subject to Delisting -------------------------------------------------------------- Elan Corporation, plc notifies that it received a Nasdaq Staff Determination on August 12, 2002 indicating that the Company's Contingent Value Rights issued as part of the consideration for the acquisition of The Liposome Company, Inc. in May 2000 are subject to delisting from The Nasdaq National Market at the opening of business on August 20, 2002 for non-compliance with the minimum number of market makers requirement set forth in Nasdaq Marketplace Rule 4450(a)(6). The Company has requested a hearing before a Nasdaq Listing Qualifications Panel to review the Staff Determination. The hearing request will stay the delisting of the Company's Contingent Value Rights pending the Panel's decision. There can be no assurance the Panel will grant the Company's request for continued listing. Elan is focused on the discovery, development, manufacturing, selling and marketing of novel therapeutic products in neurology, pain management and autoimmune diseases. Elan shares trade on the New York, London and Dublin Stock Exchanges. ELAN CORPORATION: Armen Says SEC Probe Found No Improprieties ------------------------------------------------------------- Irish pharmaceutical company Elan Corporation's chairman Garo Armen disclosed that an internal investigation of the company's accounts discovered "no signs of improprieties," the Bloomberg reports. Speaking in a shareholders' annual meeting in Dublin, Mr. Armen also promised to make the company's earnings reports more comprehensible, the news agency says. Mr. Armen became Elan's chairman after he took over former Chairman and Chief Executive Officer Donald Geaney, who stepped out of the post last month. Elan is currently trying to recover investor confidence after it lost USD17 billion off its market value this year. The company's struggles with concerns about an accounting probe by the U.S. Securities and Exchange Commission, and the failure of an experimental Alzheimer's disease drug and competition for its best-selling medicine, the Bloomberg adds. The annual shareholders meeting attended by about 150 shareholders, became a venue for individual investors to speak up to top executives for the first time after the SEC announced its probe in February, the news agency says. Forty-nine years old Mr. Armen is also chief executive officer of the New York-based biotechnology company Antigenics Inc. He is former chief executive of Immunex Corp. and PerSeptive Biosystems Inc. After taking over Mr. Geaney's post, Mr. Armen revealed plans to sell assets worth USD1.5 billion by the end of next year and to cut 1,000 of 4,700 jobs this year in a bid to pare costs and revive profit. Armen told investors at in the meeting that the level of interest revealed in the disposals show that possibility that the process will go on smoothly. Mr. Armen also revealed plans of ending a "handful" of its 55 joint ventures, the news agency says. Elan has been in the pharmaceutical industry for 33 years. It was founder by U.S. entrepreneur Don Panoz. It transformed from helping larger companies to develop drug-delivery systems to making medicines of its own through a series of acquisitions in the 1990s. Optimism that Elan, led by Geaney, would develop treatments for Alzheimer's and multiple sclerosis helped turn the company into the biggest on the Irish stock exchange with a market value of as much as EUR23.76 billion (USD23.26 billion) in June of 2000, compared with EUR725 million today. In March, Elan and American Home Products Corp. stopped work on an Alzheimer's treatment after 15 patients developed inflammation of the central nervous system. Presently, Mr. Armen revealed that Elan has multiple Alzheimer's treatments in development and clinical trials on one of them could begin in 2002, the news agency adds. Mr. Armen further informed investors and shareholders that Elan is currently seeking a new chief executive and has found eight prospective candidates for the job. It is expected that a new CEO will be appointed in the next six to eight months, the Bloomberg reports. Shares of Elan, plunged 10 cents, or 4.4%, to 2.20 euros as trading closed in Dublin at 4:30 p.m, Monday. ELAN CORPORATION: Shareholders Reject Plan to Issue New Equity ----------------------------------------------------------------- Elan Corporation's shareholders voted against a proposal allowing the management flexibility to issue new equity without launching a rights issues, hindering the group's effort to avoid a cash crunch, the Financial Times reports. The Irish pharmaceutical faces a USD1 billion-bond repayment at the end of 2002 that it can redeem in either cash or shares, the paper says. At Elan's annual shareholders meeting, investors refused to honor the proposal because they feared they might be substantially diluted if the company were to repay bondholders with equity, the paper adds. Elan fell two percentage points short of the 75% it needed to approve the special resolution. The company however noted its restructuring plans would not be affected by the vote since the company has no immediate plans of going to capital markets. But analysts said it vote could further depress the share price as any new issue of shares to repay debt would have to be even larger to accommodate the rights issue, the paper says. Earlier in August, the Troubled Company Reporter said Elan had seek to request permission from its shareholders during the general meeting to purchase 15pc of the issued share capital. If the total amount were bought back it would equate to USD90 million worth of shares based on the current value of the company. Previously, Elan's plan to buy back shares has been faced with dissent from brokers who believe that Elan is currently facing a cash crunch making the move questionable, the TCR said. The pharmaceutical company has debts of USD1.03 billion this year. The figure is expected to rise up to USD1.256 billion next year and USD1.688 billion the following year, according to recently revealed second quarter results. Elan's spokesman at the time said the company's plan to buy back the shares was to keep the company's options open. He also a pointed to a recent purchase by Pfizer of USD10 million worth of its shares in a bid to inspire confidence in the stock, the TCR reported. But Elan is not allowed to purchase back any of its shares until after November under the terms of the takeover of Dura, the TCR said. ===================== N E T H E R L A N D S ===================== KPN NV: Reports USD9.33 BB in Asset Write Downs ----------------------------------------------- Net result Royal KPN recorded a net loss of EUR 9.3 billion in the second quarter of 2002, mainly due to a non- cash impairment, compared with a net loss of EUR 499 million in the corresponding period of 2001. The net loss per share was EUR 3.90 compared with a net loss of EUR 0.41 in the second quarter of 2001. Exceptional items Exceptional items impacted heavily on KPN's net result in Q2. Among other things, the KPN Board of Management decided to write down approximately EUR 9 billion of the company's foreign mobile assets following an impairmenttest. The write down mainly concerns UMTS licenses and goodwill related to the mobile operators E-Plus in Germany and BASE in Belgium. In addition of KPN's 15% interest in Hutchison 3G in the United Kingdom an amount of EUR 1.2 billion has been written off, which is included in the above-mentioned EUR 9 billion. Other exceptional items besides the impairment had a negative effect of EUR 154 million on KPN's net result in Q2.These other items concerned mainly KPNQwest's bankruptcy and the related write down in KPN Belgium. The impairment does not affect KPN's operational free cash flow*, which improved from a negative EUR 166 million in Q2 of 2001 to a positive EUR 412 million in Q2 of 2002. (Refer to quarterly report KPN second quarter of 2002 page 5 for more details). Net result excluding exceptional items Excluding exceptional items, KPN recorded a net loss of EUR 79 million in the second quarter of 2002, a 78% improvement on the EUR 354 million net loss posted in Q2 of 2001. Highlights - The operational result (EBITDA)increased to EUR 1.1 billion, improvement by 18% compared with Q2 of 2001 - Strongly improved operational free cash flow of EUR 412 million - EBITDA margin�� increased from 29.3% to 35.5% - Reduction of FTE's in the Netherlands under collective labour agreement this half year from 29,377 to 23,071 - Net debt has been reduced from EUR 15.4 billion at the end of the first quarter of 2002 to EUR 15.0 billion - Revenue growth in the core activities: 3% -Operational cash flow after capex, interest, taxes and restructuring expenses. -Excluding exceptional items CEO Ad Scheepbouwer said: "Our underlying operating results have exceeded expectations and our continuing focus on cash generation is proving highly effective in restoring the fortunes of the company. Once more, we have been able to revise positively the outlook for the year as a whole. Separately, we have decided to take another critical look at the value of our mobile assets in the current economic environment and actively addressed the industry wide issue of impairment. Although we are the first operator to take this view with respect to a continuing mobile business we believe that this is the only sensible course of action." The KPN Board of Management expects the following outlook for the full year of 2002 based on the developments during the first half of 2002: Impairment The general economic developments, and more specifically, the recent developments in the mobile markets, were the trigger to have a critical look at the existing business plans of KPN's mobile activities. This resulted in new business plans, in line balance with the present situation and prospects. Impairment tests resulted in a non-cash impairment charge and effects on deferred tax assets of approximately EUR 9 billion. There is no impairment concerning the carrying value of the assets of KPN Mobile The Netherlands. The 15% participation in Hutchison 3G UK is no longer considered as a strategic participation. As a result, Hutchison 3G is no longer valued at net asset value, but at net realisable value. This resulted in a write-off of EUR 1.2 billion, which is included in the above-mentioned EUR 9 billion. Restructuring At year-end 2001, KPN's workforce in the Netherlands consisted of 29,377 full-time equivalents covered by its collective labour agreement plus 1,674 temporary employees. By the end of the second quarter of 2002, these numbers have been reduced to 23,071 and 729, respectively. Of the total reduction, 2,629 was due to outsourcing of non-core activities. Pension Based on the current situation of the coverage of KPN's pension funds, KPN will possibly charge an amount of EUR 125 million to its 2002 Q4 results. This amount is based on the coverage of the pension assets and liabilities as per August 1, 2002. If financial markets do not improve, KPN has to pay an amount of EUR 375 million, to be paid over the period 2003-2005, the first instalment to be paid in 2003. If at year-end 2003, the coverage of the pension fund improves, the obligation to pay the remaining part (EUR 250 million) will cease to exist. The exact amount of the additional pension contribution will be established at December 31, 2002. Whilst the total minutes of traffic slightly decreased, second- quarter revenues rose by 0.8% compared with the corresponding 2001 period. Internet traffic increased by 3.7 % in the second quarter of 2002. Offering customers a possibility to dial in via their own ISP (originating Internet access) and the ongoing penetration of broadband connections shifted volumes within the division from business unit Fixed Telephony to Consumer Internet and Media Services (CIMS). The number of paying (active) Internet customers increased from 0.8 million a year ago, to 1.5 million per Q2. Total revenues increased by EUR 108 million (up 10%) thanks to higher revenues in the Netherlands, Germany and Belgium and full consolidation of E-Plus from March 13th, 2002. The decrease in the total number of customers that started in Q1 continued partly because of the marketing strategy with a stronger emphasis on post-paid subscribers than on prepaid customers. In the second quarter the total number of customers decreased by 175,000, as a result of a decrease in E-Plus, to 13.4 million. The total number of i-mode customers in the Netherlands and Germany reached 67,000 by the end of Q2 and has since passed the 100,000 milestone. Compared with Q2 of 2001, the average revenue per user (ARPU) per month increased in Q2 of 2002 from EUR 32 to EUR 33 in the Netherlands and from EUR 21 to EUR 24 in Germany. In Belgium there was a decrease from EUR 23 to EUR 22. External revenues rose through higher sales by the Integrated Solutions and Managed Applications business lines (which serve mostly large business customers) and through increased sales of ADSL/Mxstream. There were 192,000 subscriptions at the end of June 2002 compared with 62,000 one year earlier. Lower internal revenues, mainly caused by cost cutting operations within KPN, negated the external growth. Revenues of this division, consisting mainly of non core activities, decreased by 39%, in particular because of the deconsolidation of KPNQwest and KPN Lease and lower revenues at Netwerk Bouw (Network Construction). =========================== U N I T E D K I N G D O M =========================== ANTISOMA PLC: Will Finish Phase III Study of Cancer Drug in 2004 ---------------------------------------------------------------- Antisoma plc, the U.K.-based biopharmaceutical company developing new drugs for cancer, announces the result of an independent statistical analysis refining the predicted completion time for its pivotal phase III trial of pemtumomab in ovarian cancer. The analysis shows that completion of the SMART (Study of Monoclonal Antibody Radioimmuno-Therapy) trial is most likely to take place during the second half of 2004. The predicted completion time, based on the aggregated death rate in the study to date, was reported by the SMART Independent Data Safety Monitoring Committee (DSMC), who also reported that there are no safety data or concerns that warrant changes in the conduct of the study at the present time. The SMART study compares survival of patients receiving standard treatment plus pemtumomab with that of patients receiving standard treatment alone. The trial will finish once there have been a total of 116 deaths across both groups. The study also includes an interim analysis, which is expected to take place in approximately 12 months time. If SMART demonstrates a survival benefit with pemtumomab, the study will form the basis for applications for licences to market the drug. Recruitment into the trial started in 1998 and is expected to reach the planned target of 420 patients later this year. Glyn Edwards, Antisoma's Chief Executive Officer, commented, 'There is a desperate need for new and better treatments for ovarian cancer. We look forward to completing recruitment later this year and the interim analysis in about a year's time. Today's projection gives us confidence on the timing of the final analysis as we pull together all the information required for regulatory approval in Europe and the USA.' Pemtumomab is based on a mouse antibody that binds specifically to an abnormal form of mucin found on the surface of tumour cells affecting the epithelium, a membranous tissue that covers most body surfaces. Many solid tumours, including those of the ovary, stomach, lung, breast and prostate, are epithelial in origin. The antibody is attached to the radioisotope Yttrium-90, which irradiates and destroys the cells to which the antibody binds as well as those in close proximity. Pemtumomab is designed for the treatment of intra-abdominal cancer, and is initially being developed for use in patients with ovarian and gastric cancer. Pemtumomab has designated Orphan Drug status in the U.S. and EU. The WHO estimates that there were around 192,000 cases of ovarian cancer and 114,000 deaths from the disease worldwide in 2000. The lifetime risk of ovarian cancer in American women with no family history of the disease has been estimated at around 1 in 70. Mortality is high because the majority of women with ovarian cancer are not diagnosed until the disease has spread beyond the ovary. Antisoma is a biopharmaceutical company developing novel products for the treatment of cancer. Using its drug development experience, the Company aims to produce safer and more effective tumour targeting therapies for commercialisation by pharmaceutical partners. Antisoma acquires the rights to promising new product candidates through partnerships with internationally recognized academic or cancer research institutions. These include the lead product candidate, pemtumomab, which was licensed from the Imperial Cancer Research Fund. There are three additional products in the clinical pipeline, Therex, DMXAA and TheraFab, and an extensive pre-clinical program. Contact Information: Antisoma plc West Africa House Hanger Lane,Ealing London W5 3QR,UK Tel: +44 20 8799 8200 Fax: +44 20 8799 8201 Web site: http://www.antisoma.com RAILTRACK PLC: Railtrack Group Sells SPACIA for GBP17 MM --------------------------------------------------------- Railtrack Group announces that it sold Railtrack (Spacia) Limited, which has long term leases over approximately 130 railway arches, to Railtrack PLC, which already owns the majority of the commercial properties managed under the 'Spacia' brand, for approximately GBP17 million in cash. Railtrack Group has retained certain property interests which were previously held through Railtrack (Spacia) Limited. The Board of Railtrack Group intends that the proceeds of the disposal will be returned to shareholders as part of the solvent voluntary liquidation of Railtrack Group as soon as reasonably practicable after the proposed disposals of Railtrack PLC and the Group's interests in the Channel Tunnel Rail Link have been completed. The net book value of the properties which are being sold within Railtrack (Spacia) Limited as at 31 March 2002 was approximately GBP16.5 million. The net book value of the properties, which are being retained by Railtrack Group as at 31 March 2002, was approximately GBP5.5 million. Commenting on the disposal, David Harding, Chief Executive of Railtrack Group, said: 'Following the sale of the Group's interests in the Broadgate Development, the Board is pleased to announce the sale of Railtrack (Spacia) Limited and believes that the Group is on track to be able to return between 245 and 255 pence per share (subject to the qualifications set out in the circular to shareholders dated June 27, 2002).' EQUITABLE LIFE: Gov't Delays Release of Inquiry Results to 2003 ---------------------------------------------------------------- Results of a government inquiry into the near downfall of Equitable Life Assurance Society, which was forced to slash payment to policyholders to stay afloat, will not be published until the first half 2003 instead of at the end of this year, a report from Bloomberg says. This news was met with concern from customers who wondered if the report may be watered down, the news agency says. Lawmakers in U.K. have carped at the Financial Services Authority, which oversees insurers, for its failure to do enough to stop the decline of the 240-year-old insurer. Lord Penrose's report will focus on the way the regulator handled the company, the news outfit reports. Paul Braithwaite, spokesperson of Equitable Members Action Group, said that the delay of the report's release would help "neutralize a terribly embarrassing situation.'' But Liz Kwantes, head of 20,000 Equitable customers Action Group expressed her doubts saying, `the question is whether the Treasury will ever let the full details out.'' Equitable closed to new business in December 2000 after London's High Court ruled it had unlawfully cut bonuses to clients who bought guaranteed annuities. The insurer then failed to find a buyer after a six-month search. A separate report published last October by the FSA's internal auditor Ronnie Baird told the government he had identified weaknesses in the regulator's handling of the affair. The FSA has since increased oversight of insurers. Lord Penrose aimed to publish his report by the end of 2002, but postponed the publication because he had wanted the report to thorough as possible, the news agency says. The U.K. Treasury regulated insurers before the FSA. The new board of Equitable has said it may file a lawsuit against the FSA, which started overseeing insurers in 1999, in a bid to get money to shore up its reserves. Equitable in April filed suits against 15 former directors and its former auditor Ernst & Young LASTMINUTE.COM PLC: Notice on 3.17% Holdings -------------------------------------------- In accordance with Part VI of the Companies Act (as amended), the Company has received notification from Deutsche Bank AG that on 19 August 2002 the total notifiable interest of Deutsche Bank AG and its subsidiary companies, in the ordinary shares of lastminute.com plc was 6,575,000 being 3.17% of the issued share capital. Percentage holdings have been calculated using an issued share capital of 207,515,684 ordinary shares. UK COAL PLC: Notice of 3.2% Holdings ------------------------------------ Name Of Company: UK Coal Plc Name Of Shareholder Having A Major Interest: Merrill Lynch & Co Inc Class of security: ordinary shares Date company informed: August 20 2002 Total holding following this notification: 4,629,056 Total percentage holding of issued class following this notification: 3.2% Any additional information: increased holding Contact: M. Garness Telephone: 01302 755 002 Date of Notification: August 20 2002 BIOCOMPATIBLES INTERNATIONAL: Notice on 3% Interest in Shares -------------------------------------------------------------- Biocompatibles International plc was advised that as from 15 August 2002, Commerzbank AG holds 1,341,379 ordinary shares in the Company representing 3.02% of the issued ordinary share capital. AMELCA PLC: Receiver Sends Home Half of Milk Factory Workers ------------------------------------------------------------ Deloitte and Touche fired this week half of the 70 workers at the Foston milk-processing factory of Amelca Plc, the start-up dairy company that has run out of money barely three months since starting operations in May. According to the Evening Telegraph, the accounting firm, which was appointed receiver Thursday last week, immediately took action and included in the redundancy Len Jackson, managing director of Amelca since its early days. The report says Amelca began production three months ago and has since spent almost GBP20 million. The company owes the Bank of Scotland GBP11 million. The bank will have first claim on any funds raised by the receiver by virtue of its being a preferential and secured creditor. Any remaining money will be distributed to other secured lenders, followed by trade creditors and shareholders in that order. Among these trader creditors are 150 dairy farmers, who invested an average of 20,000 pounds each in the company. They live within a 25-mile radius of the factory and are now unlikely to be paid for six weeks' supply of milk, the paper said. "This is very regrettable because we have supported Amelca for 18 months, but the overdraft facility has increased several times in recent months. If a business has no more cash, then the receivers have to be called in," a spokesman for the Bank of Scotland told the paper Tuesday. The paper says until last week, the company was still on good terms with the Bank of Scotland and was even lining up for a GBP2 million additional credit. The 150 farmers contributed about GBP3 million to the company's coffers and "founding members" numbering seven, pitched in another GBP1 million. A further o4.6m was raised from other investors. "We are absolutely astounded. Some farmers will go bust because they borrowed money and they won't be paid for six weeks' milk. But we're not giving up," Fergie Atkinson, a founding member who contributed 140,000 pounds to the firm, told the Evening Telegraph. MARCONI PLC: Finance Director Stands to Lose Job ------------------------------------------------ Marconi Plc's finance director Steve Hare faces the possibility of losing his job this week when the company reveals an agreement in principle with its creditors to restructure its GBP4 billion debt, the Financial Times reports. Mr. Hare's departure was seen as "a legitimate possibility," according to the newspaper. The newspaper says that despite having only taken the finance director role in April last year, thee months before the company fell after admission of collapsing sales, Mr. Hare still is considered to be unpopular among the company's creditors. Some of Marconi's senior figures are wondering why Mr. Hare is being held responsible for the group's debt pile. They said that the group's high debt level was caused by wrong decisions made prior to Mr. Hare's arrival, the daily says. Moreover, these senior figures believe Mr. Hare even played an important role in the progress made in decreasing net debt from GBP4.4 billion to 2.6 billion, through an aggressive disposals program, and in cutting overheads -- action which has made an agreement with creditors possible, the paper adds. COOKSON GROUP PLC: Announces Rights Issue Update ------------------------------------------------- Following a vote in favor of the resolutions relating to the Share Capital Reorganization and Rights Issue at the Extraordinary General Meeting on 5 August 2002, the Board of Cookson announces that it has received, over the last week, new written indications from institutional Shareholders that they intend to take up rights representing approximately 520 million (45%.) of the New Shares under the Rights Issue. The Company announced interim results on 19 July 2002 and confirms that current trading continues to be in line with its expectations. In addition, borrowings under the Company's medium term bank facilities remain at anticipated levels. The latest time and date for acceptance and payment in full for New Shares pursuant to the Rights Issue is 9.30am on 28 August 2002. Contact Information: Sir Bryan Nicholson, Chairman Stephen Howard, Group Chief Executive Dennis Millard, Group Finance Director Cookson Group plc Telephone: 020 7766 4500 KINGFISHER PLC: Files Castorama Minority Offer ---------------------------------------------- In accordance with French takeover offer rules, Kingfisher recently filed with French stock market regulators a request for approval of its formal cash offer for the minority shareholding in Castorama Dubois Investissements SCA that it does not already own. Under Article 21 of Castorama's articles, Kingfisher (through its wholly-owned subsidiary, Socodi S.A.R.L.) will acquire a casting vote at meetings of the executive bodies of Castorama giving it effective control of Castorama from the time the Conseil des marches financiers approves this cash offer by issuing an avis de recevabilite. Kingfisher expects to proceed to make the formal offer to the minority shareholders of Castorama, under the terms, which have been previously announced of euros 67 per share, by the end of this month, with cash settlement expected in mid-October. In the event that Kingfisher holds at least 95% of the voting rights in Castorama at the end of the offer, Kingfisher will consider whether to make a public offer followed by a compulsory acquisition offer for the Castorama shares then held by the public. Following the offer and depending on its outcome, Castorama shares may be delisted from the premier marche of Euronext Paris, subject to the financial and legal conditions applicable to such a delisting being satisfied. Kingfisher is Europe's leading home improvement retailer, and is ranked number three in the world. The company operates more than 580 home improvement stores in 11 countries, and enjoys market- leading positions in the U.K., France and Taiwan. Sales for the Home Improvement sector for the year to 2 February 2002 were more than GBP5.8 billion, with retail profit in excess of GBP430 million. Kingfisher Electricals & Furniture operates more than 820 stores in nine countries. It is Europe's third largest electricals retailing business by sales and number two by retail profit. As well as holding the leading position in France and the number two position in the U.K., Kingfisher also enjoys leading positions in Belgium and in the Czech and Slovak Republics. Sales for the year to February 2, 2002 were more than GBP3.7 billion, with retail profit of GBP184 million. Contact Information: Ian Harding Director of Investor Relations Telephone: +44 (0) 207 725 4889 ************ 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. * * * End of Transmission * * *