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/raid1/www/Hosts/bankrupt/TCREUR_Public/020823.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 Friday, August 23, 2002, Vol. 3, No. 167 Headlines * F R A N C E * COMPLETELEUROPE: Shareholders Approve Recapitalization Proposals FRANCE TELECOM: Equant Delivers WAN Solutions in China NORTEL NETWORKS: Activates Voice Over IP Network With Tiscali * G E R M A N Y * ADS SYSTEM: Network Service Provider Files for Insolvency BABCOCK BORSIG: Engineering Group May Sell Power Systems Unit BASLER AG: Progresses in Turning Company Around CONSORS DISCOUNT-BROKER: Discontinues Trading of Shares DATADESIGN AG: Roy Von Der Locht Leaves Board DATADESIGN: Software Developer Loses Half of Share Capital DEUTSCHE TELEKOM: Reveals EUR3.9 BB Net Loss for H1 2002 KIRCHMEDIA: Lowers Price on 25% Stake in Telecinco TEAMWORK INFORMATION: Reveals Positive EBIT in July * N E T H E R L A N D S * BAAN NV: Results of Exit Offer by Invensys on Baan in Liquidatie KPN NV: Atos Origin Takes Over KPN Software House PRIORITY TELECOM: Announces Second Quarter 2002 Results * S W E D E N * FRAMFAB AB: Reveals January 1 - June 30, 2002 Interim Results LM ERICSSON: Unstable Shares Negatively Affect Rights Issue LM ERICSSON: Signs USD40 MM Deal With LLC TelecomInvest * U N I T E D K I N G D O M * BIG FOOD: Issues Notice on Aviva's 5.96% Interest in Shares AEX DRAX: Moody's Downgrades AES Drax's Ba1 Debt Rating to Ba2 ANTISOMA PLC: Completes Patient Recruitment I Trial of TheraFab PPL THERAPEUTICS: Appoints New Business Development Director UK COAL: Seeks Tenders From Prospective Coal Mining Operator =========== F R A N C E =========== COMPLETEL EUROPE: Shareholders Approve Recapitalization Proposals ----------------------------------------------------------------- Completel Europe N.V. announces that the Extraordinary General Meeting (EGM) of its Shareholders held Tuesday approved all of the proposals in support of Completel's previously announced recapitalization plan. These proposals include, among other things, a 670-to-one reverse split to Completel's ordinary shares intended to normalize the post-recapitalization trading in Completel's ordinary shares and the amendment of Completel's articles of association necessary to effect the recapitalization. Completel's recapitalization is still subject to the final sanction of the Dutch bankruptcy court of the Akkoord composition plan proposed by Completel, on which an initial confirmation hearing was held Wednesday, August 21, 2002. The recapitalization also remains subject to other customary closing conditions. At its hearing yesterday, the Dutch bankruptcy court overseeing the Akkoord deferred its final confirmation hearing regarding the recapitalization until Wednesday, September 4, 2002, in order to determine that (i) the outstanding balance in the interest escrow account established at the time of the issuance of Completel's 14% Senior Notes due 2010 has been distributed to the holders of these Notes and (ii) the relevant approval has been granted by the French securities regulatory authorities in order to list Completel's securities to be issued in the recapitalization on Euronext Paris. Completel anticipates it will meet these requirements by that date and that the closing of the recapitalization will occur during the third week of September. Completel believes that, upon the completion of its recapitalization, its cash balances, together with the anticipated cash flow from its restructured operations, will provide it with sufficient capital to fully fund its business to cash flow breakeven. Additional information concerning Completel's recapitalization plan can be found in the proxy statement relating to the EGM which is available on Completel's website at http://www.completel.com. In addition, Completel's Annual General Meeting of shareholders (AGM) held on August 20, 2002, has approved Completel's statutory annual accounts for the fiscal year ended December 31, 2001, as required under Dutch law. Additional information concerning the AGM can be found in the proxy statement relating to that meeting which is available on Completel's website. Completel also announced yesterday that James Dovey has resigned from his role as chairman of its Supervisory Board, but will continue to serve as a member of the Supervisory Board until the completion to the recapitalization. Appointment of a new chairman of the Supervisory Board will be announced following that completion. Completel is a facilities-based provider of fiber optic local access telecommunications and Internet services to business end- users, carriers and ISPs in France. Contact Information: Catherine Blanchet Investor Relations of Completel Europe N.V. Telephone: +33-1-72-92-20-32 E-mail: c.blanchet@completel.fr Web site: http://www.completel.com FRANCE TELECOM: Equant Delivers WAN Solutions in China ------------------------------------------------------ China Netcom Corp. (CNC) was awarded a three-year contract to provide China Mobile Communications Corp. (China Mobile) a wide area network (WAN) solution based on Equant Frame Relay. The service was made possible through the strategic partnership between CNC and Equant. Since the partnership was established last year, Equant and CNC have secured agreements with companies wishing to connect into China as well as China-based companies connecting globally. The China Mobile contract marks the partnership's first implementation of an end-to-end international service both inside and outside China. The cooperation between the domestic CNC network and the global Equant network enables China Mobile to connect to its business partners in Denmark, Germany and Luxembourg, enhancing data clearance for its international roaming service and extending its service portfolio for the customers. In addition, the worldwide scope of this network service makes the exchange of China Mobile data easier for cross-border mobile users. "We are pleased to work with such established providers as CNC and Equant to ensure our network communication is fast enough for roaming service billing transactions. By using frame relay, we can further increase our operational efficiency and provide better service to our customers," said Weining Wu of China Mobile. Francis Yip, general manager of Equant China, said, "This implementation of service for China Mobile is a milestone for the partnership. Not only have we extended the availability of data communication services in China to more than 40 cities across the nation, we can also offer dedicated network connections in 26 of these cities. This puts us far ahead of the competition." This contract was also significant to CNC because it demonstrated that the company could provide a one-stop shopping solution to companies who want domestic and global network services. "I am very pleased with the progress we've made with Equant since the partnership was announced in October 2001," said Gilbert Lee, general manager of Sales Management, China Netcom Corporation. "Our overall network services have developed to a level that can support multinational companies through one-stop shopping. As China continues to increase its presence on the world stage, we look forward to working more closely with Equant to deliver quality network services." Equant is a recognized industry leader in global IP and data services for multinational businesses, offering network, integration and managed services to global business. The network has unmatched seamless global reach, connecting key business centers in 220 countries and territories, with local support in 145 countries and territories. Building on more than 50 years of experience in data communications, Equant serves thousands of the world's top companies. Equant, a member of the France Telecom Group (http://www.francetelecom.com),meets the diverse needs of global companies with the industry's most extensive portfolio of managed data network services. NORTEL NETWORKS: Activates Voice Over IP Network With Tiscali ------------------------------------------------------------- Nortel announces that Tiscali UK, a subsidiary of Tiscali, the Internet Communication company, is believed to be the first UK service provider to carry live, commercial voice traffic on a single, consolidated, carrier-grade voice over IP (Internet Protocol) network - with activation of its new service based on Succession softswitches from Nortel Networks. Nortel Networks Succession Communication Server 2000 softswitch controls how voice traffic traverses the network, positioning Tiscali UK to drive reduced operational costs and to build a foundation for delivery of new, multimedia IP services. It also cost-effectively extends geographical coverage by enabling use of smaller footprint `media gateways' as `points-of-presence' under centralized control. "Tiscali UK and Nortel Networks are radically changing the way UK phone services can be delivered by eliminating the need for separate voice and data networks," said Stephane Huet, chief operating officer, Tiscali UK. "We chose Nortel Networks voice over IP technology because it is second to none in the industry and was available for immediate deployment." "This agreement will allow us to deliver a market-leading, robust and proven 2.5 gigabit network with 18 points-of-presence in cities across the UK, enabling us to handle growing customer demand for high-value IP and voice services," Huet said. "This is a landmark achievement for the UK's telecommunications infrastructure," said Colin Doherty, president, carrier voice over IP and data services, Nortel Networks EMEA (Europe, Middle East, Africa.) "Just as manual switchboard operators were superceded by automated switching and analogue voice signals have been replaced by digital voice, all voice calls will eventually be carried over converged, packet networks," Doherty said. "With this new deployment, Tiscali UK has first-mover advantage to efficiently accommodate their customers' growth and deliver new voice services." Voice over IP enables voice traffic to be broken down into smaller pieces and sent as data packets, allowing carriers to operate more cost-effectively and efficiently by using a common packet network to carry voice, data and video traffic. All of Tiscali UK's 18 locations use products from Nortel Networks voice over IP portfolio, including Succession Communication Server 2000 softswitches. Tiscali UK forms part of Tiscali SpA., headquartered in Cagliari, Italy. The company UK was launched in July 2001 following the acquisitions of Liberty Surf, World Online and LineOne. Most recently, Tiscali UK acquired Tiny and Gateway ISP. Tiscali UK is positioned within the UK market as the fourth largest ISP. Tiscali S.p.A., (Nuovo Mercato, Milan: TIS, Nouveau Marche, Paris: 005773), is the leading pan-European Internet Communication Company providing access, content and business applications, as well as innovative communications services. As at 31 March 2002, Tiscali had 7.4 million active users and Internet traffic of 10.9 billion minutes in the first quarter 2002. With over 14 million unique visitors to the Tiscali portal in March 2002, Tiscali is confirmed as Europe's leading web property. Tiscali's corporate website can be found at www.tiscali.com. Tiscali UK Business Services has a focused product portfolio enabling customers to choose from IP Virtual Private Network and Managed Hosting solutions, ADSL and Leased line access, Streaming Media, Virtual Internet Service Provision and Telephony services. In essence, a one-stop shop for business communications needs. Visit the Tiscali UK Business Services website: www.tiscali- business.co.uk. Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Metro and Enterprise Networks, Wireless Networks and Optical Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the Web at http://www.nortelnetworks.com. ============= G E R M A N Y ============= ADS SYSTEM: Network Service Provider Files for Insolvency --------------------------------------------------------- German network service provider Argyrakis Dein System (ADS) Systems' shareholders have decided to file for insolvency, a report from the Borsen-Zeitung and the Financial Times says. The company has sold its Swiss subsidiary. Its Dutch unit is up for sale, and talks continue regarding its business in Austria, the report adds. ADS Systems started facing financial woes in the second half of 2001 when funds from its IPO dried up rapidly. After which, it failed to convince banks with its plans to restructure the business, the report says. BABCOCK BORSIG: Engineering Group May Sell Power Systems Unit -------------------------------------------------------------- German engineering company Babcock Borsig AG, may be obliged to sell its power systems unit, Babcock Borsig Power Systems GmbH, a report from Handelsblatt says. It is reported that the sale may add as much as EUR300 million (GBP294 million) to Babcock's coffers, the paper says. Handelsblatt adds that the company, which is in talks with two unnamed investors, may also sell shares in the power systems unit. Babcock filed for protection from creditors last month following it admission that it lacked fund to pay workers and banks. Talks with creditor banks failed as the banks rejected an emergency cash injection. The engineering firm has confirmed it will focus on creating a new company comprising its core businesses, the Handelsblatt says. BASLER AG: Progresses in Turning Company Around --------------------------------------------------- In the second quarter of 2002, Basler AG posted its best results in six quarters. Sales revenues of Euro 8.1 million were significantly higher than First quarter 2002 (Euro 3.5 million or +131%) and the year- earlier quarter (Euro 7.6 million, +7%). Year-to-date sales for these 1st half year totaled Euro 11.5 million and ranged 21% below the same period last year (Euro 14.6 million). The positive trend in new orders observed since the start of the year continued into the second quarter. New orders valued at Euro 9.7 million increased 59% over the previous quarter (Euro 6.1 million) and 26% over the prior-year quarter (Euro 7.7 million). Orders received in the first fiscal half of 2002 totaled Euro 15.8 million (+5% with Euro 15.0 million for the 1st half of 2001). Results for 2nd quarter 2002 improved markedly thanks to increasing sales. The net loss of Euro -0.4 million was 87% less than in the 1st quarter (Euro -2.8 million) and 71% better than in the same quarter last year (Euro -1.3 million). The total net loss for the 1st half of 2002 was Euro -3.2 million, or a drop of 17% from a year ago (Euro -3.8 million). Although Basler AG made important progress as it moved forward along the path to turning the business around, it will not be able to fulfil the scheduled timing. Additional sales and increased new bookings indicate that investment behavior in Basler's relevant target markets will further normalize. Because of unexpected low investment activities in the main markets Korea and Taiwan the Business Unit Display Inspection is expected to show less profits. Therefore the result for the full year will still show a net loss and the turnaround for the full year will from today's point of view only be achieved in the transcourse of next year. Profit is already expected for the second half of this year, which means that the results for the full year 2002 will turn out better than the results for the first half. Basler has resolved to adhere to the Code of Corporate Governance to document a responsible corporate governance and thus to further promote and enhance the trust of its shareholders. Christian H"ck, Tel. 04102 - 463 175, christian.hoeck@baslerweb.com CONSORS DISCOUNT-BROKER: Discontinues Trading of Shares ------------------------------------------------------- Consors Discount-Broker AG has made an application for discontinuance of listing and trading of Consors shares on the Neuer Markt segment of Deutsche B"rse AG after Friday, 13 September 2002 and for admission to price determination on the regulated market of the Frankfurt Stock exchange as from Monday, 16 September 2002. The decision to change trading segment was taken due to the costs involved with the Neuer Markt listing which are disproportionately high in view of the freefloat of under 5 percent. Following expiry of the takeover offer, BNP Paribas currently holds 95.05 percent of the capital stock and voting rights of Consors. DATADESIGN AG: Roy Von Der Locht Leaves Board --------------------------------------------- Data Design announces that the CEO Roy von der Locht has left the company. His responsibilities have been assumed by Philip Hartley (COO) and Gerhard Weichenhain (CFO). The previously announced restructuring program is not affected by this management change. Given the size of the order backlog, the company believes it will again achieve profitability in the coming quarters. The companys liquidity is circa 3.4 Mio. EUR. DATADESIGN: Software Developer Loses Half of Share Capital ---------------------------------------------------------- German financial software developer DataDesign is suffering a crisis six months after it acquired insolvent software group Brokat, a report from Frankfurter Allgemeine Zeitung and the Financial Times says. DataDesign revealed at the end of July that it lost half of its share capital. Now, according to German law, the company is required to call an Extraordinary General Meeting, the report says. The company posted a pre-tax loss of EUR2.8m million in the second quarter of the year, up from one of EUR0.2 million in the first quarter, while turnover came in at just EUR1.8 million. In July, the company experienced increasing losses due to the fall in demand in online banking and brokerage software, the report says. DEUTSCHE TELEKOM: Reveals EUR3.9 BB Net Loss for H1 2002 -------------------------------------------------------- Deutsche Telekom announces that the company has continued its growth course in the first half of 2002, achieving satisfactory results in a difficult environment. Group revenue increased by almost 15 % to EUR 25.8 billion (first six months of 2001: EUR 22.5 billion). Revenue generated outside Germany increased from 27 % to 33 %. Group EBITDA (excluding special influences) increased by 7.2 % to EUR 7.8 billion. Net loss totaled EUR 3.9 billion, primarily a result of depreciation and amortization relating to newly consolidated companies. Excluding special influences, the net loss amounted to EUR 3.1 billion. As part of the extensive package of measures to reduce the Group's debt, investments in property, plant and equipment were reduced by 17.6 % to EUR 3.1 billion compared to the same period last year. This reduction in capital expenditure has considerably contributed to the increase in net cash provided by operating activities of 40.8 % to EUR 6.6 billion. Chairman of the Board of Management, Prof. Dr. Helmut Sihler, called the results encouraging and, all in all, highly satisfactory against the backdrop of the general economic situation. According to Sihler, Deutsche Telekom also has a solid market position and one from which it can expand. "We know what we have to achieve and we see clearly the path we must take. The combined efforts of all those responsible in the company, and by this I mean all employees, will ensure that we reach our goal despite the unfavorable environment", stated Sihler. Sihler named the review of the corporate strategy as one of the urgent tasks facing Deutsche Telekom's Board of Management. An important aim of this shall be to further develop operational strengths. Sihler announced that the results of this review process shall be made known in November. E3 - the program which is already underway to improve the company's results by means of measures to generate savings and greater efficiency - will, according to Sihler, achieve sustained improvements in the order of EUR 1.5 billion by reducing capital expenditure and workforce numbers. The new Chairman reaffirmed the aim of reducing Deutsche Telekom's net debt to EUR 50 billion by the end of 2003. Thanks to the improved cash flow, among other things, it has already been possible to reduce net debt by EUR 3.1 billion to EUR 64.2 billion in the second quarter of 2002. CFO Dr. Karl-Gerhard Eick emphasized this point: "Our net debt has been reduced by almost EUR 7 billion compared to the same period last year. This is proof of the progress we have already made in debt reduction." Segment reporting for the company's four divisions once again reveals T-Mobile to be the primary source of growth within the Group, with the majority shareholdings of the T-Mobile Group accounting for net additions of around 5.7 million subscribers compared with June 30, 2001. Market leadership in Germany was further expanded. The U.S. company VoiceStream was also highly successful and its development exceeded expectations. The second quarter alone saw VoiceStream register around 526,000 net customer additions, representing a disproportionately high share of market growth. T-Mobile's total revenue increased by 53 % to EUR 9.14 (5.97) billion, largely due to companies that were not consolidated for the entire first six months of 2001. EBIDTA for this segment increased by 86 % to EUR 2.56 (EUR 1.38 billion). T-Com was able to stop the slight decrease in revenue that had been reported in the first quarter. Total revenue for the half- year increased by 1 % to EUR 14.84 billion (compared with EUR 14.69 billion for the same period last year). Successful rebalancing made it possible to continually increase access revenue from domestic operations, and increased revenue from access charges in the second quarter of 2002 for the first time more than offset the reduction in call revenue. The successful marketing of T-DSL continued, with the number of lines more than doubling from one million at the end of June 2001 to 2.5 million at the end of the first six months of 2002. The number of ISDN channels totaled 21.5 million by the end of June, an increase of 5.4 % compared with the beginning of 2002. EBITDA at T-Com remained stable at EUR 4.98 billion compared to EUR 5.03 billion for the same period last year - thanks to a 6.9 % increase in EBITDA in the second quarter of 2002 compared with the first quarter. The T-Systems division increased revenue by almost 7 % in the second quarter of 2002, largely offsetting the decrease in the first quarter. Revenue in the first six months decreased by 3.5 % to EUR 5.5 billion. This was largely a result of a decrease in the Telecommunication Services unit while IT Services continued to show positive development. EBITDA increased by 42.6 % to EUR 509 million (compared to EUR 357 million for the same period last year). The awarding of contracts to T-Systems for a whole range of major projects in Germany and Europe, for example from the Federal Institute for Employment, TotalFinaElf, BASF and ARD, had a positive impact on the business of the company, one of the largest systems houses in Germany and Europe. T-Online further increased its number of customers at Group level to 11.6 million by the end of the reporting period. The revenue of the T-Online segment (including DeTeMedien) grew by 22.2 % to EUR 864 million (compared to EUR 707 million for the same period last year). The T-Online Group recorded positive EBITDA, amounting to EUR 82 million (compared to EUR -52 million for the same period last year). This contributed to considerably higher earnings before taxes of EUR 40 million (EUR -79 million last year). In the segment "Other", revenue decreased by 17.6 % to EUR 1.92 billion due to deconsolidations and intensified cost reduction activities in other areas which resulted in lower demand for the services provided by the segment. Adjusted EBITDA decreased to EUR -171 million compared with EUR 539 million in the same period of the previous year. In addition, EBITDA includes a negative special influence after netting the proceeds from the sale of shares in Satelindo and France Telecom. KIRCHMEDIA: Lowers Price on 25% Stake in Telecinco -------------------------------------------------- Insolvent KirchMedia will be forced to sell its 25% stake in Spain's Telecinco, at a lesser price than originally planned due to the lack of bids that emerged, a report from the Handelsblatt says. Citing a report from Spanish daily Cinco Dias, the Handelsblatt says another auction of the shares, currently held by Kirch creditor Dresdner Bank, took place on Tuesday evening but failed to attract any bids. The starting price was set at EUR225 million, lesser than a previously set EUR300 million. The stake will be auctioned again in September with no minimum price set, the daily reports. Kirch had used the Telecinco shares as collateral against a EUR460 million loan from Dresdner Bank. But the loan was extended to Kirch Holding, while the shares actually belong to the insolvent Kirch Media arm. This has led to disagreement between Dresdner and other Kirch creditors over whether the bank is actually entitled to the Telecinco shares, the paper says. Italian broadcaster Mediaset holds a 40% stake in Telecinco, and unlisted Spanish media group Correo another 25%. The remaining 10% stake belongs to Dutch fund ICE Finance. Mediaset has an option to buy it for a minimum of EUR200 million if Spanish laws restricting foreigners to a 49% stake are changed. KirchMedia's Leo Kirch initially planned to sell the 25% Telecinco stake for EUR500 million as early as the end of 2000 when he started talks with Mediaset. At the time, Mediaset planned to increase its stake to the permitted limit of 49%. However, the talks crumbled when both parties failed to agree on the price, the Handelsblatt reports. TEAMWORK INFORMATION: Reveals Positive EBIT in July --------------------------------------------------- In July 2002, teamwork AG was able to achieve a positive EBIT again following the positive figure for June, the company reports. teamwork information management AG closed the second quarter of 2002 with consolidated sales of 1.6 million euros and an EBIT of -0.7 million euros. Sales declined compared with the first quarter of 2002 (-25%), although the EBIT was improved by 14% thanks to the implementation of additional cost-cutting measures. Sales of 3.7 million euros and an EBIT of -1.4 million euros were achieved by the group in the first half of 2002. In the second half of 2002, the Board of Management expects sales of around 4.3 million euros and a positive EBIT of 0.2 million euros in the group. This forecast is based on the positive results from June and July, the positive development of the UK subsidiary InfoSys, and the expected increase in creditworthiness after the company's insolvency ends. Preparations for the second capital increase are progressing as planned. The invitation to subscribe will be issued in mid- October and the insolvency proceedings concluded by the end of November. Contact Information: Mr. Heinz Ikenmeyer Chairman of the Board Telephone: +49 (0)5251-5201-121 E-mail: hikenmeyer@teamwork.de ===================== N E T H E R L A N D S ===================== BAAN NV: Results of Exit Offer by Invensys on Baan in Liquidatie ---------------------------------------------------------------- Invensys Holdings Ltd. (http://www.invensys.com)recently announced its exit offer on all outstanding shares in Baan Company NV (http://www.baan.com)in liquidatie at an offer price of Euro 2,85 per share. The offering period commenced on 19 June and expired, after a four weeks extension, on Friday 16 August 2002. As per 16 August 2002, 25,907,716 shares, constituting 9.69% of the total outstanding share capital in Baan Company N.V. in liquidatie, were offered to and purchased by Invensys Holdings Ltd. under the exit offer. This brings the total number of Baan shares held by Invensys Holdings Ltd. as per 16 August 2002 at 245,127,609 shares, constituting 91.69% of the total outstanding share capital in Baan Company N.V. in liquidatie. The exit offer is now closed and will not be further extended. KPN NV: Atos Origin Takes Over KPN Software House ------------------------------------------------- Royal KPN and French IT service provider Atos Origin reaches a definitive agreement on Atos Origin's takeover of the activities of KPN's Software House. Atos Origin has paid EUR 29 million for the acquisition. The 600 employees of the Software House will join Atos Origin Consultancy & System Integration in the Netherlands. The Software House provides software development and application management services to KPN. This is the third transaction between KPN and Atos Origin within a short time. The transactions are part of KPN's disposal of non- core activities and reaffirm KPN's partnership with Atos Origin in the field of ICT services. Atos Origin took over KPN's Datacenter (1,400 employees) in October 2001. The two companies reached definitive agreement in May 2002 on Atos Origin's takeover of KPN's Workstation Services (700 employees). KPN and Atos Origin will jointly carry out a 'Total Cost of Ownership' programme. In this context Atos Origin has given an undertaking to reduce to a structurally lower level the cost of the total package of IT services it provides for KPN. PRIORITY TELECOM: Announces Second Quarter 2002 Results ------------------------------------------------------- Priority Telecom N.V., the facilities-based business telecommunications provider, announces its results for the second quarter 2002. Highlights Q2 2002 Financial - Revenues amounted to EUR 30.9 million with a gross margin of EUR 18.9 million, 61% of revenues. - Reduced EBITDA loss, from EUR 4.7 million in Q1 2002 to EUR 1.5 million in Q2 2002. - Outstanding long-term liabilities of EUR 22.3 million as of June 30, 2002. - Total of EUR 37.9 million in available cash and cash equivalents as of June 30, 2002. Operational - Priority Telecom Netherlands implemented an enhanced Customer Contact Solutions platform in partnership with Logica and Cisco, enabling business customers to benefit from increased flexibility, reduced operating costs and improved customer service in their call centers. - Introduced Corporate Internet Access in Vienna and the greater Rotterdam area; this high capacity fibre-based Internet service is now available on the entire dense fibre network in the Netherlands, Austria and Norway. - Increased top tier capacities on our fiber based lease line products in the Netherlands and Austria, to include STM-4 and STM-16 services. - Priority Telecom Norway signed contracts with Helseregion Ost and Sykehuset Ostfold for the provision of managed data solutions and provides a new ASPsolution for schools in the Halden kommune. - Priority Telecom Austria signed contracts with Cybertown and Top-Sportwetten for the provision of Corporate Internet Access and ISDN 30. - Decoupled voice interconnect business from UPC as part of the ongoing process of separating operational responsibilities between the two parties. - Cumulative number of retail business voice minutes in the second quarter 2002 amounts to 34.2 million. Commenting on the Q2 2002 results, Priority Telecom Chief Executive Officer David Chadwick said: "Priority Telecom continues to make progress on its strategy of managed growth with a focus on profitability. We continue to exploit over 9,000 route kilometres of fibre optic cable, which enables us to promote up-sell opportunities while efficiently expanding our customer base with on-net and near-net businesses. During the second quarter of 2002, the company focused its sales initiatives toward engagements, which adhere to more stringent margin and return on investment criteria. "I am extremely pleased with the advanced capabilities that we can now provide our business customers via the introduction of several new products. In particular, corporate call centers and service providers can benefit from the web-enabled intelligent and fully integrated call routing functionality and real-time monitoring and control capabilities of our recently launched Customer Contact Solution product. Restructuring our customer and product base in order to attain 'qualitative high margin revenue' has been a major objective for Q2, 2002. This process has resulted in the elimination of low margin revenue services from our portfolio. "The rationalisation of Priority Telecom's overall organisation has reaped strong operational results. Our management and operational focus remains on those core competencies that drive success within a telecommunications company; selling, delivering, service management and collection." =========== S W E D E N =========== FRAMFAB AB: Reveals January 1 - June 30, 2002 Interim Results ------------------------------------------------------------- Highlights of Framfab AB's latest first Half results are as follows: - Operating earnings (EBIT) for April-June were SEK -23.7 million (-157.3). The SEK -32.4 million (-1,702.8) operating earnings for the first six months included SEK -8.8 million in restructuring costs. Total revenue was SEK 87.8 million (154.5) for April-June and SEK 195.7 million (418.5) for January-June. - Liquid funds amounted to SEK 89.0 million at the end of the second quarter. Cash flow from operating activities totaled SEK - 5.6 million (-114.2) for the second quarter, as opposed to SEK - 15.3 million for the first quarter. - As a result of the cautious market, Framfab adopted measures to lower costs, including the reduction of the group's workforce by 45. The lower costs should boost earnings somewhat in the third quarter and have a full impact in the fourth quarter of 2002. Framfab had 563 employees at the end of the second quarter. - During the year, Framfab entered into a number of new long-term agreements with organizations, including Avanturo, BNN, Central, Ellipsus, Finanz- und Versorgungsdienst GmbH (FDV), Haftplichtverband der Deutschen Industrie V.a.G. (HDI), the Knowledge Foundation and Renault Sweden. Meanwhile, Framfab concluded new general agreements with the Volvo Group and AstraZeneca. - During the second quarter, Framfab won a Grand Prix for its nikefootball.com website and a Gold Lion for Nike Freestyle at the Cyber Lions Awards in Cannes. The jury called nikefootball.com "the best thing that happened on the web last year". - Framfab's (http://www.framfab.com/)new initiatives includes Web Services and the packaging of established installations and projects as products, for launch during the second half of the year. Framfab is a leading provider of consulting services and business solutions based on Internet technology. Most of Framfab's customers are big international companies, including 3M, AXA, the Coca-Cola Company, Danske Bank, Electrolux, Ericsson, Hydro Texaco, IKEA, Kellogg's, Maersk Sealand, NEC Packard-Bell, Nike, Observer, Postbank, Quelle Versicherungen, SAAB, Volvo Car Corporation, Volvo Group and UBS. Framfab 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). LM ERICSSON: Unstable Shares Negatively Affect Rights Issue ----------------------------------------------------------- Ericsson's underwriter may be forced to pick up much of the company's SEK30 billion rights issue after Ericsson's shares teetered earlier this week, shoving its stock price SEK5 at one point, the news outfit Finance Director reports. The telecom equipment maker's stock price plunged to more than 98% since its June 2000 high. On Monday, the most-traded B share was down 10% at one stage, reaching SEK4.70, its lowest level for nine years and just less than SEK1 above the rights issue price of SEK3.80, the news outfit says. But the shares recovered to close at SEK5.25, down just one per cent in the afternoon on Monday. Ericsson's two largest shareholders, Investor and Industriv"rden, have pledged SEK8 billion of the issue, with several large Swedish institutional owners promising another SEK2 billion, the news outfit adds. A consortium of banks that included Morgan Stanley and Enskilda Securities have underwritten the remaining SEK20 billion. Previously, when the company announced the right issue, the deeply discounted price and the guarantee were considered as evidence of extreme caution. But now, it is believed that the company was well advised on the matter, the news outfit says. Moreover, some brokers blame the bad condition of the telecoms sector and the crisis atmosphere hovering the company and the rights issue. But most brokers said that technical trading was the reason for the falling price, with hedge funds shorting the stock. One broker even noted that underwriters were shorting to cover themselves if the price plunges below SEK3.80, the Finance Director reports. LM ERICSSON: Signs USD40 MM Deal With LLC TelecomInvest ------------------------------------------------------- Russian telecom operator LLC TelecomInvest-XXI, together with NEFTEGAZBANK and Ericsson (http://www.ericsson.com),have signed a contract for the supply of a multi-service network for the Moscow region and Moscow. The network, which will launch at the close of 2002, will provide telecommunications services for private and corporate users. The network will use the most advanced Ericsson equipment including state-of-the-art access technology, Engine Access Ramp- and will allow TelecomInvest-XXI to provide a wide range of modern narrow- and broadband, voice and data communications services with flexible tariff plans. The contract includes supply of equipment and professional services. "The contract has a strategic importance for NEFTEGAZBANK, because it allows the bank being the major shareholder in LLC TelecomInvest-XXI to strengthen its relationships with Ericsson, to expand the range of services based on new electronic technologies and take a firm position on the market of advanced banking services," said Mr.Golybev, Chief of the Board of Directors, NEFTEGAZBANK. "With this contract we start our strategic partnership with Ericsson. We foresee extensive use of Ericsson's unique experience and deep insight into the future development of the industry," said Mr. Grigoriev, General Director, LLC TelecomInvest-XXI. "We are very proud of this partnership and look forward to a long and fruitful close cooperation between the companies in developing world class information and communication technology," said Bjorn Hemstad, President, Ericsson Eastern Europe and Central Asia. Ericsson is shaping the future of Mobile and Broadband Internet communications through its continuous technology leadership. Providing innovative solutions in more than 140 countries, Ericsson is helping to create the most powerful communication companies in the world. =========================== U N I T E D K I N G D O M =========================== BIG FOOD: Issues Notice on Aviva's 5.96% Interest in Shares ----------------------------------------------------------- Frozen food retailer Big Food Group plc notifies that on behalf of Morley Fund Management Limited's subsidiary, Aviva plc (formerly CGNU plc), Aviva has interest over 20,456,232 ordinary 10p shares or a total of 5.96% in the total number of shares issued by Big Food. The Regulatory News Service of the London Stock Exchange reports the breakdown of the interest of Aviva is as follows: REGISTERED HOLDERS NUMBER OF SHARES HELD BNY Norwich Union Nominees Ltd 6,311,705 (Material) Chase GA Group Nominees Ltd 5,716,823 (Material) CUIM Nominee Ltd 8,427,704 (Material) TOTAL INTEREST OF MORLEY FUND MANAGEMENT LIMITED: 5.96% ISSUED SHARE CAPITAL ON WHICH THIS NOTICE IS BASED: 343,109,788 AEX DRAX: Moody's Downgrades AES Drax's Ba1 Debt Rating to Ba2 -------------------------------------------------------------- AES Drax Holding Ltd's Ba1 rating on the GBP200 million and USD302.4 million senior secured bonds and the GBP 905 million senior secured bank debt issued by InPower Ltd, has been downgraded to Ba2 by Moody's Investors Service, a report from the rating agency says. In addition, Moody's also downgraded to Caa2 from B1 the ratings on the GBP 135 million and USD 200 million notes issued by AES Drax Energy Ltd. All ratings have been placed under for possible further downgrade. These rating actions follow a rating review initiated by Moody's on 13 August 2002. Moody's says, "the downgrades fundamentally reflect the confirmation of a new base case financial model, with revised projections that include new market price forecasts from the market consultant. The price forecasts have been revised down again, and are the principal reason for the model showing a generally weaker financial profile for the Drax project going forward. Additionally, the revised model has led to one of the tests not being met to allow distributions this month to AES Drax Energy Ltd. As a consequence, this could lead to a payment default on the AES Drax Energy Ltd notes on 30 August 2002." In line with this, Moody's believes "that the ultimate parent, AES Corp (Ba3, on review for downgrade) intends to avoid this payment default by making a payment to the AES Drax Energy noteholders." Furthermore, Moody's says, "looking beyond the immediate issue of a potential payment default on the AES Drax Energy Ltd notes on 30th August, it will focus on the following key issues. Firstly, the general outlook for wholesale electricity prices. Secondly, the viability of the hedging contract with TXU Europe (Baa1, on review for downgrade). This contract underpins the Drax revenue stream and the ratings of the senior secured debt." Moody's adds it "remains concerned that this contract appears to be imposing a significant burden on TXU Europe, and notes public statements made by its parent, TXU corp, about seeking to restructure various power purchase contracts. Thirdly, the ongoing liquidity of the Drax project. Notwithstanding the significant cash balances currently held by Drax, Moody's will monitor whether the weakened credit profile of the project will lead to increased pressure on liquidity, and how any such pressure is mitigated. Fourthly, the ongoing efforts by Drax to reduce its cost base, including its attempts to burn petcoke as part of its fuel base. Moody's understand that the current base case financial model does not incorporate all the cost reductions that Drax believe are possible." All the ratings have put under review for downgrade showing lingering uncertainty on the full and timely payment on the interest on the AES Drax Energy Ltd notes on the 30th August; the ongoing uncertainty regarding the UK electricity market; and the rating agency's concerns regarding the TXU Europe hedge contract, Moody's says. Drax is a 3960MW coal-fired power station in the north of England. It is the largest power station in the UK, with revenues in 2001 totalling approximately GBP 586 million. ANTISOMA PLC: Completes Patient Recruitment I Trial of TheraFab --------------------------------------------------------------- Antisoma, the U.K.-based biopharmaceutical company developing new drugs for cancer, announces that it has completed recruitment for a phase I trial of its radiolabelled monoclonal antibody fragment, TheraFab. The trial enrolled patients with non-small cell lung cancer, the commonest form of lung cancer. The aim of the study is to show how effectively TheraFab binds to lung-derived tumour cells and to check that the antibody does not deliver unacceptable levels of radiation to healthy tissues. TheraFab is a member of the HMFG-1 family of antibody products, which bind to the tumour antigen MUC1. The MUC1 antigen is known to be expressed in a high proportion of non-small cell lung cancers. Commenting, Glyn Edwards, CEO of Antisoma said 'Completion of recruitment means we are on target to finish the study by the end of the year. We hope that the findings will ultimately contribute to the development of improved therapy for lung cancer, which remains poorly treated with current therapies.' Contact Information: Antisoma plc Glyn Edwards Chief Executive Officer Telephone: +44 (0)20 8799 8200 PPL THERAPEUTICS: Appoints New Business Development Director ------------------------------------------------------------ The Board of PPL Therapeutics plc (PPL), the U.K. listed biotechnology company involved in the application of transgenic technologies for the production of human proteins for therapeutic and nutritional applications, notifies that the group has appointed Adam Christie as Business Development Director, effective from September 9, 2002. This is a main board appointment. According to the PPL's announcement filed with the Regulatory News Service of the London Stock Exchange, Christie, aged 39, was most recently GlaxoSmithKline's Head of Marketing for Primary Care UK and European business team leader for Neurology and Psychiatry. Prior to that he was an equity analyst at ABN Hoare Govett. He has also held marketing positions with a number of pharmaceutical companies, including Abbott Laboratories, Fisons and Schering AG, the notice adds. This important appointment has been made by PPL to strengthen the management team and help deliver its goal of bringing transgenic protein products to market, the statement says. PPL Therapeutics is a biopharmaceutical company which specializes in the application of transgenic animal technologies to the development and production of human proteins for therapeutic and nutritional applications. PPL's three lead products are Alpha-1-Antitrypsin (AAT), fibrinogen and bile salt stimulated lipase (BSSL). The company's GMP-grade production facility is now producing up to 1 kg/week of clinical grade material. PPL has a world wide exclusive licence from the Roslin Institute to use the Institute's intellectual property relating to nuclear transfer (cloning) in the field of production of proteins for pharmaceutical and nutraceutical use in the milk of ruminant livestock and rabbits. PPL (http://www.ppl-therapeutics.com)is the only company to offer a wide range of animals for transgenic protein production, including sheep, cows, rabbits and pigs. UK COAL: Seeks Tenders From Prospective Coal Mining Operator ------------------------------------------------------------ EXPRESSION OF INEREST FOR THE THORNE COLLIERY PROJECT Thorne Colliery ceased coal production in 1956 to permit major shaft repair work to take place. Following the completion of these works, the colliery remained open on a care and maintenance basis, but coal production never restarted. During the 1980's, a major reconstruction scheme was started which saw the demolition of the old surface buildings and the erection of new head gear, winder houses and associated colliery buildings. A new pit bottom circuit was driven that could provide future access to the High Hazel and Barnsley Seams. The "new mine" project was put on hold in 1992 as a result of HM Government's review of the coal mining industry and its pending privatization. The Thorne Coliery Project has been maintained in this "nothballed" state since 1992. It was acquired by UK Coal Mining Ltd. as part of the privatization package of English mines. The colliery remains under care and maintenance management. Following a review of the Company's future deep mining stategy, UK Coal has informed the Coal Authority of its intention to suspend its care and maintenance management and to abandon the Thorne Colliery Project. Thorne Colliery has the benefit of a license issued under Parh II of the Coal Industry Act 1994 and a 99 year lease of the coal. Freehold surface land and colliery plant and equipment are owned by UK Coal. UK Coal has stated that it intends to abandon the Thorne Colliery Project in October 2002 and, in conjunction with the Authority, is seeking expression of interest from prospective operators of sufficient financial standing to secure the physical integrity of the existing mine and to invest in the renewed development as an active mine. Meaningful inquiries from interested parties must be made before October 1, 2002 directly to: Dr. I. S. Roxburgh, Chief Executive, The Coal Authority 200 Lichfield Lane, Mansfield, Nottinghamshire, NG18 4RG Telephone: 01623 638301 Facsimile: 01623 427316 and copied to: Mr. M. Garness, Company Secretary, UK Coal Plc Harworth Park, Blyth Road, Harworth Doncaster, South Yorkshire, DN11 8DB Telephone: 01302 751751 Facsimile:01302 752797 ************ 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. 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