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/raid1/www/Hosts/bankrupt/TCREUR_Public/020829.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 29, 2002, Vol. 3, No. 171 Headlines * F I N L A N D * STORA ENSO: Announces Plans to Wind up U.S. Operations STORA ENSO: EU Ends Probe on Newsprint Competition Case * F R A N C E * ALCATEL: Optronics Unit Introduces New Optical Pumping System FRANCE TELECOM: Interconnects GRX Network With Cable & Wireless * G E R M A N Y * E.MULTI: Insolvent Computer Games Group Posts H1 Positive EBIT KIRCHMEDIA: Italy's MediaSet Eyes 53% Stake in ProSiebenSat1 SACHSENRING AG: Posts First-Half Operating Losses as Sales Drop SILICON VISION: Gesco Writes Off Stake in Insolvent Manufacturer WELLE MOBEL: Secures Rescue Package, Lifeboat Company Formed * I R E L A N D * ELAN CORPORATION: Shares Rise Amid Speculation of a Takeover JEFFERSON SMURFIT: Shares Spun Off in Smurfit-Stone Container * I T A L Y * FI.M.O. S.R.L.: Issues Notice on Asset Sale Without Auction * P O L A N D * NETIA HOLDINGS: Minority Claimholders Challenge Arrangement Plan * S P A I N * UNION FENOSA: Shares Soar Amid Reports of Gas Unit Sale * U N I T E D K I N G D O M * ARTHUR ANDERSEN: UC Settles International Firms in Enron Lawsuit BRITISH ENERGY: Hopes for Rescue Deal Dashed by Magnox Delay CORDIANT COMMUNICATIONS: Issues Notice on 4.79% Interest ECLIPSE ELECTRONICS: Receivers Notifies Sale of Component Co. ENRON CORPORATION: Begins Auction Process to Sell 12 Major Assets EQUITABLE LIFE: Moody's Upgrades Debt Rating to Caa2 From Caa3 LASTMINUTE.COM PLC: Holders Approve Purchase of TravelPrice.Com MARCONI PLC: In Restructuring Talks With Syndicate Banks NTL INCORPORATED: Confirmation Hearing Convenes on September 5 ============= F I N L A N D ============= STORA ENSO: Announces Plans to Wind up U.S. Operations ------------------------------------------------------ Stora Enso announces that further to its existing program to improve the operational and financial performance of its North American division, and in response to continuing poor market conditions for its main products in North America, the company announces the details of its previously advised profit enhancement plan, including the permanent shutdowns of production units in the U.S. The plan aims to significantly improve Stora Enso's competitiveness in North America, and position its operations for profitable growth in this important market. The weaker market conditions have also had an impact on the recoverable value of the assets acquired by Stora Enso in the USA in 2000, prompting the management decision to take a one-time impairment charge of EUR 1 150 million (USD 1 081 million) in the third quarter of 2002 assuming that an average EUR/USD exchange rate is 0.9400. The full financial impact of the plan and the impairment charge is an estimated improvement on the Group's EPS of EUR 0.13. "Shortly after our acquisition of Consolidated Papers in September 2000, the North American paper markets began a prolonged downturn, particularly in publication grades, due to dramatically decreased advertising spending. This poor market environment persists today. Group management has decided not to wait and rely on a recovery, but to take action now. We are confident that this profit enhancement plan, together with the earlier initiatives, will improve profitability in the near term, while positioning us for long-term competitiveness." says CEO Jukka H"rm"l". Profit enhancement plan The profit enhancement plan comprises a comprehensive range of measures that will together significantly improve Stora Enso North America's competitive position and profitability. The main elements of the plan include: Restructuring selected manufacturing assets - Wisconsin Rapids Pulp Mill to be converted to fully bleached fine paper pulp Targeted capital investments - Rebuilding of paper machines at Wisconsin Rapids (PM16), Kimberly (PMs 96 and 97) and Biron (PM26) - Modifications to paper machines at Niagara (PMs 43 and 44) and Whiting (PM64) - Expansion of the thermomechanical pulp line at Port Hawkesbury, subject to cost objectives being met Permanent shutdowns of production units - PM12 at Wisconsin Rapids to be shut down by the end of 2002 - Shutdown of PM24 at Biron by the end of 2003, dependent on market conditions - Shutdown of groundwood and high-yield pulp operation at Port Hawkesbury - Closure of the groundwood pulp mill at Kimberly by the end of 2002 Workforce reduction - Approximately 500 jobs will be eliminated as a consequence of the plan and other cost cutting initiatives. The workforce reductions will take place primarily at Wisconsin Rapids, Biron, Kimberly and Port Hawkesbury. Impact on Stora Enso North America The total expenditure associated with the plan is estimated at EUR 266 million (USD 250 million), to be spread over the forthcoming 36 months. Once completed, the plan will have no material effect on the division's total annual production capacity. Write-offs and charges resulting from these measures total some EUR 80 million (USD 75 million), of which EUR 53 million (USD 50 million) is non-cash. The improvement to the North American division's profit (EBITDA) as a result of cost savings, increased productivity and higher-value-added production is expected to be approximately EUR 85 million (USD 80 million) per year from 2005 onwards. Impairment of assets Stora Enso will record a one-time impairment charge of EUR 1 150 million (USD 1 081 million) in its income statement in the third quarter of 2002, reflecting the recoverable value of assets acquired with Consolidated Papers, Inc. in 2000. This charge is a non-cash item. The calculation of asset impairment is based upon International Accounting Standards (IAS 36, impairment of assets), using a discounted cash flow model for each "cash generating unit". In this case, the impairment mainly relates to Stora Enso's North American Magazine business unit. Financial impact on the Group The financial impact of asset closures and impairment charge on the Group will be a reduction of annual depreciation and amortisation of EUR 75 million, equal to an increase of EPS by EUR 0.08. The Group's capital employed will be reduced by EUR 1 203 million and the debt/equity ratio will be deteriorated by 0.07. The charges will be classified as non-recurring items. The profit enhancement plan is estimated to have an additional positive impact of EUR 0.05 on the Group's EPS, once the full effect of the plan is realised (2005 onwards). Stora Enso North America is a division of Stora Enso Oyj. The division is North America's leading producer of coated and supercalendered printing papers for the printing and publishing industries. In addition, Stora Enso North America is a premier producer of speciality papers, and manufactures paperboards and paperboard products. The division produces elemental chlorine-free kraft pulp, totally chlorine-free mechanical pulp and recycled pulp from printed, preconsumer and postconsumer scrap paper. Stora Enso North America has papermaking operations at Biron, Kimberly, Niagara, Stevens Point, Whiting and Wisconsin Rapids, Wisconsin; Duluth, Minnesota, and Port Hawkesbury, Nova Scotia, Canada. Contact Information: Jukka Harmala Chief Executive Officer Telephone: +358 2046 21404 Bjorn Hagglund Deputy Chief Executive Officer Telephone: +46 70 528 2785 Esko Makelainen Chief Financial Officer Telephone: +44 20 8432 1540 Kai Korhonen Senior Executive Vice President Stora Enso North America Telephone +1 715 422 4039 Scott Deitz Vice President Investor Relations Stora Enso North America Telephone: +1 715 422 7521 STORA ENSO: EU Ends Probe on Newsprint Competition Case ------------------------------------------------------- The European Commission informs Helsinki-based paper products company Stora Enso that it has terminated its investigation in the competition case related to newsprint producers' operations. In 1999 the European Union Statement of Objection alleged that there had been a newsprint price cartel in the period 1989 to 1995. The case is now closed. Contact Information: Jyrki Kurkinen Senior Vice President Legal Affairs Telephone +358 2046 21217 =========== F R A N C E =========== ALCATEL: Optronics Unit Introduces New Optical Pumping System ------------------------------------------------------------- Alcatel Optronics ( http://www.alcatel.com),a world leader in opto-electronic components for telecommunications systems, introduces a new 980 nm terrestrial pump without thermo-electric cooler, the Alcatel 1998 PLM coolerless. In a low profile butterfly package, it provides high optical pumping power up to 150 mW. This pump laser is particularly dedicated to single-channel and WDM Erbium-doped fiber amplifiers (EDFAs) for metro and metro-access applications. The technical advantages of this new coolerless pump module combine to offer increased equipment density and reduced costs, while maintaining high optical performance. Amplifiers are used more and more often in optical cross-connects and metropolitan rings therefore any reduction in the size and cost of amplifiers and their associated pump modules will improve network performance. The absence of a thermo-electric cooler in the new Alcatel Optronics' terrestrial pump reduces both electrical power consumption and dissipation and leads to simpler amplifier control electronics. The combination of these features together with a low profile package will increase equipment density and reduce the total cost of ownership. "With this new coolerless FBG pump module, Alcatel Optronics has responded to customer demands in terms of equipment density and cost reduction," explained Philippe Bregi, Chief Operating Officer of Alcatel Optronics. "This high performance coolerless pump module benefits from our expertise demonstrated by the high reliability of our 980 nm terrestrial and submarine pumps." With an output power from 82 mW to 150 mW, the Alcatel 1998 PLM coolerless provides high optical performance over a wide temperature range, from -5 to +70?C. The absence of a thermo- electric cooler offers a very low power consumption (typically 500 mW), which reduces system operating costs. The standard low profile 14-pin butterfly package (29 x 12.7 x 8 mm3) contains a high power 980 nm laser that emits a highly concentrated pumping optical signal. In addition, thanks to a fiber Bragg grating (FBG) pump stabilizer located in the fiber pigtail, the wavelength is stabilized and locked. Alcatel Optronics designs, manufactures and sells high performance optical components, modules and integrated sub- systems for use in terrestrial and submarine optical telecommunications networks. Operating state-of-the-art manufacturing plants in North America and Europe, Alcatel Optronics is a leading supplier of DWDM lasers, photodetectors, optical amplifiers, high-speed interface modules and key passive devices such as arrayed waveguide multiplexers and Fiber Bragg Grating filters. It also has experience in integrating active and passive components and modules into sub-systems. The Optronics Division is part of Alcatel's Optics Group which comprises Alcatel's world-leading activities in optical networking, including submarine and terrestrial transmission systems, fiber optics and optical components. FRANCE TELECOM: Interconnects GRX Network With Cable & Wireless --------------------------------------------------------------- France Telecom (http://www.francetelecom.com/)confirms a leading position on GPRS roaming market, with connection to over 40 mobile operators worldwide. As part of its carriers business, the company has signed an interconnection agreement with Cable & Wireless, in order to interconnect their GRX (GPRS Roaming Exchange) networks. France Telecom GRX network is now interconnected with more than 40 mobile operators, through contracts with about 10 mobile operators in addition to 6 interconnection agreements with leading GRX providers. GPRS roaming service providers have the common purpose of interconnecting their networks in order to offer mobile operators with a maximum connectivity and gain end-users satisfaction. The aim is to provide GPRS services wherever mobile users travel and answer their need for an easy international mobility. This link up lets respective customers exchange GPRS roaming traffic with each other, and extend both operators' service coverage. Francois Ravel, Executive Vice President Voice and Mobile Products at France Telecom Long Distance*, said : "We are delighted to have signed with Cable & Wireless. With this agreement, France Telecom enlarges its GRX coverage and enables effective GPRS roaming to millions of mobile users worldwide. We are proud to show how France Telecom built up a comprehensive GPRS roaming infrastructure thanks to selective interconnection agreements and contracts with key mobile operators - and we are expecting many more to come." * France Telecom Long Distance is the division in charge of operating and commercializing the long distance network of France Telecom worldwide Andrew Sangster, Senior Vice President, global mobile carrier services, Cable & Wireless, commented: "Interconnection with France Telecom builds on our existing relationships with other leading GRX providers and demonstrates that a growing number of operators are connecting directly to our GRX. GPRS uptake depends on the availability of global roaming services and agreements like this demonstrate that GPRS roaming is now a reality for customers." The France Telecom and Cable & Wireless interconnection was made at the GRX Peering Amsterdam (GPA) exchange point: a common interconnection point that enables faster and more cost-effective interconnection between GRX networks than other bilateral peering agreements. France Telecom GRX service is available in more than 100 countries. The service uses an MPLS-based IP VPN network architecture, which ensures maximum security, reliability and scalability for mobile operators wishing to transit their GPRS roaming traffic. France Telecom is among the pioneers of GPRS roaming, as part of the first 17 contracting members of the GPA (GRX Peering Amsterdam) and an active member of the GRX Task Force, created in 2000 under the International Roaming Expert Group (IREG), part of the GSM Association. With this GRX service, France Telecom's Open Transit Mobile provides a complete range of premium solutions dedicated to mobile operators: SS7 - the world leading roaming and SMS signaling offer, Mobile-to-Mobile - premium international transit service for direct exchange of voice traffic, and GRX - global service for a secure and seamless international GPRS roaming. Dedicated technical, sales and marketing teams ensure that France Telecom's over 70 Open Transitr Mobile customers derive all the benefits from the services of the future. France Telecom is one of the world's leading telecommunications carriers, with more than 107 million customers on the five continents (220 countries and territories) and consolidated operating revenues of 43 billion euros for 2001 (22.5 billion euros at June 30, 2002). Through its major international brands, including Orange, Wanadoo, and GlobeCast, France Telecom provides businesses, consumers and other carriers with a complete portfolio of solutions that spans local, long-distance and international telephony, wireless, Internet, multimedia, data, broadcast and cable TV services. France Telecom is the second-largest wireless operator and Internet access provider in Europe, and a world leader in telecommunications solutions for multinational corporations. France Telecom is listed on the Paris and New York stock exchanges. ============= G E R M A N Y ============= E.MULTI: Insolvent Computer Games Group Posts H1 Positive EBIT -------------------------------------------------------------- German Internet games developer, E.multi Digitale Dienste AG has posted a first-half profit before interest, tax, depreciation and amortization for the first time, Bloomberg says. The news agency adds that E.mult's EBITDA reached EUR381, 000 following the assets sale that included its headquarters, valuable paintings and 51% stake in Bet-at-home.com. The company did not provide any year-earlier figure. It also forecasts a profit in the third quarter and currently holds cash worth EUR515,000, which will be used to pay down its debt and reduce costs to EUR300, 000 annually, Bloomberg reports. The company, which posted a EUR8.65 million loss with turnover of around EUR4.5 million in 2001, filed for insolvency in May. The district court in Karlsruhe is handling the company's insolvency procedure. KIRCHMEDIA: Italy's MediaSet Eyes 53% Stake in ProSiebenSat1 ------------------------------------------------------------ KirchMedia's 53% stake in German broadcaster ProSiebenSat1 Media AG has attracted a major buyer in Italy's largest commercial-TV company Mediaset SpA, that is, if the price is right. The stake is valued at around EUR835 million in the market today, a report obtained from Bloomberg says. Insolvent German media company KirchMedia confirmed yesterday that it would put up for sale its 53% stake in ProSiebenSat1 separately from its assets. Previously, it had indicated that it was keen on selling the company as a whole but it changes its mind, the news agency reports. Mediaset' spokeswomen Rossana Camana said the company is "is interested in buying the ProSiebenSat1 stake from Kirch if the price is right." In the past, Mediaset's Chairman Fedele Confalonieri and ChiefFinancial Officer Marco Giordani already voiced out their interest only in Kirch's ProSiebenSat1 stake, the Bloomberg adds. If Mediaset, 48% owned by Italian Prime Minister Silvio Berlusconi, agrees to buy Kirch's stake in ProSiebenSat1, German law would then require that a bid be made for the broadcasting company's remaining outstanding stock, the news outfit says. Mediaset already holds 2.3% of KirchMedia, while Fininvest SpA, the Berlusconi holding company owns another 2.5%. SACHSENRING AG: Posts First-Half Operating Losses as Sales Drop --------------------------------------------------------------- German car parts manufacturer Sachsenring Automobiltechnik AG, which has filed for protection from creditors, posted a first- half operating loss as sales declined, the Bloomberg reports. In its first-half last year, the company had a loss before interest and taxes of EUR9.1 million (GBP8.9 million), compared with an operating profit of EUR900,000. Sales fell 17% to EUR117.5 million, the news agency adds. Insolvency proceedings will start on Friday. Sachsenring has posted losses for the last two years as sales have fallen. The company said it cannot afford a shareholders meeting this year, Bloomberg adds. The company employs 1,425 and is a supplier to major carmakers such as DaimlerChrysler AG and Volkswagen AG. It filed for insolvency protection on May 30, the Troubled company reporter said on its June 6 issue. SILICON VISION: Gesco Writes Off Stake in Insolvent Manufacturer ---------------------------------------------------------------- German investment company Gesco AG will write off its 16% interest in insolvent German image sensor manufacturer Silicon Vision AG, a report obtained from Frankfurter Allgemeine Zeitung says. The write down is expected to cost around EUR 2.2m in annual surplus, but Gesco plans to continue with its current dividend policy. The group's does not expected its operating earnings to be affected by the write-off. The EBIT target remains at EUR 9.5 million, the German paper adds. The German manufacturer announced that it filed for insolvency on August 16, the Troubled Company - Europe reported on its August 20 issue. The Executive Board was forced to take this step since, following an adjustment of the business plan, the banking consortium (under the leadership of HypoVereinsbank) was no longer prepared to make available the originally promised additional funds to keep business operations running, the report added. The insolvency application was filed as a result of inability to pay, but the company is not subject to excessive indebtedness. The Executive Board of Silicon Vision AG aims to develop a viable continuation concept, given that the global market opportunities for the products manufactured by the company continue to be evaluated positively, the Troubled Company Reporter said. WELLE MOBEL: Secures Rescue Package, Lifeboat Company Formed ------------------------------------------------------------ Wellemobel GmbH is the new name of the lifeboat company created for Welle Mobel GmbH, the insolvent subsidiary of German furniture group Welle. The new company has been freed from the existing debts of Welle Mobel, a report from Frankfurter Allgemeine Zeitung and Financial Times says. For the first quarter to the end of 2002, the company aims for turnover of EUR37 million, while turnover of EUR84 million is targeted for 2003. A balanced result is expected in the early phase of restructuring, in view of the increase in productivity already achieved. The Troubled Company Reported said early May that Welle Mobel GmbH declared itself insolvent after two banks cancelled its credit lines. The demise was blamed on fierce competition and restrained consumer spending amidst the economic meltdown. The company had reported a double-figure reduction rate in turnover for the first quarter, the TCR said. The insolvency affected 900 employees. All other subsidiaries of the Welle group are not affected by the filing. They are reportedly healthy and still generating profits, the TCR said. ============= I R E L A N D ============= ELAN CORPORATION: Shares Rise Amid Speculation of a Takeover ------------------------------------------------------------ Irish pharmaceutical Elan Corporation posted market gains this week amid speculation it has become an attractive takeover target, a report from Bloomberg says. The company's market value has fallen USD14.5 billion over the past year. Elan's shares climbed 15 cents, or 4.4%, to 3.60 euros in as trading in Dublin closed at 5:10 p.m., after climbing as high as 13%. They've gained 67% since last Wednesday. Elan's market value has plummeted this year, from USD15.17 billion at the start of 2002 to its current valuation of USD1.25 billion. The reduction is blamed on a probe by the Securities and Exchange Commission, the failure of an experimental Alzheimer's disease drug and cheaper competition for its best-selling medicine. David Marshall, an analyst at NCB Stockbrokers noted, "Elan's strong price performance over recent days appears to have been sparked by rumors of a takeover approach." Yet he said: "Any approach is unlikely until the SEC has completed its investigation and the company's restructuring program has progressed further." Previously, Elan's chairman Garo Armen promised to sell assets worth USD1.5 billion by the end of 2003. He also plans to reduce manpower by cutting 1,000 out of its 4,700 jobs and cut most of the company's joint ventures as measures to ensure cost reduction and revive profit, the news agency says. During Elan's August 19 annual shareholders meeting, Mr. Armen said he hopes that SEC probe would be resolved soon. JEFFERSON SMURFIT: Shares Spun Off in Smurfit-Stone Container ------------------------------------------------------------- The High Court of Ireland has approved a petition by Jefferson Smurfit Group plc (JSG) seeking an order to confirm the capital reduction authorized by special resolution of JSG's shareholders on 29 July 2002. The capital reduction will effect the distribution of JSG's approximately 29.3% stake in Smurfit-Stone Container Corporation to JSG shareholders in exchange for the cancellation of a portion of JSG's share capital. It is anticipated that MDCP Acquisitions I will declare its offer for the entire issued share capital of JSG unconditional in all respects on September 3, 2002 assuming all conditions to the Offer have been satisfied or waived. The High Court order will become effective contemporaneously with the Offer becoming unconditional. The Independent Directors of JSG accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the Independent Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information. ========= I T A L Y ========= FI.M.O. S.R.L.: Issues Notice on Asset Sale Without Auction ----------------------------------------------------------- CIVIL AND CRIMINAL COURT OF MILAN, REAL ESTATE CONTRACT OFFICE (TRIBUNALE CIVILE E PENALE DI MILANO UFFICIO ESECUZIONI IMMOBILIARI PROCEDURA No.952/97) Following the bankruptcy of FI.M.O. S.r.l., in liquidation, represented by the Trustee Dott. Giuseppe Ugo with studio in Milan in via S.Orsola n. 8, tel .02-8901-3658. NOTICE OF SALE OF PROPERTY WITHOUT AUCTION SIXTH ATTEMPT It is announced that on November 20, 2002 at 12.00 in the presence of the G.D. Dr.ssa Marianna Galioto proceedings will be initiated for the non auction-based sale, in one single lot, of the following property site: Via De Angeli, Laveno Mombello (VA), consisting of a disused industrial area with abandoned industrial buildings, named "Area ex Richard Ginori", registered in the - the N.C.E.U., Section LA, sheet 6, map reference 173, sub-section 1, of a cadastral surface area of 25,250 sq.m.; It is announced that: - The bankruptcy owns 80% of the building capacity on the whole disused industrial area, which, for the remaining part, registered in the N.C.E.U., Section LA, sheet 6, map reference 173, sub-section 2, of the building capacity, of the cadastral surface area of 2,700 sq. m., is the property of Ca' Sagredo s.r.l., who owns, in turn, 20% of the building capacity of the whole disused industrial area - the construction of the area can only be carried out by means of a recuperation plan that regards the whole disused area; - The owners of the whole disused industrial area presented to the Municipality of Laveno Mombello a recuperation plan approved by the Town Council on January 14, 2002, which includes, among other things, the subdivision of the property areas of the parties into lots only partially coinciding with the actual properties; - Between the bankruptcy and Ca's Sagredo s.r.l., a transitional agreement was made on June 28, 2008 which includes, among others: (a) the parties shall engage in transferring each other's property areas, in such a way as to attribute to Ca' Sagredo s.r.l. the property of lots 1, 4 and 10 of the recuperation plan and to the bankruptcy the property of all the remaining lots, as best stipulated in the above-mentioned act of transaction; (b) the building capacity of each party is that of responsibility of the lots which will be attributed to each party following the above-mentioned transfer (c) the parties will have to reach the drawing up of the settlement following the recuperation plan with the Municipality of Laveno Mombello, assuming all the charges, 80% by the bankruptcy and 20% by Ca' Sagredo s.r.l., as well as proceed with the realization of urbanization works, all of which as best established in the above-mentioned settlement; (d) the cost relating to the planning and presentation of the recuperation projects - established at EUR 1,180,000 by the act of the above-mentioned settlement - 80 % of the said amount will be charged to the buyer of the real estate resulting from the bankruptcy here on sale and 80% will have to be definitely reimbursed to Ca' Sagredo s.r.l., documented by invoices, all of which as best established in the above-mentioned settlement; - Ca' Sagredo s.r.l. and the contractor of the property of the bankruptcy will have to, proceed, in public, with the identification of the land of respective competence at the moment of the demolition of the industrial buildings; - Basic price: EUR4,648,112.01 plus 20% VAT. The offers must be presented in the Chancery by 12.30 pm on November 18, 2002 and the bidders will have to give surety equal to 10% of the offered price - which cannot be inferior to the determined price - as well as EUR 620 for cost relative to the transfer of the decree and land registering, depositing the offer and the relative amount at the same time with banker's drafts made out to the Ufficio Esecuzioni Immobiliari. Payment of the purchase price plus VAT, after deduction of the deposit, is to be within 60 days of the auction in banker's drafts directly to the Trustee. It must be noted that there is a possibility that the claimed credit will be assumed by ITALFONDARIO S.p.A. before the bankruptcy, according to articles 508 - 585 c.p.c., except for the sum of EUR 619,748.28. Further information at the Chancery Milan, July 24, 2002 =========== P O L A N D =========== NETIA HOLDINGS: Minority Claimholders Challenge Arrangement Plan ---------------------------------------------------------------- Netia Holdings S.A., Poland's largest alternative provider of fixed-line telecommunications services, announces that it received on August 26, 2002 an appeal of the court's ruling in Netia Holdings S.A.'s arrangement proceeding. In the appeal, minority claimholders SISU Capital Fund Limited, SISU Capital Fund Limited Partnership, SISU Capital Fund Limited II, Ltd., OTA, LLC, Triage Offshore Fund Ltd. and Triage Capital Management LP, requested that the Polish Court vacate the lower court's decision of August 9, 2002 and refuse to approve the arrangement plan for Netia Holdings S.A. or, alternatively, to remand the case for determination by a lower level court. The Company will defend against the appeal. Contact Information: Anna Kuchnio Investor Relations Netia Holdings S.A. Telephone: +48-22-330-2061 ========= S P A I N ========= UNION FENOSA: Shares Soar Amid Reports of Gas Unit Sale ------------------------------------------------------- Debt-laden Spanish company Union Fenosa's shares rose more than 6% following a released report that the company is renewing efforts to put up for sale half of its natural gas unit for EUR1.6 billion, a report from Dow Jones says. Citing regional newspaper La Vox de Galicia, Dow Jones says that Chief Executive Officer Honorato Lopez Isla disclosed that there are six prospective suitors identified. They are BP PLC (BP), BG Group PLC (BRG), Royal Dutch/Shell Group (RD, SC), TotalfinaElf SA (TOT), ENI SpA (E) and Gaz de France. The news agency further reports that analysts have surmised that Fenosa may be in a difficult financial condition based on its candor with media. Investors, on the other hand, welcome the possible sale as beneficial for Fenosa, noting that a new partner may provide the company with "deep pockets." An analyst with Schroder Salomon Smith Barney, Mr. Guy Farmer, noted that Fenosa is in a troubled situation, saying that the company's leverage is forecast to become 184% by the end of 2002, making it one of the most indebted utilities in Europe, the news outfit says. Last Wednesday, Virginia Sanz, an analyst at Deutsche Bank in Madrid, assigned a downgrade on Fenosa saying the company's mounting debt, ambitious capital expenditure plans and lingering regulatory uncertainties in Spain have raised "the financial risk of the stock," Dow Jones says. Analysts noted that the EUR1.6 billion value placed on the 50% of Fenosa's gas business is too high a price considering that the unit has more growth plans than collection of assets. Among its plans are gas supply contract with Egypt, Algeria and Oman, and ambitions to build a liquefied natural gas terminal in Egypt and regasification and distribution links in Spain, the news outfit says. Fenosa's net debt of EUR6.84 billion in June is expected to inflate further in the subsequent two years. The company also needs to renegotiate an estimated EUR1.8 billion debt between now and the end of 2003, the news agency reports. According to a Fenosa official a deal is said to be reached by the end of the year but refused to confirm if the price tage of EUR1.6 billion represents the transaction value for half the equity in the gas business or, as analysts increasingly believe, a joint-venture investment to balance some of the company's costly capital expenditure plans, the news outfit adds. The identified prospective buyers of Fenosa's gas unit refused to comment on the matter. However, analysts commented that BP, Eni and Shell have more chances. BP is currently Spain's largest independent gas supplier. It has been in talks with Fenosa regarding its plans on investing in Fenosa's Egyptian LNG project. But other reports say that BP may be out of the list after Fenosa rejected an offer from BP because it was too low. Eni has made gas sales outside of Italy a top priority, and Fenosa's customer base numbers almost four million. Shell is looking for markets to sell vast quantities of Nigerian gas and is thought to be eyeing an interest in Egypt's blossoming LNG development. France's TotalFinaElf and Gaz de France are seen having less of a chance because Spanish authorities have refused to grant the pair access to the domestic gas grid, claiming a lack of reciprocity in France where no law has been passed yet adopting the EU gas directive, the news outfit says. Around 1400 GMT, Fenosa shares were EUR0.50, or 4.2%, higher at EUR12.52, off an intraday high EUR12.79. =========================== U N I T E D K I N G D O M =========================== ARTHUR ANDERSEN: UC Settles International Firms in Enron Lawsuit ---------------------------------------------------------------- On behalf of Enron investors, the University of California has tentatively reached, subject to the approval of certain of the principals and the court, a US$40 million settlement with Arthur Andersen's international umbrella organization in the Enron securities and pension class action suits. Andersen Worldwide, SC and its non-U.S. member firms will be released from liability and dismissed from the suit; the U.S. firm (Arthur Andersen LLP) and its members will not be released and will remain in the suit. "This substantial settlement is a favorable result for the class in light of the limited role of the non-U.S. Andersen entities, and represents one of the more substantial securities recoveries from an accounting firm," said James E. Holst, the University's general counsel. "We regard this settlement as only a first step in obtaining recovery for the class, and will continue to pursue damages from the remaining defendants, most of whom had far deeper involvement in the Enron debacle than the overseas Andersen firms." In its amended complaint filed on April 8, UC named Andersen Worldwide, SC and several overseas Andersen firms as defendants in the securities lawsuit. Arthur Andersen was organized into separate partnerships that were independent legal entities in each country; Andersen Worldwide, SC, a Swiss partnership, serves as a coordinating entity for the international network of Andersen firms. Unlike the non-U.S. firms, Andersen LLP, which is not being released from the suit, was Enron's auditor and signed its financial statements. Anderson Worldwide denies any liability or wrongdoing with regard to Enron. The settlement is subject to court approval, and settlement funds will eventually be divided among class members on the basis of an allocation formula that estimates their pro-rata share of total class damages. The division of the Andersen payment between the securities and pension classes will also be determined later. The settlement includes US$15 million that will be available to finance costs -- but not attorney's fees -- of the ongoing litigation, subject to court approval. "This first settlement recovers millions of dollars for the class and demonstrates that even relatively minor actors may face substantial liability to Enron's investors," said William S. Lerach, a partner in the Enron lead counsel firm of Milberg Weiss Bershad Hynes & Lerach. This spring, UC and the Enron plaintiffs attempted to negotiate a settlement with Arthur Andersen's U.S. firm. When discussions with Arthur Andersen, LLP ended, the University entered into negotiations with the non-U.S. firms regarding the possibility of a separate settlement. Enron and its creditors committee are not part of this settlement with the non-U.S. firms and will have no right to share in the proceeds. The University of California was named lead plaintiff in the securities class action suit in February 2002. The total losses experienced by all Enron shareholders are estimated at more than US$25 billion. Background materials on the University of California and the Enron shareholders lawsuit are available at http://www.ucop.edu/news/enronand the Milberg Weiss site at http://www.enronfraud.com BRITISH ENERGY: Hopes for Rescue Deal Dashed by Magnox Delay ------------------------------------------------------------ Cash-strapped British Energy's hopes crumbled Tuesday when a possible deal with British Nuclear Fuels over the running of its aging Magnox atomic power plants was delayed, a report from the Guardian says. The government also ruled out any substantial changes to new electricity trading arrangements that have caused a huge drop in power prices, dismissing suggestions of a bailout as "completely unfounded," the daily reports. The paper adds that energy regulator Ofgem, which set up the new trading market known as Neta 18 months ago, confirmed that it would resist changing the rules in a way that would subsidize the nuclear industry. The regulator fears such a change would lead to increased energy prices. British Energy confirmed to the stock market that it is currently in talks that began last May with BNFL on several issues, including the "possible operation of Magnox plant" and "fuel service arrangements," the daily reports. If BE could run the Magnox operations, it would be given an unqunatified source of extra revenue as the company faces a 20% drop in wholesale power prices since Neta began. And BE has no other retail businesses to offset this drop, the daily notes. Some of BNFL's senior executives noted that despite the fact that Magnox's operations are considered no longer as core business, the company has not decided whether BE should takeover the operations, the daily says. The Magnox business is due to be transferred to the new liabilities management authority, which will take over the nuclear industry's GBP48 billion decommissioning costs, but legislation to set up the LMA is still in the pipeline. Until a bill to establish the LMA is published, BNFL insists any deal with BE over running the reactors cannot be reached, the daily says. The Magnox reactors lost GBP115 million before tax last year but exceptional charges taken to cover the early closure of two of these, Calder Hall and Chapelcross, increased this loss to GBP477 million. The last of the remaining four, Wylfa, on Angelsey, is due to close in 2009, the Guardian says. CORDIANT COMMUNICATIONS: Issues Notice on 4.79% Interest -------------------------------------------------------- Cordiant announces that on August 23, 2002, Fidelity International Limited and its direct and indirect subsidiaries have a holding of 19,620,611 Ordinary shares, representing 4.79% of the issued share capital of the Company. London-based Cordiant Communications Group PLC is a marketing communications company serving the global industry. The company has over GBP1.1 billion in assets, GBP861 million in liabilities, and recorded a GBP399.7-million loss for the year 2001. ECLIPSE ELECTRONICS: Receivers Notifies Sale of Component Co. ------------------------------------------------------------- Eclipse Electronics Limited (In Administrative Receivership) The Joint Administrators, Jason Godefroy and Andrew Stoneman, offer for sale as a going concern the business and assets of Eclipse Electronics Limited. Leading Independent Component Distributor Wymondham, Norfolk Principal features of the business include: - Distribution, kitting and manufacturing - Turnover circa GBP 6 million per annum - Blue chip customer base - Stock at cost circa GBP900,000 - Order book circa GBP1.2 million - Long leasehold property -- 25,000 square feet Contact Information: Mark Newton Menzies Corporate Restructuring Telephone: 020 7291-9750 Facsimile: 020 7281 9777 E-mail: newton@menzies.co.uk ENRON CORPORATION: Begins Auction Process to Sell 12 Major Assets ----------------------------------------------------------------- Consistent with a plan outlined in May to maximize the value of its core assets, Enron Corp. announced today that it has commenced a formal sales process for its interests in certain major assets. The company is extending invitations to visit electronic data rooms containing information on 12 of Enron's most valuable businesses to a broad universe of potential bidders with whom the company has executed confidentiality agreements. "This process continues our efforts to maximize value and enhance recovery for our creditors," said Stephen Cooper, Enron's interim CEO and chief restructuring officer. "Enron and its advisors, in consultation with the Unsecured Creditors' Committee and its advisors, will evaluate all offers received to determine the combination of bids that maximizes the value of all assets." The company has established a timetable that would result in reaching final decisions and making necessary Bankruptcy Court filings on such asset dispositions in December 2002. Consistent with that timetable, Enron and its advisors envision initial indications of interest will be due in October, with final bids due in November 2002. Enron reserves the right not to sell any of its assets if the bids received are not deemed fully reflective of the assets' value. The 12 assets, or interests in assets, include: Portland General Portland General Electric is a fully integrated electric utility serving more than 740,000 retail customers in northwest Oregon. Contrary to local political concerns raised in the past weeks, Enron will only sell the entity in its current structure as a fully integrated electric utility. Transwestern Transwestern Pipeline Company is principally comprised of a 2,600-mile natural gas pipeline extending from west Texas to California. Citrus Enron owns a 50 percent interest in Citrus Corp., which is the holding company for Florida Gas Transmission Company, comprised principally of a 5,000-mile natural gas pipeline system extending from south Texas to south Florida. Northern Plains Enron's wholly-owned subsidiary Northern Plains Natural Gas Company owns a 1.65 percent general partner interest, and approximately 500,000 limited partner units, in Northern Border Partners, L.P., a limited partnership publicly traded on the NYSE. Northern Border's principal business segment is interstate natural gas pipelines, which include a 70 percent interest in Northern Border Pipeline, an approximately 1,250-mile natural gas pipeline extending from Canada to the midwestern United States, and Midwestern Gas Transmission Company. Elektro Elektro Electricidade e Servicos S.A. is a local electricity distribution company in Sao Paulo state, Brazil that serves more than 1.7 million customers. Cuiaba Cuiaba is an integrated energy project comprised of a 480- megawatt natural gas-fired power plant in the State of Mato Grosso, Brazil, two natural gas pipelines that transport natural gas from eastern Bolivia through western Brazil directly to the plant, and two gas supply companies that supply natural gas to the power plant. Enron owns various controlling or co-controlling interests in the project companies. Bolivia to Brazil Pipeline/Transredes The Bolivia to Brazil Pipeline system is comprised of Gas TransBoliviano, S.A. and Transportadora Brasileira Gasoduto Bolivia-Brazil S.A., South America's longest intercountry natural gas pipeline. Transredes owns more than 3,400 miles of liquid hydrocarbon and natural gas pipelines that gather and transport products within Bolivia. Sithe Enron owns a 40 percent equity interest in and a subordinated note from Sithe/Independence Power Partners, LP, the principal asset of which is a 1,042-megawatt cogeneration power plant located in Scriba, N.Y. Eco-Electrica Enron owns an indirect 47.5 percent interest the Eco-Electrica Project, a 542-megawatt cogeneration power plant, a 1 million barrel liquified natural gas terminal, and a 2 million gallon per day water desalination facility located in Penuelas, Puerto Rico. Mariner Enron indirectly owns 96 percent of Mariner, a domestic exploration and production company primarily focused on the Gulf of Mexico, as well as the Permian Basin. Mariner had proved reserves of 237 billion cubic feet equivalent at year-end 2001, of which approximately 75 percent were natural gas. Stadacona Compagnie Papiers Stadacona owns a 500,000 tons per year newsprint and directory paper mill in Quebec City, Quebec. The company also owns timberland assets in the vicinity of the plant and in Maine. Trakya Enron owns a 50 percent interest in the Trakya Project, a 478- megawatt natural gas-fired power plant in Marmara Ereglisi, Turkey. Enron may expand the group of assets included in this process under the appropriate circumstances. Enron has retained The Blackstone Group L.P. as its lead advisor with respect to these sales and, for the Mariner asset, has retained Batchelder & Partners Inc. as co-advisor. Interested parties may contact Michael Hoffman, Raffiq Nathoo, or Steve Zelin at The Blackstone Group L.P. at 212/583-5000, or, in the case of the Mariner asset, Joel Reed at Batchelder & Partners Inc. at 858/704-3302. Enron has significant electricity and natural gas assets in North and South America. Enron's Internet address is http://www.enron.com. EQUITABLE LIFE: Moody's Upgrades Debt Rating to Caa2 From Caa3 -------------------------------------------------------------- Moody's reports that the credit ratings agency has adjusted its subordinated debt rating on Equitable Life Finance to Caa2 from Caa3 and applied a developing outlook. At the same time, Moody's "withdraws its Ba2 insurance financial strength rating on Equitable Life Assurance Society, the parent and guarantor of Equitable Life Finance". In March 2002, Moody's explained that Equitable Life Assurance Society said its members had comprehensively accepted a compromise scheme, which removed the substantial and open-ended GAR-related reserve, offset to an extent by compensating increases to guaranteed benefits. As part of the asset sale agreement with Halifax plc, Moody's adds that Equitable "received a further capital injection following the successful compromise". In Moody's opinion, the substantial uncertainty in relation to GARs has been removed. However, the credit rating group believes that substantial elements of risk continue to affect Equitable Life in its run-off state. Principal risks include the following: (1) the need to prudently manage the run-off solvency position, through a variety of economic scenarios, for example through adjusting policyholder values with the use of market value adjusters. Moody's notes positively, from a bondholder's perspective, Equitable's recent actions in this regard (2) the majority of Equitable's remaining business which is entitled to a fixed guaranteed accrual rate (3.5%), necessitating a matched investment position and active reinvestment policy (3) the potential for further external litigation or regulatory intervention, including actions in relation to potential mis- selling. Equitable has established reserves for such eventualities, although Moody's notes that considerable uncertainity remains around the quantum of such amounts. Moody's adds that Equitable remains weakly capitalized, although Moody's notes that the company's policy of reducing equity exposure has to an extent insulated Equitable from recent stock market falls. "Overall, Moody's upgrade for subordinated debt therefore reflects the material improvement in the financial stability of the life fund through the removal of the GAR liability, tempered by the ongoing high level of uncertainty in respect to the run- off of the fund. Moody's will continue to monitor Equitable as it progresses through its run-off status," Moody's concludes. Equitable Life, headquartered in London, England, had total assets of GBP24 billion as at end 2001. The following rating was upgraded with a developing outlook: Equitable Life Finance plcSubordinated debt to Caa2 from Caa3 The following rating was withdrawn: Equitable Life Assurance SocietyBa2 insurance financial strength LASTMINUTE.COM PLC: Holders Approve Purchase of TravelPrice.Com --------------------------------------------------------------- Result of EGM and Listing of Shares At the extraordinary general meeting of the company, the resolution approving the issue of shares relating to the acquisition of Travelprice.com was duly passed. Application has been made to the UK Listing Authority and London Stock Exchange for the listing of 34,645,088 new ordinary shares. It is expected that completion of the acquisition will occur on Thursday August 29. Exactly 27,999,940 new ordinary shares will be issued on that date with the majority of the balance of the new ordinary shares being issued on or before February 28, 2003, following the exercise of outstanding Travelprice.com warrants. Brent Hoberman, Chief Executive Officer of lastminute.com said: 'We are delighted that shareholders have approved this transaction. We understand that Travelprice.com is performing well ahead of our expectations during the current quarter. Total transaction value is over 50% ahead of last year for the key months of July and August. We look forward to the business contributing to lastminute.com's European growth in the future.' Contact Information: Brent Hoberman - Chief Executive Officer Martha Lane Fox - Group Managing Director David Howell - Chief Financial Officer lastminute.com Telephone: +44 (0) 20 7802 4498 MARCONI PLC: In Restructuring Talks With Syndicate Banks -------------------------------------------------------- Further to press speculation, Marconi plc (http://www.marconi.com)confirms that negotiations are continuing with its syndicate banks and an informal ad hoc committee of bondholders concerning the Group's financial restructuring. As stated previously, the restructuring process is likely to involve a debt for equity swap for a significant proportion of Marconi's indebtedness. It is currently envisaged that existing holders of Marconi ordinary shares would receive 0.5% of the share capital immediately following the restructuring together with warrants allowing the purchase of 5% of the issued share capital, subject to certain criteria. The prospective capital structure being discussed has been designed to provide flexibility for Marconi Group's ongoing success, maximize cash and overall recovery for creditors and allow existing Marconi shareholders to maintain an ongoing economic interest in the Group. It is currently expected that Marconi will have pro forma net debt following the restructuring of approximately GBP300 million. As stated above, the negotiations are ongoing and the above details may be subject to change. Further announcements will be made in due course. Marconi plc is a global telecommunications equipment and solutions company headquartered in London. The company's core business is the provision of innovative and reliable optical networks, broadband routing and switching and broadband access technologies and services. The company's aim is to help fixed and mobile telecommunications operators worldwide reduce costs and increase revenues. The company's customer base includes many of the world's largest telecommunications operators. The company is listed on the London Stock Exchange under the symbol MONI. Contact Information: Heather Green Investor Relations Marconi plc Telephone: +44 (0) 207 306 1735 E-mail: heather.green@marconi.com NTL INCORPORATED: Confirmation Hearing Convenes on September 5 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved NTL Incorporated and its debtor-affiliates' Disclosure Statement, finding that the document contains adequate information within the meaning of section 1125(a) the Bankruptcy Code and gives creditors enough information to make informed decisions about whether to vote to accept or reject the Company's Plan of Reorganization. A hearing to consider confirmation of the Plan, is scheduled for September 5, 2002, at 10:30 a.m., before the Honorable Judge Allan L. Gropper at the United States Bankruptcy Court, Alexander Hamilton Custom House, One Bowling Green, New York, New York 10004. Objections to the Plan, to be deemed timely-filed, must be filed with the Court not later than August 26, 2002. A hard copy must be delivered to the Honorable Judge Gropper, and must be received by: Counsel for the Debtors Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036-6552 Attention: Thomas H. Kennedy, Esq. Kayalyn A. Marafioti, Esq. Telephone: (212) 735-3000 Facsimile: (212) 735-2000 Counsel for the Creditors' Committee Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004-1980 Attention: Brad Eric Scheler, Esq. Lawrence A. First, Esq. Telephone: (212) 859-8000 Facsimile: (212) 859-4000 United States Trustee The Office of the United States Trustee 33 Whitehall Street, Suite 2100 New York, New York 10004 Attention: Richard C. Morrissey, Esq. Telephone: (212) 510-0500 Facsimile: (212) 668-2255 NTL is the largest cable television operator and a leading provider of business and broadcast services in the U.K., and the owner of 100% of Cablecom in Switzerland and Cablelink in Ireland. Kayalyn A. Marafioti, Esq., Jay M. Goffman, Esq., and Lawrence V. Gelber, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in their U.S. Bankruptcy proceedings and Jeremy M. Walsh, Esq., at Travers Smith Braithwaite serves as U.K. Counsel. On December 31, 2001, the Company's books and records reflected, on a GAAP basis, $16,834,200,000 in total assets and $23,377,600,000 in liabilities. *********** 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. 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