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/raid1/www/Hosts/bankrupt/TCREUR_Public/021104.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 Monday, November 4, 2002, Vol. 3, No. 218 Headlines F R A N C E ALCATEL: Telecel Renews Contract For Its Network In Portugal VIVENDI UNIVERSAL: Announces Plan to Sell Houghton Mifflin SCOR: Agencies Issue Profit Warning Ratings VIVENDI UNIVERSAL: Quells Rumors of Canal Plus Buy-out Talks VIVENDI UNIVERSAL: Head Sets Time To Ask For BT's Cegetel Stake G E R M A N Y BANK WESTDEUTSCHE: Moody's Places Deposit Ratings on Review BAYER AG: Bayer Corp Submits New Drug Application in US BREMER LANDESBANK: Moody's Puts C+ Financial Strength on Review DRESSER INC.: Restructuring Actions To Affect Europe Operations KIRCHMEDIA GMBH: Mediaset To Join New Consortium In Bid LANDESBANK HESSEN: Moody's Downgrades Financial Strength to C I T A L Y FIAT SPA: Bankers Pressure Majority Owner To Oust Chairman L U X E M B O U R G VINTAGE CAPITAL: Fitch Downgrades Secured Floating-Rate Notes N E T H E R L A N D S EUROSTAR: Fitch Downgrades Eurostar I CDO A-3 and B Notes P O L A N D NETIA HOLDINGS: Subsidiary To Postpone Payment on Notes NETIA HOLDINGS: Minority Shareholder Challenges Resolution S W E D E N LM ERICSSON: Supplying CDMA2000 1X Network to BellSouth Colombia LM ERICSSON: Passes 10,000 Base Station Goal as Planned S W I T Z E R L A N D ABB LTD.: Moody's Downgrades Senior Debt Ratings To Ba2 CREDIT SUISSE: Fitch Ratchets Class E Note Rating Up to BB- CREDIT SUISSE: CSFB Taps Co-Presidents, Institutional Securities SWISS LIFE: S&P Puts Swiss Life 'A' Ratings on Watch Negative U N I T E D K I N G D O M ABERDEEN ASSET: Issues European Market Update MYTRAVEL: Former Employees Show Interest in Assets PACE MICRO: Enables 3D Video Games On IPTV Gateway Range TELEWEST COMMUNICATIONS: Announces Restructuring Progress - - - - - - - - =========== F R A N C E =========== ALCATEL: Telecel Renews Contract For Its Network In Portugal ------------------------------------------------------------ Alcatel (Paris: CGEP.PA and NYSE: ALA) announced that Vodafone Telecel, the Portuguese subsidiary of the Vodafone Group, has extended its contract for Alcatel's industry leading Local Multipoint Distribution Services (LMDS) for its customer base direct access services network in Portugal. This contract with Vodafone Telecel highlights a growing trend in the fixed wireless industry to use LMDS to meet the increasing amounts of voice and data traffic for its own network transport needs. The 26GHz network covers Lisbon, the Centre & South of Portugal and is already operational. Vodafone Telecel is using its Alcatel's LMDS network to deliver high speed Internet access, leased line, frame relay and voice over Internet Protocol services to small and medium sized enterprises. Under the terms of this contract, Alcatel is also supplying Vodafone Telecel with a turnkey solution including LMDS, network and service management, radio network planning, site acquisition, installation and commissioning, project management, maintenance and technical support. Featuring rapid and easy deployment, Alcatel's LMDS provides fiber-like reliability for advanced voice and data services while enabling mobile service providers to bypass the incumbent operators' infrastructure and reduce operating expenses. "We are glad to renew our trust in Alcatel and our decision to select them was led by both the technology and their strong presence in Portugal. Its LMDS technology will enable us to reduce our operating expenses " said, Eng. Miguel Martins, network engineering director from Vodafone Telecel. "The Alcatel 7390 already enables Vodafone Telecel to accommodate the constant growth in voice and data traffic", said Marc Rouanne, President of Alcatel's Mobile Networks activities. "This contract highlights Vodafone Telecel's renewed confidence in Alcatel's LMDS technology." About Vodafone Telecel Vodafone Telecel is the second largest operator in the Portuguese Telecommunications market. Its activity is focused on voice and data mobile services. It operates a nation-wide GSM cellular network and was granted a UMTS license. Vodafone Telecel also provides fixed services, as a complement of its mobile offer and especially dedicated to the corporate segment. Detaining the second largest share of the total market of Telecommunications service revenues, after the historical operator, Vodafone Telecel is recognised as one of the best Portuguese companies and as one of the best international cellular operators. About Alcatel Alcatel designs, develops and builds innovative and competitive communications networks, enabling carriers, service providers and enterprises to deliver any type of content, such as voice, data and multimedia, to any type of consumer, anywhere in the world. Relying on its leading and comprehensive products and solutions portfolio, stretching from end-to-end optical infrastructures, fixed and mobile networks to broadband access, Alcatel's customers can focus on optimizing their service offerings and revenue streams. With sales of EURO 25 billion in 2001, Alcatel operates in more than 130 countries. About Alcatel's Evolium solutions Alcatel is now the world's fastest growing GSM/GPRS supplier. Currently, over 110 mobile operators worldwide rely on Alcatel's Evolium(TM) GSM/GPRS core and radio solutions. By creating Evolium SAS, an Alcatel-Fujitsu company, Alcatel clearly reinforces its position in both mobile infrastructure and mobile Internet. Evolium SAS combines Alcatel's expertise in GSM, GPRS, and EDGE as well as in ATM and IP technologies, with the advanced experience of Fujitsu as supplier of NTT DoCoMo. NTT DoCoMo is the world's leading mobile communications company with more than 40 million customers. The company provides a wide variety of leading-edge mobile multimedia services. These include i- mode(TM), the world's most popular mobile Internet service, which provides e-mail and Internet access to over 32 million subscribers, and FOMA, launched in 2001 as the world's first 3G mobile service based on W-CDMA. Alcatel's UMTS solutions are a reality today, with 20 UMTS pilot networks in operation or planned to be delivered by Alcatel in Europe and in Asia by the end of 2002. Alcatel's strategy covers all aspects of UMTS deployment, from radio access and core network to terminals. Evolium SAS delivers a radio infrastructure that is 3GPP-compliant, field-proven and capitalises on Japanese 3G technical and field experience. Alcatel, which played a vital part in developing the mobile Internet market, in particular through the successful roll out of GPRS commercial networks worldwide, has today a timely UMTS offering. VIVENDI UNIVERSAL: Announces Plan to Sell Houghton Mifflin ---------------------------------------------------------- Vivendi Universal (NYSE: V; Paris Bourse: EX FP) has entered into exclusive negotiations with the consortium formed by Thomas H. Lee Partners, Blackstone Group, Bain Capital and Apax Partners with a view to disposing of Houghton Mifflin. The sale is expected to go ahead on the basis of an enterprise value of Euro 1.75 billion, representing 1.4 times Houghton Mifflin's 2001 revenue and 9.5 times its 2001 EBITDA after bookplate amortization. Excluding the games businesses, the Vivendi Universal Publishing asset sales completed or under way since January 1, 2002 amount to an enterprise value of Euro 4.3 billion (professional press, Comareg, Groupe L'Express-L'Expansion, Houghton Mifflin and the publishing businesses in Europe and Latin America). Vivendi Universal also confirms that, as announced on September 25, it is targeting disposals of Euro 12-billion-worth of assets over 18 months (excluding Cegetel and Vivendi Environnement), under satisfactory conditions for shareholders despite difficult markets. The company already estimates that it will have sold assets worth more than Euro 5 billion in enterprise value by the end of the year. This gives it an advance of over one quarter on its initial schedule, which planned for asset sales worth Euro 5 billion by March 2003. CONTACT: Vivendi Universal Investor Relations: Paris Laurence Daniel Phone: +33 (1) 71 71 1233 New York Eileen McLaughlin Phone: +(1) 212/572-8961 SCOR: Agencies Issue Profit Warning Ratings ------------------------------------------- Recently ratings agencies have issued the following: -- AMBest has placed the 'A' (Excellent) financial strength rating of SCOR and its guaranteed subsidiaries under review with negative implications, -- Fitch has lowered SCOR's financial strength rating from "A+" to "BBB" and maintained it on rating watch negative, -- Standard & Poor's has lowered its long-term insurer financial strength and counter party credit ratings on SCOR and subsidiaries to single 'A' minus from single 'A', and placed them on CreditWatch with negative implications, and -- Moody's has placed the ratings of SCOR on review for possible downgrade, the Group confirms that it will address all the issues raised by the ratings agencies in the two forthcoming weeks. (REUTERS:SCOR.PA)(BLOOMBERG:SCO)(SICOVAM:13030)(TICKER:SCO.N) CONTACT: SCOR Clare Brennen Phone: +33 (0)1 46 98 74 71 Delphine Deleval Phone: +33 (0)1 46 98 71 64 Valentine Semet Phone: +33 (0)1 46 98 72 32 Home Page: http://www.scor.com or Brunswick Andrew Dewar Phone: +33 (0)1 53 96 83 83 VIVENDI UNIVERSAL: Quells Rumors of Canal Plus Buy-out Talks ------------------------------------------------------------ Media and entertainment company, Vivendi Universal, sent an e- mail to the staff of Canal Plus assuring them it is keeping the French pay-TV group, Europemedia says. A report from French daily Monde had earlier indicated that discussions concerning the group's future had been re-opened. The news came out as Vivendi raises cash to contest Vodafone's bid for Cegetel and as the deadline for football rights, in which both TF1 and CanalPlus have vested interests, approaches. A group consisting of Pathe, TF1 and possibly the Belgian financier Albert Frere, reportedly urged BNP Paribas to officially offer a cash takeover for Canal Plus. Pathe and TF1 are working on merging CanalSatellite with rival satellite broadcaster TPS. According to Le Monde, Pathe and TF1 may be launching their bid now in order to pressure Canal Plus ahead of a November 12 deadline for submitting bids for renegotiating sports broadcasting rights in France. It is expected that broadcast rights would be much cheaper if CanalSatellite and TPS could negotiate in tandem, according to the report. The Lagardere group, however, may block the bid for Canal Plus group through its 34% ownership of CanalSatellite, a sister broadcaster in which Canal Plus holds the remaining 66%. CONTACT: VIVENDI UNIVERSAL 42 avenue de Friedland 75380 Paris Cedex 08, France Phone: +33-1-71-71-10-00 Fax: +33-1-71-71-11-79 Home Page: http://www.vivendiuniversal.com VIVENDI UNIVERSAL: Head Sets Time To Ask For BT's Cegetel Stake --------------------------------------------------------------- Media giant Vivendi Universal will bid for BT's stake in Cegetel, the French mobile phone operator whose control is being contested by Vivendi with Vodafone. Reuters learned from Elisa Perrot of the CGT union that Chief Executive Jean-Rene Fourtou told union representatives he had set a two-week deadline to complete an offer for BT's 26% stake in Cegetel. Fourtou is allegedly confident it has a "two-in-three" chance of striking the deal--that is, if he has the necessary funds. The source said Mr. Fourtou is renegotiating the EUR3 billion loan given by banks, in order to contest Vodafone's bid. The chairman has reportedly been in talks with banks since the mobile operator launched its bid. Vodafone offered EUR4 billion for BT's 26% stake, EUR2.3 billion for SBC's 15% stake, and EUR6.77 billion for Vivendi's 44% stake. Vivendi recently refused the mobile operator's offer. The chief executive is set to seek board support to keep control of Cegetel after a commercial tribunal in Paris granted the company an extra month to contest Vodafone's offer for the telecom operator. The tribunal extended to December 10 Vivendi's deadline to pre- empt the bid. ============= G E R M A N Y ============= BANK WESTDEUTSCHE: Moody's Places Deposit Ratings on Review ----------------------------------------------------------- Moody's Investors Service placed under review for possible downgrade the A1 deposit ratings and C+ financial strength rating of WGZ - Bank Westdeutsche Genossenschafts-Zentralbank eG. It also confirmed WGZ's P-1 deposit and WGZ-Ireland's long- and short-term deposit and debt ratings of A2/Prime-1 and C- financial strength rating respectively. A notable level of loan loss provisioning of the bank over the last years prompted the action. The rating agency does not see these charges decreasing during the year amidst the difficult economic environment in Germany. It recommends, though, the creation of potential additional loan loss provisions. Moody's will review the extent to which sufficient loan loss reserves might have been built-up in relation to the bank's exposure for some troubled corporates in Germany and whether the changes in WGZ's strategy can improve it's overall risk-return profile. WGZ is aiming at having a stronger regional focus and concentrating on its role as the central for its local co- operative banks. Moody's confirmed the bank's short and long-term ratings because of the support provided by the German-cooperative banking movement. WGZ is headquartered in Duesseldorf. It has pro-forma assets of around EUR 56 billion as of June 30, 2002, and is the regional central bank for the cooperative primary banks in the regions of Rheinland and Westfalen. BAYER AG: Bayer Corp Submits New Drug Application in US ------------------------------------------------------- Bayer Corporation, Pharmaceutical Division, a member of the worldwide Bayer Group based in Leverkusen, Germany, announced it has submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) to market Cipror XR (ciprofloxacin extended-release) in a once-daily modified release tablet formulation for the treatment of complicated urinary tract infections (UTIs). This new formulation of ciprofloxacin has been submitted for once-daily dosing for a course of 7-14 days. Cipro XR was developed using a bilayer matrix of the active ingredient ciprofloxacin. This new formulation enables an initial rapid release of ciprofloxacin, which distributes to the serum and tissues within hours. This is followed by a second extended release of the active ingredient over 24 hours. In March 2002, Bayer submitted an NDA to the Food and Drug Administration to market Cipro XR (ciprofloxacin extended-release tablets) as a once-daily, three-day treatment for uncomplicated urinary tract infections. "This NDA submission for Cipro XR in complicated urinary tract infections represents Bayer's commitment to developing and bringing to market innovative therapies," said Dr. Lawrence Posner, Senior Vice President and Worldwide Head, Regulatory Affairs, Bayer Corporation. "We asked physicians what was most important to their UTI patients and once-a-day dosing was a common response," he added. Urinary tract infections are a serious health problem, accounting for millions of physician visits each year. UTIs are most often caused by bacteria and are frequently treated with antibiotics, such as fluoroquinolones. Complicated urinary tract infection (UTI) can be defined as symptomatic infection with significant bacteria in the urine associated with structural or functional urinary tract abnormality. Such abnormalities or risk factors predisposing patients to UTIs are numerous, including stones, neurogenic bladder disorder, urinary tract instrumentation, catheterization, and metabolic conditions such as diabetes. Complicated UTI is often associated with recurrent infections and frequently involves multi-resistant microorganisms and can be associated with increased morbidity, mortality and length of stay in hospitalized patients. Symptoms of UTIs include painful, burning urination, pelvic pain and the frequent urge to urinate. A physician can make a diagnosis of a UTI with a simple urine test for bacteria and pus. Left untreated, UTIs may lead to a more serious infection. Note: The recent resignation of Frank Morich, Bayer's healthcare unit head, suggests internal problems regarding the German company's fate, particularly its troubled pharmaceuticals unit, the Financial Times says. The German company has been seeking for a pharmaceuticals partner after being forced to withdraw its best-selling drug Baycol last year due to linked deaths. Bayer's pharmaceuticals business had drifted off from its status as the world's no.2 pharmaceuticals company as its size and profitability diminished. BREMER LANDESBANK: Moody's Puts C+ Financial Strength on Review --------------------------------------------------------------- Moody's placed on review for possible downgrade the C+ Financial Strength Rating of Bremer Landesbank Kreditanstalt Oldenburg - Girozentrale due to the increasingly difficult operating environment faced by German banks. The bank's debt and deposit ratings at Aa1/P-1 remain unchanged. The difficulties are putting further pressure on the bank, which is already characterized by comparatively low profitability, the rating agency says. Moody's signed to monitor Bremer Landesbank on how it would improve operating profitability amidst the pressures. The rating agency warns that despite countermeasure's Bremer LB's limited franchise will leave it exposed to further market downturn, additional loan loss provisions and increased competition. The bank's franchise focuses mainly on regional mid- cap customers, private clients/high net worth individuals and specialised financing mainly for ships, aircraft and renewable energy projects. Bremer Landesbank Kreditanstalt Oldenburg - Girozentrale had assets of ?35 billion at year-end 2001. DRESSER INC.: Restructuring Actions To Affect Europe Operations --------------------------------------------------------------- Dresser, Inc. on Thursday announced that it has implemented restructuring programs affecting several of its business units. The restructurings include the rationalization of manufacturing capacity in North America and Europe in Dresser's industrial blower and retail fueling business, and the discontinuance of several small product lines. "These restructuring steps are a continuation of our efforts to improve business performance during difficult economic conditions," stated Dresser CEO Patrick Murray. "In the industrial blower business we have consolidated manufacturing of our standard design rotary blower products at our Houston manufacturing plant and downsized our Connersville, Ind. facility. As a result of these actions we expect to see much improved performance from this business in 2003." "In our retail fuel dispenser business," continued Murray, "we are closing a Canadian manufacturing facility and consolidating North American manufacturing at our Austin, Texas facility. We also have announced plans to restructure our European operations that will include the consolidation of dispenser manufacturing at our Malmo, Sweden facility and the associated downsizing of a plant in Germany during 2003." Concluded Murray, "We will continue to monitor market conditions closely to take further action if necessary." The total cost of these restructuring activities is estimated to be USD11.4 million of which approximately USD5.5 million represent cash expenses and USD5.9 million are non-cash expenses. The company will record restructuring expenses of USD6.4 million in the third quarter of 2002 and the remaining USD5.0 million will be recognized as incurred to complete the restructuring and will be expensed over the next nine to twelve months. Estimated savings once the restructuring is complete are USD10.8 million annually. In addition, in the third quarter, Dresser also announced it will record total non-cash charges of USD8.1 million to provide primarily for increased reserves for excess and obsolete inventory and write-downs for inventory shrinkage, asset impairments and doubtful accounts. The combination of the restructuring expenses and the above non- cash charges will result in a total third quarter charge of USD14.5 million. Approximately USD1.6 million of the third quarter charges represent cash expenses and USD12.9 million are non-cash expenses. Dresser will announce third quarter earnings results during the second week of November. The company reaffirmed that it expects third quarter results before the effect of these charges to meet its previous estimates. CONTACT: Dresser, Inc., Dallas Stewart Yee Phone: 972/361-9933 E-mail: stewart.yee@dresser.com KIRCHMEDIA GMBH: Mediaset To Join New Consortium In Bid ------------------------------------------------------- Italian Mediaset, which last week denied having joined the TF1- Haim Saban consortium in the bid for KirchMedia, announced this week it will join a new consortium. The new group will also consist of investment bank Lehman Brothers, an old Kirch shareholder, German retailer REWE, German Commerzbank and Saudi investor Prince Al Waleed Al Talal, says Europemedia. Munich-based Kirch, which owns numerous film library and sports right and controls Germany's largest commercial broadcaster ProSienbenSat.1 Media, is offering its assets for sale after admitting insolvency in April. The report meanwhile noted that German political and media sources have publicly opposed the idea of Mediaset gaining control of Kirch. Italian Prime Minister Silvio Berlusconi owns Mediaset and the sources are wary of the effects of Berlusconi controlling media interest in Germany. LANDESBANK HESSEN: Moody's Downgrades Financial Strength to C ------------------------------------------------------------- Moody's downgraded to C from C+ the Financial Strength Rating of Landesbank Hessen-Thueringen Girozentrale (Helaba). The debt and deposit ratings at Aaa/P-1 remain unchanged. The action, which is the conclusion of the review started in mid- May 2002, considered the gradual deterioration of Helaba's financial fundamentals. The rating agency believes that "the [bank's] situation cannot be reversed in the short term because of the continuation of a difficult business environment and the slim likelihood of maintaining or even raising profitability under such circumstances." As a result, Moody's maintains the rating outlook for the FSR at negative. Moody's noted that the difficult business environment is timely with the Frankfurt-based bank's adjustment to face the challenges post 2005. It therefore recommends a redefinition of Helaba's functions and strategies, possibly towards closer co-operation with the regional savings banks if it created the expected synergies, although it also deems the scenario still very uncertain. Landesbank Hessen-Thueringen had assets of ?137 billion at year- end 2001. Rating change: Financial Strength RatingC Unchanged Ratings: Debt and DepositAaa/P-1 Senior UnsecuredAaa Subordinated DebtAaa ========= I T A L Y ========= FIAT SPA: Bankers Pressure Majority Owner To Oust Chairman ---------------------------------------------------------- The Agnelli family, which controls troubled industrial group, Fiat, is facing pressure from bankers to eject the chairman of its Italian automotive group. Rumors came out earlier that chairman Paolo Fresco is to step down from his post in the group which posted third quarter operating losses of EUR339 million. Fiat on Thursday denied the speculations, saying they were "absolutely false." Fiat's main Italian banks, which were worried about the company's management after Giovanni Agnelli, the firm's honorary chairman, suffered an illness, wants a "strong leadership" to tackle Fiat's problems. The company's banks include IntesaBci, Uni- Credito and Sanpaolo IMI. Mr. Agnelli, the patriarch of the Agnelli family was considered as the strongman of the company due to its national and international prominence. The banks as well as some leading politicians considered Mr. Fresco's management as lacking in "industrial muscle." Allegedly confirming the management's management weakness is its failure to persuade General Motors to participate in the recapitalization of the group's troubled car operations. The unit declared EUR340 million operating loss. The Financial Times says the statement denying the rumors also sparked a new political storm by calling to the government a declaration of a state of crisis in the automotive business. A pronouncement from the government would let the industrial group benefit from joint state and company-sponsored lay-off schemes for more than 5,500 workers, the report says. CONTACT: FIAT SPA 250 Via Nizza 10126 Turin, Italy Phone: +39-011-686-1111 Fax: +39-011-686-3798 Toll Free: 800-804027 Home Page: http://www.fiatgroup.com/e-index.htm =================== L U X E M B O U R G =================== VINTAGE CAPITAL: Fitch Downgrades Secured Floating-Rate Notes ------------------------------------------------------------- Fitch Ratings has downgraded Vintage Capital SA's floating-rate notes as: --Class B to 'BBB-' from 'A+'; --Class C to 'CCC' from 'BBB-'. The classes A1 and A2 are affirmed at 'AAA'. In February 2001, Vintage Capital SA, a special purpose vehicle (SPV) with limited liability incorporated under the laws of Luxembourg, acquired a bond portfolio originated by Banca Monte dei Paschi di Siena and CDS portfolio originated by Bank of America. At closing these acquisitions were financed by issuing EURUSD198 million floating-rate notes and a EURUSD162 million senior swap. The bond portfolio contains asset-backed securities (ABS), corporate, financial institution and sovereign debt. The combined weighted average Fitch factor for both portfolios has decreased from 'BBB+' to 'BBB-' due to the downgrade of some of the underlying ABS and corporate assets. Fitch has reviewed the performance of the portfolio in detail. To date there have been no defaults in the bond portfolio, though there are three ABS assets rated below 'CCC+', one of which carries a default rating. The notional of these assets comprise 5.5% of the portfolio. There have been no credits events in the reference portfolio though it does contain Lucent Technologies (rated 'CCC+' by Fitch), TXU Europe (rated 'C') and British Energy (rated 'B-'). The transaction has a semi-annual payment date in June and December. The transaction has a final maturity date in December 2010. Deal information and historical performance data for this transaction is available on the Fitch Ratings web site at 'www.fitchratings.com'. CONTACT: Fitch Ratings Stefan Bund Phone: +44 (0)20 7417 4334 or Fionnuala Connolly Phone: +44 (0)20 7417 4354, London. ===================== N E T H E R L A N D S ===================== EUROSTAR: Fitch Downgrades Eurostar I CDO A-3 and B Notes --------------------------------------------------------- Fitch Ratings, the international rating agency, has today taken the following actions on Eurostar I CDO Notes, a collateralized debt obligation (CDO) backed predominantly by high yield bonds. These securities have been downgraded and removed from Rating Watch Negative: --Class A-3 notes to 'B+' from 'A-'; --Class B notes to 'CC' from 'CCC'. These securities have been affirmed and removed from Rating Watch Negative: --Class A-1 and A-2: 'AAA'; --Class C 'CC'. Fitch's downgrades reflect the deterioration in credit quality of the portfolio: the portfolio contains nine defaulted assets with a total par value of EUR40.5 million and seven 'CCC' or below rated assets with a total par value of EUR33.89m. The weighted average Fitch rating of the current portfolio is B+ (excluding defaulted assets). The downgrade of class B is also due to the fact that class B is currently deferring interest, thus increasing its principal balance. Due to the failure of the overcollateralization tests, interest proceeds have been diverted from class B and C notes to pay down EUR13.19m of the class A-1 and A-2 notes. This mechanism has improved the credit quality of the class A-1 and A-2 notes and allowed Fitch to affirm their ratings. Interest proceeds will continue being diverted until such time that the coverage tests are back into compliance. In June 2000, Stichting EuroStar I CDO, a Dutch foundation, issued EUR306.31m of various classes of fixed- and floating-rate notes and invested the proceeds in a portfolio of sub-investment grade debt securities. =========== P O L A N D =========== NETIA HOLDINGS: Subsidiary To Postpone Payment on Notes ------------------------------------------------------- Netia Holdings S.A. (WSE: NET), Poland's largest alternative provider of fixed-line telecommunications services (in terms of value of generated revenues), on Thursday announced that, in accordance with the terms of the restructuring agreement entered into earlier this year with its noteholders, Netia Holdings B.V. ("BV I"), one of Netia's Dutch finance subsidiaries, will not make the following interest payments due on November 1, 2002 on certain notes: (i) US$10,250,000 on the 10 1/4% Dollar Notes due 2007 issued by BV I, (ii) US$10,887,000.50 on the 11 1/4% Discount Dollar Notes due 2007 issued by BV I and (iii) EUR 5,822,801.57 on the 11% Discount DM Notes due 2007 issued by BV I. In addition, these interest payments are not being made by the company in accordance with the Dutch Court's grant on July 12, 2002 of provisional payment suspensions on the repayment of all obligations of BV I and Netia's other two Dutch finance subsidiaries. CONTACT: NETIA HOLDINGS S.A. (IR) Anna Kuchnio Phone: +48-22-330-2061 NETIA HOLDINGS: Minority Shareholder Challenges Resolution -------------------------=-------------------------------- Netia Holdings S.A. (WSE: NET), Poland's largest alternative provider of fixed-line telecommunications services (in terms of value of generated revenues), on Thursday announced that it received on October 30, 2002 a copy of the claim filed by a minority shareholder requesting the invalidation of a resolution adopted at the Extraordinary General Meeting of Shareholders held on August 30, 2002. The minority shareholder claims that the Extraordinary General Meeting of Shareholders was convened in violation of formal requirements under section 402 of the Polish Commercial Companies' Code. Netia's management board believes the claim to be unsubstantiated and expects to file for its dismissal. CONTACT: Netia Anna Kuchnio (IR) Phone: +48-22-330-2061 =========== S W E D E N =========== LM ERICSSON: Supplying CDMA2000 1X Network to BellSouth Colombia ---------------------------------------------------------------- Ericsson was today selected as the sole supplier for BellSouth Colombia's new CDMA2000 1X network. Ericsson will overlay its end-to-end CDMA2000 1X solution on BellSouth Colombia's existing nationwide TDMA network. "We are honored to further develop our relationship with BellSouth Colombia by supporting their nationwide network advancement with our CDMA2000 1X products and services," said �ke Persson, president of Ericsson Mobile Systems CDMA. Ericsson's CDMA2000 solution is built on true 3G platforms that will enable BellSouth Colombia to reduce costs through decreased space requirements, deployment flexibility, simplified site acquisition and leasing, decreased construction costs and lower power consumption. BellSouth Colombia will also be able to reuse existing TDMA network components, maximizing their current investment. Ericsson's true 3G approach for CDMA2000 will provide BellSouth Colombia a smooth upgrade to CDMA2000 1xEV-DO and 1xEV- DV. Ericsson will begin shipping its end-to-end CDMA2000 1X solution to BellSouth Colombia next month. BellSouth Colombia is expected to launch the network commercially early in the first half of 2003. 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. About Ericsson CDMA Systems Ericsson's total CDMA2000 solution, which includes infrastructure, applications, devices, services and proven market expertise, is optimized for delivering advanced data solutions. Developed by the industry's premier CDMA experts, Ericsson's true 3G CDMA2000 solution offers operators unique performance and cost-saving advantages by leveraging the full strength of Ericsson's expertise in wireless, IP/datacom and Mobile Internet technologies. Ericsson's CDMA2000 solution, based on innovative product design, global platforms and open standards, provides the flexibility operators need to succeed in an always-evolving wireless market. Note: Ericsson is currently planning to cut jobs as part of the company's plan to have annual breakeven costs of SEK 120 billion (EUR12.87 billion) in 2003. Earlier, Ericsson made a prediction that the telecom equipment environment will remain "uncertain with few signs of stabilizing in the near term." CONTACT: For Ericsson Investor Relations Glenn Sapadin Phone: 212/685-4030 E-mail: Investor.relations@ericsson.com LM ERICSSON: Passes 10,000 Base Station Goal as Planned ------------------------------------------------------- Ericsson's leadership in supplying 3G networks to the market confirmed the milestone of 10,000 commercial UMTS/WCDMA macro base stations has been passed. This milestone also signifies that the deployment of third generation mobile technology is progressing in accordance to the operators rollout plans. In March 2001, Ericsson became the first vendor to deliver commercial WCDMA systems and has to date shipped to more than 35 customers in 24 countries. Ericsson holds a leading 40 % world market share of the estimated order values for WCDMA. Ericsson's powerful macro WCDMA base station is the first product in the market of a product family based on pooled architecture and packet switching core. The pooled architecture enables operators to scale up the capacity within existing cabinets in a cost-effective way. The packet switching core allows for fast introduction of new user services, as well as IP transport technology. This makes it a future-proof choice for operators. "The milestone shipment is really exiting since it is yet another factor that highlights Ericsson's leading market position in 3G," says Torbj"rn Possne, Vice President WCDMA at Ericsson. "We have all the elements in place for successful network launches. Several operators have announced 3G soft launches during this autumn and will be followed by many more during first half of next year, when a variety of 3G handsets will be introduced." Ericsson has secured that not only networks, but also handsets and services are available in order for the operators to introduce a complete 3G business. Ericsson's comprehensive interoperability testing program includes all major handset vendors. Handsets from several vendors, including Sony Ericsson Mobile, have now passed the interoperability program for use in networks from Ericsson. Ericsson Mobile Platforms has previously announced a complete end-to-end-proven WCDMA/GSM dual mode chipset offer that all phone manufacturers can use. To facilitate the initial marketing phase for the operators, Ericsson has created a 3G services portfolio together with independent developers, consisting of more than 15 application types targeting both consumer and enterprise needs. 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. ===================== S W I T Z E R L A N D ===================== ABB LTD.: Moody's Downgrades Senior Debt Ratings To Ba2 ------------------------------------------------------- Moody's Investors Service on Thursday downgraded the senior debt ratings of ABB Ltd. (ABB) and its supported financial subsidiaries to Ba2 from Baa3. It maintained the company's long- term ratings on review for possible further downgrade and confirmed the Not-Prime rating for short-term debt. The action reflects "the deteriorating operating performance and cash flow generation of ABB, the liquidity and refinancing needs faced by the group, the execution risks related to the accelerated restructuring program and the disposals of key assets." The rating which, assumes that ABB will successfully complete the disposal of the structured finance portfolio, notes the company's profit warning and earnings outlook revision. Moody's pointed out that ABB has a substantial refinancing risk concerning debt maturities of about USD4.0 billion over the next 15 months and of USD1.4 billion in the fourth quarter of 2002. The rating agency projects the need for its key banks to execute a timely refinancing or replacement of the company's current facility to give it financial headroom or compensate in case it does not carry out its asset disposal on schedule. The rating actions also considered the uncertainties around the resolution of the company's exposure to asbestos litigation. Moody's sees the company's planned filing of Chapter 11 for its US operation to carry significant uncertainties and execution risk. The following ratings remain on review for possible further downgrade: ABB Ltd. - Ba2 Issuer Rating, ABB Holdings, Inc. - Ba2 Backed Issuer Rating, ABB International Finance Limited - Ba2 Backed Senior Unsecured Rating, ABB Asea Brown Boveri Ltd. - Ba2 Issuer Rating and Senior Unsecured Rating, ABB Finance Inc. - Ba2 Backed Senior Unsecured Rating, ABB Capital B.V. - Ba2 Backed Senior Unsecured Rating, ABB Financial Services Australia Ltd. - Ba2 Backed Senior Unsecured Rating Short-term ratings were confirmed at: ABB Ltd. - Not Prime Short-term Issuer Rating, ABB Treasury Center (USA) Inc. - Not Prime Backed Commercial Paper Rating, ABB Capital B.V. - Not Prime Backed Commercial Paper Rating ABB Financial Services Australia Ltd. - Not Prime Backed Short- term Debt Rating ABB Ltd., headquartered in Zurich, Switzerland, is a global engineering group with leading positions in power and automation technology products serving the manufacturing, process and consumer industries, utilities, and the oil and gas market. CREDIT SUISSE: Fitch Ratchets Class E Note Rating Up to BB- ----------------------------------------------------------- Fitch upgrades Credit Suisse First Boston Mortgage Securities Corp./DLJ Mortgage Acceptance Corp.'s commercial mortgage pass- through certificates, series 1995 T1, $5.8 million class D to 'A' from 'BB+' and the $11 million class E to 'BB-' from 'B+'. Fitch does not rate the class F certificates. The upgrades follow Fitch's annual review of the transaction, which closed in February 1995. The trust's primary asset is class B of DLJ Mortgage Acceptance Corp./Credit Suisse First Boston Mortgage Securities Corp., series 1994 MF1. Class B provides subordination for class A of 1994 MF1 transaction, which is held in Fannie Mae 1994-M5 with the interest-only certificates. The upgrades reflect the increased subordination levels as a result of amortization and loan payoffs. As of the October 2002 distribution date, the pool's aggregate certificate balance decreased by 80.5% to $26.1 million from $221.6 million at issuance. To date, the trust has realized losses of $285,865. The certificates are collateralized by 14 loans secured by multifamily (79%) and health care (21%) properties. The properties have significant concentrations in Texas (37%), Florida (16%), Michigan (14%) and Louisiana (10%). GMAC Commercial Mortgage Corp., as Master Servicer, collected year-end 2001 operating statements for 95 % of the loans remaining in the pool. The weighted average debt service coverage ratio for YE 2001 is 1.49 times compared to 1.45x for YE 2000. One loan (5%), Northridge II Evergreen Apartments, is currently delinquent and specially serviced. The loan is secured by a multifamily property in Arlington, TX. The borrower is working to improve the quality of residents. Cardinal Retirement Village (7%) is secured by a health care property in Kettering, OH. The loan matured in October 2001, but the borrower was unable to obtain refinancing. The loan remains current. An additional loan of concern (9%) is secured by a healthcare property in Las Vegas, NV. The current operator, Summerville Healthcare, is having difficulty maintain a stable occupancy. Each of the characteristics discussed above, including paydown, property type concentration, geographic concentration and pool performance, were incorporated in Fitch's stressed scenario. Under this stress scenario, subordination levels were sufficient to upgrade the class D and E certificates. Fitch will continue to monitor the performance of this transaction. CREDIT SUISSE: CSFB Taps Co-Presidents, Institutional Securities ---------------------------------------------------------------- Credit Suisse First Boston (CSFB) on Wednesday announced that Brian D. Finn and Brady W. Dougan have been named Co-Presidents, Institutional Securities. In these new roles, Mr. Finn and Mr. Dougan, who will report to CSFB CEO John Mack, will oversee day- to-day management and strategy for the Firm's equity, fixed income, investment banking and private equity businesses. Vice Chairman Jeff Peek will continue to lead CSFB's Financial Services Division and report to Mr. Mack. Mr. Dougan currently serves as Global Head of the Securities Division, while Mr. Finn serves as a member of the Office of the CSFB Chairman, working closely with the Firm's Investment Banking and Private Equity businesses. Both will continue to serve on CSFB's Executive Board and Operating Committee. Commenting on the announcement, Mr. Mack noted, "With my expanded role at Credit Suisse Group, Brady and Brian will be assuming new roles at CSFB to ensure we continue moving forward with changes necessary to build on our strong market positions, return the Firm to profitability and build shareholder value. Brian and Brady have each held a variety of key roles at CSFB over the years; they know our company, our clients and our people; and they have proven themselves to be extremely effective managers. Their expanded leadership roles will further strengthen what is already an outstanding team at CSFB." Mr. Finn said, "I am extremely pleased to be taking on this new role at the Firm and particularly excited to be working even more closely with Brady and the rest of the talented individuals leading the businesses in our securities and investment banking divisions. Despite the obvious challenges posed by the current market environment, I believe that CSFB has a significant opportunity to grow our market share in key businesses and improve our productivity and financial performance." Mr. Dougan said, "I look forward to this new opportunity to work with Brian and the rest of the management team to continue moving CSFB forward. Having led a variety of these business units, I know that we have many outstanding people who have worked hard to build industry-leading franchises. This new management structure should allow us to make further progress in building a cohesive firm-wide culture and in cooperating across divisions to improve efficiency and grow the business." About Brian Finn Brian Finn currently serves as a member of the Office of the CSFB Chairman, a role he has held since returning to the Firm in March of 2002. He spent 15 years in a variety of roles at CSFB, including co-head of Mergers and Acquisitions, before spending five years as a Principal with the private equity investment firm Clayton, Dubilier & Rice. Finn currently serves as a director of Acterna Corporation and ICO Global Limited. He is also a member of the Undergraduate Executive Board of the Wharton School and the Board of the City Kids Foundation. Mr. Finn received his B.S. in Economics from the Wharton School of the University of Pennsylvania. About Brady Dougan Brady Dougan, who joined the Firm in 1990, has served as Global Head of CSFB's Securities Division since 2001. Prior to this, he served as Head of CSFB's Equities Division for five years. Mr. Dougan has also been Co-Head of the CSFB Global Debt Capital Markets Group and Co-Head of Credit Suisse Financial Products' marketing effort in the Americas. He joined CSFB from Bankers Trust where he began his career in the Derivatives Group. Mr. Dougan received his B.A. in Economics and his M.B.A. in Finance from the University of Chicago. SWISS LIFE: S&P Puts Swiss Life 'A' Ratings on Watch Negative ------------------------------------------------------------- Standard & Poor's Ratings Services said on Thursday it placed its single-'A' long-term counterparty credit and insurer financial strength ratings on Switzerland-based life insurer Swiss Life/Schweizerische Lebensversicherungs- und Rentenanstalt AG (Swiss Life) and related entities on CreditWatch with negative implications. "The CreditWatch placement reflects Standard & Poor's concerns about a further reduction in Swiss Life's financial flexibility, defined as a company's ability to raise funds relative to its capital needs, as a result of several pieces of adverse publicity, the latest being that the Swiss regulator is to investigate the group," said Standard & Poor's credit analyst Christian Dinesen. The rights issue announced on Sept. 17, 2002, represents a key element of the group's capital-raising program, and is an important factor in demonstrating Swiss Life's continued ability to raise external funds. Swiss Life expects to complete the underwriting of the issue on November 13. Standard & Poor's expects to affirm the ratings on Swiss Life at their current level if the rights issue is fully underwritten, as this will demonstrate the group's financial flexibility. A negative outlook would be assigned to reflect that maintenance of the ratings is dependent on Swiss Life's ability to restore the long-term profitability of its core business to a level consistent with the ratings. The group has already implemented a number of steps to reduce its dependency on capital markets and to improve earnings. The Swiss government's decision to cut the minimum required yield on the mandatory layer of group life pension plans to 3.25% from 4.00% has also been a key step in alleviating some of the earnings pressure. However, this alone will not be sufficient to rebuild earnings to a strong level. Standard & Poor's expects to lower the ratings on Swiss Life if the rights issue is not fully underwritten, to reflect the significantly reduced financial flexibility of the group. Standard & Poor's current expectation is that, in such an event, the ratings would most likely be lowered to single-'A'-minus. Standard & Poor's will closely monitor the outcome of the regulator's investigations. CONTACT: Standard & Poor's Karin Clemens, Frankfurt Phone: (49) 69-3 39 99-193 Christian Dinesen, London Phone: (44) 20-7847-7043 =========================== U N I T E D K I N G D O M =========================== ABERDEEN ASSET: Issues European Market Update --------------------------------------------- The global economic recovery that had started to come through in the second quarter of the year petered out more quickly than we envisaged. Europe has suffered from the weakening global backdrop coupled with softening domestic demand. The European consumer has retrenched as rising unemployment, stubbornly high inflation, and weak stockmakets and have resulted in softening sentiment surveys. The ECB have failed to lower interest rates despite this weakening economic backdrop, due to inflation staying above their target (headline inflation is currently 2.1%, whilst core inflation is 2.4%), and still strong money supply growth. The outlook for the European economy therefore looks fairly lacklustre. We are forecasting 2003 Eurozone GDP to be a mere 1.5%-1.75%, with interest rates being trimmed a further 25bp in Q402. US economic data remains fairly mixed. The housing sector remains strong, durable goods orders have picked up and the consumer is still relatively resilient despite the pick-up in unemployment. This is countered by the fall off in the leading indicators data and generally weak consumer and business sentiment surveys which are partly due to stock market weakness. Despite this soft economic backdrop stockmarkets started to rally over the past 2 weeks as funds have begun to shift from bonds to equities. Arguably Government bonds have become too overbought (US 10 Year Govt. bonds yields hit 3.57% on 9 Oct), and risk aversion in general had been played aggressively. Likewise, hedge funds have recently closed out part of their 'short positions' and this has added to the upward squeeze we have seen in the equity markets. One interesting point we have noticed is that the average UK- based Continental European unit trust outperformed the benchmark index by some 350bp over Q302. So how did they do that? Well in almost a mirror image of the latter stages of the TMT bubble, i.e. Q100 when everyone was massively overweight TMT, now we have virtually the complete opposite, i.e. the vast majority is very defensively positioned. This is borne out by funds having reasonably high cash levels of around 5-6%, and our belief that they are invested in the risk averse sectors of the market, i.e. bond proxy utilities, oil, food, drinks and tobacco. We feel this is an increasingly dangerous fund strategy to adopt in that not only are these defensive sectors generally fairly expensive, but also that these funds may start to try and lock in part of this relative outperformance by switching away from these areas and move to 'buying some beta'. This combined with any hint of a pick-up in US economic data, any lessening in the US hawkishness regarding War with Iraq, or any potential co-ordinated move by the Central Banks to lower interest rates would quite easily push stock markets up further over the remainder of 2002. The technical backdrop also looks reasonably constructive for equities, in that there is the possibility of further asset allocation moves towards equities, as well as some of the cash that has built up over the past 6 months re-entering the market. Corporate activity has also started to re-emerge over the past few weeks as witnessed by deals such as Bank of Ireland's failed takeover of Abbey National, Henkel's rumored approach for Wella, Lagardere buying Vivendi's French publishing division, PPR's sale of their consumer credit division Finaref, CMG merging with Logica, or Granada's planned link up with Carlton. In terms of valuation, European equities look cheap on most valuation metrics. For example, the stockmarkets dividend yield at 3.1% is almost in line with short-term interest rates, the earnings yield is around 6%, compared to Eurozone 10-year Government bond yields of around 4.75%. In addition, based on historic price to cash flow and price to book value multiples we are close to long-term lows. Portfolio Strategy At the sector level we remain underweight in most of the more classic Defensive sectors such as Food Manufacturers, Drink and Tobacco, all which contributed to our underperformance in the third quarter. Valuations here discount too high implied growth rates. In the defensive arena we favour the Pharmaceuticals sector as conversely here valuations are discounting very little in terms of long-term growth, favored companies include Aventis, Sanofi, Altana and Roche. We remain overweight Telecomm. operators because of below market mutiples for above average profits growth due to lower capital expenditure and improving ARPU's (average revenue per unit). Preferred companies include KPN, Sonera, and more defensive plays such as Swisscom and Telecom Italia. An overweight oil position is retained as an 'insurance policy' in case war is declared on Iraq and this turns into a protracted affair. If any attack on Iraq is pushed further out then this should mean the 'war premium' in the oil price should be retained for longer. The oil stocks have defensive characteristics due to safe balance sheets and good free cash flow generation. Banks remain broadly neutral within portfolios. The sector underperformed sharply during Q3 2002 as it is viewed as a geared play on recession and deflation, an outlook we are not expecting to occur. We have started to move overweight more recently, favouring stocks in the more peripheral parts of Europe such as Ireland, Scandanavia and Spain which are experiencing stronger relative domestic economic growth rates. Favored names include Bank of Ireland, Allied Irish Bank, SE Banken, Nordea and Banco Popular. Insurance is also an overweight position. We favor the Non-life and Reinsurance oriented groups due to the improving operating environment because of better pricing following on from reduced capacity. This sector performed dreadfully because of the impact of sharply lower stock markets and poor corporate bond markets that have impacted capital adequacy levels and in some cases created the need for capital raising to repair balance sheets. MYTRAVEL: Former Employees Show Interest in Assets -------------------------------------------------- Two former employees of holiday group MyTravel are interested in buying parts of the business, says The Scotsman. Harry Coe, former managing director of MyTravel, and David Burns, former group secretary, who are understood to be particularly interested in MyTravel's Scandinavian businesses, are thought to want to bid for the assets with the backing of venture capitalists. A spokeswoman from the group, however, denied the idea as mere speculation "as far as we are concerned" she says. Both Coe and Burns, who were said to have had talks with venture capitalists about the bid, were also unavailable for comment. The private equity groups are believed to include Hg Capital and 3i. The report of the backing initially hoisted MyTravel's shares by 2 %, but the shares later closed down 0.25p at 16.75p. The company's shares have fallen in value after the group's three profit warnings. Since late September alone, the share price has fallen 86%. CONTACT: MYTRAVEL GROUP PLC Parkway One, Parkway Business Centre, 300 Princess Rd. Manchester M14 7QU, United Kingdom Phone: +44-1-61 23-20-066 Fax: +44-1-61 23-26-524 Home Page: http://www.airtours.com PACE MICRO: Enables 3D Video Games On IPTV Gateway Range -------------------------------------------------------- A partnership between Thirdspace, G-cluster, and Pace has made it possible for telecommunications and IP broadband service providers worldwide to deliver advanced PC-style video games with full 3D graphics and stereo-sound using IPTV home gateways (set- top boxes) from Pace Micro Technology. The announcement follows a partnership between Pace, a leading supplier of IP-based gateways, G-cluster, the games system provider and Pace's long- standing IPTV partner Thirdspace, a market-leading broadband TV enablement company. Through the partnership G-cluster's multi-player broadband video games provided via Thirdspace can be delivered as real-time MPEG streams over IP networks direct to Pace's DSL4000, IP500 and IP400 gateway family. Operators using Pace's IPTV gateways will be able to provide on- demand, revenue-rich game services to household TVs from simple card and board games to sophisticated 3D action-packed multi- player titles. Research shows a rapid growth rate for on-demand games across Europe, with revenues for games rising more than 80 times from USD1.6m in 2001 to an expected USD134m in 2003, and a further 500% to USD835m between 2003 and 2006. Games services can also be delivered alongside other core IPTV features including multichannel TV, true and near video-on-demand, email, enhanced Internet browser services and karaoke-on-demand. The G-cluster gaming system can be installed directly into the IP provider's server head-end. This will enable operators that have already deployed Pace IPTV gateways to provide new gaming services to their customers without costly engineer installation visits. The open architecture of Pace's IPTV gateways and G- cluster's gaming systems also means future upgrades of new gaming titles can be added online at any time as and when they are launched. As a result Pace's IPTV gateways continue to be the most `future-proofed' in the industry, enabling operators to maximise their investment in IP services over the longer-term. The connection of joysticks and games pads that may be required for playing video games is achieved by using existing expansion ports on Pace's IPTV gateways. Easy-to use on-screen interfaces provided by G-cluster will also enable users to easily select, start and play games. According to Ben Keen, director of research firm Screen Digest, "the market opportunity for games-on-demand in the TV space could quickly grow larger than the initial PC-centric services offered by broadband operators and products like Pace`s IPTV gateway range will be critical in realizing this vision." Andrew Clifforth, managing director of Pace's IPTV Division, said, "Today's announcement sees the introduction of even more exciting revenue-generating services for IP operators. By delivering 3D games over Pace's IPTV gateways, service providers will be able to further differentiate their interactive digital TV packages from competing cable and satellite platforms. "Pace is giving IP operators the power to provide the latest range of top-title video games through the TV, without the need for games consoles or PCs," Clifforth added. "Games over TV will be a `sticky' interactive digital TV services that customers are willing to pay for and come back to time and time again, which could be a vital factor in helping to reduce churn." Sebastian Kramer, VP global sales at Thirdspace added, "The combination of Pace and Thirdspace`s broadband solution is a truly stunning package and will accelerate the deployment of IPTV systems. G-cluster is available as a stand-alone package or fully integrated with Thirdspace`s OVA suite. We are delighted to be working closely with Pace and G-cluster on a number of large deployments and opportunities." According to Thomas Schmidt, VP strategy and development at G- cluster: "We are pleased to be working with Pace to enable 3D on- demand games over the TV. Our partnership with Pace creates a whole new audience for games and enhances the interactive TV experience for digital TV viewers. We are in no doubt that on- demand games have the potential to become one of the most lucrative, revenue-generating services an IP operator can offer." Clifforth of Pace concluded: "There are now more ways than ever before for IP operators to deploy highly competitive and imaginative multimedia TV and games services over IP networks. These new developments are enabling our customers to drive maximum value from their investments in broadband network infrastructures." About Pace Micro Technology plc Pace Micro Technology plc (LSE: PIC) is a leader in digital television technology. The Company's primary focus is the development of innovative home gateway (set-top box) solutions for operators, broadcasters, telecommunications companies and retail markets worldwide. In addition, Pace develops edge of network devices for service providers, in particular digital IP gateways for low-cost integrated voice and data services. Pace's head office is in Shipley West Yorkshire, with further offices in Bracknell, Cambridge, the USA, France and Hong Kong. For further information, please visit Pace's web site at http://www.pace.co.uk. About Thirdspace Thirdspace Living Limited is a leading developer and integrator of open standard video server systems and client software, and a suite of advanced broadband applications. Shareholders include Concurrent Computer Corporation (NASDAQ: CCUR), the pioneer and market leader in video on demand (VOD) commercial deployments in North America; Alcatel (Paris: CGEP.PA and NYSE: ALA), the world`s leading provider of DSL infrastructure to world leading carriers and Oracle (NASDAQ: ORCL), the world`s largest enterprise software company. For more information, go to www.thirdspace.tv About G-cluster G-cluster - the games service and system provider, offers server technology to broadband network operators. Computer games are processed by the G-cluster server platform with the sound and pictures transmitted to the players set-top boxes in real time. Keyboard signals are sent back to the G-cluster server platform. The system can operate over any low latency broadband network including UMTS. Any device that can display an MPEG stream can be used for gaming (e.g. set-top boxes, PDAs, Mediaphones, PCs). Game complexity is no longer limited by the processor power of a console or individual PC. Note: The resignation of Malcolm Miller, the chief executive of Pace Micro Technology is seen as another blow to the company, which has been hit by the collapse of ITV digital, NTL's bankruptcy proceedings and a new deal with BSkyB. CONTACTS: Pace Corporate Helen Kettleborough Pace Micro Technology Phone: +44 1274 538005 E-mail: helen.kettleborough@pace.co.uk Amanda David Pace Micro Technology Phone: +44 1274 537093 E-mail: amanda.david@pace.co.uk Pace US Terry May HighTech Public Relations Phone: 001 904 387 3899 E-mail: terrymay@hightechpr.net Thirdspace Living Limited Abi Connor Head of Media Relations Phone: +44 (0) 1628 428 928 E-mail: abi.connor@thirdspace.tv G-cluster Thomas Schmidt VP Strategy and Development Phone: +44 779 695 3376 E-mail: thomas.schmidt@g-cluster.com TELEWEST COMMUNICATIONS: Announces Restructuring Progress --------------------------------------------------------- Telewest Communications plc announced on 30 September 2002 that it had reached a preliminary agreement relating to a restructuring with an ad hoc committee of its bondholders. That agreement provides for the cancellation of all outstanding notes and debentures issued by Telewest and Telewest Finance (Jersey) Limited and certain other unsecured foreign exchange hedge contracts in exchange for new ordinary shares representing 97 % of the issued share capital of the Company immediately after the Restructuring. Existing shareholders will retain a 3 % interest in Telewest post-restructuring. Telewest continues to make progress in relation to the restructuring. In particular, Telewest is close to reaching an agreement with a steering committee of its senior lenders and the Bondholder Committee with respect to amended and restated bank facilities. The agreement includes total committed amount of the facilities; maturity; margins; and financial covenants. It is expected that the Facilities will provide Telewest with liquidity which the Company believes will be sufficient to meet its funding needs going forward. The provision of the Facilities is conditional on various matters including the completion of the restructuring on terms satisfactory to Telewest's senior lenders. Negotiations are continuing with other major stakeholders with a view to them agreeing to vote in favour of the restructuring and Telewest expects to be able to make a further announcement on the progress of these negotiations by the end of November. Telewest also announced on 30 September 2002 that it was deferring payment of interest under certain of its Notes and the settlement of certain foreign exchange hedge contracts. In view of the continuing progress in the restructuring process, the Board has determined to continue to defer the payment of interest under certain of its Notes (including a payment due on 1 November 2002) and the settlement of these foreign exchange hedge contracts. As anticipated, the decision to defer such payments has resulted in defaults under the group's bank facilities and a number of other financing arrangements. Based on one such default, a creditor has filed a petition for the winding up of Telewest as a result of non-payment of amounts due (GBP10.5m). Telewest intends to deal with this claim as part of the overall restructuring of its unsecured debt obligations and does not believe that the legal action will delay or significantly impede the restructuring process. Telewest will of course continue to meet its obligations to its suppliers and trade creditors and this legal action will have no impact on customer service. This announcement has been approved solely for the purposes of Section 21 of the Financial Services and Markets Act 2000 by Salomon Brothers International Limited, trading as Schroder Salomon Smith Barney of Citigroup Centre, 33 Canada Square, Canary Wharf, London E14 5LB. Schroder Salomon Smith Barney is acting for Telewest and no one else in connection with the transaction and will not be responsible to any other person for providing the protections afforded to customers of Schroder Salomon Smith Barney or for providing advice in relation to the transaction. Telewest Communications, the broadband communications and media group, currently passes 4.9 million homes and provides multi- channel television, telephone and internet services to around 1.8 million UK households, and voice and data telecommunications services to around 74,300 business customers. Its content division, Flextech, is the biggest provider of basic channels to the UK pay-TV market and is the BBC's partner in UKTV, which has a portfolio of pay-TV channels based on the corporation's programming, including UK Gold. CONTACT: TELEWEST Charles Burdick, Managing Director Phone: 020 7299 5000 Jane Hardman, Director Of Corporate Communications Phone: 020 7299 5888 Richard Williams, head of investor relations Phone: 020 7299 5479 Brunswick John Sunnucks/Sarah Tovey Phone: 020 7404 5959 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 and Ma. Cristina Canson, Editors. Copyright 2002. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *