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/raid1/www/Hosts/bankrupt/TCREUR_Public/021113.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 Wednesday, November 13, 2002, Vol. 3, No. 225 Headlines * C Z E C H R E P U B L I C * VITCOVICE STEEL: LNM Holdings Submits CZK4 Billion Proposal * F I N L A N D * SONERA CORP: Telia Extends Offer Period in Share Offering SONERA CORP: Pricing of GSM Mobile Calls in Europe Clearer * F R A N C E * ARC INTERNATIONAL: Hires Adviser to Review Capital Structure VIVENDI UNIVERSAL: Records Revenues for Third Quarter * G E R M A N Y * BAYER AG: Drops Majority Shareholding Condition to Find Partner BAYER AG: Sells Household Insecticides to SC Johnson for EUR725MM DEUTSCHE TELEKOM: Writedowns to Spell Significant Losses DEUTSCHE TELEKOM: Union Backs Insider's Ascend to CEO Post MOBILCOM AG: Schmid's Reluctance Blocks Rescue Deal * I T A L Y * FIAT SPA: Workers Block Port to Protest Restructuring Plan TELECOM ITALIA: Seat Signs Advertising Deal With La7 and Cairo * N E T H E R L A N D S * GETRONICS NV: Announces Further Cost Reduction Measures LAURUS NV: Plans to Close Heerenveen Distribution Center SONG NETWORKS: Announces Third Quarter 2002 Financial Results SONG NETWORKS: Shareholders Approve Proposed Restructuring * P O L A N D * PGE: Fitch Affirms PGE's Ratings; Remains on Watch Negative * S W I T Z E R L A N D * CREDIT SUISSE: To Report Significant Third-Quarter Loss CREDIT SUISSE: Fitch Ratings Affirms CSFB's USD$2.4B Certificates CREDIT SUISSE CSAM's Fixed Income Team Outline Investment Views * U N I T E D K I N G D O M * AMEY PLC: Notification of Major Interests in Shares AVECIA GROUP: Moody's Subjects Ratings Under Review CORUS GROUP: To Acquire 100% of the Equity of Precoat MARCONI PLC: Considers Compulsory Redundancies to Cut Cost TEXON INTERNATIONAL: Moody's Downgrades Senior Notes Rating to C =========================== C Z E C H R E P U B L I C ============================ VITCOVICE STEEL: LNM Holdings Submits CZK4 Billion Proposal ----------------------------------------------------------- Dutch group LNM Holdings submitted a proposal to pay CZK3 billion for a majority stake in troubled Moravian steel and engineering company, Vitkovice, and an additional CZK 1 billion for investments, Prague Business Journal reports. LNM Holdings submitted the bid to Osinek, owned by the National Property Fund, the Czech Consolidation Agency, and the Finance and Industry ministries. Vitcovice Steel's financial troubles became apparent when in the year 2000 it posted losses of CZK8.836 billion. During the same year, the company experienced a sharp drop in asset value from CZK20.817 to only CZK9.364 billion. ============= F I N L A N D ============= SONERA CORP: Telia Extends Offer Period in Share Offering --------------------------------------------------------- Telia has decided to extend the offer period for the offer to holders of shares, including shares in the form of ADSs, and warrants in Sonera. The extended offer period will expire at 16:00 Helsinki time (09:00 a.m. New York City time) on Friday, November 15, 2002. The uncertainties related to the discussions between the main owners of Telia and Sonera concerning the composition of the combined TeliaSonera board, were resolved on November 7, 2002. Telia has understood that the short time period between the announcement on November 7, and the original expiration of the exchange offer, may have resulted in certain shareholders, particularly non-Finnish investors, being logistically unable to meet the original time of expiry. The extension is intended to give all shareholders sufficient time to tender. Based on preliminary estimates, as of November 10, 2002, shares and ADSs representing approximately 88% of the outstanding shares of Sonera have been tendered. Sonera Corporation (HEX: SRA, NASDAQ: SNRA) is a leading provider of mobile and advanced telecommunications services. Sonera is growing as an operator, as well as a provider of transaction and content services in Finland and in selected international markets. The company also offers advanced data solutions to businesses, and fixed network voice services in Finland and neighbouring markets. In 2001, Sonera's revenues totaled EUR 2.2 billion, and profit before extraordinary items and taxes was EUR 0.45 billion. Sonera employs about 7,400 people. www.sonera.com CONTACT: SONERA CORPORATION Jari Jaakkola, Executive Vice President, Corporate Communications and IR Distribution HEX Major Media TELIA Michael Kongstad Senior Vice President, Communications Phone: + 46 8 713 6410 Tobias Lenner, Head of Investor Relations Phone: + 46 8 713 6649 SONERA CORP: Pricing of GSM Mobile Calls in Europe Clearer ---------------------------------------------------------- The pricing of calls made from Sonera's mobile subscriptions and the reception of calls in Europe will change. On 1 January 2003 Sonera introduces its new pricing policy for GSM roaming. The new pricing simplifies the prices of mobile calls in Europe and facilitates the forecasting of mobile call costs. Sonera has selected a number of European operators whose networks it recommends to be used when abroad. There are 11 selected operators, in 11 countries. Calling from the networks of the European operators recommended by Sonera cost EUR 0.95/minute. So, for instance a call from Orange's network in Great Britain to Finland costs EUR 0.95/minute. Calls made in the Nordic countries cost EUR 0.77/minute in all operators' networks. Calls made in Europe from the networks of other operators than the ones Sonera recommends cost EUR 1.23/minute. The reception of calls costs EUR 0.37/minute in the Nordic countries and in all the other European countries EUR 0.55/minute. The calls have the same per-minute price seven days a week, 24 hours a day. The new pricing does not require a separate order - as from 1 January 2003 it applies to all Sonera customers in the following countries and areas: Andorra, Austria, Belgium, Cyprus, the Czech Republic, the Faroe Islands, France, Germany, Gibraltar, Great Britain, Greece, Hungary, Ireland, Italy, Liechtenstein, Luxembourg, Monaco, the Netherlands, Poland, Portugal, San Marino, Slovakia, Slovenia, Spain, Switzerland, as well as in the Nordic countries of Denmark, Iceland, Norway and Sweden. When a customer is abroad, he can select the operator network from which he wishes to make his call. The best partners in Europe The mobile operators that Sonera recommends are Orange in Great Britain, T-Mobile in Germany, Orange in France, Mobistar in Belgium, KPN Mobile in the Netherlands, Vodafone in Spain, Optimus in Portugal, TIM in Italy, Telestet in Greece, Sunrise in Switzerland and O2 in Ireland. In the selection of recommended operators, careful consideration was given to the functioning of future services, in addition to present ones. "These operators are some of the most progressive operators in Europe. In addition to clear-cut pricing, we can offer our customers well-functioning and advanced services in the networks of these operators. For instance the sending and reception of multimedia messages as well as GPRS data connections will operate over these networks just like in Finland," says Director Janne Pesu of Sonera. Further information on the new pricing and the operators recommended by Sonera is found at: www.sonera.fi/matkalla Sonera Corporation (HEX: SRA, NASDAQ: SNRA) is a leading provider of mobile and advanced telecommunications services. Sonera is growing as an operator, as well as a provider of transaction and content services in Finland and in selected international markets. The company also offers advanced data solutions to businesses, and fixed network voice services in Finland and neighbouring markets. In 2001, Sonera's revenues totaled EUR 2.2 billion, and profit before extraordinary items and taxes was EUR 0.45 billion. Sonera employs about 7,400 people. CONTACT: Janne Pesu, Director, Products and Services Sonera Corporation Phone: +358 2040 66722 E-mail: janne.pesu@sonera.com E-mail: janne.pesu@sonera.com =========== F R A N C E =========== ARC INTERNATIONAL: Hires Adviser to Review Capital Structure ------------------------------------------------------------ Semi-conductor and software technology licensing company, ARC International PLC, has appointed WestLB Panmure Ltd. as joint corporate broker and financial adviser to review the loss-making company's capital structure. ARC International is evaluating the relative merits of the strategic options currently available to the company, including a review of the group's capital structure and requirements and its business plan. For six months, the company's major shareholders have been trying to return most of the company's GBP108 million cash reserve. Arc International, which has a stock market value of o76 million, has lost more than GBP12 million since January. The board says it hopes to make significant progress on the assessment in the month of November, and will announce the results as soon as it is complete and ready for implementation. Many shareholders, however, are unhappy at the review's lack of a clear timetable, says The Scotsman. VIVENDI UNIVERSAL: Records Revenues for Third Quarter ----------------------------------------------------- -- E44.5bn for the first nine months, up 9% Vivendi Universal (Paris Bourse: EX FP; NYSE: V) announced that for the first nine months of 2002, the company reported revenues of E44.5 billion (E22,4 billion for Vivendi Universal excluding Vivendi Environnement), up 9% from the comparative 2001 period. On a pro forma basis(1), revenue growth was 5%. For the third quarter ended September 30, 2002, the company generated revenue of E7.4 billion, excluding Vivendi Environnement, up 1% compared to the same period last year. On a pro forma basis, revenues were down 4%. THIRD QUARTER 2002 BUSINESS UNIT HIGHLIGHTS Revenue Results for Businesses owned more than 50% Music: Universal Music Group's (UMG's) revenues were down 9% to E1.3 billion, reflecting primarily the strength of the euro against the U.S. dollar. On a constant currency basis, revenues were down 2%. Sales of recorded music increased slightly in constant currency terms but were offset by higher provisions for returns and lower manufacturing revenue. Best sellers in the period included new releases from Bon Jovi, Eve and India.Arie and a Spanish language release from Enrique Iglesias. UMG increased its global market share in a difficult period for the music industry. The U.S., the world's largest music market, saw an industry decline of 12.4% in the quarter as measured by SoundScan, while UMG's share of current albums increased to an unprecedented 31.4%. Vivendi Universal Publishing (VUP): Vivendi Universal Publishing (VUP) reported third quarter revenue of E1.2 billion, essentially flat year-on-year on a pro forma basis and a 5% growth year-to- date, excluding B&B and Health divisions sold in June 2002. The Games division reported 22% revenue growth, due primarily to the Warcraft III launch on PC in July 2002 and the success of The Thing and Crash Bandicoot on console. The Publishing division reported a slight decline in revenue offsetting part of first half of the year advance, due to adverse movements in foreign exchange rates impacting North America and Latin America. Vivendi UNIVERSAL Entertainment (VUE): VUE achieved 7% actual (non-comparable) revenue growth in the third quarter, principally due to the impact of the acquisition of the entertainment assets of USA Networks on May 7, 2002. On a pro forma basis, VUE reported a 24% revenue decline in the quarter (14% decline on a constant currency basis) primarily due to fewer theatrical releases. The 2001 results included revenue from Jurassic Park III, American Pie II, The Fast and the Furious, Bridget Jones's Diary and The Mummy Returns, compared to a lighter release schedule in 2002, which included such theatrical releases as The Bourne Identity, Blue Crush and About a Boy. Lower attendance at the theme parks, as compared to the same quarter in 2001, also contributed to the decline in revenues for the quarter. CANAL+ Group: CANAL+ Group reported a 5% revenue growth during the third quarter, reaching E1.2 billion, mainly driven by subscriber portfolio growths at Canalsatellite, Canal+ Nordic and NC Numericable, and partially offset by lower performances from StudioCanal and Canal+ Technologies. Globally, subscriptions increased by 5% to 16.6 million at the end of September. Digital subscribers grew 10% year-over-year to 6.8 million. Revenues were essentially flat for the quarter at Canal+ France. The French digital platform Canalsatellite recorded an 11% growth of its revenues in the third quarter, driven by higher subscriptions, combined with flat ARPU (average revenue per user); its subscription base grew by 13% over one year, reaching 2.159 million individual and collective subscriptions at the end of September. Internet: In the third quarter, Vivendi Universal's Internet businesses reported revenues of E31 million, down 9% compared to the same period in 2001. On a pro forma basis, Internet revenues fell by 33%, largely due to business restructuring, company downsizing and declining online advertising revenues for U.S. properties. Vivendi Telecom International (excludes Maroc Telecom): Vivendi Telecom International (VTI) reported third quarter revenue of E108 million, up from E73 million in the prior year comparable period. This significant improvement primarily reflects the full consolidation of Kencell (Kenya) in December 2001. Revenue Results for Businesses Owned Less Than 50% Cegetel: For the third quarter of 2002, Cegetel reported revenue growth of 9% to E1.8 billion, reflecting the strong performance of both the mobile and fixed telephony services divisions. At SFR, revenues increased 8% and the customer base (including SRR, its subsidiary in La Reunion, an overseas department of France) grew to 13.2 million customers. ARPU from prepaid customers increased 19% to E24, and ARPU from postpaid customers increased 1% to E59.1. Revenues for Cegetel's fixed telephony services division increased 11% in the quarter, mainly due to local traffic opened to competition since January 1, 2002. Maroc Telecom: Maroc Telecom's revenues increased 18% in the quarter due to strong mobile prepaid customer growth combined with slight growth in fixed revenues. Vivendi Environnement: As reported by Vivendi Environnement in their November 7, 2002 press release, consolidated revenue for core businesses for the first nine months of 2002 increased 6.9% to E20.5 billion compared with E19.2 billion for the prior year period. Internal growth in core businesses was 5.6%. Taking into account the disposal of non-core businesses, revenue amounted to E22.2 billion, up 4.5%. Vivendi Environnement, in which Vivendi Universal has announced its intent to sell half of its interest by private agreement, also released for the first nine-months of 2002, 6% growth in EBIT for core businesses to E1,297 million (at constant exchange rates) and `capacite d'autofinancement' (French GAAP cash flow measurement) up 19% to E1,997 million. (For additional information please refer to the press release available on the website: http://www.vivendienvironnement.com/en.) (1) The pro forma information illustrates the effect of the acquisitions of the entertainment assets of USA Networks, Inc., Maroc Telecom, Houghton Mifflin and MP3.com and the divestiture of VUP's Business-to-Business and Health divisions, as if these transactions had occurred at the beginning of 2001. The pro forma information is calculated as a simple sum of the actual results of Vivendi Universal's businesses with the actual results reported by each of the acquired or divested businesses in each year presented. Additionally, the results of Universal Studios international television networks are now reported by CANAL+ Group. This reclassification has no impact on the total results of Vivendi Universal. The pro forma results are not necessarily indicative of the combined results that would have occurred had the transactions actually occurred at the beginning of 2001. Vivendi Universal today provided preliminary, unaudited revenue information, on a French GAAP basis, for the third quarter and nine months of 2002 to `Balo,' an official French business newspaper, for publication in accordance with French regulatory requirements. The company will issue its third quarter/nine month earnings press release during the latter part of November 2002. To see Vivendi Universal's Preliminary Revenues: http://bankrupt.com/misc/Vivendi.htm CONTACT: Investor Relations Paris Laurence Daniel Phone: +33 (1).71.71.1233 New York Eileen McLaughlin Phone: +(1) 212.572.8961 ============= G E R M A N Y ============= BAYER AG: Drops Majority Shareholding Condition to Find Partner --------------------------------------------------------------- Bayer is breaking new ground in its search for a partner for its pharmaceuticals business: "A possible partnership will not be prevented by rigid insistence on Bayer having a certain shareholding," Bayer CEO Werner Wenning said at the company's Fall Financial News Conference on Tuesday in Leverkusen. "We will proceed pragmatically and attempt to achieve the optimum scenario for our business and our stockholders. One thing has become clear, however: we can no longer realistically expect Bayer to have a majority interest in a partnership that would at the same time benefit our business. Therefore, the pursuit of this option is currently no longer a priority." In order to maximize Bayer's influence in such a partnership, the company must exhaust the full potential of its own business, press on with restructuring and fully support the market launch of new products, Wenning explained. The restructuring initiative launched in Pharmaceuticals in May of this year should save Bayer EUR 400 million by the end of 2004. All the related projects are proceeding on schedule. The Bayer CEO also announced that Bayer would focus its research on therapeutic fields in which it possesses expertise all the way along the value chain. All of these measures are primarily aimed at maximizing the value of Bayer's pharmaceuticals business, and thus also the company's influence in a future partnership. Wenning also commented on the status of Bayer's search for a partner: "We are currently involved in very good and constructive discussions along the lines I've mentioned, and we're confident that these discussions will lead to a value-enhancing solution for our pharmaceuticals business." BAYER AG: Sells Household Insecticides to SC Johnson for EUR725MM ----------------------------------------------------------------- Bayer AG, a world leader in healthcare and chemical products, has reached an agreement with SC Johnson on the sale of the household insecticides business of its Consumer Care Division, consisting of insect control, cleaning and air freshener products. The agreement will give SC Johnson worldwide rights to such brands as Baygonr, Autanr, Bayclinr and Bayfreshr, among others. The two companies have agreed on a purchase price of EUR 725 million. The transaction is intended to be closed prior to year end for the majority of countries, subject to any legally required approvals by the relevant merger control authorities. Under the agreement, SC Johnson will purchase Bayer's household insect control and repellent business and other household specialty brands, which posted combined sales of close to EUR 400 million in 2001. Bayer will retain the active ingredients used in these household insecticide products and will continue to supply them to SC Johnson on a non-exclusive basis. All of the approximately 2,300 dedicated employees will be transferred to the purchaser. "In our Consumer Care business we now want to concentrate on our core competencies, which are non-prescription health care products such as Aspirin, Alka-Seltzer and Canesten," explained Bayer CEO Werner Wenning. "I am glad that after recently closing the sale of Haarmann & Reimer we have now met another target for streamlining our portfolio this year," he added. "Bayer will use the proceeds to further reduce net indebtedness." In the first half of 2002, Bayer already sold the company housing units, the interest in Agfa and the generics business in France and Spain. "For over a century, SC Johnson has been dedicated to providing products to improve the quality of life for people around the world," said Dr. H. Fisk Johnson, Chairman, SC Johnson. " This acquisition expands our capability and reach into those countries where insect control products are needed the most to help make people's lives better every day." About Bayer AG: Bayer is an international, research-based group with major businesses in health care, crop science, polymers and specialty chemicals. For 2001, the group recorded sales of EUR 30.3 billion and a group net income of EUR 965 million. Capital expenditures totaled EUR 2.6 billion in 2001, and EUR 2.6 billion were invested in research and development. The total number of employees worldwide at the end of June 2002 amounted to about 127,800. For more information visit www.bayer.com About SC Johnson: SC Johnson is a family-owned and -managed business dedicated to innovative, high-quality products, excellence in the workplace and a long-term commitment to the environment and the communities in which it operates. Based in Racine, Wisconsin, the company is one of the world's leading manufacturers of household cleaning products and products for home storage, personal care and insect control. It markets such well-known brands as WINDEXr, PLEDGEr, GLADEr, SHOUTr, ZIPLOCr, EDGEr and RAIDr. The 117-year old company employs more than 9,500 people and sells products in about 100 countries. SC Johnson invests at least 5 percent of pretax profits (over 4 times the national average of corporate giving) into programs designed to improve quality of life in our host communities around the world. For more information visit www.scjohnson.com DEUTSCHE TELEKOM: Writedowns to Spell Significant Losses -------------------------------------------------------- Deutsche Telekom's exceptional writedowns in the third quarter is expected to cost the German telecommunications group significant losses. The group is understood to book about EUR20 billion (US$19.4 billion) in exceptional writedowns on top of a net loss before exceptionals of about EUR5 billion for the first nine months. Analysts forecast a net loss of EUR1.1 billion to EUR1.5 billion in the third quarter for Deutsche Telekom. The writeoffs came from goodwill assumed last year on Deutsche Telekom's US$34 billion-acquisition of US mobile operator VoiceStream. According to the Financial Times, the figure would let the telecommunications group report Europe's biggest corporate loss. CONTACT: DEUTSCH TELECOM AG Friedrich-Ebert-Allee 140 53113 Bonn, Germany Phone: +49-228-181-0 Fax: +49-228-181-8872 Home Page: http://www.telekom.de DEUTSCHE TELEKOM: Union Backs Insider's Ascend to CEO Post ---------------------------------------------------------- Deutche Telekom employee union wants Kai-Uwe Ricke, head of Deutsche Telekom's mobile unit, to be the company's next chief executive. The choice came against the preference of some of the government representatives who, Reuters' sources say, favor an unidentified external candidate. According to Reuters, the source says the union's backing makes Mr. Ricke's appointment certain, as employee representatives control half of the seats on the 20-member supervisory board of the company. Mr. Ricke has long been seen as the strongest internal candidate to replace interim CEO Helmut Sihler, says the report. A source close to the government said, "One could say that from the government point of view, Ricke is seen as the second best solution." Analysts perceive Mr. Ricke's appointment to mean the company's continued existence in the US, dashing hopes that its loss-making US wireless business T-Mobile USA will be sold. Mr. Ricke is expected to continue the telecom's restructuring, cost cutting and asset sales to trim down the company's EUR64 billion debts. MOBILCOM AG: Schmid's Reluctance Blocks Rescue Deal --------------------------------------------------- The bailout offer for troubled German telecoms firm MobilCom AG is ready but the company's main shareholder, Gerhard Schmid, is still blocking a successful negotiation. According to Dieter Vogel, a bank syndicate is ready to provide EUR162 million (US$164 million) in emergency funding for the group, but the talks cannot proceed because Mr. Schmid still refused to relinquish his more than 50% stake to an outside trustee to be nominated by the government. The consortium is composed of state-owned development bank Kreditanstalt fuer Wiederaufbau, Deutsche Bank, Dresdner Bank and Landesbank Schleswig Holstein. The country's economy ministry had drawn up a rescue package that would see France Telecom assuming MobilCom's debt and the government as well as enlisted banks to provide an emergency loan of up to EUR100 million. The finalization of the agreement, however, is still dependent on Mr. Schmid's signature. The former CEO refused to sign the agreement unless the government retracts charges against his alleged abuse of a share bonus plan. Vogel said, Schmid's failure to cooperate is likely to lead to the loss of 5,000 jobs and the destruction of most of the shareholder value. CONTACT: MOBILCOM AG Hollerstra�e 126 D-24782 B�delsdorf, Germany Phone: +49-43-31-69-11-73 Fax: +49-43-31-69-28-88 Home Page: http://www.mobilcom.de ========= I T A L Y ========= FIAT SPA: Workers Block Port to Protest Restructuring Plan ---------------------------------------------------------- About 20,000 Fiat workers on Friday blocked the Sicilian port of Palermo to protest the troubled automaker's restructuring plans, CNN reports. On Monday, about 500 people were able to cut off access to the loading area at the port, and block the delivery of 3,700 new cars produced at the plant. The Termini, Imerese plant, near Palermo is in line for 1,800 job cuts under the restructuring plan. The automaker plans to reduce its total workforce by 8,100, or about one-fifth of its domestic workforce to try to bring the business back to profitability. Fiat, however, needs the Italian government's declaration of "crisis status" on the business before it can implement the job cuts. According to the report, Industry Minister Roberto told Italian newspapers the government would help Fiat meet redundancy costs on the condition that the firm guarantees all its workers in line for temporary layoffs that they would eventually return to work. 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 TELECOM ITALIA: Seat Signs Advertising Deal With La7 and Cairo -------------------------------------------------------------- Seat PG, through its subsidiary TV Internazionale S.p.A. (LA7), and Cairo Communication S.p.A. have signed an exclusive three- year license contract (2003-2005) for solicitation of advertising on broadcast network La7. The objective for the agreement is an average gross yeal turnover of Euro 90 million, with a guaranteed minimum of an average yearly net turnover of Euro 45.8 million. The contract will be renewed tacitly for an additional three-year period when the agreed objectives have been reached. The signature of the contract marks the beginning of a partnership between the publisher and the advertising broker that will be very important for the achievement of common development objectives in terms of both advertising sales as well as the success of the network. La7 targets a medium/high audience with programming that focuses on information and on the quality of its programs and personalities, and this has led to a progressive increase in audience in 2002. The Cairo Communication Group, which reached an overall turnover exceeding Euro 150 million, also works as a publisher with Editoriale Giorgio Mondadori and is currently the leading advertising broker in the pay-television sector. It has the exclusive license for advertising sales of the analog and digital networks of Telepi- and other theme TV channels, such as Cartoon Network, CNN and Discovery Channel and since 1998 - the year the contract was signed - it has more than tripled their advertising turnover. Note: Telecom Italia owns 61% of SEAT. ===================== N E T H E R L A N D S ===================== GETRONICS NV: Announces Further Cost Reduction Measures ------------------------------------------------------- Despite the ongoing difficulties in the ICT market, Getronics continues to be operationally profitable and to generate positive cash flow from its operations. However, due to the tough market circumstances throughout 2002, the operating result (EBITA) is expected to be in the range of EUR 110 million, excluding a one- off charge of EUR 45 million to implement further cost base reductions. The EUR 110 million EBITA includes a book profit of EUR 10 million related to the sale of real estate, and assumes the disposal of Getronics Government Solutions from 1 December 2002, as recently announced. This cost alignment plan mainly involves the Company's operations in Italy, the Netherlands, Spain, France and Mexico, with a total headcount reduction of 1,400 employees. The headcount reduction plan will be finalised before June 2003, and is in addition to the 1,450 headcount reduction already carried out at the end of 2001. Together with additional cost measures, this action is expected to lead to annualised savings of EUR 85 million and will secure profitability and positive cash flow from operations during 2003 and beyond. Company revenue shows a development in line with the first half of 2002. The modest decrease in services revenue is in line with the general trend in the ICT industry. Getronics strengthened its market position in Austria, Belgium, Brazil and the United Kingdom. Consulting capabilities have been reduced to reflect market conditions and international business has continued to show substantial growth. Getronics is benefiting from market opportunities in the end-to- end management of ICT infrastructure and applications, and in the outsourcing of desktop and network management services. IDC ranked Getronics as number two worldwide in its annual network and desktop outsourcing survey. Getronics expects the first signs of market recovery to take place during the second half of 2003, but does not anticipate a meaningful recovery until 2004 when ICT investments from 1997- 1999 will need to be upgraded or replaced. Due to the lower fair market value of ICT services companies, management anticipates a further impairment of the goodwill that has been paid for companies acquired in previous years. Improving the Company's balance sheet remains a high priority for management. To that end, Getronics will focus on restructuring its outstanding convertible debt and on lengthening the Company's maturity profile. Getronics continues to invest in the quality and consistency of its offering to clients and continues to see an increase in the number of multinational engagements. Over 30 new international engagements of scale have been won to date in 2002. The Company continues to strengthen its relationship with the leading technology vendors, such as Microsoft, Cisco and Dell, and to invest in new technologies such as Microsoft .Net. LAURUS NV: Plans to Close Heerenveen Distribution Center -------------------------------------------------------- Laurus is planning to close its Heerenveen regional distribution centre (RDC) with effect from spring 2003. Closure of this RDC is part of the programme of commercial and operational improvements (discussed in the 2001 Annual Report and the Explanatory Memorandum), which are needed to restore the business to profitability. This action, which is being taken to rectify the structural imbalance in distribution centre (DC) capacity, will result in total savings in the logistic system of E 5 million on an annual basis, mainly in premises costs, staff costs and transport costs. The Central Staff Council has been asked to give its recommendations on this proposal and its repercussions. Talks will be held with the trade unions on a social plan. As many as possible of the 188 permanent staff at the Heerenveen centre will be relocated within the Laurus organisation and the remainder will be given outplacement assistance. The capacity imbalance between Laurus' DCs has arisen as a result of the abandonment of the single-format strategy (conversion to the Konmar format in 2001, for which the logistical structure had been redesigned), the sale of a number of stores to (among others) Sperwer, leading to overcapacity mainly at the DCs in the north of the country. Closure of the Heerenveen location will reduce this overcapacity and give more uniform geographical coverage by the DCs. After the closure of the Heerenveen centre, Laurus will have a total of ten DCs: Beilen, Hoogeveen, Waddinxveen/Nieuw Vennep, Hoofddorp, The Hague, Den Bosch, Veenendaal/Renswoude, Someren, Apeldoorn and Heerenveen (frozen food). SONG NETWORKS: Announces Third Quarter 2002 Financial Results ------------------------------------------------------------- - Song Networks' revenues in the third quarter totalled SEK 581 million (USD 63 million). This represents a 4% increase over last quarter and a 7% decrease compared to the same period of the previous year. - Gross margin improved by 130 basis points, from 40.7% in the second quarter of 2002 to 42.0% or by 790 basis points from the same period the previous year. - Adjusted sales, general and administration costs (SG&A)1 improved to 45% of revenues or to SEK 260 million (USD 28 million) during the third quarter from 47% or from SEK 261 million (USD 28 million) the previous quarter. Adjusted SG&A was 56% of revenues or SEK 350 million (USD 38 million) during the third quarter in 2001. - As communicated in the second quarter report the Company has taken the decision to further reduce SG&A, to reach a level of SEK 230 million (USD 25 million) by the first quarter of 2003. - Adjusted EBITDA2 was -3% or SEK -16 million (USD -2 million) compared to -6% or SEK -33 million (USD -4 million) in the second quarter of 2002 and -22% or SEK -136 million (USD -15 million) in the third quarter of 2001. - The Company added 1,286 directly connected sites3 during the quarter totalling 14,275 in all. At the end of the quarter, the number of corporate customers was 22,077, of which 6,887 are directly connected. - Direct revenues4 increased to 57% of total revenues in the third quarter of 2002 compared to 56% the second quarter of 2002. Direct revenues were 42% of total revenues the third quarter of 2001. Revenues from data and internet services5 increased by 6.3% from previous quarter to 42.5% of total revenues. - Song Networks expects that all conditions for the financial restructuring will be met by mid-December 2002. An Extraordinary General Meeting will be held on November 11, 2002. - The Company expects full year 2002 revenues to be SEK 2.3-2.4 billion (USD 248-259 million) as stated in the second quarter report. Revenues are forecast to increase to SEK 2.6 billion (USD 280 million) in 2003 and the Company also expects to generate a substantially positive EBITDA for the full year of 2003. Song Networks Holding AB, formerly Tele1 Europe Holding AB (Stockholmsb"rsen: SONW), the leading pan-Nordic competitive provider of broadband communications services, reported third quarter financial and operating results. Commenting on the results, Tomas Franz,n, Chief Executive Officer, said: " I am pleased to announce that the Company performed well during the third quarter, especially considering the fact that the Company has been under a lot of pressure from the financial restructuring process. In the light of these circumstances a revenue increase of 4%, and substantially improved EBITDA compared with the second quarter, is a major achievement. I am convinced that Song's new position as a debt free company with new strong owners, and a very competitive product and service offering will result in a substantially positive EBITDA for the full year of 2003". To see Song Network's Full Release: http://bankrupt.com/misc/SongNetworks.pdf CONTACT: Principal Executive Office: Song Networks Holding AB Box 501 SE-182 15 Danderyd Sweden Visiting address: Svardvagen 19 Phone: +46 8 5631 00 00 Fax: +46 8 5631 01 01 Home Page: www.songnetworks.net Enquiries: Tomas Franzen, CEO Phone: +46 8 5631 01 11 E-mail: tomas.franzen@songnetworks.net SONG NETWORKS: Shareholders Approve Proposed Restructuring ---------------------------------------------------------- The extraordinary general meeting of shareholders in Song Networks Holding AB (publ) (Stockholmsb"rsen: SONW) held on November 11, 2002 adopted, among others, the following resolutions. Restructuring of Song Networks The general meeting resolved on a financial restructuring of Song Networks in accordance with the board's proposal. These resolutions include amendments to the articles of association and issuances of shares and convertible notes as described below. In case of full participation in the issuances, the company will receive approximately SEK 495 million in cash, before issuance costs. Following completion of the restructuring, the outstanding debt under the senior notes issued by the subsidiary Song Networks N.V., amounting to approximately SEK 5.3 billion as of September 30, 2002 1) in the balance sheet, will be eliminated. All resolutions on issuances set out below, and consequently the restructuring, are conditional on that final confirmation of a plan of composition (Akkoord) in respect of the subsidiary Song Networks N.V. will be issued by the District Court of Amsterdam and that such confirmation will become non-appealable not later than at the expiry of the subscription periods for the issuances. The company expects that the confirmation will be issued on or about December 4, 2002 and that it can become non-appealable on December 13, 2002. Reverse stock split The general meeting resolved in accordance with the board's proposal to amend the articles of association to the effect that the nominal value of the share is increased from SEK 0.05 to SEK 5, which entails a reverse stock split in the ratio 100:1. An external guarantor will contribute and provide to VPC AB's disposal the necessary number of shares for settlement of holdings which are not evenly divisible by 100. In this press release, numbers of shares and subscription prices are stated as if the 100:1 reverse stock split has been completed. The reverse stock split is expected to be completed before the end of November 2002. Introduction of a new class of shares The general meeting resolved in accordance with the board's proposal to amend the articles of association to the effect that preference shares are introduced as a new class of shares. The original shares are hereinafter referred to as ordinary shares. The preference share will be subordinated to the ordinary share in several aspects. A preference share gives one vote and does not entitle to dividends or participation in a bonus issue. Following the introduction of preference shares, an ordinary share gives ten votes. Preference shares may be converted into ordinary shares to the extent convertible notes are converted into ordinary shares. Under certain conditions, the company may redeem preference shares. Increase of share capital limits The general meeting resolved in accordance with the board's proposal to amend the articles of association to the effect that the company's authorized share capital shall be not less than SEK 80,000,000 (previously SEK 8,000,000) and not more than SEK 320,000,000 (previously SEK 32,000,000). Issuances to noteholders against payment in kind The general meeting resolved in accordance with the board's proposal to increase the share capital by, in aggregate, not more than SEK 175,054,220 by issuing not more than 31,558,182 new ordinary shares and not more than 3,452,662 new preference shares, respectively, to holders of notes issued by the company's subsidiary Song Networks N.V. in the series - USD 150,000,000 13.0% Senior Notes due May 15, 2009, - EUR 100,000,000 13.0% Senior Notes due May 15, 2009, - EUR 150,000,000 11 7/8% Senior Notes due December 1, 2009 and - EUR 175,000,000 12 3/8 % Senior Notes due February 1, 2009 The subscription price is SEK 26 for one ordinary share and SEK 5 for one preference share. Payment shall be made by way of transferring of notes during any of the subscription periods open between December 4, 2002 and May 2, 2003. Issuances with preferential rights for the shareholders The general meeting resolved in accordance with the board's proposal to increase the share capital by, in aggregate, not more than SEK 18,662,085 by issuing not more than 3,732,417 new ordinary shares. The right to subscribe for the new shares is granted to the company's shareholders, where four old shares shall entitle the holder to subscription for nine new ordinary shares. The record date for allocation of subscription rights is December 16, 2002 and subscription can be made from December 20, 2002 through January 17, 2003. The subscription price is SEK 26 per share. Trading in subscription rights will take place from December 20, 2002 through January 14, 2003. The general meeting resolved in accordance with the board's proposal on issuance of convertible notes by raising a convertible loan in the nominal amount of not more than SEK 82,942,000. The right to subscribe for the convertible notes is granted to the company's shareholders, where 20 old shares will entitle the holder to subscription for one convertible note with the nominal amount SEK 1,000. The subscription price is 100 per cent of the nominal amount of the convertible note. The record date for allocation of subscription rights is December 16, 2002 and subscription can be made from December 20, 2002 through January 17, 2003. Trading in subscription rights will take place from December 20, 2002 through January 14, 2003. The convertible loan will accrue interest corresponding to seven per cent per annum and will mature on December 30, 2007. The conversion price is SEK 39 and conversion into new ordinary shares may take place from March 1, 2003 through November 30, 2007. In case of full participation in these issuances, the company will receive approximately SEK 180 million in cash, before issuance costs. Issuances directed to Vattenfall and Stena The general meeting resolved in accordance with the board's proposal to increase the share capital by SEK 57,692,310 by issuing 7,692,308 new ordinary shares to Vattenfall AB and 3,846,154 new ordinary shares to Stena Adactum AB. The subscription price is SEK 26 per share and payment shall be made not later than on January 9, 2003. The general meeting resolved in accordance with the board's proposal on issuance of convertible notes by raising a convertible loan from Stena Adactum AB in the nominal amount of SEK 15,000,000. The subscription price is 100 per cent of the nominal amount of the convertible note and payment shall be made not later than on January 9, 2003. The convertible loan will accrue interest corresponding to seven per cent per annum and will mature on December 30, 2007. The conversion price is SEK 39 and conversion into new ordinary shares may take place from March 1, 2003 through November 30, 2007. Through the above issuances to Vattenfall AB and Stena Adactum AB, the company will receive approximately SEK 315 million in cash, before issuance costs. In addition hereto, the general meeting resolved in accordance with the board's proposal to increase the share capital by not more than SEK 19,230,770 by issuing not more than 3,846,154 new ordinary shares to Vattenfall AB. The subscription price is SEK 26 per share and payment shall be made in cash at subscription, but not later than on January 15, 2003. The total price for full subscription, SEK 100 million corresponds to the purchase price to be paid by Song Networks pursuant to its undertaking to acquire Arrowhead AB from its owner Vattenfall AB. The reason for the deviation from the preferential rights of the shareholders is that the board of directors wishes to secure the capital needs of the company. The terms and conditions for the issuances have been established through negotiations. CONTACT: Song Networks Holding AB Tomas Franzen, Chief Executive Officer Phone: +46 8 5631 0111 Mobile: +46 701 810 111 E-mail: tomas.franzen@songnetworks.net Song Networks Holding AB Lena Ekedahl, Legal Counsel Phone: +46 8 5631 0305 Mobile: +46 701 810 305 E-mail: Lena.ekedahl@songnetworks.net =========== P O L A N D =========== PGE: Fitch Affirms PGE's Ratings; Remains on Watch Negative ----------------------------------------------------------- Fitch Ratings has affirmed the ratings of Portland General Electric's (PGE's) debt securities. The securities remain on Rating Watch Negative, where they were placed on November 29, 2001. Portland General's ratings are as follows: senior secured 'BB+'; senior unsecured 'BB-'; and, preferred 'B'. The rating affirmation reflects the company's recently improved near-term liquidity position but also the continuing uncertainty pending resolution of Enron Corp.'s (ENE's) efforts to sell PGE. The ratings also consider the negative overhang from the ENE bankruptcy, contingent liability issues, and exposure to ongoing investigations into the manipulation of western energy prices. Favorable considerations include PGE's strong stand alone credit profile, constructive regulatory relations, and certain ring- fence provisions that insulate the company from involuntary consolidation. In addition, the company has a 48% minimum common equity requirement by the Oregon Public Utility Commission. On October 10, 2002, PGE issued US$150 million of 8 1/8% First Mortgage Bonds, maturing in February 2010. The bonds were issued in a private placement led by Lehman Bros. On October 28, 2002, PGE issued US$100 million of 5.6675% FMBs, maturing October 2012, with an insurance guarantee. The insurance wrap will add 150 basis points to the annual interest costs. Proceeds from the issuance will be used to repay short-term revolving bank debt and current maturities of long term debt. The company currently has cash of about US$60 million and borrowing capacity of US$190 million. Although PGE's liquidity appears adequate through May 2003, when US$142 million of Pollution Control Revenue Bonds become putable to the company, PGE's ability to refinance US$222 million of secured revolving credit facilities, which mature in June (US$72 million one-year revolver) and July of 2003 (US$150 million three-year revolver), and US$40 million of FMBs, which mature in August 2003, is a significant concern given the bankruptcy overhang and a difficult industry financing environment. Fitch Ratings will continue to monitor ongoing efforts by Enron to sell its ownership interest in PGE, along with eleven other of its solvent businesses. The auction process is underway and final offers are expected to be announced late this year or early in 2003. If an agreement to sell PGE is negotiated, regulatory approvals would be required from the Oregon Public Utility Commission, FERC, the SEC, and others in order to complete any proposed sale. If an agreement can be struck to sell the company to a strong buyer or if the company's plan to transfer PGE to a SPE insulated from the bankruptcy is approved by the bankruptcy court and implemented timely, a change in Rating Watch and/or an upgrade to investment grade creditworthiness is possible. The potential economic impact of the ongoing investigations into manipulation of western energy markets remains a concern. Moreover, Enron-related contingent liability issues stemming from pensions, health care, and taxes may not be remedied by a sale or transfer to a SPE, reducing traction for future upgrades. ===================== S W I T Z E R L A N D ===================== CREDIT SUISSE: To Report Significant Third-Quarter Loss ------------------------------------------------------- Credit Suisse is expected to report historic third-quarter loss of CHF2 billion in the week after taking a CHF350-million tax charge. Reuters says a Swiss Sunday newspaper reported Credit Suisse to have told analysts that the tax charge relates to its Winterthur insurance unit. The report sent the firm's shares down 5.9% by 1021 GMT Monday. According to Reuters, the NZZ am Sonntag paper quoted several unnamed analysts confirming they received "hints" so that they could adjust their estimates. The tip reportedly raised question over the bank's disclosure policy, but two banking analysts sought by Reuters confirmed it is standard practice for analysts to be notified when their forecasts seem to make a mistake. The information is often submitted to the bank before the actual results are release, bank insiders said. CREDIT SUISSE: Fitch Ratings Affirms CSFB's USD$2.4B Certificates ----------------------------------------------------------------- Credit Suisse First Boston (CSFB) Mortgage Securities Corp.'s commercial mortgage pass-through certificates, series 1998-C1, $265.9 million class A-1A, $1.1 billion class A-1B, $262 million class A-2MF and interest only class A-X are affirmed at 'AAA' by Fitch Ratings. In addition, Fitch affirms the $136.6 million class B at 'AA', $136.6 million class C at 'A', $136.5 million class D at 'BBB', $37.3 million class E at 'BBB-' and $24.8 million class I at 'B-'. Fitch does not rate the $142.7 million class F, $18.7 million class G, $49.6 million class H or $45 million class J. The rating affirmations follow Fitch's annual review of the transaction, which closed in June 1998. The certificates are currently collateralized by 318 multifamily and commercial mortgage loans, with concentrations of retail (41.1%), multifamily (20.1%), hotel (16.5%), and office (15.1%). Included in the retail component are 60 credit tenant lease loans (CTLs) that represent approximately 15% of the pool. The pool is geographically diverse with the largest concentrations in California (13.3%), New York (11%), Texas (6.4%) and New Jersey (5.9%). The rating affirmations are the result of the relatively stable performance and minimal paydown in the pool balance. ORIX Capital Markets, LLC (ORIX), the master servicer, collected year-end (YE) 2001 financial statements for approximately 98% of the pool, excluding the CTL loans that are not required to report financials. The YE 2001 weighted average debt service coverage ratio (DSCR), using borrower reported net operating income (NOI) is 1.64 times (x), down slightly from 1.70x for YE 2000 and 1.67x at issuance. The transaction is diverse, with the top five loans representing only 17.3% of the pool. Performance for these loans has also improved since issuance with a servicer reported weighted average DSCR of 2.02x for YE 2001 as compared to 1.79x at issuance. In addition, four of these loans have been assigned an individual credit assessment by Fitch: the Combined Properties Portfolio, Eden's and Avant loan, Ritz-Carlton - Cancun and 45 Wall Street. Performance has improved for the two retail loans (Combined and Eden's and Avant), but has declined for the Ritz Carlton - Cancun and 45 Wall Street. Not unexpectedly, the Ritz Carlton experienced a decrease in operating performance for YE 2001. The Fitch stressed DSCR for YE 2001 is 1.92x, down from 2.29x for YE 2000 but remains stronger than the 1.61x at issuance. Year to date numbers from September 2002 indicate that the property is performing ahead of budget for the year. Fitch will continue to monitor this property for any other changes in performance. The 45 Wall Street building is the fifth largest loan in the pool (2.8%) and consists of a 365 unit multifamily building in Manhattan. The property is being acquired by the city of New York via condemnation in order to provide for expansion of the New York Stock Exchange (NYSE). Most tenants have now moved out of the building and debt service payments are being paid by the city while a decision is being made whether to proceed with the condemnation or not. In the event that the city does not go forward with its plan, it will remain obligated to pay debt service payments for an additional 18 months while the subject property is being re-leased. Of concern to Fitch is the number of specially serviced loans in the transaction. There are currently 25 loans, representing 7.2% of the pool, being specially serviced. Of these loans, 10 (3.9%) are current, two (.34%) are 30 days delinquent, one (.16%) is 60 days delinquent, six (1.4%) are 90 days delinquent and six (1.4%) are real estate owned (REO) properties. The largest REO loan in the pool is the $13 million Cobb Theaters loan in Tampa, Florida. The theater was operated by Regal Cinemas, which closed the subject property as a result of bankruptcy. While there is some interest in the property, losses are still expected upon final resolution. It appears likely that losses will also be incurred by other specially serviced loans as well and appraisal subordinate entitlement reduction (ASER) adjustments have already been made for many of these loans. Fitch took into account the specially serviced loans and other under-performing loans in its analysis. The credit enhancement that resulted from remodeling the pool was adequate to support the rating affirmations. However, should losses be greater than anticipated to the unrated class J, the rating for the lowest Fitch rated class I may need to be re-analyzed. CREDIT SUISSE CSAM's Fixed Income Team Outline Investment Views --------------------------------------------------------------- As equity markets remain volatile, economic recovery continues to move further away and the market's obsession with safety looks likely to last for some time yet. CSAM believes quality bonds remain a safe haven as the high default risk amongst lower grade bonds appears to outweigh the potential rewards of a high yield. We believe outperformance of higher grade bonds is set to continue for the following reasons: - Interest rate speculation has gone through a remarkable U-turn over the last few months, on the timing and magnitude of any global interest rate tightening cycle. Expectations for future short term interest rates have fallen in almost every developed market as a result of continued equity and credit spread weakness, and evidence that momentum of recovery in US demand is stalling. - Default rates: According to the rating agency Standard & Poor's, 56 companies defaulted on a total of $52.1 bn in debt in the three months ended June 2002, a new record high for the value of defaults in one quarter. Most of the defaults, though, are amongst highly indebted issuers rated as speculative grade by the ratings agencies. Whilst the percentage rate of speculative grade companies defaulting is expected by S&P to be 10.19% this year, the expected default rate for investment grade companies is only 0.18%. - Spreads: Re-rating of higher yielding bonds does not seem imminent and the difficult period experienced by high yield over the past two years could continue with no immediate appreciation in capital values. - Demand: Demand for quality bonds from UK institutional investors such as pension funds and insurance companies remains robust. Commenting on the current bond market, Ian Fishwick, Head of UK Fixed Income at Credit Suisse Asset Management said: "In such uncertain times, it is wise to avoid too much name specific risk by running well diversified portfolios, diversified by both sector and individual names. Within this context, however, it is still important to pick good securities. When it comes to stock picking there is no substitute for detailed credit and relative value analysis. "At Credit Suisse Asset Management, we can also tap into significant proprietary global research capabilities - essential when so many sterling denominated bonds are actually issued by global companies - to help achieve relative 'safety' and a reasonable return." Credit Suisse Asset Management is the institutional and mutual fund asset management arm of Credit Suisse First Boston, part of the Credit Suisse Group, one of the world's largest financial organizations with approximately o568.5 billion in assets under management. Credit Suisse First Boston (CSFB) is a leading global investment bank serving institutional, corporate, government and individual clients. CSFB's businesses include securities underwriting, sales and trading, investment banking, private equity, financial advisory services, investment research, venture capital, correspondent brokerage services and asset management. CSFB operates in 77 locations in 36 countries across six continents. The Firm is a business unit of the Zurich-based Credit Suisse Group, a leading global financial services company. For more information on Credit Suisse First Boston, please visit our Web site at www.csfb.com. As of June 30, 2002, Credit Suisse Asset Management employed 2,262 people worldwide and had global assets under management of approximately o201.1 billion. Please note that this is not an offer for advisory services by Credit Suisse Asset Management. For more information on Credit Suisse Asset Management, please visit our Web site at www.csam.com. Issued by Credit Suisse Asset Management Limited, regulated by the FSA. CONTACT: Jane Collins Credit Suisse Asset Management Co-Head UK Institutional Marketing Telephone Phone: +44 207 426 2873 Jim Owen Credit Suisse Asset Management Co-Head UK Institutional Marketing Telephone Phone: +44 207 426 2541 Lisa Goddard Credit Suisse Asset Management Head of Marketing Communications - UK Telephone Phone: +44 207 426 2992 Gay Collins / Ben Curson Penrose Financial Telephone Phone: +44 207 786 4888 =========================== U N I T E D K I N G D O M =========================== AMEY PLC: Notification of Major Interests in Shares --------------------------------------------------- Name of company: Amey plc Name of shareholder having a major interest: STERLING INVESTMENT GROUP LIMITED Name of the registered holder(s): P.H. Nominees Limited - number of shares not stated N.Y. Nominees Limited - number of shares not stated Number of shares/amount of stock acquired: Not stated Number of shares/amount of stock disposed: Not stated Class of security: Ordinary shares of 1p Date of transaction: Not stated Date company informed: 8 November 2002. Total holding following this notification: 12,275,000 Total % holding of issued class following this notification: 4.86% Additional information: Dr. Tito Tettamanti of Totara Park House, 34-36 Gray's Inn Road, London WC1X 8NN, is also interested in the shares through his indirect controlling interest in Sterling Investment Group Limited. Contact: Carol Hui, Goup Company Secretary Phone: 020 7659 1900 Authorized company official making this notification: Timothy Maw Company Secretarial Administrator Phone: 020 7659 1935 Date of notification: November 8, 2002 AVECIA GROUP: Moody's Subjects Ratings Under Review --------------------------------------------------- Moody's Investors Service placed the following ratings of Avecia Group Plc under review for possible downgrade: - B3 rating for the US$ 540 million in senior notes of Avecia Group PLC. - B1 senior implied rating for Avecia Group PLC. - Ba3 rating assigned to the bank debt facilities for Avecia Investments Ltd. - B3 senior unsecured issuer rating for Avecia Group PLC - Caa1 preferred stock rating on the US$45m PIK Preference shares for Avecia Group PLC. The action was taken following the delay in the launching of AztraZeneca's "Crestor" drug in the US and the negative impact of this setback on Avecia, which manufactures the intermediates for this drug. According to the rating agency its review will focus on the dynamics in the fine chemicals division and the impact of the delay, Avecia's headroom under its bank covenants and liquidity cushion over the next twelve months, the outlook for Avecia's core businesses over the near term, and the ability for Avecia to improve its debt protection measures from their current weak levels. Avecia Group PLC is a holding company for a diversified specialty chemicals group generating LTM consolidated revenues of around GBP600 million. It has LTM sales of GBP 587 million (excluding Stahl's division) and operating profit of GBP 26 million as of September 30, 2002. Moody's foresees a lower operating cash flow generation for the company over the next 12 months due to continued weakness in two of its four core divisions. The rating agency warns that weak cash flow together with further significant CAPEX in 2003 could lead to further deterioration in debt protection measures. Moody's believes Avecia has adequate current liquidity under its revolving credit facility and cash balances, which combines to around GBP85 million. Yet, Moody's anticipates the availability of this facility to reduce in the near term. CORUS GROUP: To Acquire 100% of the Equity of Precoat ----------------------------------------------------- In a further move downstream, Corus has announced its intention to acquire 100 per cent of the equity of Precoat, one of the leading independent precoated steel service centres in the United Kingdom. The recommended cash offer will be 88 pence in cash for each Precoat share, valuing the whole of the issued share capital of Precoat at approximately GBP7.25 million. The offer represents a premium of approximately 35.4 per cent over the closing price of 65 pence per Precoat share on 5 November 2002 (the last business day prior to the date of the announcement of the offer). Purchase is conditional upon, amongst others, acceptance by Precoat's shareholders and regulatory consents. Completion is expected by the end of December 2002. Following the recent disposal of its Canadian subsidiary - Color Steels Inc. - Precoat has two operating subsidiaries, Color Steels and Europressings. Color Steels, based in Cross Keys, South Wales, operates one of the leading independent precoated steel service centres in the United Kingdom. Color Steels generated turnover of GBP 44.1 million in the year to 30 April 2002 (2001: GBP 51.0 million) and a profit before tax of GBP 1.1 million (2001: GBP 1.5 million). Europressings is based in Cardiff, South Wales, and was acquired by the Precoat Group in December 2000. It is the market leader in the United Kingdom in the pressing of precoated blanks into bodies and similar parts for small appliances such as microwaves and for teletronic products such as television set top decoders and DVD players. In the year to 30 April 2002, Europressings generated turnover of GBP 9.1 million (2001: GBP 11.3 million) and a loss before tax of GBP 0.1 million (loss before tax in 2001: GBP 0.2 million). For the year ended 30 April 2002, the Precoat Group, including the result of its subsequently sold Canadian subsidiary, reported a turnover of GBP 65.3 million (2001: GBP 69.7 million) and, after GBP 1.8 million of exceptional costs, a profit on ordinary activities before tax of GBP 0.9 million (2001: GBP 2.4 million). As at 30 April 2002, Precoat had net assets of GBP 13.9 million. An unaudited pro forma statement of net assets as at 30 April 2002, prepared to reflect the disposal of Color Steels Inc. and the subsequent tender offer, pursuant to which Precoat bought back approximately 43 per cent. of its share capital for an aggregate consideration of GBP 5.9 million, shows net assets at GBP 8.9 million. Precoat's operations are complementary to Corus' existing coated steel service centre operations and it is intended that a new trading business, Corus Colorsteels, will be created within the Corus Metal Services Europe ('CMSE') Business Unit. This new trading business will combine Precoat's Color Steels subsidiary and CMSE's service centre at Olbury in the West Midlands which specialises in precoated steel. Corus Colorsteels will be headed by Lyn Williams who is currently the Managing Director of Color Steels. Europressings will form part of CMSE's automotive service centre activities, which has the potential to service additional sectors. Commenting on the offer, CMSE Managing Director Tony Leggett said: 'The planned acquisition of Precoat will allow Corus to enhance its service to customers in the key market sectors of general engineering, construction, automotive and consumer goods. It will also provide opportunities for Corus to grow its position in the coated steel service centre market across mainland Europe by building upon Precoat's existing market position and customer base.' Notes: 1. This statement does not constitute or form any part of any communication inviting or inducing any person to engage in investment activity. 2. Precoated steel is a term used to describe strip steel that has had a coating applied at the manufacturing mill such as organic eg paint or a laminate. The coating is available in a wide range of colours, finishes and special effects. 3. Color Steels processes some 74,000 tonnes of steel products a year and has 146 employees. Europressings has 104 employees. CONTACT: Mike Hitchcock Phone: +44 (0) 20 7717 4502. South Wales Simon Jenkins Phone: +44 (0) 7850 620842 Lyn Williams (Precoat) Phone: +44 (0) 1252 843 811 Trade and West Midlands Lisa Benbow Phone: +44 (0) 1902 484053 MARCONI PLC: Considers Compulsory Redundancies to Cut Cost ---------------------------------------------------------- Telecoms group Marconi refused to rule out possible compulsory redundancies to reduce cost base despite warnings of a strike action, The Scotsman says. According to the report, a company spokesman said, "Over the past 18 months we have worked with the trade unions and employee representatives to achieve the high cost reductions we need through voluntary means." While emphasizing that the aim to reduce costbase is in the best interest of everyone and that the management is trying its best to mitigate the process, he maintained that other means had to be resorted to if the redundancies by voluntary offers are not enough. When asked if that other means could imply compulsory layoffs, the spokesman reportedly said: "You could not totally rule it out." Amicus engineering union earlier promised to launch industrial protests if job losses at Marconi's Coventry and Liverpool sites were involuntary. The site employs 3,000 and 900 workers, respectively. About 20,000 of Marconi's 55,000 employees were transferred when businesses were sold to reduce the group's debt. The remaining workforce was further narrowed down to 20,000 when 15,000 were subjected to voluntary redundancies; but the company still wants to reduce the number to 15,000. Roger Jeary, Amicus's national officer, said: "Our position is clear - industrial action is on the cards if one single Amicus member is made compulsorily redundant." TEXON INTERNATIONAL: Moody's Downgrades Senior Notes Rating to C ---------------------------------------------------------------- Moody's Investors Service lowered Texon International PLC's senior notes rating to C from Caa3, and placed the Leicester- based company's senior implied rating to Caa3. Moody's also withdrew all ratings on Texon International PLC and United Texon Ltd. According to the rating agency, the action reflects Moody's belief on the recovery prospects for Texon's creditors following its 75% debt for equity swap agreement. The downgrade affects approximately US$157 million of debt securities. Ratings affected include: - rating on the DM 245 million in 10% senior notes of Texon International PLC from Caa3 to C. - senior implied rating for Texon International PLC from Caa1 to Caa3. - rating assigned to the bank debt facilities for United Texon Ltd remains unchanged at Caa1. - senior unsecured issuer rating for Texon International PLC from Caa3 to C. Texon International plc is a global supplier of shoe-insoles, stiffeners, and other footwear materials. It has LTM sales of GBP 152 million as of December 2001. ************ 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 * * *