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/raid1/www/Hosts/bankrupt/TCREUR_Public/021126.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 Tuesday, November 26, 2002, Vol. 3, No. 234 Headlines * F I N L A N D * SONERA CORP: Alleged Violators of Secrecy of Information Arrested SONERA CORP: Discloses Change in Shareholders' Ownership * F R A N C E * ALCATEL: Expands Unitel's GSM Network in Angola CREDIT LYONNAIS: BNP Paribas Buys 10.9% Interest in Surprise Move SCOR GROUP: A.M. Best Lowers Rating of SCOR and Its Subsidiaries * G E R M A N Y * BAYER AG: Vardenafil Receives Positive Opinion From Regulator COMMERZBANK AG: Sells U.S. Investment-Fund Subsidiary Montgomery DEUTSCHE TELEKOM: Prosecutors Probe Severance Pay of Sommer GLAXOSMITHKLINE: Reconsiders Incentive Package for CEO HVB GROUP: To Increase Equity Interest in HVB Real Estate to 100% INFINEON TECHNOLOGIES: To Move Into Semiconductor Solutions MOBILCOM AG: Reaches Deal on UMTS Project With France Telecom MOBILCOM AG: Board Appoints Picot and Dreyer on Supervisory Board MOBILCOM AG: Extends UMTS Loan Refinancing Deadline * I R E L A N D * ELAN CORP: To Sell Remaining Stockholding in Athena Diagnostics ELAN CORP: Wraps Sale of Assets to Abelcet, Receives US$360 MM * I T A L Y * TELECOM ITALIA: Finalizes Sale of 45% Holding in IMMSI * S W I T Z E R L A N D * ZURICH FINANCIAL: Has New CEO for Business in U.K. and Ireland * U N I T E D K I N G D O M * ABBEY NATIONAL: Likely to Announce Deep Cut in Dividend ARC INTERNATIONAL: Announces Results of Strategic Review BRITISH ENERGY: Resumes Negotiations With British Nuclear Fuels BUSINESS A.M.: Publisher Fails to Attract Joint Venture Partner EQUITABLE LIFE: Expresses Opposition to Winding up Calls MYTRAVEL GROUP: Secures Short-Term Status With Banks P&O PRINCESS: Director Exercises Award Under Company's Plans ROYAL & SUNALLIANCE: Sells German Operations to Baloise ============= F I N L A N D ============= SONERA CORP: Alleged Violators of Secrecy of Information Arrested ----------------------------------------------------------------- The police have made two new arrests related to the suspected violation of secrecy of communications at Sonera Corporation (HEX: SRA, NASDAQ: SNRA) in 2000 and 2001. The National Bureau of Investigation has arrested Jari Jaakkola, Executive Vice President and member of Sonera's Executive Management Team, who has been responsible for Corporate Communications and IR, and another employee of the company. The reason for the arrests is that the persons are suspected on reasonable grounds for gross violation of secrecy of communications. Both persons have been relieved of their duties for the time being. Jyrki Karasvirta, Vice President of Press Relations at Sonera Corporation, has been appointed acting head of Sonera's Corporate Communications. Sonera Corporation holds a press conference related to the matter, on November 22, 2002, at 5:00 p.m. Address: Sturenkatu 11D, Vallila, Helsinki. 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. http://www.sonera.com CONTACT: Sonera Corporation Harri Koponen President and CEO Phone: +358 2040 541 10 E-mail: harri.koponen@sonera.com or In the United States: Mr. Steve Fleischer, Vice President, Investor Relations, Phone: +973-448-4616 E-mail: steve.fleischer@sonera.com SONERA CORP: Discloses Change in Shareholders' Ownership -------------------------------------------------------- According to the provisions in the Securities Markets Act, Chapter 2, paragraph 9, Sonera Corporation has received the following disclosure: The Swedish company Telia AB has made a public exchange offer to acquire all the shares, including shares in the form of American Depositary Shares, and warrants of Sonera Corporation. The offer period ended on 15 November 2002. The exchange offer is subject to the conditions determined in the offer document related to the exchange offer dated 30 September 2002. On 20 November 2002 the Board of Directors of Telia has established that all conditions to the combination of Telia and Sonera have been fulfilled except for the condition in section 1.01 (e) (viii) in the combination agreement between Telia and Sonera. In accordance with chapter 2, section 9 of the Securities Markets Act, Telia announces that if the exchange offer is completed, the holdings of Telia in Sonera will exceed two-third (2/3) of Sonera's voting rights and share capital. Provided that the exchange offer is implemented, Telia's holdings in Sonera immediately after the completion of the exchange offer would be the following. Number Proportion of the Proportion of the Share Capital Voting Rights Sonera's 1 060 062 362 95 % 95 % shares and ADRs** *The Sonera shares in the possession of Sonera are excluded from the total amount of voting rights. ** The numbers are based on preliminary calculations of the tendered shares and warrants. The final result of the exchange offer will be reported to Telia on or about 28 November 2002. Immediately after the completion of the exchange offer, Telia will also hold approximately 26 750 072 Sonera warrants** which entitle to subscribe for 26 750 072 Sonera shares, each share entitling to one vote in Sonera. On a fully diluted basis, i.e. taking into consideration the shares and voting rights that may be acquired on the basis of these Sonera warrants, Telia's total portion of shares and voting rights in Sonera would be 95% of the shares and 95% of the votes**. 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: SONERA CORPORATION Jari Jaakkola, EVP, Corporate Communications and IR Home Page: http://www.sonera.com =========== F R A N C E =========== ALCATEL: Expands Unitel's GSM Network in Angola ----------------------------------------------- Alcatel announced the inauguration of Unitel's, the GSM 900 telecommunications operator in Angola, GSM 900 MHz network expansion in the three major provinces of Angola related to the EUR7 million contract previously signed between both companies. Along with the infrastructure equipment, Alcatel ensured the entire management of the project, including network planning and implementation, site acquisition and construction as well as network operation and maintenance. Alcatel supplies Unitel with its industry leading EvoliumT mobile radio solution. In addition, to carrying high-capacity traffic amongst the base stations, the network utilizes Alcatel's microwave radio systems managed by an efficient and powerful network management platform. As an industry-leading solution, the Alcatel EvoliumT family of products can support GSM, GPRS and EDGE that can integrate future 3G/UMTS mobile data applications. "Today we inaugurate the commercial service of our GSM network for the first time outside the capital city of Luanda. This important step in our development strategy was possible thanks to Alcatel's committed efforts in record time." declared Mr. Luciano Pereira da Costa General Director of Unitel. "We are particularly pleased with this collaboration with Unitel that reinforces Alcatel's position at the forefront of the mobile industry with our EvoliumT radio solutions. This contract is our 40th reference in Africa, placing Unitel as a key partner for us." Added Marc Rouanne, President of Alcatel's Mobile Networks activities. Today, one out of four operators' trusts Alcatel for the supply of its GSM 800, 900, 1800 and 1900 MHz networks in all five continents. About Unitel Unitel is an Angolan-Portuguese company who has launched the first private mobile telecommunications network in Angola back in April 2001 covering the province of Launda. Unitel counts today with more than 60,000 subscribers. 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 GSM/GPRS/EDGE 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, 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 capitalizes 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 world-wide, has today a timely UMTS offering. CREDIT LYONNAIS: BNP Paribas Buys 10.9% Interest in Surprise Move ----------------------------------------------------------------- BNP Paribas surprised the banking establishment and investors on Friday by buying the French government's 10.9% stake in troubled Credit Lyonnais. The French Finance Ministry announced that the Eurozone's largest bank by market value won the auction by offering EUR58 per share (US$2.2 billion) for the stake. The price exceeds the previous record for Lyonnais shares and represents a 49% premium to the closing price on Friday. "We offered a high price that reflects the special value of the extraordinary opportunity to replace the state as the largest shareholder in Credit Lyonnais," Baudouin Prot, BNP managing director, said. Finance minister Francis Mer disclosed that the sale proceeds will be used to cut debt at state companies, including the "bad bank" holding the doubtful loan portfolio of the old Credit Lyonnais. The remaining EUR500m would go into a EUR8 billion fund to finance the overburdened pensions system. BNP bested French banks Credit Agricole and Societe Generale and insurer AGF, insiders told the Financial Times. Credit Lyonnais' shareholders are BNP, AGF and Credit Agricole, each of which has about a tenth of the bank. The move is believed to open the door to a contest for the country's fourth largest bank, says The Scotsman. SCOR GROUP: A.M. Best Lowers Rating of SCOR and Its Subsidiaries ---------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating of SCOR, Paris and its guaranteed subsidiaries from A (Excellent) to A- (Excellent). Additionally, SCOR's senior debt and convertible bond ratings have been downgraded to "a-" from "a+" and its subordinated debt rating to "bbb" from "a-". A.M. Best's rating of SCOR's Commercial Paper Program has been affirmed at AMB-2. All ratings remain under review with negative implications. These rating actions follow SCOR's recent announcement of further deterioration of EUR 150 million in its expected full-year 2002 loss to EUR 400 million, mainly due to adverse reserve developments and losses from its equity portfolio. The ratings will remain under review until A.M. Best has fully assessed SCOR's revised underwriting strategy and updated actuarial analyses. SCOR's maintenance of consolidated risk-based capital at a level consistent with an A- financial strength rating will be largely dependent on the successful completion of its proposed rights issue of EUR 381 million over the next two months. Failure to raise additional funds will place the current capitalisation under further strain, which could trigger a downgrade. The financial strength ratings of the following companies have been downgraded to A- (Excellent) from A (Excellent) and remain under review with negative implications: -- SCOR -- SCOR Canada Reinsurance Company -- SCOR Deutschland Ruckversicherungs AG -- SCOR Italia Riassicurazioni S.p.A -- SCOR Reinsurance Asia-Pacific Pte Ltd -- SCOR Reinsurance Company(*) -- SCOR UK Company Ltd -- General Security Property and Casualty Company -- General Security Insurance Company -- General Security Indemnity Company -- General Security Indemnity Company of Arizona -- General Security National Insurance Company -- Commercial Risk Reinsurance Company Ltd -- Commercial Risk Re-Insurance Company -- SCOR Life U.S. Re Insurance Company -- Republic-Vanguard Life Insurance Company -- Investors Insurance Corporation (*)SCOR Reinsurance Company is a U.S. trading company. The following ratings on existing debt have been downgraded to "a-" from "a+" and remain under review with negative implications as follows: -- senior unsecured EUR medium term note program -- five-year convertible bonds The following ratings on existing debt have been downgraded to "bbb" from "a-" and remain under review with negative implications as follows: -- EUR 100 million cumulative subordinated notes, due 2020 -- USD 100 million subordinated step-up notes, due 2029 -- EUR 50 million subordinated perpetual step-up notes issued by Societe d'Etudes et de Placements Financiers and guaranteed by SCOR The rating of the following commercial paper program has been affirmed and remains under review with negative implications: -- AMB-2 rating on EUR commercial paper program A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com CONTACT: A.M. Best Co. Public Relations: Jim Peavy Phone: +(1) 908 439 2200, ext. 5644 E-mail: james.peavy@ambest.com Rachelle Striegel Phone: +(1) 908 439 2200, ext. 5378 E-mail: rachelle.striegel@ambest.com or Analysts: Miles Trotter Phone: +(44) 20 7626 6264 E-mail: miles.trotter@ambest.com Jose Sanchez-Crespo Phone: +(44) 20 7626 6264 E-mail: jose.sanchez-crespo@ambest.com ============= G E R M A N Y ============= BAYER AG: Vardenafil Receives Positive Opinion From Regulator ------------------------------------------------------------- Bayer HealthCare and GlaxoSmithKline plc (GSK) announced that they have received a positive opinion from the European Committee for Proprietary Medicinal Products (CPMP) for Vardenafil, a new oral drug under regulatory assessment for the treatment of erectile dysfunction (ED). This means that a European Marketing Authorisation should be granted within the next few months followed by a launch in Europe in the first half of 2003. Vardenafil was researched and developed by Bayer was selected for clinical development because of its in-vitro potency and high selectivity for the PDE-5 enzyme. The substance will be co- promoted with GlaxoSmithKline plc. As leading European-based companies, Bayer and GSK are poised to bring the drug to market using their extensive network of local operating companies throughout the continent. Wolfgang Plischke, PhD, President of the Pharmaceuticals Division of Bayer Health Care, Bayer AG, said: "This positive opinion from the CPMP - received earlier than anticipated - marks another important milestone, bringing us one step closer to the global launch of Vardenafil. The plans are in place to ensure an expedited launch at approval". "We are very pleased with the Committee's decision following their assessment of our extensive clinical trial data package that showed excellent efficacy following treatment with Vardenafil in men with ED", added Robert A. Ingram, Chief Operating Officer and President Pharmaceutical Operations, GlaxoSmithKline. The clinical data presented to the CPMP for Vardenafil included results from pivotal phase III studies of almost 4,000 men, including men of varying ages and severity of ED, and those considered challenging to treat, such as men with diabetes and those who have undergone prostatectomy. In one large-scale trial including a broad range of patients, 80 percent and 85 percent of men taking Vardenafil 10 and 20 mg respectively reported an improvement in erectile function compared with 28 percent on placebo. In clinical trials, the most common adverse events reported for the substance were headache, flushing, rhinitis and dyspepsia, events typical of PDE-5-inhibition. Erectile dysfunction is a major medical condition among men that is largely untreated. Although an estimated 152 million men are affected worldwide, research shows that only ten percent of men are being treated for the condition, suggesting the need for additional therapies. COMMERZBANK AG: Sells U.S. Investment-Fund Subsidiary Montgomery -------------------------------------------------------------- On November 21, Commerzbank and the provider of financial services Wells Fargo & Company, San Francisco, reached agreement on the sale of the greater part of the asset-management activities of the US company Montgomery Asset Management, LLC. Under the agreement, Wells Fargo will acquire roughly 85% of the assets managed by the Commerzbank subsidiary, currently valued at US$5.8bn. The transaction is subject to approval by various authorities and should be completed in six monthsf?T time at the latest. 'In Wells Fargo, we have found a purchaser able to integrate Montgomery optimally into its business activities. Having successfully concluded these negotiations, we can now concentrate entirely on Europe in asset management', said Commerzbank management board member Klaus M. Patig. Following a thorough examination in the first quarter of this year, Commerzbank completely repositioned its asset-management activities in strategic and geographical terms, primarily focusing on its German home market and selected European core countries. In addition, its three former German asset-management companies were combined under the roof of COMINVEST Asset Management GmbH. All told, the Commerzbank Group will still have some 100bn euros of private and institutional assets under management after it has disposed of Montgomery. DEUTSCHE TELEKOM: Prosecutors Probe Severance Pay of Sommer ----------------------------------------------------------- Telecom group Deutsche Telekom AG confirmed that state prosecutors are conducting investigations regarding severance payments granted to ousted chief executive Ron Sommer. News agency Der Spiegel says Deutsch Telekom paid some EUR7.3 million for severance to Mr. Sommer, who was pressured to resign in July after failing to cut the group's debts and to prevent the collapse in the value of the company's shares. Mr. Sommer's contract ran to 2005. Moody's recently placed the long-term and Prime-2 short-term debt ratings of Deutsche Telekom AG on review for possible downgrade. The rating agency noted the German company's lack of progress in reducing group debt. It predicts Deutsche Telekom's net debt level to be between EUR49.5 billion and EUR52.3 billion for the year 2003. GLAXOSMITHKLINE: Reconsiders Incentive Package for CEO ------------------------------------------------------ GlaxoSmithKline may withdraw the GBP12 million incentive package of shares and options it intends to grant its chief executive Jean-Pierre Garnier after facing opposition from shareholders. GSK chairman, Christopher Hogg, had given indications that the company may reconsider the matter, says The Scotsman. A spokesman for GSK said: "We had the meetings with shareholders, but we're not commenting on what they said. The proposals will be looked at and will be put before an annual general meeting in April or May." The drug company wanted to grant the package to Mr. Garnier to keep pace with the company's U.S. rivals, taking into consideration that the company has 55% of its business in the region. The report, however, notes that the latest projections suggest Mr. Garnier's package is "as good as he would earn in the U.S." Still, the grant is subject to the approval of U.K. institutions, which own more than 80% of the company shares. Under the current share price, which is 1,248p on Friday, and the existing arrangement, Mr. Garnier is due to receive more than GBP70 million of benefits when he retires in 2008. On the other hand, if the share price is to return to their peak value of more than GBP20 two years ago, the options Mr. Garnier has is GBP44 million for its US-listed shares. His salary, pensions and bonus are worth another GBP30 million. Mr. Garnier earned GBP3.5 million before pension and share incentives last year. The chief executive denied he threatened to resign if the new package is not passed. HVB GROUP: To Increase Equity Interest in HVB Real Estate to 100% ----------------------------------------------------------------- HVB is taking the next step toward combining its real estate financing operations into a new group. The bank plans to increase its current equity interest of 96.91% in HVB Real Estate Bank AG to 100%. To this end, it is now preparing a squeezeout in which the remaining shareholders of HVB Real Estate Bank AG will be paid an adequate cash compensation for their holdings. The complete takeover of the company will facilitate the spin-off of commercial real estate financing business in the course of transforming the HVB Group, a preferred option in the coming year. The Extraordinary Meeting of Shareholders of HVB Real Estate required for adoption of this resolution is scheduled for the beginning of 2003. CONTACT: Bayerische Hypo- und Vereinsbank AG Presseabteilung Am Tucherpark 16 80538 M�nchen Phone: (089) 378-2 58 01/-2 55 12 Fax: (089) 378-2 56 99 INFINEON TECHNOLOGIES: To Move Into Semiconductor Solutions ----------------------------------------------------------- German semiconductor manufacturer, Infineon, plans to limit investment in manufacturing to prepare its shift from being a semiconductor manufacturer to a semiconductor solutions provider. According to FT Deutschland, the management board of Europe's second biggest chipmaker had lowered its investment package to over EUR981 million (US$978 million) in the current fiscal year through September 2003, down from the EUR1 billion expected by Chief Executive Ulrich Schumacher. Mr. Schumacher is understood to channel more funding to software and consultancy solutions. In fiscal year to September 2002, the group's investment reached EUR650 million, compared with EUR2.2 billion a year earlier. The chief executive hopes to make the world's third-biggest producer of chips the world's second biggest semiconductor manufacturer by 2007. Analysts, though, are not as optimistic. CONTACT: INFINEON TECHNOLOGIES AG St.-Martin-Str. 53 81669 Munich, Germany Phone: +49-89-234-0 Fax: +49-89-234-2-46-94 Home Page: http://www.infineon.com MOBILCOM AG: Reaches Deal on UMTS Project With France Telecom ------------------------------------------------------------- MobilCom AG and France Telecom have signed an agreement that should finally settle the long dispute over the UMTS project. France Telecom will assume the liabilities of MobilCom, which amount to EUR7.0 billion plus capitalised interest, and will abandon its claim for this amount against MobilCom AG. In particular the agreement covers bank loans of EUR4.8 billion from the financing of the UMTS licence, vendor facilities of EUR1.2 billion with Nokia and Ericsson and a shareholder's loan of EUR1 billion. France Telecom will waive the repayment claims against MobilCom. France Telecom is on the way to wrap up provisions with the UMTS banking syndicate and the network suppliers. Furthermore France Telecom will also assume the cost of the "freezing" of the UMTS project - a first payment of EUR14.5 million is scheduled immediately after completion of contract. All further payments will be made in compliance with financial requirements up to a total volume of EUR 580 million, a sum capable of covering all costs including the obligations of all long-term contracts. The agreement also stipulates that 90 percent of any revenue from sales of UMTS-related assets should be paid to France Telecom. In return MobilCom AG will abandon all claims arising from the co-operation framework agreement completed with France Telecom. The contract regulates the financing responsibilities of France Telecom by rolling out a UMTS network. The major shareholder, Gerhard Schmid, consented to the completion of this agreement and to the abandonment of all claims against France Telecom due to the completed co-operation agreement. The agreement between MobilCom and France Telecom is subject to the reservation of approval by the annual shareholder meetings of both companies, due to be held in January 2003, and to the signing of definitive settlements between France Telecom and the UMTS banks and network suppliers. MobilCom AG has also signed a credit agreement for EUR112 million with a banking syndicate comprising the Kreditanstalt f�r Wiederaufbau (KfW), as syndicate leader, as well as the Deutsche Bank, Dresdner Bank and Landesbank Schleswig-Holstein. Including the bridge loan of EUR50 million MobilCom conserve EUR162 million for the restructuring of the service provider, the fixed line and internet business.The original salvage plan was based on the assumption that a credit of EUR 400 million would be required. This amount has been reduced, in particular because France Telecom agreed to carry the full cost of UMTS expenditure. "The completion of these agreements signifies a successful end to a difficult series of negotiations that has been continuing over the last few months", said Dr. Thorsten Grenz, chairman of the management board of MobilCom AG. "We can now concentrate our entire energies into the rehabilitation of our core business and the safeguarding of the jobs of our employees." A particularly grateful belongs to Dr. Dieter Vogel who conduct the negotiations at request of the Federal Government and on behalf of the supervisory board. MobilCom also acknowledge the efforts of the Federal Government and the state government of Schleswig-Holstein and the guarantees that they issued in support of the transaction. A grateful also belongs to France telecom for taking over the financial obligations. MOBILCOM AG: Board Appoints Picot and Dreyer on Supervisory Board ----------------------------------------------------------------- Dr Gerhard Picot and Dr Joachim Dreyer are the new members of the MobilCom Supervisory Board. The corresponding application submitted by the MobilCom AG Board of Management was approved by the responsible Registration Court in Schleswig on Friday, 22. November. This procedure had become necessary because the Supervisory Board, following the withdrawal of the members Brigitte Bourgoin and Eric Bouvier in September of this year, no longer consisted of equal numbers of representatives. The two Supervisory Board members, Picot and Dreyer, appointed by the court must be confirmed by the shareholders at the next Shareholders' Meeting. Dr Gerhard Picot is a partner in the international law firm Freshfields Bruckhaus Deringer. He specializes in the field of mergers and acquisitions and is at the same time the holder of an professorship for business law at the "Institute for Mergers and Acquisitions - IMA" of the private university Witten/Herdecke. Dr Joachim Dreyer, physicist, is chairperson of the Supervisory Board at ECCE AG, Home Jumper Services AG, riodata N.V. (The Netherlands), a member of the Supervisory Board at Jamba! AG, Telegate AG, a member of the Advisory Board at Energie Baden- W�rttemberg, president of the VATM, chairperson of the National Blue-Ribbon Commission of the Economic Board of the CDU. MOBILCOM AG: Extends UMTS Loan Refinancing Deadline --------------------------------------------------- MobilCom AG and the banking consortium under the guidance of ABN Amro Bank, Deutsche Bank AG London, Societe Generale, and Merrill Lynch have agreed to a further extension agreement for the refinancing of the UMTS loans amounting to EUR4.7 billion due by November 22, 2002. Like the fifth extension agreement, among others, this agreement is subject to the condition subsequent that a Memorandum of Understanding concerning a long-term financing solution between France Telecom and the banking consortium remains effective. Hence, the UMTS loan (Senior Interim Facility) falls due by November 30, 2002. Furthermore it has been agreed that the interest payment is deferred until this date as well. ============= I R E L A N D ============= ELAN CORP: To Sell Remaining Stockholding in Athena Diagnostics --------------------------------------------------------------- Elan Corporation, plc (NYSE: ELN), together with the other stockholders of Elan's subsidiary, Athena Diagnostics, Inc., have agreed to sell all of the outstanding stock of Athena Diagnostics to Behrman Capital and certain of its affiliated investment funds for a gross consideration of approximately US$122 million. As a result of the sale of its approximately 80% stockholding in Athena Diagnostics, Elan expects to realise approximately US$82 million in cash after giving effect to certain contractual payments, including payments to Athena Diagnostics' other stockholders. The closing of the transaction, which is expected to occur in the first quarter of 2003, is subject to the receipt of regulatory approvals, third party consents and other customary closing conditions. The proceeds from the sale will form part of Elan's targeted proceeds from the divestment of assets as outlined in its recovery plan. "We continue to divest our non-core assets and enhance our overall cash position," said Dr. Garo Armen, chairman of Elan. "I am pleased to note that Behrman plans to continue to operate Athena Diagnostics as a stand-alone operation based in its current facilities in Worcester, Massachusetts and that the approximately 150 employees will have the opportunity to continue their employment with the company." In 2001, Elan recorded net revenue and operating profit for Athena Diagnostics of US$36.3 million and US$11.6 million, respectively. For the first nine-months of 2002, Elan recorded net revenue and operating profit for Athena Diagnostics of US$31.2 million and US$9.7 million, respectively. As at September 30, 2002 the carrying value of Elan's remaining stockholding in the Athena Diagnostics business amounted to US$26.0 million. Athena Diagnostics was originally acquired by Elan in 1996 as part of its acquisition of Athena Neurosciences, Inc. Athena Diagnostics is a commercial diagnostic laboratory, which provides esoteric testing services in the areas of neurogenetic diagnostics; peripheral neuropathy and paraneoplastic diagnostics; Alzheimer's disease diagnostics; and neutralizing antibody detection assays. The company also offers certain testing services to contract research organisations and pharmaceutical companies for use in clinical trials. Elan is focused on the discovery, development, manufacturing, selling and marketing of novel therapeutic products in neurology, pain management and autoimmune diseases. Elan shares trade on the New York, London and Dublin Stock Exchanges. CONTACT: Elan Corporation, plc Investors: (U.S.) Jack Howarth Phone: 212/407-5740 or 800-252-3526 or Investors: (Europe) Emer Reynolds Phone: 353-1-709-4000 or 00800 28352600 ELAN CORP: Wraps Sale of Assets to Abelcet, Receives US$360 MM -------------------------------------------------------------- Elan Corporation, plc (NYSE: ELN) announced the completion of the sale of its United States, Canadian and Japanese rights to Abelcet(TM) (injectible amphotericin B lipid formulation), and certain related assets to Enzon, Inc. (NASDAQ: ENZN). Elan has received a net cash payment of US$360 million from Enzon representing the total consideration, after agreed upon price adjustments, for the transaction that was previously announced on October 2, 2002. The entire proceeds from the sale will form part of Elan's targeted proceeds from the divestment of assets as outlined in its recovery plan. Elan is focused on the discovery, development, manufacturing, selling and marketing of novel therapeutic products in neurology, pain management and autoimmune diseases. Elan shares trade on the New York, London and Dublin Stock Exchanges. CONTACT: Elan Corporation, plc Investors: (U.S.) Jack Howarth Phone: 212/407-5740 or 800/252-3526 or Investors: (Europe) Emer Reynolds Phone: 353-1-709-4000 00800 28352600 ========= I T A L Y ========= TELECOM ITALIA: Finalizes Sale of 45% Holding in IMMSI ------------------------------------------------------ Telecom Italia S.p.A. announces that the sale of approximately 45% of IMMSI S.p.A's capital to Omniapartecipazioni S.p.A. was finalized today. As announced on 15 November, the sale price for 99,000,001 shares is 68.3 million euros, corresponding to 69 euro cents per share, with capital gains gross of tax for Telecom Italia of 50.2 million euros. ===================== S W I T Z E R L A N D ===================== ZURICH FINANCIAL: Has New CEO for Business in U.K. and Ireland ------------------------------------------------------------ Zurich Financial Services has appointed Geoff Riddell as Chief Executive of its General Insurance Business in the U.K., Ireland and Southern Africa. Subject to regulatory approval, he succeeds Patrick O'Sullivan, who moves to a new role as Zurich's Group Finance Director. Geoff Riddell joined Zurich Financial Services in the U.K. in 2000 to head its Commercial business and shortly thereafter was appointed to lead its Corporate and Government business. Before joining Zurich, he held management positions at American International Group, focusing on the international finance, reinsurance and retail insurance businesses. Geoff Riddell is a member of the ABI's General Insurance Council and Chair of the ABI Liability Committee. Geoff Riddell will report to Sandy Leitch, Chief Executive of Zurich Financial Services in the U.K., Ireland, Southern Africa (UKISA) and Asia/Pacific Business Division and work closely with John Amore, CEO of Zurich North America Corporate, in John's role as group-wide leader of Zurich's Non-life business. Commenting on Geoff Riddell's appointment, John Amore said: "The U.K. is a core market for Zurich Financial Services. I look forward to working closely with Geoff in developing a consistent group-wide approach to a profitable Non-life business''. Sandy Leitch added: "Geoff has demonstrated outstanding leadership capabilities over the last two years and is a worthy successor to Patrick. He has played a pivotal role in the transformation of our General business and I am delighted that he will now be leading this business forward." Geoff Riddell PERSONAL Born:1956 - age 46 Married:to Eileen with one daughter Jennifer Educated:Loretto in Musselburgh, Scotland The Queens College, Oxford Degree:Chemistry CAREER 1978 - 1982 Price Waterhouse CoopersAccountant 1982 - 2000 American International GroupFinance, IT, Strategic Planning and AdministrationUS and International Corporate Business, Facultative Reinsurance Placement and Administration 2000 - present Zurich Financial Services Initially Managing Director of Zurich Commercial. Soon after appointed Managing Director of Corporate andGovernment businesses. AFFILIATIONS Association of British Insurers Member of ABI General Insurance Council since 2000; Chairman of Liability Committee INTERESTS Sports:Hockey, Golf Zurich Financial Services is an insurance-based financial services provider with an international network that focuses its activities on its key markets of North America, the United Kingdom and Continental Europe. Founded in 1872, Zurich is headquartered in Zurich, Switzerland. It has offices in approximately 60 countries and employs well over 70,000 people. CONTACT: Zurich Financial Services UK Media and Public Relations 8022 Zurich, Switzerland Phone: +41 (0)1 625 21 00 Fax: +41 (0)1 625 26 41 Home Page: http://www.zurich.com =========================== U N I T E D K I N G D O M =========================== ABBEY NATIONAL: Likely to Announce Deep Cut in Dividend ------------------------------------------------------- Abbey National is likely to announce a dividend cut of up to 40% when it unveils its trading result to the City this week, according to market speculation. The company's chief executive, Lugman Arnold, may however delay a decision on the dividend until he posts full-year results in January, says the Scotsman. A bank spokesman dismissed the possibility of a cut of the total payout to shareholders from last year's 50p down to 30 p, and declined to comment. It is estimated that the bank would be able to save up to GBP290 million by cutting its dividend by 40%. Part of the proceeds is likely to be injected into troubled assurer, Scottish Mutual. Mr. Arnold is also expected to announce several changes as the company overhaul its balance sheet to restore investor confidence. The changes may include provisions of up to GBP750 million for its wholesale bank arm. According to the report, City analysts expect Abbey to undertake massive writedowns and dividend cut of up to 40%, strip out risks and increase provisions in the wholesale bank division, revitalize sales in its retail arm, slash costs, and inject fresh capital into Scottish Mutual. ARC INTERNATIONAL: Announces Results of Strategic Review -------------------------------------------------------- ARC International plc (LSE: ARK), a world leader in semiconductor and software technology licensing, announces the result of its strategic review and intention to return capital to shareholders. On November 1st 2002, ARC announced its intention to conduct a review of the strategic options available to the Company, including an analysis of the Group's capital structure, business plan and future liquidity requirements. In addition, the appointment of WestLB Panmure Limited as joint corporate broker and financial adviser to the Company was also announced. The Board promised substantive progress in November and can today deliver the outcome of the review. Strategy ARC's strategy remains to grow organically, increasing revenues through licensing, royalties and maintenance, whilst reducing costs across the business, forging strategic alliances and diversifying into new product areas. In addition, the Board believes that the Company can support significantly higher levels of turnover with its current infrastructure. The new management team has made significant improvements to the business during the course of this year, achieving growth in turnover, adding 23 ARCtangent processor licenses and successfully introducing the USB Now product and the A5 version of the ARCtangent processor. In addition, costs have so far been reduced by approximately o1m per quarter, the integration of all the acquired companies has been completed and the management team is now complete. A new board member has been appointed, Jez San, a founder of ARC International and the largest individual shareholder. The Board continues to work hard to develop strong relationships with all shareholders and views Mr San's appointment as a valuable addition to the Board. Along with a number of key strategic partnerships announced this year, the Intel Microelectronics Services business has recently added the ARCtangent processor to its IP library. Within its product offering, ARC has several new products that will be introduced in the next few months, which include a new generation of the ARCtangent processor as well as additional platform offerings. The Company also announced yesterday the acceleration of its expansion into the Asian market. Return of Capital As a result of the strategic review, and following discussions with shareholders, the Board believes that ARC has more than sufficient working capital funding to bring the Group to profitability on the basis of reasonably prudent assumptions. Consequently, ARC's Board intends to return o50m of capital to shareholders during the first half of the next calendar year in order to optimise the Company's capital structure and hence shareholders potential for future returns. The return of capital will be subject to shareholder and Court approval. Following the return of capital, ARC will have a strong balance sheet with sufficient cash resources to forge long term relationships with existing and prospective partners, licensees and suppliers, as well as having the flexibility to make modest complimentary acquisitions where appropriate. The Board and its advisers are currently examining the most effective method to return capital to shareholders. A further announcement will be made when this analysis is completed. Current Trading As announced at the third quarter results in October 2002, ARC believes that it continues to make meaningful progress towards achieving EBITDA breakeven and expects its financial performance for the year to fall within the current range of published analyst forecasts. Mike Gulett, CEO of ARC, commented: 'We have made good progress this year in our drive towards profitability and this remains our focus. We have won many important new customers and the recent addition of the ARC processor to the Intel Microelectronics Services library further endorses the strength of our technology. On the basis of these achievements I am very optimistic about ARC's future. Since WestLB Panmure came on board, we have rapidly completed a comprehensive review of the business. The results show that we have more than sufficient working capital funding to bring the Group to profitability and we therefore intend to return o50m of capital to shareholders during the first half of the next calendar year.' CONTACT: ARC International plc Mike Gulett, Chief Executive Officer Phone: 001 408 437 3404 Monica Johnson, Chief Financial Officer Phone: 001 408 437 3470 WestLB Panmure Phone: +44 (0) 20 7020 4000 Tim Linacre Andrew Godber Tulchan Communications Phone: +44 (0) 20 7353 4200 Julie Foster BRITISH ENERGY: Resumes Negotiations With British Nuclear Fuels --------------------------------------------------------------- British Energy is to continue its negotiations with British Nuclear Fuels regarding charges for nuclear fuel reprocessing. If successful, the deal could save the troubled nuclear generator up to GBP120 million a year, as the final agreement between the parties is understood to see BNFL slashing its annual charges for nuclear power reprocessing from GBP300 million to GBP180 million. It could also forge the way for charges to be re-negotiated with other key contractors to British Energy, says The Scotsman. The saving is seen to help British Energy pay the GBP650 million emergency loan it received from the government. A further renegotiation of fees with other contractors is also believed to help the company buy energy at prices above current market costs. British Energy is thought to be about GBP300 million short on these contracts. Sources close to both companies said it cannot yet be determined when the talks would be concluded; while a spokesman for British Energy declined to comment on the points disagreement between the parties. British Energy is meanwhile wrapping up a potential GBP500 million sale of its subsidiary in Canada. Observers believe the firm could also benefit from the sale of its Uranix operation to BNFL, which is thought to be ready to pay as much as GBP80 million for the unit. CONTACT: BRITISH ENERGY PLC 3 Redwood Crescent, Peel Park East Kilbride, Strathclyde G74 5PR, United Kingdom Phone: +44-135-526-2000 Fax: +44-135-556-5656F Home Page: http://www.british-energy.com BUSINESS A.M.: Publisher Fails to Attract Joint Venture Partner --------------------------------------------------------------- The future of Business a.m. remained uncertain after the Bonnier group, the paper's publisher, failed to find a joint venture partner for the loss-making financial and political daily. The Swedish publisher has employed merchant bank Lazard to find a partner for the business by the end of November-- a schedule deemed not so good by analysts. "The timing has been unfortunate in terms of corporate interest. Everyone who might have been interested has been focused on the SMG's sale of the Herald," says one senior Scottish media executive. Bonnier earlier intended to achieve a circulation of 19,000 copies a day by October 2002 with break even point coming in 2005 with a circulation of 35,000. But circulation reached only about 11,200 for most of 2001. Slump in advertising also compounded the trouble. According to the Scotsman, it is believed annual revenues at the paper are GBP4 million while costs amount to about GBP10 million. Business a.m. had been intended as a joint venture between the Mirror Group and Bonnier, but Mirror abandoned the partnership when it emerged that the project is a tabloid business daily. CONTACT: BONNIER Torsgatan 21 113 90 Stockholm, Sweden Phone: +46-8-736-40-00 Fax: +46-8-728-00-28 Home Page: http://www.bonnier.se EQUITABLE LIFE: Expresses Opposition to Winding up Calls -------------------------------------------------------- The Financial Services Authority opposed calls to wind up mutual assurer, Equitable Life, warning that Equitable's one million policyholders would suffer more from an administration process than if the firm continues operating. TCR-Europe reported last week that financial advisers had recommended winding up of Equitable Life to protect policyholders after the assurer warned it may not be able to pay bondholders interest that falls due next August. The mutual life assurer said it may cut payouts by up to 30% to save cash, and miss repayments on GBP346 million of bonds. Clients have been openly advised to withdraw while it is still possible. The report says, Linlithgow-based advisers Alan Steel Asset Management confirmed they had been advising clients with any surviving policies to exit as soon as possible. According to The Scotsman, Paul Braithwaite, of the Equitable Members Action Group, said the policyholders asked the FSA managing director John Tiner for a meeting, but had not yet received a response. MYTRAVEL GROUP: Secures Short-Term Status With Banks ---------------------------------------------------- MyTravel and its banks had reached an agreement necessary for the tour operator to continue as a going concern, say people close to the talks. The negotiations with Deutsche Bank and Citibank are expected to continue until late Monday, says the Financial Times. It is believed MyTravel has made progress on extending its GBP250 million credit facility, which would also enable its auditors, Deloitte & Touche, to seal its accounts for reporting on Tuesday. The travel group had issued three profits warning in five months, the last of which suspended the talks on the extension of the facility last month. The agreement with banks is believed to secure the company's short-term future, but group's long-term status remains uncertain, says the report. Accounting firm PricewaterHouse Coopers advises the bank, while Ernst & Young acts for the company. 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 P&O PRINCESS: Director Exercises Award Under Company's Plans ------------------------------------------------------------ On 21 November 2002, Peter Ratcliffe exercised an award granted to him under the Company's Deferred Bonus and Co-Investment Matching Plan. The award, over 214,976 shares, had originally been made by The Peninsular and Oriental Steam Navigation Company and had been rolled over into shares of P&O Princess Cruises plc at the time of demerger in October 2000. The award has been vested since the time of demerger. The exercise of the award gives rise to a tax charge which will be met from the proceeds of the sale of 50% of the Shares acquired under the award. This sale of 107,500 Shares took place on 21 November 2002 at a price of 490.49p per share. Mr Ratcliffe has transferred the remaining 107,476 shares to his wife. Shares required to satisfy the exercise of this award were held by the P&O Princess Cruises Employee Benefit Trust (the Trust). Following the exercise of the award by Mr Ratcliffe, the Trust holds a total of 1,540,483 Shares for the benefit of employees of the Company and its subsidiaries. Three directors of the Company, Lord Sterling, Peter Ratcliffe and Nick Luff, are potential beneficiaries of the Trust and are regarded for Companies Act purposes as being interested in all the Shares held by the Trust, although the Shares held are also for the benefit of other employees of the Company and its subsidiaries. Despite the technical interest in the Shares, a director will only be entitled to receive from the Trust that number of Shares to which he would be entitled on exercise of an award or option which has been granted to him. CONTACT: P&O Princess Cruises plc Caroline Keppel-Palmer Phone: +44 20 7805 1214 Phone: +44 7730 732015 ROYAL & SUNALLIANCE: Sells German Operations to Baloise ------------------------------------------------------- Royal & Sun Alliance Insurance Group plc announces that it has agreed to sell its German subsidiary, Royal & Sun Alliance Holding GmbH and its subsidiaries, including Securitas Bremer Allgemeine Versicherungs A.G. and Securitas Gilde Lebensversicherung AG, to the Baloise Group of Switzerland. The consideration of GBP58m (EUR 90 million) will be paid in cash on completion and will be subject to a completion accounting adjustment. In addition to the cash consideration, the deal is expected to release capital of around GBP 50m (EUR 79 million). As at 31 December 2001 the net consolidated asset value of Royal & Sun Alliance Holding GmbH was GBP 38m (EUR60 million) (German GAAP). Royal & SunAlliance will retain a presence in the German market through a branch of Royal International Insurance Holdings Ltd, which underwrites and services insurance programmes for its multinational clients. The business is to be sold as a going concern. The transaction is subject to certain conditions including normal regulatory approvals. Bob Gunn, Royal & SunAlliance's acting Group Chief Executive, commented, "As we announced on 7 November, Royal & SunAlliance has instigated a wide ranging programme of actions to reshape the Group into a leaner, more focussed business ableto deliver attractive returns to investors consistently across the insurance cycle. The sale of our German operations is part of our strategy to concentrate on businesses and markets where we can build a sustainable competitive advantage." As at 31 December 2001 Royal & SunAlliance's Gross Written Premiums through Royal & Sun Alliance Holding GmbH for property & casualty were GBP 132m (EUR 218m) and for life were GBP 43m (EUR 71m). CONTACT: Malcolm Gilbert Phone: +44 (0)20 7569 6138 Stephen Clark Phone: +44 (0)20 7569 6127 Karen Donhue Phone: +44 (0)20 7569 6133 ************ 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 * * *