/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/021129.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, November 29, 2002, Vol. 3, No. 236 Headlines * F I N L A N D * SONERA CORP: To Cooperate With SKV-Yhtiot in Broadband Services * F R A N C E * FRANCE TELECOM: State Plan Suggests EUR9 Billion Injection VIVENDI UNIVERSAL: Vodafone to Increase Offer for Cegetel * G E R M A N Y * DEUTSCHE TELEKOM: Cable Assets Sale to Fall Below Target - Report MOBILCOM AG: Has No Intention of Parting With 3G License * I T A L Y * BANCA POPOLARE: Fitch Lowers Individual Rating to 'C/D' * N E T H E R L A N D S * IFCO SYSTEMS: Reports Significant Improvement in EBITDA * P O L A N D * BRE BANK: Fitch Affirms Individual Rating at 'D' ELEKTRIM SA: Outlines Agenda of Shareholders' Meeting NETIA HOLDINGS: Fitch Withdraws Senior Unsecured Rating of 'D' * S P A I N * JAZZTEL PLC: Denies Talks Regarding Possible Uni2 Merger * S W I T Z E R L A N D * ABB LTD: Issues Report, Highlights Power And Automation Areas CREDIT SUISSE: Winterthur to Sell Portuguese Insurance Operations CREDIT SUISSE: Expands Bond Funds, Launches Three New Products * U N I T E D K I N G D O M * ABBEY NATIONAL: Issues 2002 Full Year Pre-close Statement ABBEY NATIONAL: Welcomes FSA Announcement on Polarisation ABBEY NATIONAL: Fitch Downgrades Long-Term Rating ANSBACHER & CO.: Fitch Lowers Individual Rating to 'C' BRITISH ENERGY: European Regulator Approves Government Loan EQUITABLE LIFE: Names Tyrrell Temporary Finance Chief INVENSYS PLC: Completes Rexnord and Drive Systems Disposals MYTRAVEL GROUP: Obtains Extension on Revolving Credit Facility PACE MICRO: Warns of Greater Than Expected Loss in Results ============= F I N L A N D ============= SONERA CORP: To Cooperate With SKV-Yhtiot in Broadband Services --------------------------------------------------------------- Sonera and the building management and real estate business SKV- yhtiot have signed an agreement on the provision of Sonera's broadband services to the housing companies managed by SKV- yhtiot. The agreement covers over 3,800 housing companies throughout Finland, i.e. about 90,000 apartments. In accordance with the agreement, the households in these housing companies managed by SKV have an opportunity to conclude an advantageous agreement on the use of broadband connections. "Along with the concluded agreement, it is possible for our customers to have important concentration benefits," says Jukka Linnavuori, Deputy CEO of SKV-yhtiot. "SKV offers us an opportunity to expand the delivery of our broadband subscriptions directly to housing companies, which is naturally a major growth opportunity for us. The consumer also wins by receiving an already negotiated package easily through the house manager of his own company ", states Kimmo Sepp"nen, Vice President of Sonera Living Ltd. The benefits of a broadband subscription include the speed and the fixed monthly price without local call charges. The subscription can very well be open even 24 hours a day - information retrieval gets easier as it is not necessary to open the machine separately every time. Due to the efficient access, it is easy and simple to use web services and to play web games, for instance. * * * SKV -yhtiot is formed by 55 regional companies owned by Suomen SKV Oy. SKV -yhtiot is an expert of real estate business and building management that is independent of the banks. The main message of its business idea appears in the company's name - SKV is the Finnish abbreviation of For Your Home. SKV employs more than 600 persons in duties of the real estate business and building management in 105 service offices. Last year, the company made about 6600 housing deals and estimates that the limit of 7,000 deals will be exceeded this year. The number of the customers of the company's building management amounts to about 4,500 housing companies and over 90,000 apartments. 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 neighboring 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 Vice President Kimmo Seppanen Phone number: 02040 64744 GSM: +358 40 7083936 Email: kimmo.seppanen@sonera.com SKV-yhtiot Development Manager Esko Lehtonen GSM: +358 400 481675 Email: esko.lehtonen@skv.fi E-mail: kimmo.seppanen@sonera.com esko.lehtonen@skv.fi =========== F R A N C E =========== FRANCE TELECOM: State Plan Suggests EUR9 Billion Injection ---------------------------------------------------------- The French government has a plan that could see troubled telecommunications group, France Telecom, receiving about EUR9 billion in cash. Under the scheme, the government would transfer its 54.5% controlling stake to a new public entity that could provide funds for the cash-strapped company and absorb thousands of employees as assets. People familiar with the plan told Financial Times that the assets could include local networks and other fixed line infrastructure. The move to set up a so-called EPIC entity is understood to be a major part of the company's financial restructuring plan, says the report. The vehicle is intended to support the state- controlled company until stock market conditions favors a jumbo rights issue or a mandatory convertible bond placement. EPIC will operate as an industrial entity that benefits from the higher debt ratings of a French state guarantee, and as a public- owned structure that is immune to takeover. The creation of EPIC is expected to provide France Telecom with immediate financial lifeline, while avoiding complications with European Union rules. The French government believes the funding under the plan does not constitute a state aid. The absorption of France Telecom's employees is also seen to help the telecommunications group reduce its workforce. Under the scheme, the staff would be subject to civil servant labor contracts, which are expected to retain their public servant status and their attractive benefits. VIVENDI UNIVERSAL: Vodafone to Increase Offer for Cegetel --------------------------------------------------------- Vodafone Group plans to increase its offer for French phone company, Cegetel SA, in anticipation of Vivendi Universal's move to increase its share in the phone operator. The British telecoms giant, which owns 15% of Cegetel, earlier offered EUR13.1 billion (US$13 billion) to take full control of the company which holds French mobile operator, SFR. Bloomberg cites the Financial Times saying Vodafone may move to increase its own share price, since the offer warrants a revaluation of Cegetel and other telecommunications companies. French media and entertainment company, Vivendi Universal, has recently secured financing to contest Vodafone's bid. The group was able to secure EUR2.3 billion (US$2.3 billion) after receiving EUR1 billion credit line from a group of 11 banks and a EUR1.3 loan to finance a bid for Cegetel. Vodafone offered EUR4 billion for BT's 26% stake, EUR2.3 billion for SBC's 15% stake, and EUR6.77 billion for Vivendi's 44% stake. Vivendi must at least match the offer for BT's stake, or accept Vodafone's bid for its 44% stake in the French mobile phone operator. The group has until December 10 to decide. ============= G E R M A N Y ============= DEUTSCHE TELEKOM: Cable Assets Sale to Fall Below Target - Report ----------------------------------------------------------------- The bids for the cable businesses of Deutsche Telekom are to fetch between EUR1.8 to 2.0 billion, which is below the EUR2.0 to 2.3 billion the company expects, says news agency Handelsblatt. AFX says Deutsche Telekom declined to comment on the report, which offers data not consistent with the projection the company announced on November 14. A spokesman for the fixed line operator also declined to comment on allegations that only two consortia out of the three bidders for the assets remained. Deutsche Telekom is raising EUR6.2 to 8.5 billion from non-core asset sales by the end of 2003. Analysts, though, are skeptical the management would be able to reach the target. Proceeds of the asset sales are intended to achieve debt-to- EBITDA ratio of around 3 by end-2003. At this ratio, the net debt is EUR49.5-52.3 billion--that is, granting that the group meets its 2003 EBITDA target of EUR16.7-17.7 billion. MOBILCOM AG: Has No Intention of Parting With 3G License -------------------------------------------------------- German mobile operator, MobilCom, has reiterated its intention to keep its 3G license after reports came out suggesting it is involved in talks relating to a possible buy-out. In a TCR-EU report last month, MobilCom chief executive officer, Thornsten Grenz, said he is keeping the 3G license until a buyer for its UMTS operations is found. According to Europemedia, a German media reported that MobilCom's supervisor Dieter Vogel planned to meet with prospective license buyers during the next few weeks. MobilCom spokesperson, Matthias Quaritsch, dismissed the information saying, "At present there is no need for us to separate from our UMTS license." According to the report, should MobilCom's UMTS assets, including the license, be sold off, France Telecom would get 90 % of the proceeds. MobilCom earlier planned to freeze UMTS operations and cut 1,000 staff. ========= I T A L Y ========= BANCA POPOLARE: Fitch Lowers Individual Rating to 'C/D' ------------------------------------------------------- Fitch Ratings downgraded Banca Popolare di Intra's Individual rating to 'C/D' from 'C'. The international rating agency also affirmed the Long-term and Short-term ratings of the bank at 'BBB+' and 'F2', respectively, but revised the Outlook to Negative from Stable. BPI's Support Rating has been maintained at '4'. According to Fitch, the action reflects growing concerns over the bank's ability to rebuild its capital base. BPI incurred Substantial unrealized losses on its securities portfolio in 2001 and in the first nine months of 2002. The bank planned to restore its Tier 1 capital ratio to over 6% by end-2002. Debt holders, however, seemed reluctant to support the move; only few of the holders of subordinated convertible debt maturing in 2003 chose to convert all their debt into equity early as anticipated. BPI also planned to raise further fresh capital in 2003. Fitch warns, however, of execution difficulties given the difficult market conditions. The rating agency foresees strong competition in the banking environment. ===================== N E T H E R L A N D S ===================== IFCO SYSTEMS: Reports Significant Improvement in EBITDA ------------------------------------------------------- The trading environment in Q3 continued to be challenging. While the European economies remained largely unchanged, Germany, specifically the retail market, sustained a continued downturn. The economic environment in the US also failed to show a substantial recovery. Despite these unfavorable conditions and the ongoing debt restructuring process, the company achieved 3.7% growth in revenues and 91.5% growth in EBITDA in Q3 2002; and 1.4% revenue growth and 24.2% EBITDA growth year to date 2002, compared with the previous year. The restructuring of the EURO 200m 10 5/8% Senior Subordinated Notes is due to be completed by the end of 2002 and the timing is in line with management expectations. As a result the company's debt will be reduced by EURO 200m plus the accrued interest of EURO 22.1m, for a total of EURO 222.1m, as the notes and the interest are exchanged in a debt for equity swap. Revenues: Total Revenues in Q3 2002 totalled US$93.9m compared to revenues of US$ 90.5m in Q3 2001, an increase of 3.7%. Year to date 2002 total revenues, increased by 1.4% to US$ 283.3m from US$ 279.4m in the same period in 2001. RPC revenues grew by 4.1% to US$38.3m compared to Q3 2001. Year to date 2002 revenues in this division amounted to US$108.3m and were unchanged compared to the same period in the previous year. RPC trips in Q3 2002 were 11.8% lower than in the same period of the prior year. Once again, the US RPC business performed strongly and Europe, excluding Germany, also developed in line with expectations. The shortfall in trips was mainly due to the German business, where the continuing unfavorable retail trading environment, as well as the uncertainty created by the debt restructuring process, negatively affected the business with German retailers. Pallet Services achieved revenues of US$52.3m in the third quarter 2002, an increase of 6.9% from Q3 2001. Year to date revenues in this division increased by 3.5% to US$162.7m from US$157.2m compared to the same period in 2001. As the Pallet Recycling business tracked GDP growth in the US, the crating business continued to contribute strongly. As a result of the national sales program, new contracts have provided an increase in used pallet supply as well as sales. Pallet Pooling Services (Canadian pallet rental pool) revenues declined from US$4.9m in Q3 2001 to US$3.4m in 2002 or 30.4%. Year to date revenues declined by 11.2%, from US$13.9 in 2001 to US$12.4m in the current year. Revenues in Q3 2003 were lower as a result of the elimination of the FLEX program in Q4 2001. This quarter is also a seasonally slow period for the continuing recycling business. EBITDA: Total EBITDA increased by 91.5% from US$6.8m in Q3 2001 to US$12.9m in Q3 2002. For the first nine months of 2002, the company achieved EBITDA of US$33.3m compared to US$26.8m in the same prior year period, an increase of 24.2%. The EBITDA performance reflects the strong upward trend in profitability since the beginning of 2002 from US$9.2m in Q1 2002, to US$11.1m in Q2 2002 to US$12.9m in Q3. Margins also improved significantly by 6.3 percentage points in Q3 2002 as well as 2.2 percentage points in YTD against the prior year period. The continuing strong EBITDA and respective margin performance is the result of the cost and efficiency measures that have been implemented by the management team over the last six quarters. The RPC division achieved EBITDA of US$8.9m in Q3 2002 compared to US$6.3m in Q3 2001, an increase of 41.0%. Year to date EBITDA increased 21.9% from US$18.3m in 2001 to US$22.2m in 2002. The strong improvement in the margin by 6.1 percentage points allowed a 4.1% revenue increase to be turned into a 41.0% EBITDA increase. This was achieved by increased revenue per trip and a reduced cost per trip as a result of better managed washing, transport and collection processes. EBITDA for the Pallet Services division amounted to US$4.7m in Q3 2002 compared with US$2.3m in Q3 2001, an increase of 107.6%. The company achieved EBITDA of US$13.6m in the first nine months 2002 compared with US$12.7 in the same period the previous year, an increase of 7.2%. The margin increased by 4.4 percentage points in Q3 2002 to 9.1% and 0.3 percentage points to 8.4% YTD 2002, compared with the prior year period. Comparisons with Q3 2001 are somewhat distorted due to the negative effects on the business following the events of September 11, 2001 in the United States. The YTD EBITDA growth reflects the continued strong focus on costs and process efficiencies, as well as improved controls. Pallet Pooling Services in Canada, achieved EBITDA of US$0.2m in Q3 2002 compared with US$0.4m in Q3 2001. Year to date 2002 EBITDA of US$0.2m compares to US$0.8m for the same period in 2001. The EBITDA was consistent and slightly above management's target as this division implements the restructuring measures following the problems it experienced in 2001. SG & A: Once again, significant savings have been made as the company has continued its aggressive review and control of all expenses. The company reduced SG&A expenses, as a percentage of sales, to 11.3% in Q3 2002 compared to 14.5% for the same period in the previous year; and from 14.1% to 11.5% for the nine months ended September 2001 and 2002, respectively. This was mainly achieved by overall headcount reduction, reducing legal and consulting expenses as well as a decrease in audit fees. Debt: Total interest-bearing debt, including capital lease obligations and the 10 5/8% Senior Subordinated Notes amounted to US$319.7m, as of the end of September 2002 compared to US$323.5m at end of June 2002. Senior debt decreased by US$3.7m against Q2 2002. As a result of the anticipated restructuring of the EURO 200m 10 5/8% Senior Subordinated Notes, the total interest-bearing debt will be reduced by EURO 200m or the respective amount in US$. Working capital: The working capital position has been reduced in Q3 2002 by US$25.2m to US$79.7m versus Q2 2002. This is primarily due to a decrease in accounts payable and other accrued expenses. Net income/loss: The company reports a net income of US$3.6m for the three months ended September 30, 2002. This compares to a net loss of US$98.8m in Q3 2001. For the nine months ended September 2002, the company recorded a net loss of US$37.9m, compared to a net loss of US$84.3m in the same period the previous year. For the first nine months of 2002, US$25.5m of the total net loss was primarily due to currency translation losses on the euro- denominated notes and, as such, represent a book loss. An additional amount of US$14.9m reflects the continuing accrual of interest expenses on the senior subordinated notes which will be exchanged for equity in the debt restructuring, which is planned to be completed at the end of this year. Excluding this currency translation book loss and the interest accrual for the senior subordinated notes, the recorded net loss would be a net gain of US$2.5m for the nine months 2002. To see Table: http://bankrupt.com/misc/Ifco.htm The numbers in the text refer to the company's continuing businesses only, from which Argentina (deconsolidated at end 2001) and ISL (terminated at end 2001) have been excluded. Furthermore, following a new supply agreement with SWS effective January 2002, granulate sales have also now been excluded from the company's revenue and EBITDA numbers. CONTACT: IFCO Systems N.V. Investor Relations Gabriela Sexton Phone: +49 89 744 91 223 =========== P O L A N D =========== BRE BANK: Fitch Affirms Individual Rating at 'D' ------------------------------------------------ Fitch Ratings affirmed the Long-term rating of Poland's BRE Bank at 'BBB' the Short-term rating at 'F2', the Individual rating at 'D' and Support rating at '3'. The Outlook for the Long-term rating remains Stable. The international rating agency notes that BRE benefits from sophisticated risk management systems and treasury products. It is also confident that the bank's lean structure will help it adapt to poorer market conditions and allow it to find sustainable sources of income in the future. Fitch, however, said that the institution has also been affected by current negative macro economic environment. In the first half of 2002, the bank registered net losses as a result of declining revenues, significant write-downs of equity stakes, increased provisions against irregular loans and losses reported by subsidiaries. BRE's equity investment activity, which has been an important contributor to the bank's profit, did not perform well in recent months either. The rating agency also warns of further write-downs on some of BRE's equity stakes. While saying that the bank's asset quality is better than the national average, Fitch also notes that BRE's reserve coverage is weak. As a result of poor economic environment, the bank has to provide new loan loss provisions in 2002. BRE's group costs increased but the raise did not reflect in its earnings. Benefits of the company's plan of staff rationalization are unlikely to come before 2003. Commerzbank is BRE's strategic shareholder. ELEKTRIM SA: Outlines Agenda of Shareholders' Meeting ----------------------------------------------------- The Management Board of Elektrim S.A. notifies all Shareholders that acting pursuant to 8 section 2 of the company Statutes and art. 399 1 of the Commercial Companies Code it convenes the Extraordinary Shareholders' Meeting to be held on 2o December 2002 at 10 hours in Warsaw at Panska 77/79 with the following agenda: 1.Points of order: a.opening of the Meeting, b.election of the Meeting's chairperson, c.election of the Tellers Committee, d.approval of the Agenda. 2.Passing resolutions regarding acknowledgement of the performance of duties in the year 2001 by the Management Board Members. 3.Passing resolutions regarding acknowledgement of the performance of duties in the year 2001 by the Supervisory Board Members. 4.Passing a resolution on filing a claim for curing damages caused when managing the company against former Management Board members 5.Passing a resolution on determining the number of Supervisory Board members. 6.Passing resolutions on electing Supervisory Board members in a block voting pursuant to the provisions of article 385 5 of the Commercial Companies Code. 7.Passing resolutions on electing Supervisory Board Chairman and Vice Chairman. 8.Passing a resolution on setting principles of remuneration for Supervisory Board members. 9.Passing a resolution regarding an increase in the company's share capital by the amount of PLN 4,200,000 through issuance of 4,200,000 ordinary bearer shares with the nominal value of PLN 1 one share with the exemption of preemption rights of the company's present shareholders. 10.Passing a resolution on amendments to the company Statutes. 11.Closing the meeting. The Management Board of Elektrim S.A. announces that shareholders may take part in the Meeting in person or by proxy. Representatives of legal persons should present updated excerpts from relevant registers listing the persons authorised to represent those entities. The person who has not been listed in the excerpt should bear a proxy. Co-owners of shares shall indicate their joint representative to participate in the Meeting. The proxy authorising to participate in the Meeting shall be in writing otherwise being deemed null and void. The Management Board of Elektrim S.A. announces that pursuant to art. 406 3 of the Commercial Companies Code in connection with art. 11 section 1 of the law dated 21 August 1997 Law on Public Trading of Securities (Journal of Law no 118, section 754 as amended) the right to participate in the Meeting of Shareholders is granted on the basis of depository certificates provided that they have been deposited in the company's office in Warsaw at 77/79 Panska Street, 4th floor, room no 413, tel. no 432 87 22 between 10.00 a.m. - 2.00 p.m. at least one week before the date of the Meeting, i.e. by 13 December 2002 (incl.), and are not withdrawn before the conclusion thereof. The Management Board of Elektrim S.A. announces that registration of attendance on 20 December 2002 will begin at 9.00 hours. Pursuant to the requirement of 402 of the Commercial Companies Code we present the wording of the proposed amendment to the company Statutes: Present wording of 10: "The resolutions of the General Meeting are approved by a majority of _ votes cast." Proposed wording of 10: "The resolutions of the General Meeting are approved by an absolute majority of votes" Present wording of 13.2: "The Supervisory Board Chairman and the Vice Chairman are appointed by the General Meeting from among the members of the Supervisory Board". Present wording of 13.2: "The Supervisory Board elects the Supervisory Board Chairman and Vice Chairman from among its members". Present wording of 5.1: "The company's share capital is PLN 83,770,297 (eighty three million seven hundred seventy thousand two hundred and ninety seven) and is divided into 83,770,297 (eighty three million seven hundred seventy thousand two hundred and ninety seven) bearer shares with a nominal value of PLN 1 per share". Proposed wording of 5.1: "The company's share capital is PLN 87,970,297 (eighty seven million nine hundred seventy thousand two hundred and ninety seven) and is divided into 87,970,297 (eighty seven million nine hundred seventy thousand two hundred and ninety seven) bearer shares with a nominal value of PLN 1 per share". In 16 section 8 is added with the following wording: 8. consent to sale or purchase in a single action or two actions or more actions with one entity, in a period lasting less than 12 months, of assets or contracting a liability of the value exceeding USD 1,000,000. NETIA HOLDINGS: Fitch Withdraws Senior Unsecured Rating of 'D' -------------------------------------------------------------- International rating agency, Fitch Ratings, on Wednesday withdrew the Senior Unsecured rating of 'D' for Netia Holdings BV, at the company's request. The rating was first assigned in October 1997. Netia Holdings B.V., Netia Holdings II B.V. and Netia Holdings III B.V. compose Netia Holdings SA's Dutch subsidiaries. ========= S P A I N ========= JAZZTEL PLC: Denies Talks Regarding Possible Uni2 Merger -------------------------------------------------------- Spanish alternative operator, Jazztel, denies holding negotiations with Uni2 regarding a possible merger in Spain. The telecommunications provider has informed Comision Nacional del Mercado de Valores, the Spanish capital markets regulator, of the matter, says Europemedia. The two companies discussed the issue in November last year, but talks were suspended when Uni2, owned by France Telecom, withdraw from the talks pending resolution of Jazztel's heavy debt burden. According to a previous TCR-EU report, the Spanish government is said to suggest measures promoting consolidation between Jazztel and Uni2. In August, Uni2 agreed to manage Jazztel's national long-distance merger network for three years beginning December. Jazztel operates a fiber-optic local access and backbone network and offers alternative local and long-distance voice services, including international connections, as well as data and Internet services, to small and mid-size businesses. Jazztel also offers wholesale carrier services to other telecom providers and holds licenses for fixed-wireless operations. ===================== S W I T Z E R L A N D ===================== ABB LTD: Issues Report, Highlights Power And Automation Areas ------------------------------------------------------------- ABB, the leading power and automation company, said today it invests roughly US$ 1.6 billion in research and order-related development each year. The announcement came as the company released the ABB Group Technology Report, a summary of achievements from its research and development teams working in laboratories around the world. "Research and development is the lifeblood of all technology- based companies," said J�rgen Dormann, ABB chairman and CEO. "We monitor this spending carefully, and all future research is knitted into the fabric of our business strategy - to help industry and utility customers become more competitive while keeping an eye on the environment." Research and order-related development spending was about seven percent of total revenue, despite difficult market conditions. About 75 percent of business was based on products developed in the past five years. The percentage of software-related patent first filings to total first filings rose by 4 percent to 27 percent last year. ABB's research and development is clustered around four key areas: power technologies, automation technologies, oil and gas technologies and applications of engineering and manufacturing technologies. Industrial IT, ABB's patented concept for linking products and services together with the information needed to run, service and maintain them, is the red line running thr ough all of the group's technology areas. "ABB technology is the backbone of many industries," said Markus Bayegan, ABB's chief technology officer. "Our technology platforms are designed to address customer needs with products and services that deliver more value faster, with high quality and reliability." Highlights from the report: a special medium-voltage transformer developed with a Canadian company; a fast transfer switch to improve security and quality of electricity grids; high power circuit breakers; new technology for making car windshields; wireless sensors for industrial use; software for robotic press brake tools; cleaner fuel technology; and micro-sensors which locate oil reservoirs by detecting micro-earthquakes. ABB's history of innovation stretches back more than 100 years and includes many breakthroughs: the world's first self-cooling transformer; the world's first high-speed locomotive using a direct drive system; one of the world's first industrial robots; even the world's first synthetic diamond. The group last week received top honors for wireless technology from the Wall Street Journal Europe. CREDIT SUISSE: Winterthur to Sell Portuguese Insurance Operations ----------------------------------------------------------------- Winterthur, a subsidiary of Credit Suisse Group, announced that it is selling its insurance subsidiary in Portugal, Companhia Europeia de Seguros, S.A., as well as its Portuguese pension subsidiary, Winterthur Pensoes, S.A., to Liberty International, a subsidiary of the Liberty Mutual Group. Winterthur Insurance and Winterthur Life & Pensions are refocusing their presence on markets in which they already have or can rapidly establish sustainable market positions. Manfred Broska, CEO of Winterthur Insurance, stated: "Following the divestitures of Winterthur International, Winterthur Austria and the non-life and life branches of Winterthur in France in 2001, this sale is a further key step in the implementation of Winterthur's strategy to focus on its core markets." Winterthur Insurance's principal market units are in Europe, with a particular focus on Switzerland (where it is market leader), Germany, Spain, the U.K., Italy and Belgium. For Liberty International, the acquisition of Winterthur's Portuguese business units marks the entry into the Portuguese insurance market, where Liberty Mutual intends to introduce its name alongside that of Europeia. Tom Ramey, President of Liberty International, commented: "Liberty International has a strong interest in the European market. We are enthusiastic about our entry into the Portuguese insurance market and about further consolidating our presence in southern Europe, following the acquisition of the Spanish subsidiaries of Hartford and Royal Sun Alliance in 2001." In 2001, Europeia recorded EUR 127 million (CHF 186 million) in gross non-life premiums and EUR 45 million (CHF 66 million) in gross life premiums, and Winterthur Pensoes managed EUR 13 million (CHF 19 million) in funds. With a market share of 3.6%, Europeia is Portugal's ninth largest non-life insurer and, with a market share of 1.0%, its fourteenth largest life insurer, measured in terms of gross premiums written in 2001. The details of the transaction will not be disclosed. Subject to approval by the authorities, the transaction is expected to be completed in the first quarter 2003. Credit Suisse Group Credit Suisse Group is a leading global financial services company headquartered in Zurich. The business unit Credit Suisse Financial Services provides private clients and small and medium- sized companies with private banking and financial advisory services, banking products, and pension and insurance solutions from Winterthur. The business unit Credit Suisse First Boston, an investment bank, serves global institutional, corporate, government and individual clients in its role as a financial intermediary. Credit Suisse Group's registered shares (CSGN) are listed in Switzerland and Frankfurt, and in the form of American Depositary Shares (CSR) in New York. The Group employs around 80,000 staff worldwide. As of September 30, 2002, it reported assets under management of CHF 1,221.8 billion. Winterthur Insurance Winterthur Insurance, a Credit Suisse Group division, is one of the leading European insurance companies. It offers private individuals and corporate customers a range of non-life insurance solutions through traditional and alternative distribution channels. Winterthur Insurance's principal market units are in Europe, with a particular focus on Switzerland (where it is the market leader), Germany, the United Kingdom, Italy, Spain and Belgium. In North America, Winterthur Insurance operates through several established regional insurance companies. Winterthur Insurance has more than 24,000 staff members. As of September 30, 2002, the company achieved a premium volume of CHF 14.5 billion. Winterthur Life & Pensions Winterthur Life & Pensions (Winterthur Life and subsidiaries), a Credit Suisse Group division, is one of the leading European life insurers. It offers individual and corporate clients tailor-made, local and international life insurance and pension solutions. Winterthur Life & Pensions achieved a premium volume of CHF 14.8 billion as of September 30, 2002, and reported assets under management of CHF 113.0 billion as of September 30, 2002. There are more than 7,000 people working for Winterthur Life & Pensions all over the world (around 15,000 including sales agents). Liberty Mutual Boston-based Liberty Mutual Group is a diversified international group of insurance companies and one of the largest multi-line insurers in the North American property and casualty industry. The group has more than USD50 billion in consolidated assets, more than USD13 billion in consolidated revenue and ranks 142nd on the Fortune 500 list of largest corporations in the United States. The A.M. Best company has rated Liberty Mutual "A+" (Superior). Along with being the leading provider of workers' compensation insurance, programs and services in the United States for 65 years, Liberty Mutual provides a wide range of products and services, including general liability, commercial auto and business property, group life and disability, private passenger auto and homeowners' insurance, and individual life and annuities. The company, which is celebrating its 90th anniversary in 2002, employs 35,000 people in more than 800 offices throughout the world. Liberty Mutual's website address is www.libertymutual.com. CREDIT SUISSE: Expands Bond Funds, Launches Three New Products -------------------------------------------------------------- Credit Suisse Asset Management is expanding its range of bond funds and has launched three new products, Credit Suisse Bond Fund (Lux) TOPS (Sfr), Credit Suisse Bond Fund (Lux) TOPS (Euro) und Credit Suisse Bond Fund (Lux) TOPS (US$) (subscription period: November 25 - December 13, 2002). The new bond funds are geared towards the evolving needs of investors and current financial market conditions. Due to the high levels of volatility and uncertainty in the equity markets, investors are turning to capital preservation products offering secure returns. Security and regular income are becoming increasingly important investment objectives. The current international fixed income market scenario is one of historically rock-bottom interest rates and attractive yield spreads on corporate bonds. The lackluster economic outlook and low inflation levels suggest that interest rates will stay low in the immediate future. However, if the economy starts to recover, there could be a tightening in monetary policy. Some investments, particularly in long-dated bonds, might lose value as a result. The Credit Suisse Bond Fund (Lux) TOPS investment funds are ideally positioned in this difficult environment because they pursue a special strategy that actively hedges the risk of a change in interest rates. "Investors in the funds can benefit both from the attractive returns of long-dated paper and from the low interest rate risk of short-term bond investments. This is because the fund assets are invested in bonds with long maturities, while derivatives are used to reduce the associated interest rate risk,". "Interest rate risk is therefore lower with Credit Suisse Bond Fund (Lux) TOPS than with traditional bond funds and is comparable to the risk of short-term bond investments," says Maurizio Pedrini, Head Fixed Income Portfolio Management at Credit Suisse Asset Management, explaining the investment strategy. A similar strategy has been used for some time with a Credit Suisse Asset Management product for institutional investors that boasts an impressive track record. Credit Suisse Bond Fund (Lux) TOPS funds can invest in bonds, notes and other fixed and variable interest securities. To minimize credit default risk, the investments are broadly diversified. The investment universe for the new funds comprises securities issued by public sector, private and semi-private borrowers with good credit quality on average (Standard & Poor's rating of AAA to BBB, or at least Baa3 with Moody's). By actively managing interest rates, the funds take account of market trends and use market opportunities to boost returns. Credit Suisse Bond Fund (Lux) TOPS are security and income- oriented investments that limitavoid foreign currency risks (max. 10%) and reduce interest rate risks. The special investment strategy means that Credit Suisse Bond Fund (Lux) TOPS can be expected to outperform money market investments in the medium term. Fund details Name of fund: Credit Suisse Bond Fund (Lux) TOPS (Sfr) Fund classes: Tranche A: income Tranche B: capital growth Swiss Securities Numbers: A: 1 498 944 B: 1 498 946 ISIN: A: LU0155951675 B: LU0155952053 Fund currency: CHF Management fee p.a.: 1.00% Financial year: October 1 - September 30 Fund domicile: Luxembourg Fund manager: Credit Suisse Asset Management, Zurich Subscription period: November 25 - December 13, 2002 Name of fund: Credit Suisse Bond Fund (Lux) TOPS (Euro) Fund classes: Tranche A: income Tranche B: capital growth Swiss Securities Numbers: A: 1 498 937 B: 1 498 940 ISIN: A: LU0155950867 B: LU0155951089 Fund currency: EUR Management fee p.a.: 1.00% Financial year: October 1 - September 30 Fund domicile: Luxembourg Fund manager: Credit Suisse Asset Management, Zurich Subscription period: November 25 - December 13, 2002 Name of fund: Credit Suisse Bond Fund (Lux) TOPS (US$) Fund classes: Tranche A: income Tranche B: capital growth Swiss Securities Numbers: A: 1 498 949 B: 1 498 955 ISIN: A: LU0155953028 B: LU0155953705 Fund currency: USD Management fee p.a.: 1.00% Financial year: October 1 - September 30 Fund domicile: Luxembourg Fund manager: Credit Suisse Asset Management, Zurich Subscription period: November 25 - December 13, 2002 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 USD 819.6 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 September 30, 2002, Credit Suisse Asset Management employed 2,270 people worldwide and had global assets under management of approximately USD 284.3 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. The representative in Switzerland is Credit Suisse Asset Management Funds, Zurich. The paying agent in Switzerland is Credit Suisse, Zurich. Past performance is not necessarily a guide to future returns and the value of units in the funds and any income from them may fall as well as rise and is not guaranteed. All estimates and opinions represent a subjective assessment and may be changed at any time without notice. Unless otherwise stated, all data is unaudited. This document does not constitute an offer or solicitation to purchase units in the funds. Subscriptions are only valid on the basis of the current prospectus and latest annual report (or half-yearly report, if this is more recent). Prospectuses, terms and conditions and copies of the most recent annual and half-yearly reports may be obtained free of charge from Credit Suisse Asset Management Funds, Zurich or any Credit Suisse Group bank in Switzerland. CONTACT: Sandrine Mehr Credit Suisse Asset Management Corporate Communications Phone: +41 (0)1 333 4248 =========================== U N I T E D K I N G D O M =========================== ABBEY NATIONAL: Issues 2002 Full Year Pre-close Statement --------------------------------------------------------- Abbey National will be holding discussions with analysts ahead of its close period for the full year ending 31 December 2002. This statement outlines the information that will be covered in those discussions. At the full year results presentation on 26th February 2003, the Group's Chief Executive, Luqman Arnold, will present in detail the new Group strategy. It will build on the strategy of re- focusing on personal financial services in the UK, announced at the interim results. Updates on the cost reduction programme and on the Group's dividend policy will also be provided at that time - with an expectation that the present dividend level will not be sustained. The Group will also continue the practice adopted at its half- year results of increasing transparency of its financial reporting enabling clear external assessment of business performance as well as of the exposures still carried by the Group. Today's statement: (i) outlines current performance, with second half 'trading' profit before tax expected to be below the first half for the Group, but with a stronger performance from our personal financial services businesses; (ii) identifies certain charges and accounting changes that, based on our current expectations, are likely to in aggregate produce a loss at the level of the Group's full year 'headline' results; and (iii) gives an update on strategic direction, ahead of the full presentation scheduled for 26th February. Abbey National has begun the process of reinvigorating its U.K. personal financial services businesses, with positive early signs on costs, market share and business quality already evident. Strong focus is being given to improving earnings quality and restructuring the business portfolio to one less exposed to adverse credit and equity markets. Much more remains to be done over the coming months. Trading Update - Ongoing Financial Performance The following analysis is before the impact of material charges and accounting changes, which are outlined later in the statement. Retail Bank In the Retail Bank, profit before tax (PBT) for the second half of 2002 is expected to be broadly in line with the first half. This is despite the impact of planned spread reduction from 1.82% in the six months to June, to around 1.75% for the second half. Net interest income is running at levels similar to the first half, with strong new business volumes offsetting the reduction in spread. Non-interest income is expected to be comparable to first half levels, despite a reduction in Abbey National Life profits. Operating expenses in the second half are running modestly ahead of costs incurred in the first six months, reflecting increased marketing spend. This level is nevertheless expected to be around 5% lower than originally planned as the Group cost programme takes effect. Growth in assets is expected to result in a second half credit charge slightly ahead of the first half. Credit quality however remains excellent, with continued improvements in terms of arrears and properties in possession through the second half to date. Wealth Management and Long-Term Savings PBT in this division is expected to be modestly ahead of the first half. Prior to changes in embedded value accounting (see below), new business profits in the life businesses are running slightly below first half levels reflecting planned reductions in 'with profit' sales; in force profits are expected to be comparable to the first half. The established Wealth Management businesses are expected to deliver an improved second half performance, whilst losses at cahoot have continued to fall as expected. First National earnings are expected to be similar to the first half. Wholesale Banking By the end of 2002, risk-weighted assets are expected to be below o35 billion, compared to around o40 billion at the 2001 year-end. Income before write-offs for the Wholesale Bank is consequently running below first half levels, with the business also constrained by limited new business flows and poor trading conditions. Second half operating expenses are expected to show a decline on the first half levels as the cost programme takes hold. Overall, this is likely to result in profits, pre- provisioning and losses on asset disposals, lower than the first half. Provisioning is covered later in this statement. Group Infrastructure The charge reported in Group Infrastructure is expected to be around 50% higher than the first half, principally reflecting increased interest expense associated with capital injections into the Life businesses, new capital issuance, and an increase in operating expenses relating to a variety of one-off items. Group Summary As a result, excluding Wholesale Bank provisioning and before the material impact of certain costs, charges and accounting changes described below, the Group is expecting to report profit before tax for the second half of 2002 somewhat below the first half. The contribution from its personal financial services businesses is expected to be comparable to, or slightly ahead of, the first half, with reduced profits in Wholesale Banking and increased costs in Group Infrastructure. On this basis, operating income across the Group is expected to be down slightly on the first half of the year, largely due to the planned reductions in risk-weighted assets in the Wholesale Bank and increased central interest costs. Second half operating expenses are expected to be modestly up, but with a declining trend expected as the Group's cost programme takes hold. Retail credit quality remains very strong. Trading Update - Personal Financial Services New Business Flows Gross mortgage lending is running around 40% ahead of the first half, with net lending running at even higher levels and on track to deliver a significantly improved market share in the second half of the year, reflecting increased focus on lending and retention. However, we continue to maintain a cautious stance on credit quality. Credit card openings through the Abbey National and cahoot brands in the second half are expected to again exceed 100,000, with personal bank account openings expected to exceed 200,000 over the same period. Deposit inflows in the second half are forecast to be significantly better than in the first half. Investment new business premiums (APEs) are running below last year's levels. However, Abbey National Life second half new business levels in total are running ahead of the same period last year, reflecting success in rotating the product set, with ISA and Unit Trust sales expected to be almost double last year's levels. From 2003, the alliance with Prudential will further offset the impact of reduced 'with profits' sales. Sales of general insurance policies are running around 10% ahead of the same point last year, and are up on the first half, benefiting from the successful roll out of new product offerings and platforms. Scottish Provident protection new business levels also continue to be strong, with year-on-year new business APEs expected to be up by around 50%. Risk Management, Material Charges and Accounting Policy Changes The financial impact of certain of the following charges and accounting policy changes will depend in part on the capital markets during the balance of the year and their year-end closing levels, as well as outcomes of the strategic review referred to herein. Most of the items are 'non-cash' and those relating to goodwill do not impact on capital ratios. Nevertheless these charges in aggregate will have a material impact on the Group's core Equity Tier 1 ratio which otherwise would have been comparable to that reported at the interim stage. Management are committed to rebuilding relevant ratios and to a continuing focus on conservatism in capital and risk matters. Life Assurance In its year-end accounts, Abbey National plans to change the ongoing accounting treatment of embedded value in its life insurance businesses such that period end, rather than smoothed, market values are used. For indicative purposes, the 2002 impact of embedded value re-basing using the FTSE 100 level of 4040 at the end of October would be in the region of o500 million post tax. This takes into account the additional impact of increased guarantee liabilities resulting from markets being at lower levels and the adoption of a more conservative equity backing assumption for the 'with-profits' funds. In addition, there would be a smaller prior year adjustment. There may also be further smaller charges arising from assumption variances and guarantee provision, incurred as a result of the completion of risk management and earnings 'quality' reviews in this area. Wholesale Bank Provisioning The impact of movements in specific stressed credits and capital markets generally prior to the year-end will be influential in determining the extent of further provisioning required in the Wholesale Bank, as will the 'Portfolio Businesses' strategy referred to in the Strategic Review section of this statement. However, the marked deterioration in credit markets since June means that provisions and related charges are already expected to be materially above the previous guidance. Inter alia, these will be reflective of loan and bond exposures in the power sector and other risk concentrations in the bond portfolio, private equity and airline leasing. Goodwill writedowns The Group will provide for significant goodwill write-downs relating to certain past acquisitions. Other items Other charges will include the expensing of stock option costs and related changes in hedging practice, one-off costs associated with the 2002 component of the Group cost programme, and a back- dating of increased pension costs to earlier in the year, arising from the triennial review due to be completed in November. Disclosure In relation to the above, further disclosure will be given at the year end results announcement on the Group's risk profile including guarantee liabilities in its 'with profits' funds, the composition of its wholesale securities and credit portfolios, the Group pension fund deficit and any other relevant items. It is expected that the combination of provisioning and disclosure will allow better ongoing external assessment of 'fair value' exposures (some of which are not covered in the 'mark to market' disclosures to date, or are understated relative to true disposal levels), concentration risk (such as to the US economy) and risk reduction activities. Strategic Review Abbey National is in the middle of a wide-ranging and intense strategic review, covering business, financial and risk aspects of its activities. An immediate goal of this review is to establish a robust risk management and control framework, within which management will move as rapidly as markets permit to align exposures more closely to the Group's risk tolerance whilst avoiding unnecessary value destruction. Provisioning together with enhanced disclosure will provide a strong and on-going level of transparency. The key objective of this review is to deliver a compelling future strategy and business, built around the customer, targeting a competitive, efficient and profitable leadership position in the Group's core U.K. personal financial services franchise. It will serve the full range of U.K. consumers' financial needs, both directly and through intermediaries. Under the new strategic direction, our core businesses are those with competitive advantage that leverage brand and franchise strengths. Those parts of the Wholesale Bank, which are relevant to this strategy, will be incorporated into the new Personal Financial Services business. It is intended to enhance the productivity or scale of businesses where necessary. Other portfolios of the Wholesale Bank as well as certain other businesses will be placed in a new 'Portfolio Businesses' unit. Management of this unit will be responsible for executing a medium term strategy to reduce or exit these portfolios and businesses, whilst optimising the value captured for shareholders. Final decisions have not yet been reached as to which businesses will be included in the Portfolio Businesses unit. However, full disclosure will be made to allow shareholders to track performance. These actions will progressively release capital for investment in core activities or for return to shareholders as part of, or supplemental to, the dividend. The full year results announcement will provide details of this strategy, implementation plans and a new integrated organisation that will replace the current Group structure. The functional approach will provide greater clarity of the organisation and economics of distribution and production; it will increase business momentum and raise accountability through greater internal and external transparency and significantly facilitate and accelerate cost savings. Cost reduction targets and new Key Performance Indicators to be used internally will be disclosed externally and reported alongside financial results on an ongoing basis as part of the drive towards a stronger performance culture. Abbey National is aware of the interest of shareholders in its dividend policy. This policy must reflect both the current and future capital position of the Group, as well as the appropriate payout ratio relative to its core cash earnings capacity. Although, final guidance on this issue can only be prudently provided once the strategic and financial reviews are completed, the present dividend level is not expected to be sustained. Luqman Arnold, Group CEO, said: "Abbey National has an outstanding brand and a core franchise of over 15 million customers across the United Kingdom. We enjoy both the scale and scope necessary to compete successfully in our core Personal Financial Services markets. We are engaged in a fundamental strategic review whose prime objective is straightforward - to deliver outstanding service, advice and solutions to our personal and intermediary clients across the full range of banking, mortgage, insurance and long-term savings products. We will succeed by focusing all our human and financial resources to serve our customers. We will be the largest financial services organisation in the country dedicated to personal financial services. We intend also to be the most successful. Rigorous implementation of this strategy will optimise value and maximise total shareholder returns. As part of this exercise, we need to manage our risks and capital more effectively and to reduce progressively our exposure and resource commitment to those activities that are not central to our core personal financial services strategy. I have been impressed by the open culture of the firm and the evident dedication of our staff. We expect our core franchise to respond well to determined and focused reinvigoration. Because of the complex and inter-related issues that need to be addressed and reviewed by the Board of Directors, we do not intend to provide any further specifics on financial or strategic matters until the year-end announcement. At that time we will also deliver a significantly higher level of financial, risk and performance transparency." Future diary dates: 2002 Full Year Preliminary Results Announcement 26th February 2003 2003 Interim Results 30th July 2003 CONTACTS: Thomas Coops (Director of Corporate Communications) Phone: 020 7756 5536 Jon Burgess (Head of Investor Relations) Phone: 020 7756 4182 ABBEY NATIONAL: Welcomes FSA Announcement on Polarisation --------------------------------------------------------- Abbey National welcomes the new opportunities the FSA decision on polarisation, announced, will provide for consumers. Consumers should have every chance to receive transparent and clear advice on a wide choice of products, in order to encourage savings. New initiatives, which will reduce the complexity around the distribution of financial products, will bring benefits to consumers. Abbey National already operates a multi-distribution strategy because it believes consumers should have access to advice through the channels that most easily and effectively meet their needs. Andrew Pople, Managing Director of Abbey National's Retail Banking said; " We have already taken steps towards bringing the benefits of a de-polarised regime to our customers, with the recently announced reciprocal agreement with Prudential U.K. We will be selling Prudential's market-leading With-Profits Bond in our branches for an initial four-year period from the end of 2002. We will also tailor our range of life protection products for Prudential to sell through its multi-channel distribution network. "In retail branches we look forward to being able to offer more choice of products alongside our current range". Ambrose McGinn, Director Sales and Marketing, Abbey National for Intermediaries said: "Abbey National for Intermediaries was created earlier this year in anticipation of these changes and we welcome and support the move. The new regime will give more choice and freedom to a whole range of providers and intermediaries whilst ensuring that customers get the best deal possible. The title Independent Financial Adviser will mean exactly what it states and that can only be beneficial to our industry". ABBEY NATIONAL: Fitch Downgrades Long-Term Rating ------------------------------------------------- Fitch Ratings downgraded its long-term rating for Abbey National Plc to 'AA-' from 'AA'. The Outlook for the Long-term rating is Stable. The ratings affirmed are: -- Short-term rating at 'F1+' -- Individual rating at 'B', and -- Support at '2' As a result of the rating action, Abbey National's subordinated debt securities, preference shares and other innovative Tier 1 instruments rated by Fitch have also been downgraded, to 'A+' from 'AA-'. Fitch also assigned a Long-term rating of 'AA-' and a Short-term rating of 'F1+' to Abbey National Treasury Services Limited, Abbey National's guaranteed wholesale banking subsidiary. According to Fitch, the action reflects further deterioration in asset quality in parts of Abbey National's wholesale banking operations. As a result, a significant increase in provisions and write-downs in 2HO2 is necessitated. Fitch comments "sub-investment grade and private equity exposures remain significant in relation to the bank's equity at a time of great volatility in the credit and equity markets." The rating agency also warns of possible write-downs on the embedded value of Abbey National's insurance operations and against goodwill, which will result in a headline loss in 2002. Considering dividend cuts and reduction in weighted risks in the wholesale bank for 2002, Fitch says that Tier 1 ratio will consequently fall from the 9% reported at end-1H02. The rating agency noticed that capital flexibility has been affected by Abbey's insurance operations. Fitch, however, is confident in the management's drive to rebuild capital adequacy. ANSBACHER & CO.: Fitch Lowers Individual Rating to 'C' ------------------------------------------------------ Fitch Ratings lowered the Individual rating for Ansbacher & Co to 'C' from 'B/C'. It meanwhile affirmed the company's support rating of '4' as a result of the presence of its shareholder FirstRand Limited of South Africa. According to the international rating agency, the action "reflects profitability weakened by margin pressure in a low interest rate environment, the impact of a reduced capital base and exposures to Argentine and U.S. corporate debt." While recognizing the company's efforts to mitigate the effects of these pressures, the rating agency proceeded to say that in the short term the measures may not be able to offset further margin pressure due to the recent lowering of U.S. interest rates. Fitch assures that the quality of Ansbacher's loan book to private clients remains sound and well secured. The agency also notes the absence of adverse quality trends for the loan book during the past few years. Fitch assures that with shareholder FirstRand Limited, which has a risk weighted capital adequacy of 24%, the group remains well capitalized. The agency, however, warns that the ratio is likely to be managed lower through either asset growth or dividend payments. BRITISH ENERGY: European Regulator Approves Government Loan ----------------------------------------------------------- The European Commission has officially cleared the government loan for struggling British Energy, confirming that the funding does not break European Union rules. The European Commission said: "The aid was warranted on the grounds that there is a risk of disruption in the supply of electricity in the United Kingdom and to ensure nuclear safety." It was also given with a full restructuring in place by March 9, 2003. The move is seen to open the way for the much needed extension of the loan--failure to achieve of which will result to the nuclear generator going into administration. The GBP650 million loan package expires Friday. In case the government decides to extend the package, the funding may now be increased up to GBP899 million, with an additional GBP276 million allotted for "identified contingencies." Under the terms approved, British Energy has to repay the state loans at market interest rates, and must not use state credit facilities for capital expenditure. The nuclear generator has so far drawn 60% of the facility. EQUITABLE LIFE: Names Tyrrell Temporary Finance Chief ----------------------------------------------------- Equitable Life temporarily assigned James Tyrrell, former group finance director at Abbey National, finance chief following the recent resignation of finance director Charles Bellringer. Mr. Tyrrell's duty as finance consultant starts immediately, says The Scotsman. The assurer's former chief finance investment officer indicated to step down following the publication of the company's latest financial reports and completion of the compromise scheme earlier this year. Financial advisers had earlier called for the winding up of the mutual assurer to protect policyholders after the company warned it may not be able to pay bondholders interest that falls due next August. The Financial Services Authority, however, opposed the idea; warning that Equitable's one million policyholders could suffer more from an administration process than if the firm continues operating. INVENSYS PLC: Completes Rexnord and Drive Systems Disposals ----------------------------------------------------------- Invensys plc, the international production technology and energy management Group, announces that it has completed the sale of its Rexnord business to the Carlyle Group for the agreed consideration. Invensys has also completed the sale of its Drive Systems business to Eurotherm Drives Holdings Limited, a company formed by the management team of Invensys Drives Systems and their investment partner, Compass Partners European Equity Fund L.P. The sale proceeds from both disposals will be used by Invensys to continue to reduce its level of indebtedness. About Invensys plc Invensys plc is a global leader in production technology and energy management. The group helps customers improve their performance and profitability using innovative services and technologies and a deep understanding of their industries and applications. Invensys Production Management works closely with customers in order to drive up performance of their production assets, maximise their return on investments in production technologies and remove cost and cash from their whole supply chain. The division includes APV, Baan-Wonderware-Avantis, Eurotherm, Foxboro, SIMSCI/Esscor and Triconex. These businesses address process and batch industries -- including oil, gas and chemicals, food, beverage and personal health care -- and the discrete and hybrid manufacturing sectors. Invensys Energy Management works with clients involved in the supply, measurement and consumption of energy and water, to reduce costs and waste and improve the efficiency, reliability and security of power supply. The division includes Energy Management Solutions, Appliance Controls, Climate Controls, Building Systems, Global Services, Metering Systems, Powerware and Home Control Systems. These businesses focus on markets connected with power and energy infrastructure for industrial, commercial and residential buildings. The company also serves the specialised rail, wind-power and electronic manufacturing (power components) markets through Invensys Rail Systems, Hansen Transmissions and Lambda, respectively, in its Development division. Invensys operates in more than 80 countries, with its headquarters in London. For more information, visit www.invensys.com. CONTACT: Duncan Bonfield Phone: +44 (0)20 7821 3712 Fax: +44 (0)20 7821 3709 Invensys plc Simon Holberton Tel: +44 (0)20 7404 5959 Fax: +44 (0)20 7831 2823 Brunswick MYTRAVEL GROUP: Obtains Extension on Revolving Credit Facility -------------------------------------------------------------- MyTravel's banks have finally extended the tour operator's GBP250 million revolving credit facility, says the Scotsman. The report, however, did not mention the amount committed by the banks as the figure is still uncertain. The reprieve means the group can now publish its overdue results for the year to the end of September on Wednesday and continue operating until at least the end of next year. The reporting of the tour operator's financial results was suspended Tuesday when one of the 23 banks involved in the negotiations--though to be Commerzbank, says the report--refused to sign the deal. Lawyers examining the final draft contract reportedly found a technical problem with the agreement. The group last month announced its third profits warning in five months. It also disclosed a hole in its accounts and indicated to scrap its final dividend. MyTravel's lead banks include Bank of America, Citibank and Deutsche Bank. PACE MICRO: Warns of Greater Than Expected Loss in Results ---------------------------------------------------------- Prior to entering its interim results close period, the company is providing the following update. As indicated in the AGM Statement on 10 September 2002, trading conditions within the global digital tv market have been difficult. Our performance in the U.K. remains solid. Sales in mainland Europe and the U.S. are however not yet meeting targets, despite having recently started shipments to our second major U.S. customer. Accordingly the loss anticipated for the six months to 30 November 2002 will be greater than anticipated. The previously announced cost savings plan, which will reduce overheads by approximately o15m in a full year, was achieved by the end of September. Further actions are being taken to lower the cost base to a level that is commensurate with reduced revenue expectations. With shipments of U.K. cable inventory in line with our expectations, cash balances remain positive. In spite of the present market difficulties, we remain confident that Pace's technological abilities and commercial relationships will enable us to take advantage of the emerging opportunities in all our geographic markets. *********** 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 * * *