/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/021220.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, December 20, 2002, Vol. 3, No. 252 Headlines * F I N L A N D * SONERA CORPORATION: Disputes EUR45 MM Claim Filed by Broadband * F R A N C E * BUFFALO GRILL: Under Investigation for Serving British Beef VIVENDI UNIVERSAL: Sells Another Holding at a Huge Discount VIVENDI UNIVERSAL: Raps Shareholders Group for Misinformation * G E R M A N Y * ALLIANZ AG: Influential CEO Steps Down Amid Dimming Prospects BINTEC COMMUNICATIONS: Files for Insolvency in Nuremberg * N E T H E R L A N D S * ASML HOLDING: Refines Guidance for Second Half 2002 * S W I T Z E R L A N D * ABB GROUP: S&P Cuts Unsecured Rating Due to New Credit Line CREDIT SUISSE: CEO Rejects Severance Pay * U N I T E D K I N G D O M * COMPASS GROUP: Ratings Unchanged Despite Plans to Sell Two Units EQUITABLE LIFE: Chair Vows to Sue Regulators If Found Negligent EUROSTAR II: Fitch Downgrades Investment Portfolio Ratings LONDON CLUBS: Sells Emerald Safari in South Africa ============= F I N L A N D ============= SONERA CORPORATION: Disputes EUR45 MM Claim Filed by Broadband -------------------------------------------------------------- Sonera Corporation filed yesterday its response to the writ by Broadband Mobile AB's bankruptcy estate served on November 8, 2002. The response, which simply said that Sonera contests the claims, was filed with the district court of Asker & Baerum. The court has not yet announced the date of the hearing, which is not expected to take place until end of 2003. Broadband Mobile AB's bankruptcy estate has claimed a total of NOK332 million or EUR45 million from the shareholders of Broadband Mobile, Enitel ASA (50%) and Sonera Corporation (50%). The claim is based on the shareholders' commitment to provide adequate financial resources to the investment. The commitment was given at the time of applying for the UMTS license. CONTACTS: SONERA CORPORATION Sonera UK Ltd. (Carrier Networks) 20 Garrick Street 2nd floor London WC2E 9AX UK Phone: +44 20 7664 7812 Fax: +44 20 7664 7878 Contact: Jyrki Karasvirta Vice President, Acting Head of Corporate Communications =========== F R A N C E =========== BUFFALO GRILL: Under Investigation for Serving British Beef ----------------------------------------------------------- The chief executive of steak house chain Buffalo Grill is facing an investigation for allegedly violating an embargo on imports of U.K. beef implemented to control the spread of mad cow disease, Dow Jones said Wednesday. The report said Christian Picard was among four people questioned by investigators over suspicions the restaurant served U.K. beef until 2000 - four years after the government first banned the meat. The four were detained as part of wider investigation opened two years ago into the sources of variant Creutzfeldt-Jakob Disease, a fatal brain-wasting disease linked to the consumption of contaminated beef. At least four people have died of the disease in France, Dow Jones said. The judicial officials said two executives of Distrigroupe, a subsidiary of Buffalo Grill that supplies the chain's meat, will likely be placed under investigation - one step short of formal charges - in connection with the probe. Their identities were not revealed. According to Dow Jones, the European Union banned imports of U.K. beef in 1996 after the first cases of bovine spongiform encephalopathy, or mad cow disease, were identified. VIVENDI UNIVERSAL: Sells Another Holding at a Huge Discount ----------------------------------------------------------- Vivendi's fire sale involving assets acquired during the tenure of ex-CEO Jean-Marie Messier continued this week, as it announced Wednesday an agreement to return its 10% stake in EchoStar Communications Corp. at a price far less than the original price tag. According to The Daily Deal, the company bought the stake for US$1.5 billion on December 14 last year. It will return the stake to the satellite television provider for as little as US$1.066 billion or a discount of US$400 million. Originally heralded as an eight-year strategic alliance that was supposed to give Vivendi a piece of the action in developing programming and interactive television services, the partnership will be cut short as the French conglomerate needs cash to trim down its US$20 billion debt-pile. The Daily Deal says terms of the deal call for EchoStar to convert Vivendi's Series D preferred stock into about 57.6 million of EchoStar Class A common stock. Post-conversion, EchoStar will retire the shares at a price of $18.50 per share, valuing the entire transaction at $1.066 billion. The $18.50-per-share price represents a 15% discount to EchoStar's Tuesday close of $21.80 and a nearly 29% discount to the $26-per-share price of the original deal, the report says. Taking the average price of $20.15 per EchoStar share for the 20 trading days preceding Wednesday's announcement halves the discount to 8%. The Daily Deal tried but failed to get additional information from Vivendi and EchoStar press officials, who had only furnished the media an official statement announcing the deal. As a result of the transaction, Vivendi will forfeit all contingent value rights granted it under the original deal, the report says. Those rights called for Vivendi to receive a maximum payment of $225 million upon completion of EchoStar's merger with Hughes Electronics Corp. and $525 million in the event of regulatory rejection of the deal. Under terms of the original agreement, Vivendi had to keep static its 10% stake in Littleton, Colo.-based EchoStar until a final decision on the merger with Hughes, a division of General Motors Corp., was rendered. Last week, however, regulators officially moved to block the $20 billion EchoStar-DirecTV merger, freeing Vivendi to exit its EchoStar investment in the process. This latest fire sale follows a deal forged by Vivendi last month involving the sale of Houghton Mifflin & Co. to a group of private equity houses for $1.6 billion, a shaving of $600 million off the $2.2 billion Mr. Messier had paid for the educational publisher in July 2001. VIVENDI UNIVERSAL: Raps Shareholders Group for Misinformation ------------------------------------------------------------- Vivendi Universal has decided to institute legal proceedings against APPAC (minority shareholders association) and its President before the Paris Civil High Court. The aim of the action is to halt the spread of false information through the destabilization campaign being conducted by APPAC. In public statements made on December 12 and 13, 2002, APPAC and its President announced that Vivendi Universal was going to be declared insolvent and placed into receivership, that Vivendi Universal had failed to provide APPAC with a copy of the audit report effected upon its request, and that Vivendi Universal had filed at least seven different balance sheets. As a result of such declarations, Vivendi Universal has filed a complaint with the Paris Civil High Court (Tribunal de Grande Instance de Paris) citing, in particular, APPAC's negligent conduct. Vivendi Universal considers it has a duty to take legal action on behalf of its shareholders and employees, in order that they not fall victim to such misinformation. Vivendi Universal states that it has filed this civil claim in order to cooperate fully in revealing the truth. CONTACT: VIVENDI UNIVERSAL 42 avenue de Friedland 75380 Paris Cedex 08, France Phone: +33-1-71-71-10-00 Fax: +33-1-71-71-11-79 Home Page: http://www.vivendiuniversal.com ============= G E R M A N Y ============= ALLIANZ AG: Influential CEO Steps Down Amid Dimming Prospects ------------------------------------------------------------- The wave of resignation involving European insurance executives added another member to its distinguished list in the person of Henning Schulte-Noelle, the 60-year-old point man of German insurer Allianz AG. Considered one of Germany's powerful corporate chieftains, Mr. Schulte-Noelle surprised many when he announced his early exit purportedly to avoid the risk of a public discussion about his successor. The Wall Street Journal, however, says the resignation caps the disastrous year for the insurance giant, which reported net losses of EUR2.5 billion in the third quarter -- EUR972 million of which was caused by troubled Dresdner Bank, the bank it acquired for EUR24 billion last year. He will be replaced by Michael Diekmann. The paper says the insurer faces a tough restructuring and will likely go back to the basics -- selling insurance policies. It will also likely reconsider its exposure to unpredictable capital markets, one of the main causes of its present woes. "And Allianz is expected to look for a way to spin off the corporate and investment-banking division of struggling subsidiary Dresdner Bank when market conditions allow," the Wall Street Journal said. According to the paper, almost all European insurers have been stung in the past two years by a vicious combination of collapsing equity markets and rapidly rising insurance claims for terrorism, floods and asbestos. That combination wiped out vast chunks of insurers' financial reserves, forcing many of them, including Allianz, to raise new capital on debt or equity markets simply to continue underwriting new insurance policies. The German group recently raised EUR3.5 billion ($3.6 billion) in debt to help shore up its solvency ratios. Allianz's woes were compounded by its acquisition of Dresdner Bank last year, the paper said. The acquisition meant that the giant insurer was suddenly exposed not only to the problems of the insurance industry but also to the abrupt downturn in international investment banking and the growing wave of loan defaults among the bank's industrial clients in Germany, Latin America and the U.S. Mr. Diekmann, who will formally take over from Mr. Schulte-Noelle in April, gave no immediate clues about his intentions, the paper said. The incoming CEO is a 14-year veteran of Allianz's insurance business, with experience running its Asian and, most recently, its American operations. Mr. Schulte-Noelle will be nominated to become chairman of the group's supervisory board. Mr. Schulte-Noelle is the latest of a growing line of European insurance executives to abruptly step down from the top job at their crisis-ridden companies this year. These include the top officers at two Swiss insurers, Zurich Financial Services and Swiss Life; the top man at Assicurazioni Generali in Italy; the head of Royal & Sun Alliance in London; and the chairman of Scor SA in Paris, the paper said. BINTEC COMMUNICATIONS: Files for Insolvency in Nuremberg -------------------------------------------------------- Bintec Communications AG, a European manufacturer of IP-based Remote Access Solutions, will file for bankruptcy in Nuremberg after unsuccessful talks with investors over further financing. Founded in 1989 by Stephan Feige and Gregor Krawczuk in Nuremberg, Germany, as "BinTec Computersysteme GmbH", Bintec Communications is the specialist for "IP Access Solutions". It offers leading-edge products, for efficient, cost-effective and secure enterprise communications and focuses on flexible solutions for the link-up between home-, mobile or branch offices and corporate headquarters as well as for the connectivity of various central sites. BinTec was floated on the Frankfurt "Neuer Markt" on March 10, 1999. However, the company's shares were suspended from trade Tuesday for one hour beginning at 1610 GMT. CONTACT: BINTEC COMMUNICATIONS AG Sodwestpark 94 D-90449 Nuremberg Phone: +49 (0) 911 / 9673 - 0 Fax: +49 (0) 911 / 688 07 25 Homepage: www.bintec.de MOBILCOM AG: France Telecom Bailout Main Topic in January EGM --------------------------------------------------------------- Shareholders of restructuring MobilCom AG will vote on France Telecom's (FTE) EUR7 billion bailout at an extraordinary shareholders meeting set for January 27, The Wall Street Journal said Wednesday. The approval of shareholders is necessary for the rescue plan that was agreed by MobilCom, France Telecom and creditors in November to go ahead, the paper said. MobilCom, 28.5%-owned by France Telecom, is cutting jobs, putting development of third- generation wireless services on ice and restructuring its main mobile services business in a bid to return to profit. ===================== N E T H E R L A N D S ===================== ASML HOLDING: Refines Guidance for Second Half 2002 --------------------------------------------------- ASML Holding NV (ASML) yesterday reiterated its previously disclosed expectation that it will ship approximately 100 lithography systems during second half 2002. Despite market share gains in 2002, ASML has continued to suffer from the extended semiconductor industry downturn. Consequently, the company plans to implement further measures to contain costs, which will result in its recording provisions and other charges totaling approximately EUR125 million in second half 2002. After giving effect to these measures, ASML is targeting to be cash flow neutral in second half 2002. The further cost-saving measures to be taken by the company are in response to the semiconductor industry entering year three of the worst downturn in its history. The measures include a reduction in work force, divestment of Thermal operations and termination of Track operations. The company's Track and Thermal segment accounted for approximately six percent of total net sales during the first half of 2002 but also for over 60 percent of the company's operating losses in that period. "The global market for semiconductor capital equipment has slumped by more than 70 percent in the last two years," said Doug Dunn, president and CEO, ASML. "Consequently, we are doing all the things that good companies do in extreme downturns. We have been cutting costs, managing down our working capital and gaining market share. Our regrettable but real requirement is to continuously calibrate our work force to global market conditions." Lithography Segment In its global lithography segment, which accounted for approximately 94 percent of total net sales in first half 2002, ASML plans to lower the break-even point by adjusting labor capacity and increasing operating flexibility. ASML intends to reduce its lithography-related work force by approximately 700 positions worldwide, which includes approximately 350 positions in the Netherlands. The company is notifying employees, works councils and labor unions in accordance with local labor law and employment practices and will commence consultation as required. Total costs worldwide for lithography-related employee termination are estimated not to exceed an amount of EUR 10 million, which will be largely recorded in 2003. Due to the prolonged downturn and the effects on anticipated sales, ASML also has taken provisions that will not exceed EUR 80 million in second half 2002 for slow-moving lithography inventory. Track and Thermal Segment ASML's Track operations, based in San Jose, California, will be discontinued as of December 2002, with a related charge (including employee termination costs) of EUR 45 million comprising EUR12 million in cash and EUR 33 million of non-cash charges. ASML is taking steps, however, to continue the servicing of customers in the discontinued Track operations. "We have concluded that integrating our track systems with our lithography platform would take too long and would require too much investment," said Doug Dunn. "We still believe in the integration of track and lithography. Moving forward, we will look for possible partners to accomplish this goal." As of December 2002, the company employs approximately 300 people in the discontinued Track operations. ASML also is actively pursuing the divestiture of its Thermal operations, based in Scotts Valley, California. "We have decided that divestment will unlock Thermal's inherent value. ASML's focus is imaging solutions. Thermal will be better outside ASML," said Doug Dunn. "We want to create the conditions to secure Thermal's future success." As of December 2002, the company employs approximately 450 people in Thermal operations. Work Force The intended size of the company's total work force will be approximately 5,200 positions by July 2003, a reduction of approximately 1,450 positions or approximately 22 percent, compared with approximately 6,650 employees as of December 2002. Approximately 750 of these positions reflect the anticipated combined effect of the discontinuance of the company's Track operations and the divestiture of Thermal. "ASML is making difficult but crucial decisions. However, with our range of new products and new customers, ASML is well positioned to expand rapidly when the market recovers," concluded Doug Dunn. "Offering customers the right technologies at the right time creates value for them and helps secure the future success of ASML." About ASML ASML is one of the world's leading providers of advanced technology systems for the semiconductor industry, mainly for manufacturing complex integrated circuits. Headquartered in Veldhoven, the Netherlands, ASML is traded on Euronext Amsterdam and NASDAQ under the symbol ASML. In the first half of 2002, the company reported net sales of EUR823 million. ASML is present in 50 locations throughout the world. For more information, visit: www.asml.com. "Safe Harbor" Statement under the U.S. Private Securities Litigation Reform Act of 1995: the matters discussed in this document include forward-looking statements that are subject to risks and uncertainties including, but not limited to, economic conditions, product demand and industry capacity, competitive products and pricing, manufacturing efficiencies, new product development, ability to enforce patents, availability of raw materials and critical manufacturing equipment, trade environment, and other risks indicated in filings with the U.S. Securities and Exchange Commission. CONTACT: ASML HOLDING N.V. De Run 1110 5500 AH Veldhoven, The Netherlands Phone: +31-40-268-3687 Fax: +31-40-268-3655 Contacts: Doug J. Dunn Chairman, President, and CEO Stuart K. McIntosh EVP, Operations and President, Lithography Division Peter T.F.M. Wennink EVP, Finance and CFO ===================== S W I T Z E R L A N D ===================== ABB GROUP: S&P Cuts Unsecured Rating Due to New Credit Line ----------------------------------------------------------- A new US$1.5 billion secured credit facility negotiated by the ABB Group that ranks senior to outstanding bonds has forced Standard & Poor's to lower the group's unsecured debt ratings to 'BB+' from 'BBB-'. The group's 'BBB-' long-term and 'A-3' short-term corporate credit ratings, including its 'K-3' Nordic Scale short-term rating on ABB Ltd. and related entities remain unchanged. The ratings also remain on CreditWatch with negative implications, where they were placed on October 22, 2002, S&P said in a statement Wednesday. "The downgrade of the group's unsecured debt ratings reflects the material additional subordination that bondholders will experience following the agreement of the new secured bank facility," said Standard & Poor's credit analyst Ralf Kortuem. "The security agreements of the New Facility add to previous concerns over the degree of structural subordination to which bondholders are exposed as a result of the legal structure of ABB group." According to the rating agency, the New Facility is a one-year revolving credit facility for $1.5 billion, with a further one- year term-out feature. The term-out gives ABB the option to retain up to $750 million in borrowings under the facility. The New Facility expires on December 17, 2003. It replaces an existing $1 billion unsecured credit facility, which expired Tuesday. "The New Facility has been structured to complement the group's liquidity requirements that are expected to arise over the next 12 months. It is secured by assets that ABB plans to divest--most importantly, the assets of the group's Oil, Gas, and Petrochemicals (OGP) division--as well as additional share pledges over other ABB companies. ABB will use proceeds from the disposal of the OGP division to make early redemptions under the New Facility," S&P said. "The New Facility contains four financial covenants (minimum net worth, maximum total debt, minimum adjusted EBITDA, and minimum adjusted interest coverage) and a number of milestone agreements (mainly on the divestment program and asbestos-related legal proceedings). It does not contain rating triggers," S&P said. "Despite the lowering of the unsecured debt rating, the New Facility significantly supports the group's credit profile as it ensures adequate liquidity for the next year," said Mr. Kortuem. "The resolution of the CreditWatch placement is now primarily dependent on the review of the group's restructuring and cost- savings program. This review is ongoing, and is expected to be finalized by mid-January 2003," he added. For more information, contact: Ralf Kortuem (Frankfurt) Tel: (49) 69-3 39 99-126 e-mail: ralf_kortuem@standardandpoors.com Maria Bissinger (Frankfurt) Tel: (49) 69-3 39 99-120 e-mail: maria_bissinger@standardandpoors.com Lars Bjorklund (Stockholm) Tel: (46) 8-440 5915 e-mail: lars_bjorklund@standardandpoors.com CREDIT SUISSE: CEO Rejects Severance Pay ---------------------------------------- Chief executive officer of Credit Suisse Group, Lukas Muehlemann, told The Wall Street Journal he will waive his right to severance pay when he leaves at the year-end. According to the report, this is in contrast with many recent reported incidents in the U.S. and Europe of large severance and pension payments awarded to management despite leaving companies in a ruinous state. Hans-Jacob Heitz, who heads the protection agency for Swiss investors, was quoted saying "Bearing in mind the huge provisions they're making and the loss that Credit Suisse is going to report this year - a result of Muehlemann's strategy - this decision is a logical consequence." He added that a big severance package would have been received badly by shareholders and Credit Suisse employees, who have to take big pay cuts this year. It is noted that Switzerland's second largest bank, expected to report a net loss of up to CHF3.5 billion this year, said Muehlemann will simply draw his salary until the end of his notice period on March 31, 2003. Despite the news that there will be no severance pay for the CEO, Credit Suisse shares fell, closing down CHF1.10 or 3.4%, to CHF31, while the overall market fell 2%. Although Credit Suisse didn't specify the amount Muehlemann would have been entitled to but in line with new Swiss bourse rules, the bank will disclose top management salaries as a lump sum in its 2002 annual report. Martin Eisenring, an attorney and corporate governance analyst at the Ethos fund, which holds Credit Suisse shares, said Ethos welcomes Credit Suisse advised early, but under the new stock market law, they would need to disclose the severance package anyway. "It proves our case that transparency helps to avoid costs. As a matter of principle, we're not particularly in favor of severance packages, which after all are hard to justify, given that these executives no longer serve the company," Eisenring added. Muehlemann, who was forced to leave amid growing criticism over the bank's growth and investment strategy in the recent years, handed in his resignation in September. =========================== U N I T E D K I N G D O M =========================== COMPASS GROUP: Ratings Unchanged Despite Plans to Sell Two Units ---------------------------------------------------------------- There will be no changes on the ratings of Compass Group PLC as a result of its plan to sell two units to private equity fund Permira, says Standard & Poor's. Rated 'BBB+/Stable,' Compass announced recently that it had reached an agreement with the fund involving the sale of its TraveLodge and Little Chef businesses. The deal is worth GBP712 million in cash. "Compass' business profile should not be adversely affected, as TraveLodge and Little Chef account for about 3.5% and 11.6% of Compass' consolidated sales and EBITDA, respectively, and their absence will not change the balance of the group's portfolio of activities," S&P said in explaining its decision to maintain the current rating of the world's largest food-service company. "While the disposal will result in a loss of operating cash flow, Standard & Poor's expects Compass to apply about GBP400 million of the sale's proceeds to debt reduction in order to maintain lease-adjusted credit measures of funds from operations to net debt of over 25% and EBITDA coverage of net interest of over 5x, in line with the current rating," the rating agency said. For more information, contact: Melvyn Cooke (Paris) Tel: (33) 1-4420-6783 e-mail: melvyn_cooke@standardandpoors.com Anna Overton (London) Tel: (44) 20-7826-3642 e-mail: anna_overton@standardandpoors.com EQUITABLE LIFE: Chair Vows to Sue Regulators If Found Negligent --------------------------------------------------------------- If an inquiry led by the Lord Penrose yields evidence that regulators failed to protect policyholders' interest, the government can be sure it will face a suit from Equitable Life. Chairman Vanni Treves made this pronouncement during an interview with Channel 4 News yesterday. He said the company is prepared to sue for regulatory failure if the Treasury, the Financial Services Authority or the Department of Trade and Industry are found negligent. "We will take legal action against whoever was responsible, against any arm of Government that Lord Penrose finds has legal culpability," Mr. Treves told Channel 4. "The board will not shrink from pursuing that claim in member's interests." Already, former auditors Ernst & Young and several former directors are now facing a GBP3.9 billion lawsuit filed by the society. The official inquiry by Lord Penrose is not expected to report until next summer at the earliest, the Telegraph said yesterday. According to the paper, the case against the Treasury and the Financial Services Authority could be based on its culpability for allowing the society to sell more than 100,000 pension policies between 1998 and 2000, even though regulators knew that the society's reserves were dangerously thin. The society has GBP16 billion in with-profits funds and around 450,000 members, down from a peak of more than one million, the paper said. Equitable believes 30,000 people are withdrawing pension policies from the society every month and has set aside GBP900 million for claims of mis-selling. EUROSTAR II: Fitch Downgrades Investment Portfolio Ratings ---------------------------------------------------------- The deterioration of EuroStar II CDO's portfolio of investment grade and sub-investment grade debt securities has led Fitch Ratings to cut its ratings on three notes Wednesday. The notes and the corresponding action taken by the rating agency are as follows: (1) Class B notes lowered to 'B+' from 'BBB' (2) Class C notes cut to 'CCC' from 'BB' (3) Subordinated notes down to 'CC' from 'CCC' The 'AAA' ratings of the class A-1 and A-2 notes were affirmed, as is the 'AA' rating of the class A-3 notes. "In February 2001 Sichting EuroStar II CDO, a limited liability company incorporated under the laws of the Netherlands issued EUR417 million of various classes of fixed- and floating-rate notes and invested the proceeds in a portfolio of investment grade and sub-investment grade debt securities," Fitch said. "[The] rating action reflects the deterioration in credit quality of the portfolio and the number of losses suffered by the transaction. The portfolio contains nine defaulted assets with a total par value of EUR37 million and two 'CCC' rated assets with a total par value of EUR10 million. The weighted average Fitch rating of the current portfolio is 'BB+', excluding defaulted assets. The portfolio manager DWS Finanz-Service GmbH, has also sold five defaulted assets realizing a loss of EUR12.5 million," Fitch said. According to the rating agency, the transaction is currently failing all of its over-collateralization tests and in November it failed the class B interest coverage test. "As a result interest proceeds have been diverted from class B and C notes to pay down EUR8.9 million of the class A-1 and A-2 notes. This mechanism has improved the credit quality of the class A-1 and A-2 notes and allowed Fitch to affirm their ratings," Fitch said. "The class A-3 notes, though not being redeemed, benefit from their seniority to the class B and C notes. All interest proceeds will continue being diverted until such time that the coverage tests comply." For more information, contact: Fionnuala Connolly (London) Tel: +44 (0)20 7417 4354 Benjamin Toledano (London) Tel: +44 (0) 20 7417 6309 Marjan van der Weijden (London) Tel: +44 (0)20 7417 4279 LONDON CLUBS: Sells Emerald Safari in South Africa -------------------------------------------------- Cash-strapped casino operator London Clubs International will sell the Emerald Safari and Resort Casino in South Africa to meet its pledge to repay GBP100m by September next year, the Guardian says. The move is a desperate attempt by anxious shareholders since rival casino operator Stanley Leisure has been courting LCI's main lender Bank of Nova Scotia, hoping it can force through a takeover deal at no premium to LCI shares. Reports say the sale of Emerald is expected to form the last element in LCI's disposal program, in which proceeds will cover more than half of next year's debt repayment through the two London casino sales. It is noted that 50 St James and Palm Beach London casinos have already been marketed. Earlier, Stanley approached LCI with a 25p share offer proposal, including plans to pay off 90% of the company's net debt. However, LCI chariman Michael Beckett dismissed the offer as ridiculous. According to The Guardian, chief operating officer Barry Hardy denied that LCI's tough debt repayment requirements placed the board in the thrall of the Bank of Nova Scotia, saying LCI was "very confident" of meeting the o100m repayment commitment. He was speaking after the company posted underlying pre-tax profits for the six months to October of GBP2.6m compared with a loss of GBP14.7m for the same period the previous year. Among exceptional items was a GBP2m bill for advisers who negotiated the restructuring of LCI's debt in July, reports say. ************** 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, Ma. Cristina Canson and Laedevee Gonzales, 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. 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