/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/030102.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 Thursday, January 2, 2003, Vol. 4, No. 1 Headlines I T A L Y CIRIO FINANZIARIA: Postpones EGM to January 3 FIAT SPA: Truck Leasing Unit May Change Ownership this Month ITALY DAILY: Falls Victim to Decline in Advertising Support TELECOM ITALIA: Sells Controversial Telekom Serbia Stake N E T H E R L A N D S GETRONICS NV: Bondholders Seeks Early Redemption IFCO SYSTEMS: Issues Revised Warrants S W I T Z E R L A N D ABB LTD.: Signs US$200M Order for Ethylene Project in China U N I T E D K I N G D O M AMEY PLC: Faces Obscure Future CABLE & WIRELESS: Investors Likely to Speed CEO's Exit CABLE & WIRELESS: U.S. Law Firm Files Class Suit in Virginia CORUS GROUP: Offer for Precoat International Waived INVERESK PLC: Refinances to Ward Off Receivership IZODIA: Violates U.K. Listing Rules NTL INC.: No Longer Certain About Exact Date of Chapter 11 Exit MG ROVER: Future Hinges on One Last Meeting with Chinese Partner PNC TELECOM: Lord Stevens to Quit as Chairman RAILTRACK GROUP: Delisted from London Stock Exchange ROYAL MAIL: Wants Three-year Price Freeze Scrapped WAX LYRICAL: UK Unit Faces Administrative Receivership - - - - - - - - ========= I T A L Y ========= CIRIO FINANZIARIA: Postpones EGM to January 3 --------------------------------------------- Defaulted Cirio Finanziaria SPA postponed its extraordinary board meeting set to hammer out a final compromise deal with creditor banks from December 23 to January 3. A report from Dow Jones International News said Cirio announced Monday that Cirio Chairman and Chief executive Sergio Cragnotti will step down as president of soccer club Societa Sportiva Lazio SpA (I.SSL), a unit of Cirio, as soon as new Lazio management is appointed by a group of creditor banks, led by Capitalia SpA (I.CIT). A Cirio spokesman said Mr. Cragnotti is also expected to sell his majority stake in the team to the banks, although it remains uncertain whether he will eventually yield to pressure from creditor banks and resign from his posts as chairman and chief executive of the company. In an earlier report of TCR-EUR, creditor banks and Cirio were in disagreement over the company's refinancing. The creditors banks wanted Mr. Cragnotti to resign before approving a bridge loan, which would keep it afloat after it was declared in default on more than EUR1 billion of bonds. Mr. Cragnotti, however, reportedly indicated to resign only after the group receives the loan. FIAT SPA: Truck Leasing Unit May Change Ownership this Month ------------------------------------------------------------ The sale of Fiat's truck rental business to a French investment group could be firmed up as early as this month, the Financial Times said recently citing sources privy to the negotiations. Backed with Credit Agricole and Pragma Capital, investment group Eurazeo is believed to be in exclusive talks with Fiat over the sale of Fraikin, the French truck rental company controlled by Fiat's Iveco commercial vehicle arm. The unit, bought by the Italian industrial group for EUR760 million three years ago, posted sales of EUR570 million this year, the paper said. Both companies would not reveal the sale price under negotiation. The report said Iveco paid EUR556 million in 1999 to gain control of Fraikin from the family investors who controlled the company, which also operates in Spain and the Benelux countries. The purchase of France's largest truck leasing group came at a time when high capital costs and maintenance charges had led to rapid growth in the leasing sector from users such as supermarket groups. The deal was also intended to boost the proportion of sales Iveco generated from non-manufacturing activities. The sale of the French unit follows the series of asset disposals made by the Italian group this year. Rising debts and low sales in its car division have pushed the company to sell non-core business in order to meet loan covenants and reduce borrowings. Just last week Fiat sold its 5.1 percent stake in General Motors to Merrill Lynch for US$1.16 billion, and agreed to sell 51 percent of Fidis, its profitable consumer lending arm, to its creditor banks for about EUR400 million. Fiat in June sold 34 percent of Ferrari, its luxury sports car unit, and sold Teksid, its castings unit. Moody's Investors Service also downgraded last week Fiat's credit ratings, which affected US$15 billion of debts. The rating agency said the downgrade reflected Fiat's weak operating performance, particularly at Fiat Auto, and the company's high level of debt. The company's ratings would not be helped even if Fiat exercised its option to sell its remaining 80 percent in Fiat Auto to General Motors, Moody's said. Eurazeo, which was created in April 2001 through the merger of two investment funds, is publicly listed and makes investments in France, the Financial Times said. ITALY DAILY: Falls Victim to Decline in Advertising Support ----------------------------------------------------------- Italy Daily has folded after falling victim to a severe drop in advertising revenue, the Associated Press reported Sunday. Owned by the International Herald Tribune and Rizzoli-Corriere della Sera, which publishes the nation's leading Italian-language daily, Italy Daily focused on national news and cultural stories and appealed primarily to an expatriate audience. A statement issued by the newspaper said, "This unfortunate decision was forced upon the IHT/RCS joint venture by the difficult market conditions in Italy in the past 18 months, which have led to a sharp decline in advertising support for the five- year-old Italy Daily." The only English-language daily newspaper in Italy, which came as a supplement to the International Herald Tribune, published its last edition this weekend. However, it will be converted into a 12-page weekly publication as "Italy Weekly" and will start publication on January 17. In the past, several English-language daily papers have appeared in Italy. None have stayed in business, reports say. Meanwhile, in Germany, the English-language edition of the Frankfurter Allgemeine Zeitung suffered the same fate as Italy Daily in June, going from a daily to a weekly, due to rising production costs. TELECOM ITALIA: Sells Controversial Telekom Serbia Stake -------------------------------------------------------- Telecom Italia announced over the weekend that it had sold its 29% stake in Yugoslav phone company Telekom Serbia to PTT Srbija for EUR195 million. The Wall Street Journal said the sale came a year after allegations surfaced that the phone company's 1997 purchase of the stake involved millions of dollars in kickbacks. Citing a statement published on Italian news wires, the Journal said PTT Srbija is a public company controlled by the Belgrade government that already owns 51% of Telekom Serbia. The paper said Telecom Italia bought the stake in 1997, two years before NATO's air war halted a crackdown by Serb forces on separatist ethnic Albanians in Kosovo. At the time, Telecom Italia was owned by the Italian Treasury through a holding company, STET. STET was part of an Italian-Greek consortium, which paid $922 million for nearly half of Telekom Serbia. The Journal said prosecutors in Turin launched in February 2001 an investigation into the deal after a left-leaning newspaper, La Repubblica, alleged that Italians had demanded millions of dollars in kickbacks as part of the purchase. The newspaper didn't say who received the alleged kickbacks. At the time, Telecom Italia said it was unaware of any irregularities in the deal and Yugoslav officials denied the report. Former Foreign Minister Lamberto Dini has also denied the Italian government played any role. Mr. Dini, who was in the previous center-left government, has constantly had to fend off suggestions he was too friendly with the regime of President Slobodan Milosevic, who was ousted from power in 2000. ===================== N E T H E R L A N D S ===================== GETRONICS NV: Bondholders Seeks Early Redemption ------------------------------------------------ Bondholders in Dutch information technology Getronics NV are seeking immediate redemption of some EUR183 million in convertible bonds, following the sale of a large Getronics unit last month. Frans Faas, a representative of bondholders who hold about 11 percent of the convertible bonds due in 2004, told Reuters on Friday that the bondholders are entitled to early redemption due to the dissolution of a material subsidiary according to the contract. Faas added he was seeking to organize a meeting of bondholders in January at which time a vote could be taken. Despite the requirement that he must represent 20 percent of bondholders in order to force a vote, Faas said he was confident he would have 20 percent soon. However, Getronics spokesman Herbert can Zijl said, "We will wait and see if there will be a trustee meeting with the bondholders. But the sale (of the government services unit) does not trigger an early redemption." Reportedly, Getronics completed the sale of the unit for EUR224 million in November, cutting its net debt to less than 450 million euros. Reuters further indicated that Getronics shares hit a 17-month low last month as investors grew increasingly concerned over heavy debt dilution as a result of its plans to restructure its 450 million euros of debt amid a slump in demand for computer services. IFCO SYSTEMS: Issues Revised Warrants ------------------------------------- IFCO Systems NV issued Friday revised terms and conditions of the Warrants allotted to existing shareholders on December 13, 2002. Form 1 (1) Up to 4,393,119 warrants (the Warrants) have been allotted by IFCO Systems N.V., Rivierstaete, Amsteldijk 166, 1079 LH Amsterdam, The Netherlands, (the Company), to its current shareholders (the Current Shareholders and each an Current Shareholder) of record on December 13, 2002 (the Record Date) at a ratio of one Warrant per one issued and outstanding ordinary share of the Company held by such Current Shareholders. No Warrants shall be issued with respect to fractions of ordinary shares held by Current Shareholders. Subject to these terms and conditions of the Warrants (the Terms and Conditions), the Warrants carry the right to subscribe for new bearer Ordinary Shares (as defined in 9.1 of these Terms and Conditions) in the Company (the Warrant Shares and each a Warrant Share). The Warrants shall rank pari passu among themselves. (2) Warrants issued to Current Shareholders as of the Record Date listed on the Company's New York share register shall be issued in certificated form (the Certificated Warrants). Warrants allotted to Current Shareholders that hold Ordinary Shares of the Company as of the Record Date through the clearing system of Clearstream Banking AG, Frankfurt am Main (Clearstream), shall be issued in bearer form (the Bearer Warrants). Bearer Warrants shall be represented by a single definite global bearer warrant certificate (the Global Bearer Warrant Certificate), which shall be deposited with Clearstream. All Warrant Shares issued upon exercise of the Warrants shall be held through the clearing system of Clearstream and shall be issued in bearer form. A holder of Bearer Warrants (each a Holder and collectively Holders) shall not be permitted to hold his/her Warrants in certificated form or have his/her Warrants evidenced by a warrant certificate. (3) The Global Bearer Warrant Certificate shall represent such of the outstanding Warrants as shall be specified therein and shall provide that it shall represent the aggregate amount of outstanding Warrants from time to time endorsed thereon and that the aggregate amount of outstanding Warrants represented thereby may from time to time be increased, as appropriate, by adjustments made on the records of Clearstream. (4) The Global Bearer Warrant Certificate shall be signed on behalf of the Company by any two Directors of the Company as permitted by the Company's Articles of Association. (5) The Global Bearer Warrant Certificate deposited with Clearstream shall bear the following legend on the front thereof (in addition to any other legends that may be required under applicable law or that the Company shall deem appropriate to reflect any other restrictions applicable to the Global Bearer Warrant Certificate or the Warrants represented thereby): "THE WARRANTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR OTHER SECURITIES LAWS OF THE UNITED STATES OR ANY STATE OF THE UNITED STATES. NEITHER THESE WARRANTS NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT AND ALL APPLICABLE SECURITIES LAWS OF OTHER JURISDICTIONS OF THE UNITED STATES." The rest of the REVISED VERSION: TERMS AND CONDITIONS OF THE WARRANTS can be viewed at this URL: http://bankrupt.com/misc/IFCOREVISEDWARRANT.htm ===================== S W I T Z E R L A N D ===================== ABB LTD.: Signs US$200M Order for Ethylene Project in China ----------------------------------------------------------- ABB announced recently that it had signed an order for approximately US$200 million with Shanghai SECCO Petrochemical Company for part of a new US$2.7 billion petrochemical complex in China. "This project highlights our commitment to China, where we have more than 30 years experience in meeting our customers' needs for leading-edge technologies which help increase efficiency and protect the environment," said Erik Fougner, head of ABB's Oil, Gas and Petrochemicals division. The petrochemical complex near Shanghai is scheduled to start operations in the first half of 2005. ABB will provide process technologies and engineering and procurement services for a 900,000 metric tons per annum (MTA) naphtha cracker and an olefins conversion unit to produce 590,000 MTA of propylene. ABB's contribution in the SECCO project includes an innovative way of making propylene, which cuts energy consumption and reduces greenhouse gas emissions. It is the first time this technology is used in China. The engineering and procurement services will involve partnerships of ABB Lummus Global with Sinopec Engineering Inc. (SEI). Shanghai SECCO Petrochemical Company Ltd. is a joint venture owned by BP Chemical, Sinopec and Shanghai Petrochemical Corporation. ABB is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in more than 100 countries and employs about 146,000 people. =========================== U N I T E D K I N G D O M =========================== AMEY PLC: Faces Obscure Future ------------------------------ Amey may be facing a difficult year ahead, as fears over the financial strength of the support services firm prevent it from winning new Private Finance Initiative contracts. The Scotsman reported Monday that Amey is understood to be set to miss out on contracts it had previously thought were all but secured. Responsible for the maintenance of the motorway network in central Scotland and the Glasgow and Edinburgh schools projects, Amey is one of the largest contractors involved in the Government's Private Finance Initiative program. However, the company's shares went into trouble as a result of accounting change that saw its EUR55 million profit turning into a EUR18 million loss in March. Reports have also noted that in the week before Christmas, Amey lost out on a �860 million project to extend Manchester's Metrolink train system and a �766 million contract with Northamptonshire County Council. "Sources close to the council in Wakefield, West Yorkshire, where Amey has been named as preferred bidder on a �130 million street lighting scheme, have also claimed a contract has yet to be signed and the project could fall through," The Scotsman said. CABLE & WIRELESS: Investors Likely to Speed CEO's Exit ------------------------------------------------------ Shareholders of Cable & Wireless plc are expected to succeed in removing CEO Graham Wallace soon amid the recent wave of class actions filed against the British telecom operator in the United States, The Scotsman said. The chief executive is being blamed for the firm's woes, a result of its strategic shift from its old-reliable telecom business to Internet-related ventures. Last month, the firm cut 3,500 jobs at its money-losing corporate telecoms arm, C&W Global, and soon after announced that its chairman-designate, David Nash, had quit after institutional pressure. Several U.S. law firms filed last week securities class action against the British telecom operator over an undisclosed tax liability. Lawyers acting for a group of C&W American depository receipt holders have accused the British company of issuing "materially false and misleading statements to the market between 6 August, 1999 and 6 December, 2002". The law firm of Schiffrin & Barroway singled out a press release of 6 August in which C&W announced that it had agreed to sell 50 percent of the mobile phone business One2One to Deutsche Telekom. The German group was worried it might eventually face a big UK tax bill on the sale. The US investors in the company say statements relating to that sale were materially false and misleading "because they failed to disclose that a critical term of the One2One deal was a GBP1.5 billion tax indemnification clause agreed to by Cable and, more specifically, a trigger clause, whereby a future downgrade of Cable's long-term debt rating below a predetermined threshold would trigger a GBP1.5 billion cash obligation on behalf of Cable". When credit rating agency Moody's announced a downgrade on December 6, 2002, C&W put out a press release that day saying the ratings trigger had been activated. The price of C&W's ADR's slumped 40 percent in one day from $3.90 to $2.33. In Britain, according to The Scotsman, C&W's shares lost almost half their value when the potential GBP1.5 billion-tax liability was finally revealed. However, the company has expressed confidence that Deutsche would not be hit with the tax liability and the GBP1.5 billion will never be needed. CABLE & WIRELESS: U.S. Law Firm Files Class Suit in Virginia ------------------------------------------------------------ The Law Offices Of Charles J. Piven, P.A. filed a securities class action last week on behalf of shareholders who purchased, converted, exchanged or otherwise acquired American Depository Receipts (ADRs) of Cable and Wireless plc (NYSE: CWP) between August 6, 1999 and December 6, 2002, inclusive. The case is pending against Cable and Wireless plc in the United States District Court for the Eastern District of Virginia. The action charges that defendants violated federal securities laws by issuing a series of materially false and misleading statements to the market throughout the Class Period which statements had the effect of artificially inflating the market price of the Company's securities. No class has yet been certified in the above action. Until a class is certified, you are not represented by counsel unless you retain one. If you are a member of the Class, you may move the court no later than February 24, 2003 to serve as a lead plaintiff for the Class. In order to serve as a lead plaintiff, you must meet certain legal requirements. To be a member of the class you need not take any action at this time, and you may retain counsel of your choice. CONTACT: Charles J. Piven Law Offices Of Charles J. Piven, P.A., 410-986-0036 CORUS GROUP: Offer for Precoat International Waived --------------------------------------------------- KPMG Corporate Finance on behalf of Corus is pleased to announce that all of the conditions of the recommended cash offer made on November 6, 2002 to acquire the entire issued and to be issued share capital of Precoat (the Offer), as set out in the Offer Document dated November 6, 2002, have now been satisfied or waived and, accordingly, the Offer is hereby declared unconditional in all respects. The Offer will remain open for acceptance until further notice. Precoat Shareholders who have not yet accepted the Offer, and wish to do so, are urged to complete and return their Forms of Acceptance as soon as possible. Consideration under the Offer will be dispatched by 10 January 2003 to those Precoat Shareholders who have already provided valid and complete acceptances under the Offer. Consideration in respect of valid acceptances received following the date of this announcement will be dispatched to accepting Precoat Shareholders within 14 days of such receipt. As at 3.00 p.m., December 27, 2002, valid acceptances of the Offer have been received in respect of, in aggregate, 8,068,932 Precoat Shares, representing approximately 97.93 per cent. of the existing issued share capital of Precoat. Prior to the announcement of the Offer on 6 November 2002, Corus had received irrevocable undertakings to accept, or procure acceptance of, the Offer in respect of, in aggregate, 4,987,351 Precoat Shares, representing approximately 60.5 per cent. of the existing issued share capital of Precoat. Corus intends to procure that Precoat will apply to the UKLA for cancellation of the listing of Precoat Shares on the Official List of the UKLA and to the London Stock Exchange for admission to trading of Precoat Shares on the London Stock Exchange's market for listed securities to be cancelled. Accordingly the notice period of 20 business days prior to such cancellation, as referred to in the Offer Document dated 6 November 2002 has commenced. Corus also intends to acquire compulsorily any outstanding Precoat Shares to which the Offer relates by applying the provisions of sections 428 to 430F of the Act. Terms defined in the Offer Document dated 6 November 2002 have the same meanings in this announcement. The Directors of Corus accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the Directors of Corus (who have taken all reasonable care to ensure that such is the case), the information contained in this document for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. KPMG Corporate Finance, a division of KPMG LLP, which is authorized by the Financial Services Authority for investment business activities, is acting only for Corus as financial adviser in relation to the Offer and is not acting for any other person in relation to the Offer. KPMG Corporate Finance will not be responsible to anyone other than Corus for providing the protections afforded to its clients nor for providing advice in relation to the contents of this announcement, the Offer or any other matter referred to herein. The availability of the Offer to persons who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdiction in which they are located. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements. The Offer is not being made directly or indirectly in or into the United States, Canada, Australia or Japan, except where permitted by applicable law. Subject to this exception, neither this announcement nor the Offer Document and/or the Form of Acceptance may be distributed or sent, in, into or from the United States (whether by use of the mails or by any means or instrumentality of interstate or foreign commerce), Canada, Australia or Japan and doing so may render invalid any purported acceptance. Any person (including, without limitation, any custodian, nominee or trustee) who may have a legal or contractual obligation to forward this announcement, the Offer Document and/or the Form of Acceptance to any jurisdiction outside the United Kingdom, should have regard to the above provisions and, if necessary, take appropriate legal advice before taking any action. This announcement does not constitute, or form any part of any offer for or solicitation of, any offer for securities or any inducement to acquire or dispose of any securities. CONTACT: KPMG CORPORATE FINANCE, Financial Adviser to Corus Tom Franks Phone: 020 7311 1000 Johanne Arnesen Phone: 020 7311 1000 INVERESK PLC: Refinances to Ward Off Receivership ------------------------------------------------- In order to recapitalize Inveresk Plc, the Board announced Friday that it intends to raise EUR2,000,000 by way of an issue of 20,000,000 New Ordinary Shares at a price of 10 pence per share. The Company also intends to enter into an unsecured loan of between EUR2,000,000 and EUR2,500,000 with Klippan AB and certain persons connected with it for the purposes of this transaction, being Jan Bernander, Bengt Ostensen, Stefan Lersen and Alan Walker (the Klippan Parties). It was announced on 20 December 2002 that the Company intends to move from the Official List of the UKLA to the Alternative Investment Market of the London Stock Exchange (AIM) subject to the passing of a resolution at the Extraordinary General Meeting of the Company to be held at 10.00 a.m. on 20 January 2003 (the EGM) and being able to satisfy the admission requirements of AIM. Provided these conditions are satisfied, Inveresk will apply to the UK Listing Authority to have its listing cancelled with effect from 8.00 a.m. on 23 January 2003. The Company will also apply to have its issued share capital admitted to trading on AIM with effect from the same date. The Board remains of the opinion that the working capital currently available to Inveresk is not sufficient for the Company's present requirements, that is, for at least 12 months following the date of this announcement. In order to try to ensure the continued survival of the Group, the Board believes that it is essential that Shareholders vote in favor of the Resolutions at the EGM. If Shareholders do not vote in favor of the Resolutions, in view of the shortfall of working capital, the Company may be left in a position where it is not likely to meet its commitments as they fall due. In such circumstances, the board believes that it would either have to sell the Carrongrove Mill and/or the St Cuthberts Mill or place the Company into administration or receivership. The raising of the funds through the Placing and the Loan is therefore important to the future survival of the Group. The Placing and the Loan The Company has conditionally placed 20,000,000 Placing Shares (representing approximately 37.2 per cent. of the Company's current issued share capital) with certain investors at a price of 10 pence per share. In addition, the Klippan Parties have conditionally agreed to lend between EUR2,000,000 and EUR2,500,000 to the Company on an unsecured basis. The terms of the Loan provides that it is repayable after six months or earlier at the option of the Company or, after three months of making the Loan, in the event of certain events of default, including insolvency. No interest will accrue on the Loan. The aggregate proceeds from the Placing and the Loan are expected to amount to between EUR4,000,000 to EUR4,500,000 and will be used to reduce the Company's indebtedness. It is expected that the proceeds of the Placing and Loan will be received on or before 23 January 2003. The Loan will be capable of being drawn down on admission to AIM (expected to be on 23 January 2003). The Placing is not underwritten and is conditional, inter alia, on Admission to AIM and the passing of a resolution at the EGM. The New Ordinary Shares will, when issued and fully paid, rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions hereafter declared, made or paid. Background to and reasons for the Placing and the Loan Inveresk announced on 16 August 2002 that the Group had breached the covenants set out in the loan agreements with the Royal Bank of Scotland plc. On 30 October 2002, Inveresk announced that it was in severe financial difficulty and that in the opinion of the directors, the working capital available to Inveresk was not sufficient for the Company's present requirements, that being, for at least 12 months following the date of that announcement. In order to alleviate this situation, the Company disposed of the business and certain assets relating to the Caldwells Mill to Klippan AB without obtaining prior Shareholder approval. On the 30 October 2002, the Company also announced that it was in discussions with Klippan AB with a view to raising additional finance. The Board remains of the opinion that the working capital currently available to Inveresk is not sufficient for the Company's present requirements, that is, for at least 12 months following the date of this announcement. In order to resolve this situation, the Board has considered various options to re-capitalize and refinance the Company. These have included a sale of the remaining businesses and an issue of equity. In addition the Directors are in discussions with various banks in order to replace the Company's existing bankers, the Royal Bank of Scotland plc. Due to the Company's publicized financial difficulties, the Board believes that it would not obtain a fair price for either of its businesses if it tried to sell them now and therefore does not believe that raising funds by means of an asset sale would be in the best interests of the Company or its Shareholders. Accordingly, the Board believes that the proposed Placing and the Loan are the best options currently available to re-capitalize the Company. Intention to announce a pre-emptive share issue The Board recognizes that the Placing will dilute existing Shareholders. In order that Shareholders be given an opportunity to claw back partially their interests in the Company, the Board intends that subsequent to the completion of the Placing, further New Ordinary Shares will be offered to holders of New Ordinary Shares on a pre-emptive basis. The Board also intends that under the terms of the proposed pre-emptive share issue, Shareholders will be given the opportunity to apply for New Ordinary Shares in excess of their entitlements. The Directors expect to publish further details and documentation in relation to such offer in 2003. Intention to move to AIM In order to facilitate the Placing, the Company announced on 20 December 2002 that it intended to move from the Official List of the UK Listing Authority to trading on AIM subject to the passing of a resolution at the EGM and being able to satisfy the admission requirements of AIM. Provided these conditions are satisfied, Inveresk will apply to the UK Listing Authority to have its listing cancelled with effect from 8.00 a.m. on 23 January 2003, being 20 business days after the announcement of the intention to transfer to AIM was first made. The Company will also apply to have its issued share capital admitted to trading on AIM with effect from the same date. The Board believes that AIM, with its lower cost of complying with continuing obligations, is a more appropriate market for the Company given its size and shareholder base. In connection with Inveresk's move to AIM, KBC Peel Hunt will be appointed as the Company's nominated adviser and broker. Application will be made for the New Ordinary Shares and the Placing Shares to be admitted to AIM. No application will be made for the Placing Shares to be admitted to the Official List of the UKLA. It is expected that admission of the New Ordinary Shares and the Placing Shares will become effective and that dealings will commence on 23 January 2003. Reorganization The current nominal value of the Company's shares is 10p. Given the price at which the Placing Shares are being placed, the Board does not believe that it is appropriate to maintain the nominal value of the Company's Ordinary Shares at this level. In order to reduce the nominal value of its Ordinary Shares, it is proposed that: (i) each issued ordinary share of 10p each in the Company will be sub-divided into ten New Ordinary Shares of 1p each in the Company and that nine of such ordinary shares of 1p each in the Company will be redesignated as deferred shares of 1p each; (ii) each authorized but unissued ordinary share of 10p each in the Company will be sub-divided and converted into ten New Ordinary Shares of 1p each in the Company; and (iii) each Deferred Share will be purchased by the Company or its nominee for cancellation in due course. The rights of the Deferred Shares, which will not be admitted to the Official List or AIM, will be minimal, thereby rendering them effectively valueless. As such, no share certificates will be issued in respect of the Deferred Shares. The proportionate interests of Shareholders prior to the issue of the Placing Shares will not be affected by the proposed creation of the Deferred Shares. Their creation is simply a mechanism to reduce the nominal value of the Ordinary Shares in the Company from 10p to 1p. Accordingly, immediately following completion of the Reorganization, Shareholders will hold the same number of Ordinary Shares in the capital of the Company, but of a different nominal value. Similarly, the Reorganization will not affect Shareholders' voting or dividend or rights on a return on capital in respect of the New Ordinary Shares. The Directors have been advised that as a consequence of the Reorganization, the existing base cost of Ordinary Shares held will become the base cost of the New Ordinary Shares and that there should be no liability to tax by reason of the creation and cancellation of the Deferred Shares. Accordingly the reduction should have no adverse impact on the UK tax position of shareholders resident in the UK. Breach of borrowing powers and amendment to the Company Articles of Association At the EGM, a resolution will be proposed to ratify a breach of the Company's borrowing powers contained in Article 115 of the Company's Articles of Association. This breach has arisen because Article 115 currently restricts the Company's borrowings to two times the Company's 'Adjusted Total of Capital and Reserves' (as defined in the Articles). To rectify the situation, an amendment will be proposed to Article 115 to provide that the Group's borrowings shall be limited to the higher of (i) three times the Adjusted Total of Capital and Reserves and (ii) EUR25,000,000. In order to create the Deferred Shares, an amendment to the Company's Articles of Association will be proposed at the EGM pursuant to which a new provision will be included which sets out the rights of the Deferred Shares. As stated above, these provisions will render the Deferred Shares effectively valueless (but all Shareholders' existing rights will be preserved in the New Ordinary Shares which Shareholders will retain). EGM The EGM of the Company will be held at the offices of Jones, Day, solicitors to the Company, Bucklersbury House, 3 Queen Victoria Street, London, EC4N 8NA at 10.00 a.m. on 20 January 2003. Recommendation The Board remains of the opinion that the working capital currently available to Inveresk is not sufficient for the Company's present requirements, that is, for at least 12 months following the date of this announcement. In order to try to ensure the continued survival of the Group, the Board believes that it is essential that Shareholders vote in favor of the Resolutions at the EGM. If Shareholders do not vote in favor of the Resolutions, in view of the shortfall of working capital, the Company may be left in a position where it is not likely to meet its commitments as they fall due. In such circumstances, the Board believes that it would either have to sell the Carrongrove Mill and/or the St Cuthberts Mill or place the Company into administration or receivership. The raising of the funds through the Placing and the Loan is therefore important to the future survival of the Group. The Board believes that the resolutions to be proposed at the EGM are in the best interests of the Company and its Shareholders as a whole and recommends you to vote in favor of them as they intend to do in respect of their own registered shareholdings of 4,711,707 Ordinary Shares representing approximately 8.75 per cent. of the current issued share capital of the Company. CONTACT: INVERESK PLC Alan Walker (Chief Executive) Phone: 020 7240 1234 Jan Bernander (Chairman) Phone: 00 65 9661 7974 IZODIA: Violates U.K. Listing Rules ----------------------------------- The botched e-commerce industry Izodia may have breached London listing rules, as it failed to disclose all the directorships held in the past five years by Peter Catto, an Izodia director, within 14 days of his appointment to the company's board, which is required by the UK listing authorities. Financial Times reported Saturday that although Mr. Catto joined Izodia on August 2, the required listing was only published on September 11. To which, commenting on the delay, Mr. Catto said, "I just do not have an answer for that." Izodia's shareholders have been trying to requisition an extraordinary meeting to change the board and put the company into liquidation, and have so far failed in their request for copies of bank statements that would confirm the existence and whereabouts of its sole asset, t33m in cash. Reports say Mr. Catto was director of Orb Estates until July 31. The Estates is a subsidiary of Orb, a Jersey-based investment company whose offices were raided by the Serious Fraud Office investigate allegations of "unlawful appropriation of funds belonging to Izodia." Refusing to be drawn on the location of Izodia's cash, reports indicate Mr. Catto said he had been unable to contact his fellow Izodia director, Jarlath Vahey, an Orb employee who has been in the US for the most of the past three months. Some shareholders believe Mr. Vahey has been more in contact with Orb than with Izodia during that period. "Ross Peters, one of Mr. Vahey's predecessors on Izodia's board, wrote to the company's advisers in an e-mail in August that he had been told by one of Izodia's then employees that Mr. Vahey had moved Izodia's cash to an account in Jersey," Financial Times said. NTL INC.: No Longer Certain About Exact Date of Chapter 11 Exit --------------------------------------------------------------- After failing to fulfill its announcement regarding a November exit from Chapter 11 bankruptcy proceedings, British cable operator NTL still managed to be optimistic last week, though less definite, in saying that everything will be over in the "very near future." The company reacted to reports that negotiations with creditors have hit a snag, by saying the so-called legal wrangling between creditors is not substantive. The US parent of NTL filed for Chapter 11 in early 2002 after debts spiraled on the back of a spending spree at the height of the tech boom. Under the restructuring proposals currently being discussed by creditors, NTL plans to become two businesses - NTL UK and NTL Euroco - with the debt mountain converted to equity. News service Ananova said last week NTL is now close to signing a life-saving deal with creditors that will restructure some GBP6.9 billion-worth of debt. MG ROVER: Future Hinges on One Last Meeting with Chinese Partner ---------------------------------------------------------------- Senior executives of MG Rover, the last British volume car manufacturer, will sit down for the last time with Chinese local authorities who have seized the property of its partner, the Financial Times reported last week. According to the paper, the meeting to discuss Rover's deal with Shanghai Brilliance will be held early this year. The fate of the partnership, which is largely considered critical to Rover's survival, will be decided in this meeting, the paper said. "We will over the course of the next few weeks pursue in more detail discussions with the new powerbase of our existing partner," said Rover CEO Kevin Howe. "If we believe that ends up not being the best route but we believe there is a better route for us, we will not be shy." He said the Birmingham-based carmaker, bought for GBP10 ($15.97) from BMW two years ago by west Midlands businessmen, has been approached by vehicle manufacturers and other Chinese companies about alternative deals. "They are more than just casual inquiries," he said. "But we still have an agreement in place [with Brilliance]. Until we decide we do not have an agreement, the other conversations are interesting, but nothing more." A few months ago the Liaoning provincial government took over operations of Brilliance China Automotive after accusing Chairman Yang Rong of financial mismanagement. Mr. Yang, who fled to the US after being ousted from his post, is still negotiating with Rover. He has already filed legal claims contesting the right of the provincial government to eject him and take over his companies. Some sectors believe the ouster of Mr. Yang is actually predicated by his staunch support for the Rover partnership. Rumors are rife that the provincial government favors an alliance with another group. If loss-making Rover fails to secure the deal with BCA, which recently failed to pay GBP600,000 due under a separate deal with Manganese Bronze, the black taxicab maker, it will make the development of the replacement for the 45 mid-size car more expensive, the Financial Times said. It will also set back development of alternative models that were being produced mainly for the Chinese market, particularly the four-door saloon. More importantly, however, it will raise questions over the company's ability to find a partner for the replacement for its Rover 25 small car, the paper added. When the alliance was announced in April, the two companies said they would jointly develop a new small car. "They need a partner for the supermini," Professor Garel Rhys, director of the centre for automotive industry research at Cardiff University Business School, told the Financial Times. "They wouldn't get anywhere near the correct economies of scale on their own. It is just impossible," he said. PNC TELECOM: Lord Stevens to Quit as Chairman --------------------------------------------- The chairman of the troubled mobile phone retailer PNC Telecom, Lord Stevens of Ludgate, may resign from his post to comply to a compromise deal stitched together to end a damaging month-long dispute between the company and its founder and minority shareholder Geremy Thomas, The Independent said Monday. Under a draft agreement, Lord Stevens will quit along with five of the seven directors, including non-executive director Peter Dicks. Mr Thomas will become deputy chairman under John Peett, another non-executive director of PNC who was one of the founders of Vodafone. The Independent said: "If the deal is approved by a board meeting of PNC, which was still going on last night, Mr. Thomas will withdraw his EGM resolutions." "If the deal were rejected, Mr. Thomas would put the matter to a vote, which he believes he would win as he already has support from investors with 40 per cent of PNC," the report added. Reportedly, it is crucial that the deal would allow Ian Gray, credited with having turned round the business since he joined the company in June as a replacement for Darren Ridge, to continue as chief executive. PNC directors had feared Mr Thomas would have brought Mr. Ridge, whom the company is pursuing with a writ for misappropriation of funds, back into the company if he had won control. There is still, however, a risk the deal would fall apart during the board meeting amid rumors that Mr. Thomas was holding out for the job of executive chairman. The struggle for control of PNC has been bitterly fought with allegations of dirty tricks, threats of libel writs, and High Court legal battles, the report said. RAILTRACK GROUP: Delisted from London Stock Exchange ---------------------------------------------------- About 8 million shares of Railtrack Group changed hands Friday last week, the last time for the shares to be traded on the London Stock Exchange. The delisting from the bourse ends six turbulent years for investors, during which Railtrack's shares peaked at more than GBP17 at the end of 1998 before falling sharply in the wake of the Hatfield rail crash in 2000, the Financial Times said. On Friday, the remaining property portfolio of the group was sold for GBP63 million, completing the winding up of the group. According to the paper, the remaining 220,000 shareholders, about 10% of which are small-scale investors, are expecting a payout of between 253p and 260p a share from Deloitte and Touche, the company's liquidator. The first payment of 200p will be made on January 10 with the rest, minus 1p a share held back in case of unknown claims, expected to be distributed by the end of 2003, the paper said. Railtrack was privatized under the Conservative government in 1996 but its shares were suspended at 280p in October 2001 when Stephen Byers, the former Labour transport minister, placed the company in administration. The sale of Railtrack's remaining property assets to Hammerson, which owns Brent Cross shopping centre in London, was the final disposal needed before the payout can be made. The GBP63 million raised compares with a book value for the assets of GBP33 million. Jamie Smith, joint liquidator of RT Group, told the paper the bidding process had been competitive, attracting 40 expressions of interest for the package, which consists of 24 development sites. But Mr. Smith warned, however, that the payout was still contingent on there being no expensive litigation brought against RT Group and no further liabilities being found. Britain's rail infrastructure is now owned by Network Rail, a not-for-profit company whose debts are guaranteed by the government. ROYAL MAIL: Wants Three-year Price Freeze Scrapped -------------------------------------------------- Struggling British courier, Royal Mail, faces a GBP330 million pension shortfall and is asking the mail regulator, Postcomm, to scrap a three-year price freeze on the group, reports The Scotsman. In a 100-page submission to the regulator, the state-owned postal company said it does not want an increase in addition to the one that will take effect this year. Rather it wants flexibility to hike prices. Under current proposals, the cost of both first and second-class stamps is set to increase by a penny to 28p and 20p in April. The regulator has already approved the penny rise but wants the average price of all Royal Mail's services to be frozen until 2006. Losing an average of GBP1 million a day, the company said aside from the pensions black hole, it also faces a GBP120 million bill from higher National Insurance contributions. Royal Mail's retirement scheme covers some 443,000 workers, one of the biggest pension funds in Britain, and is made up of two funds valued in March last year at a total of GBP15.6 billion. Share prices have since plunged and the postal group believes it will have to pump in an extra GBP330 million over the next two years, The Scotsman said. The postal firm is currently restructuring operations. Its recovery program involves 30,000 job losses from a workforce of 200,000 - half of which have already been made. Reports in February suggested the lay-offs could lead to a pension shortfall of GBP800 million - claims then dismissed by Royal Mail as "alarmist," The Scotsman said. WAX LYRICAL: UK Unit Faces Administrative Receivership ------------------------------------------------------ Blyth, Inc. (NYSE:BTH) announced Friday that it had elected to place Wax Lyrical Limited, its U.K.-based specialty retail chain of 35 candle stores with annualized Net Sales of approximately USD16 million, in administrative receivership. The Company currently expects substantial full fiscal year 2003 operating losses at Wax Lyrical, and to report an estimated loss on disposal of Wax Lyrical in its 2003 fourth fiscal quarter, impacting earnings per share by approximately USD.04 - USD.06. This reduces the 2003 fourth fiscal quarter EPS outlook to USD.49 - USD.54 versus USD.29 for the same period last year. The Company made its initial investment in Wax Lyrical in 1998, acquired majority interest in February 2000, and currently owns substantially all of the outstanding shares. During that time, Wax Lyrical has been unable to achieve sustained profitability, largely due to the fact that distribution of candles and related accessories has become increasingly more mainstream, with the major retail chains as well as specialty retailers offering a wide variety of competitive product. Besides Wax Lyrical, Blyth has a significant wholesale business in the U.K. and Europe through Blyth HomeScents International, marketing home fragrance products and related accessories through its Colony Group, based in the U.K., and its Gies Group, based in Germany. In addition, Blyth markets its products directly to consumers in the U.K. and Europe through its PartyLite direct sales unit. Blyth's exiting of the retail channel is expected to have no effect on the balance of its European businesses. Robert B. Goergen, Blyth's Chairman of the Board and CEO, said, "Blyth's investment in Wax Lyrical offered us an additional opportunity to understand the marketplace for home fragrance products in the U.K. and Europe. However, specialty retailers have faced significant challenges in recent years as the economy slowed. In addition, fragranced candles have become more readily available to consumers, as evidenced by the success of our direct sales and consumer wholesale operations, undermining the viability of niche players such as Wax Lyrical. We have learned a lot, with the results clearly indicating that our combined direct sales and consumer wholesale strategy is the preferred method of growth for Blyth in what remains a very attractive marketplace for our products." Blyth, Inc., with annualized net sales of approximately $1.2 billion, is headquartered in Greenwich, CT, USA. The Company designs, manufactures and markets an extensive line of candles and home fragrance products including scented candles, potpourri and other fragranced products, as well as tabletop illumination products and portable heating fuel, and markets a broad range of related candle accessories. Its products are sold direct to the consumer under the PartyLite(r) brand, to retailers in the premium and specialty retail channels under the Colonial Candle of Cape Cod(r), Colonial at HOME(r), Kate's(tm) and Carolina(r) brands, in the mass retail channel under the Florasense(r), Ambria(r) and FilterMate(r) brands and to the Foodservice industry under the Ambria(r), Sterno(r) and HandyFuel(r) brand names. In Europe, its products are also sold under the Colonial, Gies, Ambria and Carolina brands. Blyth also markets a broad range of Creative Expressions products, including home decor and giftware products under the CBK(tm) brand, seasonal products under the Midwest of Cannon Falls(r) and JMC Impact(tm) brands, and paper-related products under the Jeanmarie(r) brand. CONTACT: BLYTH, INC., Greenwich Robert H. Barghaus, Chief Financial Officer (203) 661-1926, ext. 6668 Jane F. Casey, Vice President (203) 661-1926, ext. 6619 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 2003. 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 * * *