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/raid1/www/Hosts/bankrupt/TCREUR_Public/030121.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Tuesday, January 21, 2003, Vol. 4, No. 14 Headlines * B E L G I U M * FORTIS: Reaches Settlement With Disgruntled Investors * F R A N C E * AIR LIB: Government to Announce Decision Early This Week REIMS AVIATION: Attracts Bids From Two Interested Parties VIVENDI UNIVERSAL: Tenders Initial Payment for Cegetel * G E R M A N Y * KIRCH MEDIA: To Review Offer of Haim Saban This Week * I R E L A N D * ELAN CORP.: Pharma Files Lawsuit Against Elan in New York * N E T H E R L A N D S * JOMED N.V.: Board Initiates Investigation by Outside Auditors ROYAL PHILIPS: Moody's Downgrades Senior Debt Rating ROYAL PHILIPS: Issues Comment on Moody's Statement * P O L A N D * ELEKTRIM: Meeting Fails to Adopt Any Proposed Resolution * S P A I N * JAZZTEL PLC: In Search for Merger Partner, Say Sources * S W E D E N * LM ERICSSON: Sells Optoelectronics Operation to Northlight * S W I T Z E R L A N D * ABB LTD: ABB and Combustion Engineering Reach Asbestos Agreement ABB LTD: S&P Ratings Unaffected by Deal With Asbestos Claimants CREDIT SUISSE: Appointments at CSFB and CSAM in Switzerland * U N I T E D K I N G D O M * ABBEY NATIONAL: HBOS Offers to Buy Motor Finance Division ANTISOMA PLC: Informs Public of Additional Share Listing BAE SYSTEMS: Holds Preliminary Merger Talks With Boeing ITV DIGITAL: Granada and Carlton to Buy Set-Top Boxes for Clients KINGFISHER PLC: Sells Electricals Business to Former Owners LEGGMASON INVESTORS: Board Winds Up Trust and Securities MYTRAVEL GROUP: Lasminute.com Eyes Short-break Business NTL INC.: Maxcors Secures Stay Relief for Settlement Adjustments NTL INC.: Judge Gropper's Interim When-Issued Stock Trade Order RAILTRACK GROUP: Threatens to File Case Against Government SMG PLC: Investors Skeptical About Sale of Publishing Arm ============= B E L G I U M ============= FORTIS: Reaches Settlement With Disgruntled Investors ----------------------------------------------------- Dutch-Belgian Fortis said it has reached a settlement with a group of investors who had filed a case against the bank, according to a report released by Reuters. However, the report did not name the investors or the amount of damages they were seeking. The lawsuit was filed in March 2001 after the bank's Bahamas-based fund, Oracle, was liquidated, according to the report, which cited Fortis' spokesman Wilfred Remans. A court hearing of the case would have been held on Monday, but was postponed to next week to give the parties time to reach a settlement. Remans said, "We can confirm that our local subsidiary is pleased that this action against it has been concluded finally," referring to the bank's Bahamas unit. Remans declined to reveal the amount of the settlement. A report from German business daily Handelsblatt indicated that Oracle investors had sued the company for allegedly mismanaging US$300 million in investments. The report added that about two- thirds of the investments were lost. =========== F R A N C E =========== AIR LIB: Government to Announce Decision Early This Week -------------------------------------------------------- Transport Minister Gilles de Robien is expected to announce the government's decision on the new restructuring plan for troubled airline Air Lib as early as the beginning of the week, says AFX. The government had previously stressed that it would only accept the restructuring with a "firm and irreversible" support of an investor. That condition was satisfied when a Dutch investor group pledged up to EUR50 million of financial support for the carrier. The news came a week after the French government rejected the carrier's amended restructuring plan. Mr. de Robien deemed the proposal unacceptable, as it would effectively require the government to raise its EUR120 million outstanding credits to the airline The schedule of the announcement this week also coincides with the European Commission's plan to open an inquiry to determine whether the company received illegal state aid in 2002. In a separate report, spokesman Pascal Perri told French daily Liberation that Air Lib chairman Jean-Charles Corbet will resign "before year end." The paper quoted the chairman as saying he had always indicated he could not stay for more than two years. CONTACT: AIR LIB 42 Rue F. Forest Imm. Le Sommet 97122 Jarry-Baie Mahault Phone: +590-(0)5.90.32.56.00 Fax: +590-(0)5.90.26.64.02 REIMS AVIATION: Attracts Bids From Two Interested Parties --------------------------------------------------------- French investment company Finance Conseils Participations and Austrian group Ventana are interested in bidding for insolvent French aircraft manufacturer Reims Aviation. According to Les Echos, Finance Conseils Participations wrote to the aircraft manufacturer's administrator saying it intends to develop the manufacture, marketing and maintenance of the company's marine surveillance aircraft F406. FCP said the offer would save between 35 and 40 jobs. Ventana, which specializes in sub-contracting for the heavy engineering and automotive sectors, meanwhile, said it plans to continue production of components on behalf of other aircraft manufacturers. Local authorities signed in to help pave the way for acquisitions by taking over part, or all, of the company's properties. The company's administrators had set January 24 as the deadline for accepting offers from bidders. Reims-Aviation has a turnover of EUR36.6 million in 2001, and employs 450 workers. CONTACT: REIMS AVIATION SA Aerodrome de REIMS-PRUNAY BP 2745 51062 REIMS CEDEX Phone: 03 26 48 46 46 Fax: 03 26 49 13 60 E-mail: E-Mail reims.aviation@reims-avition.fr Home Page: http://www.reims-aviation.com VIVENDI UNIVERSAL: Tenders Initial Payment for Cegetel ------------------------------------------------------ Debt-laden French company Vivendi Universal paid British Telecoms an initial EUR2.7 billion (GBP1.8 billion) for the purchase of BT's 26% stake in Cegetel last week, reported the Scotsman, citing a spokesman for the company. The stake is worth EUR4 billion (GBP2.6 billion) and Vivendi will deliver the remaining payment this week, the report says. Vivendi aborted Vodafone's planned acquisition of the stake in France's second largest mobile phone operator when it decided to exercise its pre-emptive rights in Cegetel. Following the acquisition, Vivendi's control in the telecomsoperator increased to 70%, which effectively raised its holding in SFR, France's mobile phone operator, to 56%. The transaction will give Vivendi Universal majority control over Cegetel and SFR, two strong-growth companies that generate significant cash flow. Vivendi Universal is pursuing a target of reducing debt to below EUR8 billion by the end of 2004. CONTACT: VIVENDI UNIVERSAL (Investor Relations) (Paris) Daniel Scolan Phone: +33 (1).71.71.1470 or Laurence Daniel Phone: +33 (1).71.71.1233 or (New York) Eileen McLaughlin Phone: 212/572-8961 ============= G E R M A N Y ============= KIRCH MEDIA: To Review Offer of Haim Saban This Week ---------------------------------------------------- Insolvency managers of KirchMedia, the insolvent German TV and film rights company, are scheduled to meet U.S. media entrepreneur Haim Saban this week to consider the latter's bid for Kirch's core media assets. Munich-based Kirch is selling its film rights library, as well as a 52.5% stake in private broadcaster ProSiebenSat.1 Media AG. The meeting follows demand from the U.S. Embassy in Berlin for Kirch to review the bid of the Hollywood billionaire. It is known that Kirch ignored Saban's more than EUR2 billion (US$2.1 billion) bid last year to prefer German publisher Heinrich Bauer Verlag's bid of slightly less. Yet, despite the review, Kirch is still seeking to reach a deal with Bauer Verlag, a spokesman for the company told Financial Times Deutschland. The parties are yet to agree as to the date and conditions under which, creditor banks are to be partially repaid for loans granted to Kirch for its film rights activities. Bauer says it will take years. Kirch Group collapsed under a EUR1.9-bilion debt load from banks and studios last year after overspending on film rights acquisition and supporting its troubled pay-TV division, Premiere. UBS Warburg is Kirch's financial adviser. CONTACT: KIRCHMEDIA GMBH & CO. KGAA Communication & PR Phone: +49 (0)89 9956-2325 ============= I R E L A N D ============= ELAN CORP.: Pharma Files Lawsuit Against Elan in New York --------------------------------------------------------- Elan Corporation, plc said that Pharma Operating Ltd., a wholly- owned subsidiary of Pharma Marketing Ltd., filed a lawsuit in the Supreme Court of the State of New York against Elan and certain of its subsidiaries in connection with a risk-sharing arrangement between the parties pursuant to which Pharma Operating acquired royalty rights to the Sonatar product. The lawsuit seeks, among other things, a court determination that Pharma Operating's approval would be required in the event of a sale by Elan of its interest in Sonata to a third party. Elan believes the lawsuit is without merit and intends to vigorously defend it. Elan is focused on the discovery, development, manufacturing, selling and marketing of novel therapeutic products in neurology, pain management and autoimmune diseases. Elan shares trade on the New York, London and Dublin Stock Exchanges. CONTACT: ELAN CORPORATION PLC Emer Reynolds, Vice President, Investor Relations Lincoln House, Lincoln Place Dublin 2, Ireland Phone: +353-1-709-4000 +353-1-709-4108 ===================== N E T H E R L A N D S ===================== JOMED N.V.: Board Initiates Investigation by Outside Auditors ------------------------------------------------------------- JOMED N.V., a company registered in the Netherlands and quoted on the Swiss SWX Exchange, is striving to quickly clear up its accounting problems. The new management team is currently negotiating with all creditors and debenture holders to assure the company remains liquid. The terms of the EUR 25 million convertible bond debenture, issued in July 2002, permit immediate redemption of the face amount at 120% plus accrued interest under current certain circumstances. The bond has been called in due to the balance sheet errors in the financial statements. The company's management team is currently conducting intensive negotiations with all the creditors and debenture holders involved. The Supervisory Board of JOMED N.V. has initiated a comprehensive investigation of the company's accounting practices and has hired KPMG in Sweden (the seat of the company's Finance Department) to begin carrying out the investigation immediately. The aim is to completely clear up the erroneous entries made in 2001 and 2002. The investigation also encompasses possible stock transactions by individuals. At the same time, the Supervisory Board has formed a Finance Committee and an Investigative Committee to monitor the financial situation and the annual audit. Jan-Eric Tsterlund, Chairman of the Supervisory Board, explained these actions as follows: "The main goal of the JOMED Supervisory Board is to regain investor confidence. We hope to attain this through a thorough and rigorous investigation of all occurrences connected with the baffling false entries and by keeping the company's liquidity under control." The Supervisory Board regrets these occurrences and will report on the current situation and the measure to be taken as soon as KPMG Sweden's investigation is completed - probably in late January. CONTACT: The Investor Relations Firm Phone: +41 43 244 81 41 ROYAL PHILIPS: Moody's Downgrades Senior Debt Rating ---------------------------------------------------- Moody's Investors Service has downgraded the ratings for senior debt of Amsterdam-based Royal Philips Electronics to reflect challenges that the company face in implementing its cost cutting measures. The company aims to cut EUR1 billion of costs as part of continued restructuring. The rating agency lowered the ratings for senior debt of Royal Philips Electronics (Philips) to Baa1 from A3 and changed the outlook for the ratings to stable. The Prime-2 rating of Philips for short-term debt was confirmed. The Baa1 rating has a stable outlook and encompasses known market and implementation risk. Philips' strategy includes adding stability to its business portfolio, increasing cost efficiency and reducing its asset base. While recognizing that Philips is already advanced in integrating acquired business to become a full-range competitor, Moody's warned that there are still several steps more in realizing the margin potential inherent in the business. According to the rating agency, the full realization of the potential in Moody's view is still subject to significant execution risk as well as market stabilization. It cautioned that a seasonally strong fourth quarter last year does not necessarily mean market recovery. Royal Philips Electronics N.V. is one of the world's biggest electronics companies and Europe's largest, with revenues of around EUR23 billion in the first 9 months of fiscal year 2002. ROYAL PHILIPS: Issues Comment on Moody's Statement --------------------------------------------------- The company's targeted EUR 1 billion in cost savings is on schedule. The savings include a 25% reduction of overhead costs (actual savings were EUR 300 million on a run-rate basis at the end of 2002), EUR 350 million savings from the integration of the acquisitions made by Philips Medical Systems, half of which have been already realized and half of which have identified programs that are running to plan. A remaining EUR 350 million savings in purchasing and other costs by the end of 2003 are also on schedule. Philips Medical Systems is on track to achieve its earlier stated performance objectives, including EBITA margins of 14% in 2004, based upon its leading position across a range of medical modalities. Philips' year-end 2002 net debt position was EUR 5.25 billion, a reduction of EUR 1.7 billion in the fourth quarter, with a strong contribution from tight working capital management. Net debt is expected to be further reduced during 2003, as a result of cash flow from operations. Philips has taken actions to lower the break-even point, and is in good shape to benefit should there be a market recovery. Philips is also dedicated to maintaining its financial standards, which are commensurate with an A rated company. On February 11, 2003, Philips will announce its full year results and publish its 2002 annual report. About Royal Philips Electronics Royal Philips Electronics of the Netherlands is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 32.3 billion in 2001. It is a global leader in color television sets, lighting, electric shavers, medical diagnostic imaging and patient monitoring, and one-chip TV products. Its 184,000 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, components, semiconductors, and medical systems. Philips is quoted on the NYSE (symbol: PHG), London, Frankfurt, Amsterdam and other stock exchanges. News from Philips is located at www.philips.com/newscenter =========== P O L A N D =========== ELEKTRIM: Meeting Fails to Adopt Any Proposed Resolution -------------------------------------------------------- Elektrim has informed the public that the company's Extraordinary General Assembly has been closed without adopting any of the resolutions on the agenda. The company did not provide further details in the statement it released, but Warsaw Business Journal reported on the same day of the meeting that the unsolved conflict between Ryszard Opara, deputy-president of Elektrim and Jan Rynkiewics, a former member of the management board, is likely to be the stumbling block of the meeting. The report says, "There is a strong possibility that the meeting will close almost immediately after having been opened without tackling any substantial issues." According to the news agency, Opara failed to pay Rynkiewicz the PLN6-million commission the latter is demanding for his help in purchasing the holding's shares. The non-payment resulted to the shares being confiscated. The report further noted that in case this issue will not be resolved, the meeting would have to discuss the appointment of a new supervisory board. ========= S P A I N ========= JAZZTEL PLC: In Search for Merger Partner, Say Sources ------------------------------------------------------ Spanish fixed telecom provider Jazztel, a company currently being reorganized, is looking for a merger partner, say unnamed sources of Spanish daily Expansion. According to the report, Jazztel has hired investment bank Rothschild to look for possible investors that would help it grow in the telecom market following a deep-reaching financial restructuring. The company had earlier entered into merger talks with rival Uni2, a France Telecom subsidiary. The company's restructuring last year cancelled the company's EUR668 million of high-yield bonds, in exchange for over 457 million new shares and EUR75million of convertible bonds. It also led to the departure of 340 employees. The Spanish stock market regulator approved the scheme on November 28, giving Jazztel's former bondholders 88% of the company. Jazztel, which accumulated debt expanding its network, was expected to have EUR96.1 million of available cash at the end of the third quarter. CONTACT: N M ROTHSCHILD & SONS LIMITED New Court, St. Swithin's Lane London EC4P 4DU, United Kingdom Phone: +44-20-7280-5000 Fax: +44-20-7929-1643 Home Page: http://www2.nmrothschild.com/home/ =========== S W E D E N =========== LM ERICSSON: Sells Optoelectronics Operation to Northlight ---------------------------------------------------------- Ericsson has signed an agreement to sell its optoelectronics operation Ericsson Optoelectronics to Northlight Optronics AB. The deal is effective immediately and Ericsson Optoelectronics' 48 employees will be transferred to the new company for the forseeable future. The sale is in line with Ericsson's ongoing process to focus on its core business of providing systems and services for telecom operators. Ericsson Optoelectronics is a supplier of optoelectronic components and modules located in Stockholm, Sweden. The purchase includes all activities, mainly development and certain manufacturing. Northlight Optronics AB takes over the entire staff. Ericsson retains 9.9 percent ownership in the new operation. Ericsson is shaping the future of Mobile and Broadband Internet communications through its continuous technology leadership. Providing innovative solutions in more than 140 countries, Ericsson is helping to create the most powerful communication companies in the world. CONTACT: LM ERICSSON Investors: Gary Pinkham, Vice President Investor Relations Phone: +46 8 719 0858 or +46 730 371 371 E-mail: investorrelations@ericsson.com Homepage: http://www.ericsson.com/ ===================== S W I T Z E R L A N D ===================== ABB LTD: ABB and Combustion Engineering Reach Asbestos Agreement ---------------------------------------------------------------- ABB and its U.S. subsidiary Combustion Engineering (CE) announced they have agreed to a pre -packaged bankruptcy plan for CE with representatives of asbestos plaintiffs, which constitutes a significant milestone in the process to resolve CE's asbestos liability. The agreement in principle on a pre -pack asbestos bankruptcy plan for CE was reached with the proposed futures representative, David Austern, as well as with attorneys who ABB and CE expect to act on behalf of a sufficient number of current claimants to approve the plan. A trust, set up under the plan, will handle claims filed after a pre-packed Chapter 11 reorganization has been approved in court. Once documentation on the agreement in principle has been completed, the plan will be subject to a vote by asbestos claimants. ABB and CE expect to send the plan out for vote early next week. If sufficient claimants approve the pre -pack Chapter 11 plan, it will be filed in bankruptcy court for final approval. Under the agreement, the value of Combustion Engineering on the due date will be made available for the payment of asbestos claims. At the end of September 2002, CE's value was US$ 812 million. In addition, ABB agreed to provide an enhanced payment for the benefit of claimants in the form of ABB stock and cash. The cash payments are to be made in pre -agreed installments from 2004 to 2009. These cash payments for CE's asbestos liability could total up to US$ 350 million, comprised of US$ 250 million that are not dependent upon ABB's future performance and US$100 million that are performance-related. An additional US$ 50 million in ABB stock will also be contributed at specified prices prevailing during the last quarter of 2002. With this agreement, CE and ABB are on schedule to file a pre - pack bankruptcy case in court for CE before the end of February, aiming to provide final closure to the asbestos problem to CE and all ABB affiliates, including ABB Ltd. ABB (www.abb.com) is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impacts. The ABB Group of companies operates in more than 100 countries and employs about 146,000 people. CONTACT: ABB LTD Investor Relations Switzerland Phone: +41 43 317 3804 Sweden Phone: +46 21 325 719 USA Phone: + 1 203 750 7743 ABB LTD: S&P Ratings Unaffected by Deal With Asbestos Claimants --------------------------------------------------------------- Standard & Poor's informs that its ratings on Switzerland-based engineering company ABB Ltd. (BB+/Negative/B) are unaffected by the announcement that the group has reached an agreement on a prepackaged asbestos bankruptcy plan for its U.S. subsidiary, Combustion Engineering Inc., with representatives of claimants. It says that asbestos claimants still have to approve the plan before it can be filed in bankruptcy court for final approval. It also explained that the plan, whose terms the agency confirmed is line with the company's previous announcements, "would have very moderate implications for future cash flows, and its terms also appear to be better than the market's expectations." It, however, affirmed that once approved, the plan should significantly reduce ABB's exposure to asbestos litigation and constitute a sound position from which to execute the group's corporate restructuring and asset disposal program. These would positively influence ABB's financial position in the medium term. CREDIT SUISSE: Appointments at CSFB and CSAM in Switzerland ----------------------------------------------------------- Credit Suisse First Boston and Credit Suisse Asset Management have announced appointments to the rank of Director and Vice President in Switzerland, effective January 1, 2003. CREDIT SUISSE FIRST BOSTON Director Atallah, Karim Zurich Marti, Urs Zurich Bhend, Markus Zurich Metry, Arthur K. Zurich Fink, Madeleine Zurich Sigrist, Beat Zurich Jehle, Claude Zurich Slater, Michael J. Zurich Keller, Andr, Zurich Trauth, Thomas Zurich Lang, Markus Zurich Wagner, Inga Zurich Leibssle, Thomas Zurich Wiedemeier, Peter Zurich Maechler, Emil Zurich Zgraggen, Alex Zurich Vice President Buehler, Edit Zurich Jaquet, Michael Zurich Cerutti, Fabrizio Lugano Konstantinidis, Konstantin A. Zurich Colpo, Fr,d,ric Zurich Kuhn, Thomas Winterthur De Gottardi, Claudio Zurich Laffler, Robert J. Zurich Diche, Gregory Geneva Maclean, Scott Zurich Eggenberger, Roman Zurich Reber, Richard Zurich Faessler, Adrian Zurich Rezakhanlou, Karen Zurich Funk, Hardy Zurich Ruede, Philipp Zurich Halser, Christian M. Zurich Santi, Orlando Zurich Heine, Thomas Zurich Tschannen, Paul Max Zurich Hinkelmann, Jens Winterthur Wettstein, Roger Zurich Hubler, Gregor R.D. Geneva Wicht, Emmanuel Geneva Hunkeler, Martin Zurich Zanini, Roland Zurich Isenring, Alexander Zurich Zwahlen, Daniela Zurich CREDIT SUISSE ASSET MANAGEMENT Director Federer, Thomas Zurich Ruschak, Roger Zurich Gisler, Christoph Zurich Stalker, Michael Zurich Langewand, Jens Zurich Sutter, Heini Basel Looser, Stefan Zurich Wullschleger, Peter Zurich Possa, Bernard Zurich Vice President Christen, Thomas Zurich Rogger, Markus Lucerne Commissaris, Anton Zurich Schmid, Michael Zurich Diderich, Claude Zurich Schwarb, Martin Zurich Dobal, Vivienne Zurich Stiffler, Conradin Zurich Fitze, Christian Zurich Valka, Katerina Zurich Gasser, Hubert Zurich Vrang, Karin Zurich Hiestand, Andreas Zurich Weber, Benno Zurich Hirt, Gregor Zurich Winkler, Andr, Basel Iannella, Angelo Zurich W�rgler, Marius Zurich Monod, Laurent Zurich Z�rcher, Marcel Zurich Nawrath, Michael Zurich Roost, Marcel Zurich Rentsch, Matthias Zurich =========================== U N I T E D K I N G D O M =========================== ABBEY NATIONAL: HBOS Offers to Buy Motor Finance Division --------------------------------------------------------- Banking Group HBOS is believed to have offered Abbey National GBP150 million for the motor finance division of the bank's consumer credit arm First National, reports say. As part of its strategy to unload non-core assets and concentrate on retail financial services, Abbey National put the business up for sale in September. However, according to the Sunday Telegraph, Abbey has since considered breaking up the operation after struggling to find an investor willing to acquire the unit for GBP800 million. In December, the bank made its first planned disposals of non- core business by unloading Porterbrook, the GBP1 billion train- leasing division. It is expected that Abbey will announce further disposals at its full-year results on February 26. Abbey National's share price has lost as much as 48 percent of its value last year. CONTACTS: Thomas Coops (Director of Corporate Communications) Phone: 020 7756 5536 Jon Burgess (Head of Investor Relations) Phone: 020 7756 4182 E-mail: investor@abbeynational.co.uk ANTISOMA PLC: Informs Public of Additional Share Listing -------------------------------------------------------- Application has been made to the London Stock Exchange and the U.K. Listing Authority for the admission to the Official List of 20,733,240 Ordinary shares of 1 pence each. The shares have been issued in connection with the strategic oncology alliance with Roche as announced on 18 November 2002. Application has also been made to the London Stock Exchange and U.K. Listing Authority for the admission to the Official List of 5,000 Ordinary shares of 1 pence each. These shares have been issued in connection with the exercise of options from the Employee Share Option Scheme. These shares will rank pari passu with the existing class of Ordinary shares of 1 pence each. The total number of Ordinary shares of 1 pence each in the Company in issue and admitted to the Official List following the above transactions will be 228,065,648. CONTACT: ANTISOMA PLC Raymond Spencer, Chief Financial Officer Phone: +44 (0)20 8799 8200 BAE SYSTEMS: Holds Preliminary Merger Talks With Boeing ------------------------------------------------------- Defense company BAE Systems has entered into exploratory talks with Boeing that sources close to the British firm say could revive discussions about a possible GBP20 billion merger, which were put on hold five months ago. The report, meanwhile, has put further pressure on Defense Secretary Geoff Hoon who is due to decide on a GBP10 billion contract for two new U.K. aircraft carriers, says the Scotsman. BAE is seeking to bag the contract, but by entering into talks with Boeing "BAE is letting it be known that it has alternatives up its sleeve if the government fails to award it the aircraft carrier contract or continues to play it tough over the company's potential losses on its contracts for Astute submarines and Nimrod surveillance aircraft," says one stockbroker. The government had refused to shoulder potential losses of up to GBP1 billion on previous deals over Nimrod and the submarines. The losses have led to some fears that BAE might have to postpone publication of trading results, which are due next month. Though a merger could create an American-controlled business employing 300,000 employees, it could, however, involve considerable regulatory difficulties, including a demand from the European Commission that BAE sells its 20% stake in the Airbus consortium. An American takeover of the U.K.'s leading defense contractor is also seen as potential embarrassment for the government who initially commented that BAE was no longer a British company. The remark, which was partially retracted afterwards, had suggested the government would not help BAE secure the contract away from French group Thales, says the report. The report noted that while BAE's belief that its "Britishness" is an edge in the battle, Paris-based Thales is supported by the assertion of equal treatment under European Union rules. ITV DIGITAL: Granada and Carlton to Buy Set-Top Boxes for Clients ----------------------------------------------------------------- Parents of collapsed pay-television service ITV Digital, Granada and Carlton, will award to ITV's subscribers the set-top boxes the households have subscribed but which are being demanded back by the company. The companies plan to pay GBP2.8 million (US$4.5 million) for 990,000 set-top boxes currently owned by subscribers. The move is aimed at preventing "the prospect of an army of door-to-door debt collectors harassing households," says the Financial Times. Last month, liquidators Grant Thornton ordered ITV Digital's more than 1 million customers to "stump up" GBP40 or return their set- top box, or else face debt collection agencies. The move was seen as the liquidator's last attempt to save some cash from the company, which collapsed in 1999 under a GBP1.24 debt load in April. The joint liquidators said that under the contract the subscribers merely borrows the units and are required to pay GBP200 if they wanted to keep the item on cancellation of the contract. The deal with Granada and Carlton in effect involves subsidising a customer base for Freeview, the replacement service that is run by ITV's arch rivals the BBC and British Sky Broadcasting, says the report. Under the transaction, 8,000 households that have already sent Grant Thornton a GBP39.99 cheque will be sent refunds. CONTACT: GRANT THORNTON International Contact: Anuj Chande Grant Thornton House Melton Street, Euston Square London NW1 2EP UK Phone: 44 (0) 87 0991 2133 Fax: 41 (0) 20 7387 5356 E-mail: anuj.j.chande@gtuk.com Home Page: http://www.grantthornton.co.uk International Contact: Mr David Naylor St John's Centre 110 Albion Street Leeds LS2 8LA UK Phone: 44 (0) 113 246 0211 Fax: 44 (0) 113 242 7386 E-mail: david.m.naylor@gtuk.com International Contact: Mr George M Ross 95 Bothwell Street Glasgow G2 7JZ UK Phone: 44 (0)141 223 0009 Fax: 44 (0)141 223 0001 E-mail: george.m.ross@gtuk.com KINGFISHER PLC: Sells Electricals Business to Former Owners -------------------------------------------------------------- Kingfisher plc announced that it has reached an agreement to sell its German electricals business Kingfisher Beteiligungs GmbH ('ProMarkt Group') to its former owners, Michael and Matthias Wegert, for EUR1. In addition, Kingfisher is supporting the immediate working capital requirements of the business with a cash contribution of EUR55 million (GBP35 million). It is also making available a repayable working capital loan facility (on normal commercial terms) for up to EUR32.5 million (GBP20 million) to cover peak seasonal requirements, namely the periods August 2003 to January 2004 and August 2004 to January 2005. Completion is expected by the end of February. The sale includes 92 ProMarkt electrical stores in Germany and Austria together with a chain of 93 photographic stores (Foto- Radio Wegert), a photographic processing laboratory and the ProMarkt online business. ProMarkt employs over 3,500 people and reported a retail loss of just under GBP28 million in the year to 2 February 2002 on a turnover of GBP625 million. ProMarkt's losses in the current financial year are expected to increase to around GBP35 million. There will be a non-operating exceptional loss on disposal of around GBP190 million based on ProMarkt's net book value. Kingfisher's Chairman Francis Mackay said: 'This sale secures the immediate future of ProMarkt and its employees and minimises the cash cost to Kingfisher of withdrawing from this loss making business. It also represents another key step towards the separation of our electricals business and I remain confident that we will complete the separation within our previously announced timetable.' Kingfisher purchased the German electricals Group in several staged transactions between 1998 and 2000 for a total cumulative cost of just under GBP111 million Kingfisher is Europe's leading home improvement retailer and is ranked number three in the world. The Company operates more than 600 home improvement stores in 12 countries and enjoys market- leading positions in the U.K., France, Poland and Taiwan. Sales for the Home Improvement sector for the year to 2 February 2002 were more than GBP5.8 billion, with retail profit in excess of GBP430 million. Kingfisher also has a strategic alliance with Hornbach, Germany's leading big box home improvement retailer, which operates 99 stores across Europe. Kingfisher's Electrical & Furniture business operates more than 830 stores in nine countries. It is Europe's third largest electricals retailing business by sales and number two by retail profit. As well as holding the leading position in France with Darty and BUT and the number two position in the UK with Comet, Kingfisher also enjoys leading positions in Belgium and in the Czech and Slovak Republics. Sales for the year to 2 February 2002 were more than GBP3.7 billion, with retail profit of GBP184 million. CONTACT: KINGFISHER PLC Ian Harding, Director of Financial Communications Phone: +44 (0) 20 7725 4889 Frederique Lepelletier, Head of IR, Continental Europe Phone: +33 (0) 1 42 27 7634 Jonathan Miller, Head of Corporate Comms, UK Phone: +44 (0) 20 7725 5713 Graham Fairbank, Head of Corporate Comms, France Phone: +33 (0) 1 43 18 52 26 The Maitland Consultancy Duncan Campbell-Smith Phone: +44 (0) 20 7379 5151 Kingfisher plc Phone: +44 (0) 20 7724 7749 Home Page: http//www.kingfisher.com LEGGMASON INVESTORS: Board Winds Up Trust and Securities -------------------------------------------------------- At meetings of the board of directors of LeggMason Investors Strategic Assets Trust plc and LeggMason Investors Strategic Assets Securities plc held on 17 January 2003 it was resolved that LeggMason Investors Strategic Assets Trust plc could not by reason of its liabilities continue its business and that it was advisable to wind up the companies voluntarily. The board of directors of each of the companies will therefore proceed to take such steps as are necessary to convene a meeting of the shareholders and creditors of the companies with a view to the companies being placed into creditors' voluntary liquidation. As at the close of business on 16 January 2003, the companies (on a consolidated basis) had cash of GBP5.8 million, investments at mid market value (which may not represent realizable value) of GBP5.9 million and external liabilities of approximately GBP14.4 million. A circular will be posted to shareholders shortly. CONTACT: LEGG MASON INVESTMENTS (EUROPE) LIMITED Zoe Burton Phone: 020 7070 7474 E-mail: z.burton@leggmason.co.uk or Nitya Bolam Phone: 020 7404 5959 E-mail: nbolam@brunswickGroup.com MYTRAVEL GROUP: Lasminute.com Eyes Short-break Business ------------------------------------------------------- Internet company Lastminute.com is interested in acquiring MyTravel Group's short-break business, Cresta, say unnamed sources of the Sunday Times. Cresta had also attracted private-equity firm H-G Capital Ltd. and should the retailer of short-notice flights and vacations pursue with its offer it will compete with firm. Bids for the business will be accepted starting Friday. MyTravel, formerly Airtours, is selling non-core businesses after issuing profit warnings due to the slump in holiday bookings and a series of financing gap. The company has hired Deutsche Bank to advise it on the sale of the GBP40-million (US$65 million) business. The tour operator has also recently sold the entire share capital of Sunway Travel Limited to Broomco. The consideration of GBP22.2 million was satisfied in cash at completion. Mytravel intends to use the net proceeds, after the repayment of inter-company loans, to reduce its net indebtedness by GBP16.5 million. CONTACT: MYTRAVEL GROUP PLC Parkway One, Parkway Business Centre, 300 Princess Rd. Manchester M14 7QU, United Kingdom Phone: +44-1-61 23-20-066 Fax: +44-1-61 23-26-524 Home Page: http://www.airtours.com DEUTSCHE BANK AG Investor Relations 31 West 52nd Street 29th Floor New York, NY 10019-6160 USA Phone: +1-212-469-8000 (Switchboard) Phone: +1-212-469-7125 (Investor Relations) Fax: +1-212-469-7322 E-mail: db.ir@db.com NTL INC.: Maxcors Secures Stay Relief for Settlement Adjustments ---------------------------------------------------------------- Maxcor Financial Inc., the U.S. broker-dealer subsidiary of Maxcor Financial Group Inc. (Nasdaq:MAXF), successfully sought and obtained preliminary relief from The United States Bankruptcy Court for the Southern District of New York with respect to the settlement of all when-issued trading contracts effected in the common stock of NTL Inc., prior to NTL's emergence from bankruptcy on January 10, 2003. The emergency order of the Court, signed and released this morning, provides that, pending a full hearing on notice of the merits of granting permanent relief, Maxcor and other sellers of NTL common stock in the when-issued market may settle their transactions on an adjusted basis that fully reflects the three- fourths reduction in capitalization that NTL effected and announced upon its emergence from bankruptcy. In other words, the order confirms that a seller who sold shares in the when- issued market may now settle those trades as though they were modified by NTL's one-for-four reverse stock split. Importantly, the Court's order requires buyers in such transactions to settle on the modified basis, although their rights to object thereto afterwards are preserved. For when-issued transactions that are already locked-in for settlement, on an unadjusted basis, at the National Securities Clearing Corporation, the order confirms that those trades should settle as compared, and in full accordance with the NSCC's rules. However, Maxcor understands that the order then requires broker-dealer counterparties to enter additional transactions that will offset the already settled transactions as necessary to effectuate a net result that reflects the one- for-four reverse stock split. Mario Monello, President of Maxcor Financial Inc., said, "We are pleased that the Bankruptcy Court clearly recognized the unintentional inequities in the when-issued marketplace caused by the NTL one-for-four reverse stock split. We are hopeful that market participants will adhere to the spirit, as well as the letter of, Judge Gropper's new order and stop trying to collect on a windfall that no one ever intended." The hearing in Bankruptcy Court, for a permanent modification of the settlement terms of the when-issued trades, is scheduled for the morning of January 28th. Because the relief ordered yesterday is preliminary in nature and preserves all parties' rights, Maxcor Financial Group Inc., said it could not quantify the financial effect thereof on its 1Q 2003 results. However, the Company anticipates that if the relief granted is made permanent or comparable relief is granted after the hearing, then its previously-announced estimated 1Q 2003 loss associated with the trade settlements would be significantly reduced. Maxcor Financial Group Inc. -- http://www.maxf.com-- through its various Euro Brokers businesses, is a leading domestic and international inter-dealer brokerage firm specializing in interest rate and other derivatives, emerging market debt products, cash deposits and other money market instruments, U.S. Treasury and federal agency bonds and repurchase agreements, and other fixed income securities. Maxcor Financial Inc., the Company's U.S. registered broker-dealer subsidiary, also conducts institutional sales and trading operations in municipal bonds, high-yield and distressed debt, and equities. The Company employs approximately 500 persons worldwide and maintains principal offices in New York, London and Tokyo. NTL INC.: Judge Gropper's Interim When-Issued Stock Trade Order --------------------------------------------------------------- UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ----------------------------------x : In re: : CHAPTER 11 : NTL INCORPORATED, et al., : Case No. 02-41316 (ALG) : Debtors. : ----------------------------------x ORDER Upon the Emergency Motion (the "Motion") of Maxcor Financial Inc., Owl Creek Asset Management, L.P., JMB Capital Partners L.P., Highbridge/Zwirn Capital Management, LLC, and Salomon Brothers Holding Company (the "Movants") pursuant to Section 105(a) of the Bankruptcy Code and Rule 9024 of the Federal Rules of Bankruptcy Procedure for (i) Clarification of this Court's Order of November 20, 2002 (the "November 20 Order") authorizing modifications to the above captioned Reorganized Debtors' confirmed Second Amended Joint Plan of Reorganization (the "Plan"), and (ii) modification of the terms of certain "when-issued" trades of the securities issued pursuant to the Plan; and sufficient cause appearing therefor, it is hereby: ORDERED that a hearing (the "Hearing") shall be held on January 28, 2003 at 11:30 a.m. on the Motion and the requested clarification of the November 20 Order, to the effect that the modification of the Plan, as authorized by the November 20 Order, to effectuate a reverse stock split of the New NTL Common Stock (as defined in the Plan) shall provide for a proportionate adjustment to any trades of the New NTL Common Stock on the "when-issued" market that were made or contemplated from the date of confirmation of the Plan (the "Confirmation Date") through and including the effective date of the reverse stock split; and it is further ORDERED that pending the hearing and determination of the Motion, based on the Reorganized Debtors' election to implement a one for four reverse stock split on or about December 30, 2002, as reflected in the modified Second Amended Plan filed on January 10, 2003 (the "Modified Plan"), any given seller of New NTL Common Stock (as defined in the Plan) on the "when-issued" market (each trade hereinafter a "Transaction") may, in its discretion, settle the Transaction to which it is a party, and the buyer in that Transaction is required to accept such settlement, on the basis that would exist if such trades were amended and modified by (i) reducing the number of shares traded in each such Transaction to 25% of the number of shares originally traded in such Transaction, and (ii) by increasing the new per share price to 400% of the per share price of the original Transaction so that the total consideration in the Transaction remains the same; and it is further ORDERED that from and after the date and time that this Order is entered, all parties to Transactions to be settled in accordance with the preceding paragraph, and broker-dealers and custodians (other than registered clearing agencies and OMGEO) clearing and settling Transactions, shall enter appropriate instructions to the appropriate entity, including but not limited to clearing broker-dealers or custodians or others, and make all appropriate entries in their books and records and take all other actions reasonably necessary to enter additional transactions that will offset deliveries made in respect of such Transactions in excess of those necessary to effectuate the intended settlement, provided that all affected entities shall reserve any and all rights to object thereto at the Hearing and seek damages or other relief in connection therewith, further provided, and notwithstanding anything in this or the preceding paragraph, as between National Securities Clearing Corporation ("NSCC") and its members, all transactions due to settle on January 16, 2003 and thereafter, shall proceed in accordance with the rules and procedures of NSCC, and all entities that settle on that basis may also appear at the Hearing, be heard and seek damages or other relief; and it is further ORDERED that as soon as practical but in any event no later than January 21, 2003, the Reorganized Debtors shall (a) serve a copy of this Order via overnight courier (or in respect of clause (iv) below, by electronic means) upon (i) the United States Trustee for the Southern District of New York; (ii) the Nasdaq Stock Market, Inc., and the National Association of Securities Dealers; (iii) all parties who filed notices of appearance in these cases; and (iv) all entities which are members of NSCC; (b) post a copy of this Order through Bloomberg or a similar news-wire service; and (c) publish a copy of this Order in The Wall Street Journal (National Edition); and it is further ORDERED that any objections to the relief sought in the Motion or granted herein shall be filed on or before January 23, 2003 at 5:00 p.m. and served so as to be received by hand delivery, telecopy or e-mail by the same time by (i) Kenneth H. Eckstein, Esq., Kramer, Levin, Natfalis & Frankel, 919 Third Avenue, New York, New York 10022, counsel for the movants, and (ii) Kayalyn A. Marafioti, Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036-6522, counsel for the Reorganized Debtors NTL Incorporated, et al; and it is further ORDERED that responses, if any, shall be filed on or before January 27, 2003 at 12:00 noon and served so as to be received by hand delivery, telecopy or e-mail by the same time by (i) Kayalyn A. Marafioti, Esq., Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036-6522, counsel for the Reorganized Debtors NTL Incorporated, et al., and (ii) any parties who filed objections to this order; and it is further ORDERED that any party affected hereby may seek emergency relief from the terms hereof, for cause shown. Dated: New York, New York /s/ Allan L. Gropper January 16, 2003 ------------------------------ Honorable Allan L. Gropper United States Bankruptcy Judge RAILTRACK GROUP: Threatens to File Case Against Government ---------------------------------------------------------- Private shareholders of Railtrack who are fighting for more compensation are planning take their cause to court if the transport secretary does not respond positively to their demand. David Greene, head of litigation at Edwin Coe, the action group's solicitor, said he would finish the particulars of the claim and afterwards would write to Secretary Alistair Darling. But if Mr. Darling refused to offer more compensation than the current 252p-262p a share, "we would issue proceedings," the Telegraph quoted Mr. Greene as saying. The action group, which has raised GBP26m to fight its case, plans to file a case for misfeasance, or abuse of power, and under human righst legislation against the government. Mr. Greene said their "principal witness" is former transport secretary Stephen Byers. Another possible ally is Rail regulator, Tom Winsor. He also admitted the government could also strike out the case or demand summary judgment, says the report. The group, which is composed of 42,000 members, has hired Michael Crystal QC to help them in the case. Railtrack group's shares traded for the last time at the end of last year, at which time itts remaining property portfolio was sold for GBP63 million, completing its winding up. 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. SMG PLC: Investors Skeptical About Sale of Publishing Arm --------------------------------------------------------- Investors in troubled Glasgow-based group, SMG, have come to doubt the merits of the company's decision to sell its publishing arm after details of the plan emerged, the Scotsman says. SMG is planning to sell the publishing division to Gannett U.K. Limited to halve its GBP400 million debt and focus on its other businesses, which include television, radio and cinema advertising. Last week, SMG told shareholders in a letter that the company would suffer GBP15 million to renegotiate the terms of its long- term debt. According to the report, some analysts believe the early-repayment penalty and retained pension liabilities will take the net proceeds of the Herald deal down to as low as GBP170 million. The report noted that shares in SMG have fallen since Christmas as the City re-evaluated the terms of the deal. The shares almost hit the year lows of 80p, at 80.5 p. The company also said that SMG has still not made provisions for its legal case involving DJ Chris Evans, who is suing the company for GBP9 million in shares. Evans filed the action after the company terminated his contract following its takeover of Ginger Media. Evan's ownership of a 3.17% stake in SMG still gives him the right to oppose the motion to sell the publishing arm. ************ 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. 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