/raid1/www/Hosts/bankrupt/TCREUR_Public/030211.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, February 11, 2003, Vol. 4, No. 29


                              Headlines

* B E L G I U M *

LERNOUT & HAUSPIE: Obtains Court Nod for CFSB Dispute Settlement

* F R A N C E *

AIR LIB: Negotiates With Other Prospective Investors
AIR LIB: Slots in Orly Airport May Go to Air France and Easyjet
AIR LIB: Air France Takes Measures on Air Lib's Suspension
ARCELOR SA: Corporate Credit Rating on CreditWatch Negative

* G E R M A N Y *

ALLIANZ AG: May Tap Equity Market for Capital Increase
DEUTSCHE BA: Takeover Negotiations in Danger of Falling Off
GERLING GLOBAL: Regulator May Be Set to Reject Takeover Bid
KIRCHMEDIA GMBH: In Talks With ProSiebenSat.1 Over Activities
KIRCHMEDIA GMBH: Receives New Bid From Saban and TF1
TELECOLUMBUS: Parent Puts Loss-making Unit up for Sale

* I T A L Y *

FIAT SPA: Italian Engineering Group Interested in Fiat Avio

* N E T H E R L A N D S *

VERSATEL TELECOM: To Meet or Exceed 2002 Financial Guidance

* P O L A N D *

BRE BANK: Informs Public Regarding Cancellation of Securities
BRE BANK: Reaches Agreement to Sell Shares in Elektrim SA
NETIA HOLDINGS: Announcees Changes in Management Board

* U N I T E D   K I N G D O M *

AQUILA NETWORKS: S&P Affirms Long and Short-term Ratings
AVON ENERGY: S&P Downgrades Long-term Corporate Credit Ratings
BAE SYSTEMS: To Take GBP800MM Charge for Defense Contracts
BAE SYSTEMS: Fails to List as Bidder for Watchkeeper Contract
BAE SYSTEMS: Investors Demand Boardroom Shakeup
BAE SYSTEMS: S&P Maintains Long-term Rating on CreditWatch Neg
BRITISH ENERGY: Signs Major Sales Contracts With Centrica
BRITISH ENERGY: Issues Output Statement for January
DIRECT MESSAGE: Receives Proposal to Sell Subsidiaries to Newco
GLAXOSMITHKLINE PLC: To Update Investors on Plans for Research
HP BULMER: Former Chief Executive Threatens to File Suit
LEGGMASON INVESTORS: Holders of ZDPs Required to Approve Wind up
MARCONI PLC: Reaches Agreement on Settlement of Potential Claims
TEXSTYLE WORLD: Receivers Reject Buy-out Offer for Company
THIERRY MUGLER: Parent Decides to End Ties With Couture


=============
B E L G I U M
=============


LERNOUT & HAUSPIE: Obtains Court Nod for CFSB Dispute Settlement
----------------------------------------------------------------
Lernout & Hauspie Speech Products N.V. and Dictaphone Corp.,
sought and obtained Court approval of a stipulation settling a
dispute over the allocation of the fees charged by Credit Suisse
First Boston as the Debtors' exclusive financial advisor in
connection with the sale of Mendez SA.

CSFB agreed to accept a one-time payment of $2,875,000 in full
and final satisfaction of any obligation of any member of the
Debtors to CSFB other than:

        (a) the indemnity under the engagement letter between
            the parties, and

        (b) any payment owed to CSFB from the sale of the
            assets, securities or businesses of Mendez S.A.;

CSFB filed a Second Amended and Final Fee Application seeking
approval and allowance of the $2,875,000 payment.  The Debtors
agree that, subject to the Bankruptcy Court's allowance of the
CSFB Final Fee Application for $2,875,000, they would allocate
the CSFB payment among them as:

               Debtor                         Amount
               ------                         ------
               L&H NV                     $1,387,187.28
               L&H Holdings                  712,812.28
               Dictaphone                    775,000.00

In addition to the compensation of $2,875,000, Dictaphone will
pay CSFB $750,000 in Dictaphone stock as set forth in the
Dictaphone plan of reorganization.  Dictaphone will distribute
the $750,000 in Dictaphone stock to L&H NV as part of the
Allocation. (L&H/Dictaphone Bankruptcy News, Issue No. 35;
Bankruptcy Creditors' Service, Inc., 609/392-0900)


===========
F R A N C E
===========


AIR LIB: Negotiates With Other Prospective Investors
----------------------------------------------------
France's second-largest airline, Air Lib, said it is currently in
talks with other potential investors after rescue negotiations
fell through with the IMCA Group.

President of the recently grounded carrier, Jean-Charles Corbet,
refused to name the prospective investors, saying: "Because of
the tense period we're in, these discussions should remain
confidential."

Corbet met with transport secretary Dominique Bussereau to
determine whether everything has been done to save the company
and whether negotiations with IMCA have indeed reached
completion.

According to IMCA, take over would commence if the European
consortium Airbus would sell its 29 A319 planes at a bargain
price to renew Air Lib's fleet.

The already-extended operating license given to Air Lib expired
midnight of Wednesday, prompting other airlines to offer fly back
passengers stranded in French Antilles, Algeria, Cuba, and a
number of European and French destinations of Air Lib.

Air Lib was founded in 2001 from the ashes of Swissair's
insolvent French operations.  It made an effort to stay afloat
after the government announced it would no longer subsidize the
debt-laden company, as well as insisted that Air Lib agree to
repay government loans of 100 million euros to 130 million euros
($108 million to $140 million) and show more detail about its
potential financial backers before renewing its license.

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


AIR LIB: Slots in Orly Airport May Go to Air France and Easyjet
---------------------------------------------------------------
Groupe Air France and Easyjet Plc might acquire take-off and
landing slots held by ailing French airline Air Lib at France's
Orly airport.

Both Air France and Easyjet said in separate statements that they
could take Air Lib's slots if its financial woes force it to
declare bankruptcy.

According to Air France chairman Jean-Cyril Spinetta, the airline
"is a candidate for a number of these slots, but it will probably
only acquire a minority share."

Spinetta refused to mention how many slots he hoped to acquire,
though he said Air France will try to reinforce its presence on
the routes for Perpignan, Marseille, Toulouse and Nice.

Meanwhile, an Easyjet spokesman said: "If Air Lib files for
bankruptcy, its slots will be given back to the organization
which controls the slots. We would then be candidates for taking
up a certain number."

Reports indicate that Air Lib was forced to ground its fleet
Thursday after losing its license when IMCA Group decided to
abandon a refinancing deal, saying it could not achieve an
acceptable price from Airbus Industries as part of the necessary
fleet renewal for Air Lib.

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


AIR LIB: Air France Takes Measures on Air Lib's Suspension
----------------------------------------------------------

Additional Flights
Air France launched Thursday additional flights to Toulouse, Nice
and Toulon, and also has the necessary capacity to carry
passengers traveling to Marseille, Pau, Rome, Milan, Venice and
Pisa.

Moreover, Air France took over the Perpignan route as from Friday
February 7.

On its long-haul network, Air France introduced an additional
flight to Reunion Island from Paris-Charles de Gaulle, and, as
from 8 February, Air France will be offering 4 additional weekly
flights to Reunion Island from Paris-Charles de Gaulle.

Corsair will be operating additional flights to the French
Caribbean.

Special fares
Air France has launched special fares for customers with Air Lib
tickets.

On French domestic (Metropolitan France only) and Italian routes,
in exchange for their tickets, these customers can purchase
tickets on Air France for:
- EUR 50 including tax one way on French domestic routes
- EUR 100 including tax one way on Italian routes

On routes to the French Caribbean and Reunion Island, after the
deadline given by the French government for repatriation, Air
France will be offering Air Lib passengers, in exchange for their
tickets, a fare reduction of:
- EUR 75 one way to the French Caribbean
- EUR 100 one way to Reunion Island

These fares are only available from Air France ticket offices and
airport ticket counters as from Thursday and until 21 February
2003.

Tickets on French domestic and Italian routes may be used until 8
March 2003, last return.

On routes to the French Caribbean and Reunion Island, tickets are
valid for travel ending no later than 30 March 2003.

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

          AIR FRANCE
          Zeil 5
          60313 Frankfurt am Main
          Phone: +49-(0)18 05-83 08 30
          Fax: +49-(0)1 80-25 27 76
          Homepage: http://www.airfrance.com/


ARCELOR SA: Corporate Credit Rating on CreditWatch Negative
-----------------------------------------------------------
Standard & Poor's Ratings Services placed Arcelor's 'BBB' long-
term corporate credit rating on CreditWatch negative following a
ground-breaking review of unfunded post-retirement liabilities at
more than 500 rated European companies.

Standard & Poor's is conducting credit analysis on the
implications of unfunded post-retirement liabilities at leading
European companies.  The review is part of its ongoing monitoring
of the post-retirement exposures of rated companies.

The analysis was based on estimates of the value of equity assets
in each company's pension fund at year-end 2002, and on the
totality of each company's unfunded post-retirement obligations.

Standard & Poor's credit analyst Emmanuel Dubois-Pelerin said S&P
considers unfunded post-retirement liabilities "debt-like in
nature".  The view is taken considering "the future call on cash
these liabilities necessarily represent, despite the difficulties
of precisely valuing such liabilities and the various estimates
involved."

The belief is further based on the belief that risks arising from
such liabilities have increased, leading some corporates to
announce plans for substantial pension contributions, or to
inject additional assets in their post-retirement schemes.

The rating agency indicated to continue to closely monitor
company-specific, regulatory, and capital markets developments in
relation to the issue.

                    *****

Arcelor announced its plan to freeze investment at four of its
least profitable blast furnaces last month, including that in
Cockerill-Sambre plant in Liege, facilities in Breme, Germany and
Ekostahl, Germany.  The advice led to labor unions in Liege
threatening to stage strikes.

According to Arcelor chairman Guy Dolle, the planned closure in
Liege will affect about 1,700 of its 4,300 workforce.

The closures are part of the radical restructuring of Arcelor's
industrial plant in order to "guarantee its competitive
position," the company earlier said.  The measure is expected to
eventually result to the shut down of 8 million metric tons in
steel producing capacity by 2010.


=============
G E R M A N Y
=============


ALLIANZ AG: May Tap Equity Market for Capital Increase
------------------------------------------------------
Financial services company, Allianz AG, which is currently under
pressure to boost its capital due to the continuing slump in the
world equity market, has plans of tapping the equity market,
according to an unnamed source of The Business.

The report says, rumors are circulating in London and Frankfurt
that senior Allianz officials are currently drawing up emergency
plans to tap the equity market for more than EUR5 billion (GBP3.3
billion) in the event that share prices drop significantly
further.

Analysts expect the rights issue to come with non-core assets
disposals, and the report says interests in Munich Re, Banco
Popular, Deutsche Bank, and Unicreditor could be sold.

While the call for the company to boost is capital is mounting,
it is also said the management could choose to curtail the rate
at which the firm writes new business to counter the slump in the
equity market.

Allianz posted a EUR2.5-billion third quarter loss.


DEUTSCHE BA: Takeover Negotiations in Danger of Falling Off
-----------------------------------------------------------
Negotiations regarding the takeover of Deutsche BA by Easyjet,
Europe's largest low-cost airline, is in danger of falling apart
due to Easyjet's failure to agree on new wage contracts with
pilots.

Easyjet, which was unprepared to enter into further negotiations,
asked to stop the meetings, according to the Financial Times.

As the transaction largely depended on the agreement with the
Vereinigung Cockpit, the pilot's union, Martin Wyatt, new chief
executive of DBA, sent an internal memo to pilots saying, "We
want to make it very clear to you [the pilots] that DBA has no
alternative looming in the background and that a withdrawal of
Easyjet's option would seriously endanger every single job at
DBA."

Easyjet acquired the option to take over DBA last summer.  But
while the sell-off price is said to be worth between EUR30
million (US$32.5 million) and EUR46 million, the final purchase
price still depends on when Easyjet exercises its option.

Last week, DBA revealed plans of canceling 500 flights in
February and March, and reducing its capacity from 16 to 14
planes due to the ongoing travel downturn.

Mr. Wyatt said, the measures are necessary to improve the
airline's financial situation.  He stated further there might be
job cuts, unless the situation improves, although they will
continue to work towards reducing costs.

EasyJet PLC is expected to announce in March whether it will
exercise its option to buy Deutsche BA, says AFX.


GERLING GLOBAL: Regulator May Be Set to Reject Takeover Bid
-----------------------------------------------------------
Germany's financial services watchdog BAFin is set to reject a
bid of insurance firm Gerling to sell a majority stake in its
Gerling Global Re business, according to unidentified sources in
the industry.

The regulator will not approve the sale because the company
though which investor Achim Kann bought the business last month,
doesn't have enough cash to keep the troubled business afloat,
sources told the Financial Times.

Mr. Kann, who agreed to buy Gerling's reinsurance activities
through GmbH Lago Achte, was planning to pay for the purchase
from the future profits of the business.

"There's concern that he can't keep the company going after the
purchase," according to the source.

Peter Abrahams, a spokesman for the German banking regulator
explained the regulator based its decision on the dependability
of the purchaser, and the possibility that the business will
remain viable after the acquisition.

According to the report, Bermuda-based Castlewood Holdings is
talking with Gerling about taking a majority stake in the
reinsurance division, with Kann taking a 20% part.

The sale of the reinsurance unit, which lost EUR582.5 million
(US$631.1 million) in 2001, is needed in order to place the
takeover of Gerling's main insurance businesses.

Neither Kann nor Gerling could be reached to comment. Castlewood
also couldn't be reached for comment.

CONTACT:  GERLING VERSICHERUNGS-BETEILIGUNGS-AG
          Gereonshof
          50670 Cologne, Germany
          Phone: +49-221-144-1
          Fax: +49-221-144-3319
          Homepage: http://www.gerling.com
          Contacts: Heinrich Focke, Chief Executive Officer
                    Immo Querner, Chief Financial Officer


KIRCHMEDIA GMBH: In Talks With ProSiebenSat.1 Over Activities
-------------------------------------------------------------
Creditor banks of the insolvent Kirchmedia, representatives from
ProSiebenSat.1 Media, and German publishing company Heinrich
Bauer Verlag are orchestrating a takeover plan for the film
rights archive of the German media company.  The group is
proposing that ProSiebenSat.1, the German TV company affiliated
to Kirchmedia, acquire 24% in the company.

Last year, a consortium formed by Heinrich Bauer Verlag and
German bank Bayerishe Hypo- and Vereinsbank to bid for activities
of Kirchmedia reached a basic agreement regarding the acquisition
of ProSiebenSat.1 and the film rights archive.  The agreement
indicates that the Bauer-HVB consortium would acquire a 52% stake
in the film rights archive, while creditor banks would exchange
their credits for the remaining 48%.

However, the question remains as to how ProSiebenSat. 1 would
finance an investment in activities of Kirchmedia, while the TV
company itself is burdened with debts of almost EUR1 billion.

Creditor banks of Kirchmedia include Bayerische Landesbank,
Commerzbank, Bayerische Hypo- und Vereinsbank and DZ Bank.

CONTACT:  BAYERISCHE LANDESBANK GIROZENTRALE
          Brienner Strasse 18
          80333 Munich, Germany
          Phone: +49-89-2171-01
          Fax: +49-89-2171-23579
          Homepage: http://www.blb.de
          Contacts: Siegfried Naser, Chairman, Board of
                    Administration
                    Werner Schmidt, Chairman

          COMMERZBANK AG
          Kaiserplatz
          60261 Frankfurt, Germany
          Phone: +49-69-136-20
          Fax: +49-69-28-53-89
          Homepage: http://www.commerzbank.com
          Contacts: Klaus-Peter Mller, Chairman
                    Axel Frhr. v. Ruedorffer, Managing Director

          DZ BANK
          Am Platz der Republik
          D-60325 Frankfurt, Germany
          Phone: +49-69-74-47-23-82
          Fax: +49-69-74-47-67-84
          Homepage: http://www.dg.dzbank.de
          Contacts: Ulrich Brixner, Chairman


KIRCHMEDIA GMBH: Receives New Bid From Saban and TF1
----------------------------------------------------
A team involving U.S. billionaire Haim Saban and France's TF1 has
again been formed with a view to make a new bid for the assets of
insolvent German media company Kirchmedia GMBH.

After losing the bidding war to a consortium led by German
publishing company Heinrich Bauer Verlag in September, the new
50-50 partnership was formed with Saban taking the helm because
TF1 does not want its role to become public. The company
reportedly fears its involvement could have a negative impact on
its own share price.

Bauer and its partner HVB Group are still finalizing the deal,
which took longer than either party had expected due to the
valuation of Kirch's film library.  The deal involves Kirch
creditor banks taking minority stakes in the business.

In this connection, it is reported that Saban pledged to pitch in
EUR200-300 million in new capital for the film library, and to
make fewer staff redundant than the Bauer/HVB offer.

The additional fund is intended for invigorating stocks and
making the business profitable in the medium-term, allowing it to
pay back debts to the creditor banks.

A promise to keep most of the employees is reportedly aimed at
winning over the staff's sentiment.

KirchMedia has a 52.5% stake in broadcaster ProSiebenSat1.  Its
creditor banks include Bayerische Landesbank, Commerzbank, and
Bayerische Hypo- und Vereinsbank and DZ Bank.

CONTACT:  BAYERISCHE LANDESBANK GIROZENTRALE
          Brienner Strasse 18
          80333 Munich, Germany
          Phone: +49-89-2171-01
          Fax: +49-89-2171-23579
          Homepage: http://www.blb.de
          Contacts: Siegfried Naser, Chairman, Board of
                    Administration
                    Werner Schmidt, Chairman

          COMMERZBANK AG
          Kaiserplatz
          60261 Frankfurt, Germany
          Phone: +49-69-136-20
          Fax: +49-69-28-53-89
          Homepage: http://www.commerzbank.com
          Contacts: Klaus-Peter Mller, Chairman
                    Axel Frhr. v. Ruedorffer, Managing Director

          DZ BANK
          Am Platz der Republik
          D-60325 Frankfurt, Germany
          Phone: +49-69-74-47-23-82
          Fax: +49-69-74-47-67-84
          Homepage: http://www.dg.dzbank.de
          Contacts: Ulrich Brixner, Chairman


TELECOLUMBUS: Parent Puts Loss-making Unit up for Sale
------------------------------------------------------
Deutsche Bank AG is selling its loss-making regional cable
operator Telecolumbus, valued at EUR200 million (US$216 million)
last year, as part of a drive to part with non-core holdings.

The German banking group bought Germany's third-largest cable
company, with 2.4 million subscribers, from RWE AG, and Veba AG
for EUR740 million in 1999.

It is known that Liberty Media launched a bid for Telecolumbus in
2002 but backed out after German regulators rejected his purchase
of some of the assets of Duetsche Telekom, another telecoms
company whose influence had been thought of as the only salvation
for Telecolumbus.

Deutsche Bank Chief executive Josef Ackermann said, "We're better
off if we don't have these burdens."  The group, however, is not
in a hurry to divest the cable operator, saying it is still
waiting for better conditions to continue selling more-valuable
non-banking assets, according to the Daily Deal.

The group previously sold a 10% stake in Munich Re AG, a 10%
stake in Berlin publisher Axel Springer Verlag AG and 9.3% of
Deutsche Borse AG.  It also recently sold stakes in sugar company
Sudzucker AG, boilermaker Buderus AG and Sinius GmbH, a computer
consultancy specializing in banks.

Chief financial officer Clemens Borsig still has about EUR5.4
billion worth of industrial holdings, including a 10% stake in
forklift maker Linde AG and 34.5% of troubled insurer Gerling.

As for its 10% stake in DaimlerChrysler AG, Mr. Ackermann said he
is sticking with it.

Mr. Ackermann also ruled out merging or buying any German rivals,
although he told CNBC he might seek international deals to expand
once his reorganization of Deutsche is complete.

The group posted EUR105 million during the fourth quarter.  In
the final three months of 2001, the bank lost EUR1 billion.


=========
I T A L Y
=========


FIAT SPA: Italian Engineering Group Interested in Fiat Avio
-----------------------------------------------------------
An Italian engineering and aerospace/defense group is considering
acquisition of Fiat Avio, a unit of Italy's struggling vehicle
manufacturer Fiat SpA.

Citing reliable sources, Il Sole 24 Ore newspaper said
Finmeccanica SpA, which would possibly team up with Snecma, is
studying the possible purchase of Fiat Avio, easing government
worries over a foreign takeover.

Fiat Avio's other potential buyers include the US carlyle Group,
Rolls-Royce PLC, Pratt & Whitney, and General Electric Co, who is
closely monitoring the situation since it already has industrial
links with the aerospace company.

Fiat declined to comment on any sale of Fiat Avio.  Selling the
unit, which is valued between EUR1.5 billion to EUR1.8 billion
could help the industrial group raise the EUR5 billion it needs
to re-capitalize its loss-making unit, Fiat Auto, according to
analysts.

CONTACT:  FIAT SPA
          250 Via Nizza
          10126 Turin, Italy
          Phone: +39-011-686-1111
          Fax: +39-011-686-3798
          Toll Free: 800-804027
          Home Page: http://www.fiatgroup.com/e-index.htm
          Contact:
          Giovanni Maggiora, Vice President - Investor Relations
          Phone: +39-011-686-3290
          Fax: +39-011-686-3796
          E-mail: Investor.relations@geva.flatgroup.com

          CONTACT:  FINMECCANICA SPA
          4, Piazzi Monte Grappa
          00195 Rome, Italy
          Phone: +39-06-324731
          Fax: +39-06-3208621
          Homepage: http://www.finmeccanica.it
          Contacts: Pier F. Guarguaglini, Chairman
                    Roberto Testore, Managing Director

          SNECMA
          2, bd du General Martial-Valin
          75015 Paris, France
          Phone: +(33) 1 40 60 80 80
          Fax: =(33) 1 40 60 81 02
          Home Page: http://www.snecma.com

          CARLYLE GROUP
          Worldwide Offices
          Washington, DC
          Phone: (202) 347-2626

          Frankfurt, Germany
          Phone: 49 69 75 93 78 05

          London, England
          Phone: 44 207 894 1200

          Milan, Italy
          Phone: 39 02 6200461


=====================
N E T H E R L A N D S
=====================


VERSATEL TELECOM: To Meet or Exceed 2002 Financial Guidance
-----------------------------------------------------------
Versatel Telecom International N.V. issued its 2003 financial
guidance and announced that it expects to meet or exceed its 2002
financial guidance. The following statements are forward looking
and based on Versatel's current expectations that may differ
materially from actual results.

Although overall market conditions remain weak and difficult to
forecast, Versatel believes that its focus on bundled on-net
services will enable it to grow its business in all key financial
metrics including revenue, gross margin and adjusted EBITDA. In
each of its core markets, The Netherlands, Belgium and northwest
Germany, Versatel has benefited from its core local access
strategy and remains well positioned to take advantage of the
growing demand for broadband services in both the residential and
business markets. In addition, Versatel believes that it is in a
unique position compared to other European telecommunications
companies, since it has no financing debt on its balance sheet
and it has a fully funded business plan, which has resulted in
further commercial benefits.

2003 Financial Guidance
- Versatel expects gross billings for 2003 to increase to between
EUR 350 million and EUR 360 million.

- Versatel expects revenues for 2003 to increase to between EUR
325 million and EUR 335 million.

- Versatel expects gross margin, as a percentage of gross
billings, for 2003 to be between 47 and 50 percent. Versatel also
expects gross margin, as a percentage of revenues, for 2003 to be
between 51 and 54 percent.

- Versatel expects positive adjusted EBITDA for 2003 to be
between EUR 40 and EUR 50 million.

- Versatel expects capital expenditures in 2003 of between EUR 50
million and EUR 75 million.

Versatel also expects that it will meet or exceed its previously
announced 2002 financial guidance for *gross billings, revenue,
gross margin, adjusted EBITDA and capital expenditures. Last
year, Versatel issued the following 2002 financial guidance:

- gross billings for 2002 to increase to between EUR 300 million
and EUR 315 million.

- revenues for 2002 to increase to between EUR 275 million and
EUR 290 million.

- gross margin, as a percentage of gross billings, for 2002 to be
between 41 and 43 percent. Versatel also expects gross margin, as
a percentage of revenues, for 2002 to be between 45 and 47
percent.

- positive adjusted EBITDA for 2002 of between EUR 0 and EUR 5
million.

- capital expenditures in 2002 of between EUR 75 million and EUR
100 million.

In addition, Versatel ended 2002 with a cash balance of
approximately EUR 190 million, which fully funds its business
plan. Versatel anticipates that it will generate positive
recurring free cash flow from operations in the first quarter of
2004.


===========
P O L A N D
===========


BRE BANK: Informs Public Regarding Cancellation of Securities
-------------------------------------------------------------
The Management Board of BRE Bank SA informs that on February 6,
2002 it cancelled 200 securities issued by BRE Bank SA.

The certificates were issued within the Program of Certificates
of Deposit and/or Bonds of the Bank on 12 August 2002.

                      *****
BRE Bank posted readjusted 2002 results with over PLN100 million
(US$26 million) losses, contrary to the assurance of the bank's
president, Wojciech Kostrzewa, that the entity would have clean
accounts for year 2002.

Marcin Materna from DM BIG BG estimated that the total loss for
the whole year could even be as high as PLN160 million (US$41.86
million).


BRE BANK: Reaches Agreement to Sell Shares in Elektrim SA
---------------------------------------------------------
The Board of Management of BRE Bank SA informs that on February
6, 2003, BRE Bank SA signed two agreements with: TCF Sp. z o.o.
and Polsat Media S.A., concerning the sale of shares of Elektrim
SA. Transactions under the said agreements will be achieved in
two tranches - in June and in September 2003. After these
transactions BRE Bank will hold no shares of Elektrim SA.

Price for which BRE Bank will sell the mentioned shares amounts
to PLN 7.50 per one share

Expected capital gain for BRE Bank will be worth about PLN20.3
million

BRE Bank signed an agreement with Polsat Media S.A concerning the
restructuring of the loan, that was incurred by individual person
in BRE Bank and that was secured on Elektrim's shares

There is no relation between BRE Bank SA and Polsat Media SA and
TCF Sp. z o.o.


NETIA HOLDINGS: Announcees Changes in Management Board
------------------------------------------------------
Netia Holdings S.A., Poland's largest alternative provider of
fixed-line telecommunications services (in terms of value of
generated revenues), announced that Dariusz Wojcieszek resigned
from his position as member of Netia's Management Board as of
February 7, 2003.

                     *****

In January, Netia Holdings announced that the Extraordinary
General Meeting of Shareholders adopted resolutions, including
changes of the composition of Netia's supervisory board.  The
resolution was adopted in connection with the on-going
restructuring of the Netia group of companies.

A statement announcing the result of the EGM said:

Pursuant to the resolution of the Extraordinary General Meeting
of Shareholders held on January 15, 2003, Jaroslaw Bauc, Andrzej
Michal Wiercinski and Richard James Moon were appointed members
of Netia's supervisory board.

As a result of these changes Netia's supervisory board currently
consists of the following 10 members: Nicholas N. Cournoyer
(Chairman of the supervisory board), Jaroslaw Bauc, Morgan
Ekberg, Richard James Moon, Andrzej Radziminski, Ewa Maria
Robertson, Andrzej Michal Wiercinski, Jan Henrik Ahrnell,
Przemyslaw Jaronski and Hans Tuvehjelm. As of the date of the
registration by the Polish court of the changes to Netia's
Statute adopted by the Extraordinary General Meeting of
Shareholders on January 15, 2003, Jan Henrik Ahrnell, Przemyslaw
Jaronski and Hans Tuvehjelm will cease to be members of Netia's
supervisory board.


===========================
U N I T E D   K I N G D O M
===========================


AQUILA NETWORKS: S&P Affirms Long and Short-term Ratings
--------------------------------------------------------
Standard & Poor's affirmed its 'BBB-' long-term and its 'A-3'
short-term corporate credit ratings on the U.K. licensed
distribution network operator Aquila Networks, a holding
subsidiary of Avon Energy.  The rating agency removed the ratings
from CreditWatch.

The outlook for Aquila Networks is negative, reflecting
uncertainty about its future ownership and capital structure.
Avon Energy's long-term corporate credit ratings have been
lowered to 'B' from 'BB', on the view that the default risk of
the company has increased due to the uncertainty on the U.S.
parent's plan to sell or restructure the capital of the U.K.
group.

OFGEM recently amended the company's operating license, limiting
cash transfers from network operations to any of its affiliates,
in effect reducing the risk of insufficient operating cash flow
to service its own obligations.  But amendments and the
regulator's role generally, however, do not guarantee an
investment-grade rating, according to the rating agency.

Aquila Network has debts of almost GBP620 million, including
guaranteed bond of GBP150 million at Midlands, another Avon
Energy subsidiary, and a commercial loan from Midlands of about
GBP100 million. There are no large debt maturities for Aquila
Networks in the next two years.

Standard & Poor's Infrastructure Finance credit analyst Daniela
Katsiamakis said: "The negative outlook on Aquila Networks
reflects the irresolution by ultimate shareholders either to sell
the U.K. group or to restructure its capital in order to ease
cash flow pressures."

According to S&P, while OFGEM's license amendments enable active
surveillance of cash flow movements out of the network business,
the credit quality of the company ultimately rests with its
management.


AVON ENERGY: S&P Downgrades Long-term Corporate Credit Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its long-term
corporate credit ratings on U.K.-based electricity holding
company Avon Energy Partners Holdings to 'B' from 'BB'.  It also
downgraded Midlands Electricity PLC, Avon Energy's subsidiary, to
'B' from 'BBB-'. The ratings remain on CreditWatch, where they
were placed on November 20, 2002.

Standard & Poor's Infrastructure Finance credit analyst Daniela
Katsiamakis said the actions reflect Standard & Poor's view that
the default risk at these companies has increased.  This
condition is caused by the uncertainty on the U.S. parent's plan
to sell or restructure the capital of the U.K. group.

The uncertainty is further heightened by the possibility that
upward payments from the underlying network business to service
debt at Avon Energy will be disallowed by the regulator under the
terms of the temporary license amendments.  In this case, no
financial support is expected from the U.S. shareholders.

The rating agency warns that the ratings could still go down by
at least one notch unless the sale of the U.K group is pushed
through in the coming weeks.

S&P notes that Avon Energy has total debts bordering at more than
GBP870 million (US$1,419 million), with next coupon payment due
in March 2003.  Bond maturities are scheduled beyond the next two
years. Standard & Poor's expects this payment to be met from
agreed tax relief payments owed by Aquila Networks, a holding
subsidiary.

The rating agency said it will resolve the CreditWatch on the
ratings on Avon Energy and Midlands when the U.S. parents decide
what to do with the U.K. group.

S&P, at the same time, affirmed the 'BBB-' rating on the
outstanding GBP150 million bond issue by Midlands, reflecting the
guarantee by its subsidiary Aquila Networks PLC.  The rating was
removed from CreditWatch.


BAE SYSTEMS: To Take GBP800MM Charge for Defense Contracts
----------------------------------------------------------
Defense giant BAE Systems will take a charge of about GBP800
million for going over the budget on the Nimrod surveillance
aircraft and Astute nuclear submarine contracts, according to The
Observer.

The figure is to be announced within the next two weeks, the
report says.

But a spokesman for the company played down the issue in an
independent report, saying it was "baseless."

"We are still in negotiations with the Ministry of Defense over
those contracts," he was quoted saying in The Telegraph.

BAE Systems has been renegotiating the terms of the transaction
with the Ministry of Defense for the last two months after it
warned of cost overruns in the GBP5 billion contracts in
December.

Following the advise and the government's refusal to bail out the
company on the projects, shares in BAE Systems went down by 32.5
p to a seven-year low of 131 p.  The drop in the share price sent
the Defense giant's market value to drop by more than GBP1
billion in just 8 minutes.

According to The Scotsman, BAE did not make clear that the
trouble with its Nimrod anti-submarine shore-based aircraft
program meant a delay beyond 2005.

CONTACT:  BAE SYSTEMS
          Airbus UK New Filton House
          Filton, Bristol BS99 7AR
          United Kingdom
          Phone: +44 (0) 117 969 3831

          BAE SYSTEMS Advanced Technology Centre
          PO Box 5, Filton, Bristol BS34 7QW, United Kingdom
          Phone: +44 (0) 117 936 6024
          Fax: +44 (0) 117 936 3733

          Contact:
          Investor Relations
          E-mail: investorrelations@baesystems.com


BAE SYSTEMS: Fails to List as Bidder for Watchkeeper Contract
-------------------------------------------------------------
The Ministry of Defense confirmed it dropped BAE Systems from the
shortlist of bidders for a GBP800 Watchkeeper surveillance
aircraft contract.

The ministry said it selected the teams led by Thales (UK) and
Northrop Grumman ISS International for the next stage of the
"Watchkeeper" unmanned surveillance and reconnaissance drone
program.

Officials from the Ministry of Defense, earlier, denied
suggestions that BAE was being excluded, saying that the decision
was based purely on technical and cost considerations.

Lockheed Martin Corp had also been struck off the list, according
to reports.

The ministry plans to appoint a preferred bidder for the program
next year.

Last month, BAE Systems warned of cost overruns and delays on the
GBP2.8 billion Nimrod and GBP2 billion Astute contracts with the
British Ministry of Defense.

Still, the U.K. Ministry of Defense, in its decision this month,
has chosen BAE SYSTEMS as the Prime Contractor for the design,
development, construction, systems integration and support of the
U.K. Royal Navy's two new aircraft carriers--a project estimated
worth almost GBP10 billion (US$16.5 billion, EUR15 billion).

CONTACT:  BAE SYSTEMS
          Airbus UK New Filton House
          Filton, Bristol BS99 7AR
          United Kingdom
          Phone: +44 (0) 117 969 3831

          BAE SYSTEMS Advanced Technology Centre
          PO Box 5, Filton, Bristol BS34 7QW, United Kingdom
          Phone: +44 (0) 117 936 6024
          Fax: +44 (0) 117 936 3733

          Contact:
          Investor Relations
          E-mail: investorrelations@baesystems.com


BAE SYSTEMS: Investors Demand Boardroom Shakeup
------------------------------------------------
BAE Systems investors are calling for the restructuring of the
firm's boardroom in the wake of a row with the U.K. government,
its largest customer, and following a slump in the firm's market
value.  BAE Systems' market value went down from GBP10.3 billion
to GBP3.3 billion.

The Sunday Times said institutional shareholders are seeking for
the ouster of Sir Dick Evans, the chairman, while non-executive
directors, led by Sir Robin Biggam, on the other hand, are
planning to kick Mike Turner as chief executive.  Shareholders
are reportedly urging senior non-executive director Robin Biggam
to act before things go further downhill.

Investors are said to be concerned of the management's inability
to deliver large defense contracts to customers on time and
within cost, the report says.

In a report by The Telegraph, meanwhile, the defense giant is
said to be insisting it had "every confidence" in its management
team.

A spokesman for BAE responding to the issue is quoted saying:
"The board believes that this management team is the best-placed
to take the company forward."

BAE Systems is set to announce its full-year results on February
20.


BAE SYSTEMS: S&P Maintains Long-term Rating on CreditWatch Neg
--------------------------------------------------------------
Standard & Poor's Ratings Services maintained BAE System's 'A-'
long-term rating on CreditWatch negative, where it was placed on
December 12, 2002 following a ground-breaking review of unfunded
post-retirement liabilities at more than 500 rated European
companies.

Standard & Poor's is conducting credit analysis on the
implications of unfunded post-retirement liabilities at leading
European companies.  The review is part of its ongoing monitoring
of the post-retirement exposures of rated companies.

The analysis was based on estimates of the value of equity assets
in each company's pension fund at year-end 2002, and on the
totality of each company's unfunded post-retirement obligations.

Standard & Poor's credit analyst Emmanuel Dubois-Pelerin said S&P
considers unfunded post-retirement liabilities "debt-like in
nature".  The view is taken considering "the future call on cash
these liabilities necessarily represent, despite the difficulties
of precisely valuing such liabilities and the various estimates
involved."

The belief is further based on the belief that risks arising from
such liabilities have increased, leading some corporates to
announce plans for substantial pension contributions, or to
inject additional assets in their post-retirement schemes.

The rating agency indicated to continue to closely monitor
company-specific, regulatory, and capital markets developments in
relation to the issue.


BRITISH ENERGY: Signs Major Sales Contracts With Centrica
---------------------------------------------------------
As part of the new trading strategy announced on November 28,
2002, British Energy plc announces that it has signed electricity
sales contracts with Centrica plc for some 38 TWh of energy
output over four years, starting April 2003. The contracts will
comprise a combination of baseload and peak power provision. Over
half of the output sold will be at a fixed price, with the
remainder being linked to future electricity market prices. The
deal includes credit cover arrangements for the term of the
sales.

These contracts, together with the proposed new fuel contract
with BNFL, significantly reduce British Energy's exposure to
future movements in the electricity market price and thus
represent a major element of the new trading strategy.

The deal has been executed between British Energy Power and
Energy Trading Limited and British Gas Trading Limited, wholly
owned subsidiaries of British Energy plc and Centrica plc
respectively.

                      *****

As announced on November 28, 2002, British Energy has entered
into non-binding heads of terms with British Nuclear Fuels plc,
which allow for fuel supply and waste management costs to be
linked to wholesale electricity market prices.

Also, on November 28, 2002 British Energy announced that it was
implementing a new trading strategy under which it would seek to
enter into short and medium-term power-sale contracts.

The sale announced today covers 10 - 15% of British Energy's
anticipated total U.K. generation over the period.

1 TWh equals a million MWh or a thousand million kWh

CONTACT:  BRITISH ENERGY
          Paul Heward, Investor Relations
          Phone: 013552 62201

          Financial Dynamics
          Andrew Dowler
          Phone: 0207 831 3113


BRITISH ENERGY: Issues Output Statement for January
---------------------------------------------------
A summary of net output from all of British Energy's power
stations in January 2003 is given in the table below, together
with comparative data for the previous financial year:


          2001/02
          January                  Year to Date
                                   Load
          Output   Load   Output   Factor
          (TWh)   Factor  (TWh)    (%)

UK Nuclear  6.06   85      56.35    80
UK Other    0.81   56       5.88    41
Bruce Power 1.60   68      17.05*   85*

(82.42% owned)
Amergen     1.79  100      15.26    87**

(50% owned)

          2002/03
          January                  Year to Date
                                   Load
          Output   Load   Output   Factor
          (TWh)   Factor  (TWh)    (%)

UK Nuclear  6.45   91      52.38    75
UK Other    0.90   62       4.70    33
Bruce Power 2.35  100      18.21    78

(82.42% owned)
Amergen     1.86  101      16.68    92**


*The figures for the year to date in 2001 for Bruce Power cover a
shorter period from Financial Close on 12 May 2001.

** The capacity for Clinton was up-graded in spring of this year
to 1017 MWe and the capacity of TMI unit 1 increased to 840 MWe
following a turbine replacement in autumn 2001.

Overview

The UK nuclear plants remain on track to achieve the revised
target, announced in August 2002, of 63 TWh (plus or minus 1 TWh)
by 31 March 2003.

The output figures for both AmerGen and Bruce Power remain in
line with the plan after allowing for the higher number of
planned outages in the current year.


Planned Outages

UK Nuclear

- Off-load refuelling was carried out on one reactor at
Hartlepool.
- Low load refuelling was carried out on both reactors at
Hunterston B and one reactor each at Heysham 2, Hinkely Point B
and Torness.

Bruce

- Bruce unit 7 completed its return to service.

Unplanned Outages

There were a number of minor unplanned outages at several
stations in the period.


CONTACTS:  BRITISH ENERGY
           Paul Heward, Investor Relations
           Phone: 01355 262 201


DIRECT MESSAGE: Receives Proposal to Sell Subsidiaries to Newco
--------------------------------------------------------------
Direct Message announces that it has received a proposal to sell
the Group's subsidiaries, which comprise the whole of the
business and assets of the Company, to a newly incorporated
company (Newco) established by its management team.

The management team includes Michael Meyer, the Chairman, and
Stuart Mollekin, the Finance Director.  In view of the interests
of the management team, the proposal falls within section 320 of
the Companies Act 1985 and therefore requires the prior approval
of shareholders.  A circular has today been posted to
shareholders giving details of the proposal and also contains the
Company's unaudited Preliminary Statement of Results for the year
ended August 31, 2002, which are being released today.

Background

Since the company was floated on AIM early in 2001, the
advertising market in which the Group operates has suffered a
severe downturn.  As a result the Group's bank indebtedness,
which is now in excess of GBP23 million, has become increasingly
difficult to support and the company is in breach of a number of
its banking covenants.

The Board, together with the Group's bankers, have examined
available alternatives to try and avoid a receivership or other
insolvency proceeding. The independent directors who comprise the
Non-Executive Directors of the company have come to the
conclusion that a proposal to sell the subsidiaries to the
management team represents the best option currently available
for the potential survival of the Company.

The Proposal

The management team, through Newco, has made a proposal to the
independent directors to buy the Group's subsidiaries for a cash
sum of GBP150,000 and for Newco to procure the repayment of  the
total liability for the Group's current bank indebtedness and
certain other liabilities now amounting to in excess of GBP23
million.  This proposal, if approved by shareholders, would
represent an effective cost of approximately GBP23.15 million for
the business and assets of
the company.  The independent directors will also seek to secure
an interest of 7.5% of the share capital of Newco.

The Future of Direct Message

Should the proposal be approved by shareholders and a sale be
completed, the Company will effectively become a shell company
with few liabilities other than ongoing administrative
liabilities of a company quoted on AIM, with cash of
approximately GBP150,000 and an ongoing 7.5% interest in Newco.
The present management team would resign and the board would
comprise the existing independent directors.  As a shell company
dealt in on AIM it is possible that the Company could prove
attractive to another business seeking a quotation and the
independent directors have resolved to pursue this course of
action.  The independent directors, who do not have a proposed
transaction in mind, will consult, as appropriate, with
shareholders before entering into a transaction.

Extraordinary General Meetings

The circular being sent to shareholders today convenes an
extraordinary general meeting for February 24, 2003 to approve
the Company entering into an arrangement to sell its subsidiaries
and certain assets used in the business to Newco.  If the
proposal is approved by shareholders at the extraordinary general
meeting, a second extraordinary general meeting has been convened
and will be on March 3, 2003 at which shareholders will be asked
to approve the change of name of the Company to Saltmark plc.

Recommendation

The independent directors, who have consulted with Insinger
English Trust, the Company's nominated adviser, consider that the
terms of the proposal are fair and reasonable and in the best
interests of the Company and its shareholders.

In the circular, which has been posted today, the Independent
Directors have unanimously recommended shareholders to vote in
favor of the resolution to approve the proposal.  The independent
directors and certain other shareholders have irrevocably agreed
to vote in favor of the resolutions in respect of a total of
6,258,046 ordinary shares representing 10.20% of the issued share
capital.  The Independent Directors are also unanimously
recommending shareholders to vote in favor of the resolution to
change the name of the Company to be proposed at the second
Extraordinary General Meeting.

CONTACT:  DIRECT MESSAGE
          Head Office
          6 Riverwey Park
          Newman Lane
          Alton, Hants
          GU34 2QL
          United Kingdom
          Phone: (01420) 592100
          Fax: (01420) 592119

          Registered Office:
          Barton Hall
          Hardy Street, Eccles
          Manchester
          M30 7WJ
          United Kingdom
          E-mail : stuart.mollekin@directmessage.co.uk


GLAXOSMITHKLINE PLC: To Update Investors on Plans for Research
--------------------------------------------------------------
GlaxoSmithKline will finally update investors of its plans for
research and development when it announces its annual results on
Wednesday, says The Business.

The group has not held a research and development day since its
formation from the merger of GlaxoWellcome and SmithKline Beecham
in December 2000, and the news is expected to boost investors
confidence, according to the report.

GlaxoSmithKline is expected to discuss new projects and medicines
towards the end of November.

During the same month last year, the company's chief executive,
JP Garnier, admitted it was short of new drug when it revealed it
had no plan of updating investors on progress in research and
development.

The disclosure raised serious questions about the company's
future, as the pharmaceutical firms presentations on research and
development are usually as keenly watched as profits
presentations.


HP BULMER: Former Chief Executive Threatens to File Suit
--------------------------------------------------------
Cidermaker HP Bulmer faces possible legal threat from its former
chief executive, Mike Hughes, according to circular sent to
shareholders at the end of January.

Mr. Hughes, who led the company during a series of profit
warnings, is claiming "appropriate" compensation, and is
threatening to sue the group unless the demand is met in the near
future.

Under Mr. Hughes, HP Bulmer embarked on an ambitious
international expansion until he was ousted in September after
the discovery of GBP3.8 million gap, that corresponds to
promotional costs in its books.

If the case is pushed through, it would be the second suit filed
against the company on grounds of wrongful dismissal.

Alan Flockhart, former finance director, had also lodged a
complaint in the Employment Tribunal for claims amounting to
GBP55,600.  He was pressured to leave within three weeks of Mr.
Hughes' departure.  Richard Pennycook replaced him as finance
director.

According to The Telegraph, Bulmer said it intended to
"vigorously contest" any claims.

CONTACT: HP BULMER
         Miles Templeman, Chief Executive
         Phone: 01432 352000

         Smithfield Financial
         John Kiely
         Phone: 020 7360 4900


LEGGMASON INVESTORS: Holders of ZDPs Required to Approve Wind up
----------------------------------------------------------------
The Board of LeggMason Investors Strategic Assets Trust plc and
LeggMason Investors Strategic Assets Securities plc announced on
January 17, 2003, its decision to proceed to take such steps as
are necessary to wind up the companies by means of creditors'
voluntary liquidations. The proposal is conditional, inter alia,
upon the consent of the Ordinary Shareholders in the Company and
the Zero Dividend Preference Shares in Strategic Assets
Securities.

To effect the proposal, approval by the Company's Ordinary
Shareholders in the form of an extraordinary resolution and an
ordinary resolution passed at an extraordinary general meeting is
required. Holders of ZDPs in Strategic Assets Securities are
required to approve the proposal in the form of two extraordinary
resolutions passed at a separate general meeting of ZDP holders.

Accordingly, an extraordinary general meeting of the Company has
been convened for 10.20 am on Wednesday, February 25, 2003 at the
32 Harbour Exchange, London E14 9JX. This will be preceded by a
separate general meeting of the holders of ZDPs in Strategic
Assets Securities convened for 10.00 am on the same date at the
same venue.

CONTACT:  LEGG MASON INVESTMENTS (EUROPE) LIMITED
          Zoe Burton
          Phone: 020 7070 7474
          E-mail: z.burton@leggmason.co.uk
          Nitya Bolam
          Phone: 020 7404 5959
          E-mail: nbolam@brunswickGroup.com


MARCONI PLC: Reaches Agreement on Settlement of Potential Claims
----------------------------------------------------------------
Update on Initial Cash Distribution and Agreement in Principle
for Settlement of ESOP Derivative Arrangements with Barclays Bank
plc, Salomon Brothers International Limited and UBS AG

(i) "GBP35 million settlement agreed in principle with Barclays
Bank plc, Salomon Brothers International Limited and UBS AG in
relation to potential claims under ESOP derivative arrangements,
subject to relevant creditor approval and the Marconi Corporation
Scheme of Arrangement becoming effective " Resultant 'Day one'
redemption of approximately GBP135 million (at 110 per cent of
par value), of the Junior Notes (to be issued as part of the
Restructuring), reducing the Junior Notes by approximately GBP123
million " Marconi Corporation is seeking to make an additional
GBP20 million initial cash distribution in replacement for the
surplus cash element of the excess cash mechanism outlined in the
amended non-binding heads of terms announcement in December 2002

(ii) " Proposed initial cash distribution therefore to increase
from GBP165 million to GBP320 million (including GBP135 million
'Day one' redemption of the Junior Notes) in addition to GBP95
million of interest accrued to October 15, 2002 and already paid
to financial creditors

Marconi announces a significant development towards completion of
the financial restructuring of Marconi plc and its wholly owned
subsidiary Marconi Corporation plc.

The Group is pleased to announce that it has reached agreement in
principle with Barclays Bank plc, Salomon Brothers International
Limited and UBS AG (the ESOP Derivative Providers), for a
settlement of all potential claims made against Marconi plc and
other Group companies relating to the previously disclosed ESOP
derivative arrangements entered into during calendar year 2000.

Under the terms of the in principle settlement arrangements,
which are subject to definitive documentation and are conditional
upon the Marconi Corporation scheme of arrangement becoming
effective and the consent of the requisite majorities of both the
Syndicate Banks and the ad hoc committee of bondholders, Marconi
Corporation will pay o35 million together with costs to the ESOP
Derivative Providers in full and final settlement of all their
ESOP related claims against the Marconi Group.

Payment to the ESOP Derivative Providers will be made from the
previously disclosed cash retention of up to GBP170 million which
was to be set aside by Marconi Corporation as part of the
Restructuring pending resolution of potential liabilities of
Group companies in relation to the Group's ESOP hedging
arrangements. The balance of approximately GBP135 million will be
used upon completion of the Restructuring to redeem (in part) the
Junior Notes at 110 per cent of face value. This will reduce the
value of the Junior Notes by approximately GBP123 million.
Marconi is expecting to have discussions with relevant creditor
groups regarding the potential impact the ESOP settlement may
have on the future capital structure of the Group.

The Boards of Marconi plc and Marconi Corporation believe that
the settlement agreed in principle with the ESOP Derivative
Providers will have a positive impact on the overall
Restructuring process and is in the best interests of Marconi
plc, Marconi Corporation and their respective stakeholders as a
whole.

In reaching this conclusion, the Boards of Marconi plc and
Marconi Corporation have taken into account a number of factors,
including the merits of the claims of the ESOP Derivative
Providers, the desire to reduce the cost and expense of
continuing litigation, the potential saving in the interest
burden from which the Group will benefit by settling at this
stage (through the 'Day one' reduction in the Junior Notes) and
the benefits for the Schemes and certainty of the 'Day one'
distribution that such a settlement will bring.

In addition to the ESOP settlement and the resulting reduction in
the amount of the Junior Notes, Marconi Corporation is also
seeking to make an additional GBP20 million payment in the
initial amount of the cash to be distributed to Scheme creditors
upon completion of the Restructuring which will not result in a
reduction of the Junior Notes. This would replace the surplus
cash element of the excess cash mechanism outlined in the Group's
announcement of December 16, 2002. These arrangements are subject
to the approval of the relevant creditor
groups.

The settlement with the ESOP Derivative Providers and their
consequential exclusion as scheme creditors in the Marconi plc
scheme of arrangement will reduce the level of total claims at
Marconi plc. This reduction, combined with the results of further
due diligence that has been conducted on the liabilities at
Marconi Corporation and Marconi plc means that the current level
of identified actual and contingent claims are estimated to be
approximately GBP5.1 billion and GBP4.9 billion respectively. In
addition, the ongoing Scheme costs of Marconi plc are to be borne
by Marconi plc out of its own resources and from any Scheme
consideration it receives from Marconi Corporation. Work is
currently ongoing to quantify this amount, which is expected to
be in the range of GBP5 million to GBP15 million. More precise
details will be provided in the Marconi plc Scheme documentation.

The Boards of Marconi plc and Marconi Corporation are currently
considering the impact of these matters on the timetable for
implementation of the Restructuring, but believe that posting of
the Scheme documentation in connection with the Restructuring
will still occur before the end of Marconi's financial year
(March 2003).

Background to ESOP Arrangements

As previously disclosed, Marconi plc issued share options to
Group employees under a number of different employee share option
plans. In order to hedge the potential cost of acquiring shares
in order to satisfy the Group's obligation under such plans, the
trustee of the Marconi Group share option scheme entered into
contracts (ESOP derivative transactions) guaranteed by Marconi
plc to purchase shares in the future at prices which were fixed
at the date of the contract.

It had previously been expected that, as part of the
Restructuring, a total of up to GBP170 million was to be set
aside pending determination of any claims which the ESOP
Derivative Providers may have had against Marconi Group
companies. The ESOP arrangements provided for monies to be set
aside for the benefit of the participating ESOP Derivative
Providers only to the extent that it was subsequently found by a
court, or agreed between the relevant parties, that the
participating ESOP Derivative Providers would have been able to
recover amounts from Marconi plc and existing and past
subsidiaries of Marconi under existing inter company funding
arrangements relating to the Group's prior ESOP hedging
arrangements.

The ESOP arrangements did not have the effect of favouring claims
which the ESOP Derivative Providers might otherwise have had
against Marconi under existing guarantees given by it in favour
of the ESOP Derivative Providers. Rather, the ESOP arrangements
implemented a mechanism to resolve uncertainties as to whether
and to what extent Marconi, Marconi Corporation, the trustee of
the Marconi Group share option scheme or the participating ESOP
Derivative Providers had claims against operating and other
companies within the Marconi Group. Such companies were or are
under the ownership of Marconi Corporation and, structurally, any
such claims of the ESOP Derivative Providers, if determined to be
valid, may have ranked ahead of claims against Marconi
Corporation.

Implementation of the prospective settlement with the ESOP
Derivative Providers will require these arrangements to be
amended.

About Marconi plc

Marconi plc is a global telecommunications equipment and
solutions company headquartered in London. The company's core
business is the provision of innovative and reliable optical
networks, broadband routing and switching and broadband access
technologies and services. The company's customer base includes
many of the world's largest telecommunications operators.

The company is listed on the London Stock Exchange under the
symbol MONI.

CONTACT:  MARCONI PLC
          Public Relations Investor Relations
          David Beck
          Joe Kelly Heather Green
          Phone: +44 (0) 207 306 1771
                 +44 (0) 207 306 1735
                 +44 (0) 207 306 1490
          E-mail: joe.kelly@marconi.com
          E-mail: heather.green@marconi.com


TEXSTYLE WORLD: Receivers Reject Buy-out Offer for Company
----------------------------------------------------------
The receivers of Texstyle World, which has been in administration
for the past two months, rejected a buy-out offer from home
furnishing group Internacionale-Au Naturale, according to the
Scotsman.

The company's receivers considered Internacionale's offer--
believed to be GBP10 million--as too low.

Andrew Pepper, a partner at London-based administrator Kroll
Buchler, said yesterday: "My main aim is to maximize the returns
of the creditors.

"At the moment, we will continue to keep it trading, but in my
line of business you never know what is round the corner. Having
received several bids for the entire business as well as numerous
bids from retailers for specific units to add to their own store
portfolio, we are still in the process of considering these
offers prior to making a decision."

However, industry sources believe Internacionale is the only
serious bidder since then, according to the report.

Observers now foresee the company being broken up and sold off.

"Either option - selling the whole business as a going concern or
in groups of trading shops - will avoid the need to make
significant store closures and will maintain jobs, which is,
naturally, our strong desire," Mr. Pepper said.

But it is also believed that Internacionale's bid, led by
Scottish entrepreneur Ken Cairnduff, who have safeguarded the
jobs of most of the firm's 844 workforce and keep open most of
its 47 UK-wide stores.

Texstyle World was placed into interim management, a preliminary
form of administration, in December after owner Hilco said it
defaulted on debts of GBP8 milion.  Its troubles stemmed from
over-expansion, which could not be resolved by its restructuring
plan last year.

In September, 19 of the company's branches were closed, leading
to the dismissal of 150 employees.

After its fall into interim management, 24 staff in Glasgow head-
office were further made redundant.

Textstyle World has 27 stores in Scotland, and employs 400 staff.
In 2001, it registered a turnover of GBP63 million.


THIERRY MUGLER: Parent Decides to End Ties With Couture
-------------------------------------------------------
Clarins vice chairman in charge of finance, Pierre Milet, said
the company has decided to end its involvement in couture, an
operation that registered significant losses last year.

Clarins' Thierry Mugler Couture unit registered an operating loss
of over EUR20 million in 2002.

"We weren't able to cut costs last year and losses were
substantially worse than in 2001, Mr. Millet said.

Mr. Milet said Clarins remains open to offers from trade buyers,
though none has offered yet.  Thierry Mugler Couture revenue fell
18% to EUR29.5 million last year.

The management is set to decide prospects for the loss-making
fashion operation pending consultation with employee
representatives.  A meeting of the Thierry Mugler works council
is scheduled for February 26.

Clarins said, costs associated with Thierry Mugler Couture unit
could be included in its 2002 accounts, due April 3, if they can
reach agreement with workers before that date.  Otherwise,
charges associated with the closure of the operation will be
reflected in 2003 accounts.

The high-end cosmetics firm Clarin suffered from the travel and
tourism slump brought on by the September 11 terrorists attack.
It reported an operating profit of EUR80.3 million in 2001, down
25% from EUR107.3 million a year earlier.  Its revenue fell 18%
to EUR29.5 million last year.

CONTACT:  THIERRY MUGLER COUTURE
          50 Avenue du President Wilson BAT, 123-124
          93214 SAINT-DENIS LA PLAINE
          France
          Phone: 01 55 93 27 00
          Fax: 01 55 93 27 05
          Homepage: http://www.thierrymugler.com/


                        **************

       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-
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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.

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