/raid1/www/Hosts/bankrupt/TCREUR_Public/030312.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
Wednesday, March 12, 2003, Vol. 4, No. 50
Headlines
* F I N L A N D *
BENEFON OYJ: Directors Decide to Launch Directed Share Issue
BENEFON OYJ: Sets Extraordinary General Meeting on March 28
* F R A N C E *
ALSTOM SA: To Reveal Plan for Transmission and Distribution Unit
CANAL PLUS: To Part With Jobs and Non-Core Businesses
SUEZ SA: Dismisses Head of Waste Management Subsidiary
* G E R M A N Y *
BAYER AG: Seeks Compensation for Damages From Aventis
BUSCH JAEGER: Entrepreneur Buys Business From Thomson
DEUTSCHE TELEKOM: Has Net Loss of EUR 24.6 Billion on Writedowns
DEUTSCHE TELEKOM: T-Systems Plans to Sell Subsidiary Siris
ING BHF-BANK: Moody's Downgrades Financial Strength Rating to D+
KIRCHMEDIA GMBH: Creditors Request to Usher a Deal This Week
MOBILCOM AG: Forecasts First Full-year Profit in Years
WGZ BANK: Moody's Downgrades Financial Strength Rating to C
* I R E L A N D *
WGZ IRELAND: Moody's Retains Debt and Financial Strength Ratings
* I T A L Y *
TELECOM ITALIA: Board Approves 2002 End-Of-Year Results
* N E T H E R L A N D S *
KONINKLIJKE AHOLD: Appoints Eustace as Chief Financial Officer
KONINKLIJKE AHOLD: Contradicts U.S. CEO's Claim Over Resignations
* U N I T E D K I N G D O M *
ABBEY NATIONAL: Posts Loss Before Tax of GBP984 MM in 2002
BRITISH ENERGY: Sale of Remaining U.S. Business Fell Through
BRITISH ENERGY: Announces Extraordinary General Meeting
BUZZ: 100 Airline Staff May Lose Jobs After Buzz Takeover
CABLE & WIRELESS: Discloses Financial Reporting Timetable
CORUS GROUP: Company Profile
CORUS GROUP: In Talks to Salvage Planned Sale of Aluminum Unit
GLAXOSMITHKLINE PLC: Japanese Unit Has Undisclosed Income
GLAXOSMITHKLINE: Court Dismisses AIDS Foundation Lawsuit
INVENSYS PLC: Standard & Poor's Lowers Long-Term Ratings to 'BB+'
NEWCASTLE BUILDING: Moody's Changes Outlook of Ratings
PACE MICRO: Sugar Could Be Mulling a Bid
PIZZAEXPRESS PLC: Might Hold Talks With TDR-Capricorn Consortium
ROYAL & SUNALLIANCE: Life Funds Likely to Need Cash Injection
TEXSTYLE WORLD: Founder Reid Buys Back Texstyle World Stores
THISTLE HOTELS: To Avert BIL's Offer Through Asset Disposals
WOMBWELL FOUNDRY: Parent Company Rejects Rescue Package
=============
F I N L A N D
=============
BENEFON OYJ: Directors Decide to Launch Directed Share Issue
------------------------------------------------------------
By virtue of the valid authorization resolution of the
shareholders' annual general meeting of May 17, 2002, registered
in the trade register June 18, 2002, and as informed in a
bulletin of February 25, 2003, the Board of Directors of Benefon
Oyj has unanimously decided to increase the company's share
capital by a maximum of EUR 445,203.54 by offering for
subscription a maximum of 1,323,530 new investment shares of the
company, each with the book parity value of EUR 0.34 (not the
exact value) in a directed share issue. The issue is directed to
Xpediant LLC, an affiliate company to NRJ International LLC. As a
result of the subscriptions the share capital of the company may
increase into a maximum of EUR 3,728,125.59. This bridge
financing issue is a part of the reported total funding package
agreed with NRJ.
The shares were decided to be offered as follows:
Entitled to subscription Investment shares Subscription price
(euro)
Xpediant LLC 1,323,530 450,000.20
The reason for the deviation from the shareholders' pre-emptive
subscription right is to strengthen the company's critical
economic situation in the short term, and to secure the operating
environment of the company through bridge financing. Therefore,
there is a justified financial reason for deviating from the
shareholders' first option from the company's point of view.
There is no secondary subscription right for the possibly
unsubscribed investment shares.
The subscription price is EUR 0.34 per investment share, each
with the book parity value of EUR 0.34 (not the exact value). The
subscription price is based on the understanding achieved in the
financing negotiations of Benefon.
The investment shares offered for subscription in the issue shall
be subscribed for in accordance with the Companies Act, Chapter
3a, Paragraph 17, by paying the entire share subscription price
by the end of the subscription period into Benefon's bank
account. The subscription period begins on March 10, 2003 and
ends on March 12, 2003. The Board of Directors shall accept all
the subscriptions made in this way and in accordance with the
terms of subscription.
The new shares have the same value as the company's other
investment shares and entitle to full dividend for the financial
period, which started on 1 January 2002 and for all financial
periods thereafter. The subscribed shares will produce other
shareholders' rights after the share capital increase has been
registered.
Salo, March 10, 2003
BENEFON OYJ
Jorma Nieminen
Chairman of the Board
BENEFON OYJ: Sets Extraordinary General Meeting on March 28
-----------------------------------------------------------
The Board of Directors of Benefon Oyj has decided to convene the
Extraordinary General Meeting at 10.00 on Friday, March 28, 2003.
Meeting shall be held in Salo in Sininen Talo, address
Rummunlyojankatu 2, 24100 Salo.
Meeting Agenda:
1. Amending articles 3, 4, and 5 of Articles of Association
The Board of Directors proposes articles 3, 4, and 5 of Benefon's
Articles of Association to be amended as follows:
"3 Minimum and maximum share capital
Company's minimum share capital is EUR 1,000,000 and maximum
capital 40,000,000 in which limits the share capital can be
increased or decreased without changing the Articles of
Association.
4 Number of shares
Company has a minimum of 2,500,000 and a maximum of 120,0000,000
shares. A share has no nominal value.
5 Share series
Company shares are divided to common shares and investment shares
so that there is a maximum of five hundred thousand (500,000)
common shares and a minimum of two million (2,000,000) and
maximum of one hundred nineteen million five hundred thousand
(119,500,000) investment shares."
2. Board of Directors' proposal to a directed share issue
The Board of Directors proposes, that the share capital of the
company is raised by a minimum of 6,465,341.73 and a maximum of
EUR 14,380,067.81 by offering a minimum of 19,220,588 and a
maximum of 42,750,000 new investment shares of the company, each
with a book parity of EUR 0.34 (not the exact value), for
subscription by a maximum of one hundred professional domestic or
foreign investors and debtors of the company. The purpose of the
directed share issue is to strengthen the financial situation of
Benefon Oyj. The deviation from the pre-emptive subscription
right of the shareholders is proposed because the issue is aimed
to strengthen the company's capital structure and balance sheet.
Therefore, the company has a justified financial reason for
deviating from the shareholders' first option.
Benefon Oyj has already received subscription commitment from NRJ
International LLC for subscription of 14,750,000 shares with
subscription price of EUR 0.34 per share and in addition
subscription commitments from other subscribers for a total of
3,250,374 shares with subscription price of EUR 0.34 per share.
The issue is implemented as a share issue via book building,
where the investors named by the company are given a chance to
submit subscription commitments during the receipt period of the
offers from March 10 to March 26, 2003 (Receipt period). The
subscription commitments may also be conditional. The receipt of
the subscription commitments is executed by Benefon Oyj.
The share subscription price per investment share is the same for
all investors and it is EUR 0.34. The subscription price may also
be paid using set-off.
If the number of subscription commitments exceeds the maximum
amount of shares offered for subscription in the issue the
subscription commitments shall be accepted in the chronological
order of the subscription commitments, so that earlier commitment
will be preferred. The Board of Directors proposes, that the
General Meeting of the Shareholders shall confirm the allocation
of the subscription rights according to the accepted subscription
commitments.
The subscription period begins after the shareholders' meeting on
March 28, 2003 and ends on March 31, 2003. The shares shall be
subscribed, as provided in Chapter 3a, Section 17 of the
Companies Act, by paying the entire share subscription price on
the account appointed by the company, or into a separate
subscription list if the subscription is paid using set-off, by
the end of the subscription period. The Board of Directors shall
accept all the subscriptions made in this way and according to
the terms and conditions of the subscription.
The new shares have the same value as the company's other
investment shares and entitle to full dividend for the financial
period, which started on 1 January 2002 and for all financial
periods thereafter.
Based on all the shares now to be issued, the proportion of
shares to be subscribed for is at most 438.03 % of the company's
registered share capital and 221.97 % of the votes produced by
those shares. Of those entitled to subscribe some may be insiders
of the company due to the amount of the company's shares they
own. Insiders, based on their ownership in the company, own a
total of 50.57 % of the shares of the company and 70.51 % of the
votes produced by them. As a result of the share subscriptions to
be made in the directed issue the proportion of the company's
shares held by the insiders may not rise to more than 488.60 %
and the votes produced by them to more than 292.48 %.
3. Board of Directors' proposal for issuance of a convertible
bond loan
The Board of Directors proposes, that Benefon Oyj would increase
its share capital by issuing a convertible bond loan (Convertible
Bond Loan I/2003) on the following terms and conditions:
The increase of the share capital
The company's share capital is increased by the maximum of EUR
4,961,543.87 by offering convertible bond loan, with maximum
principal of EUR 5,015,000, for subscription by NRJ International
LLC. For the Loan a maximum of ten (10) transferable convertible
bonds is given, the principal value of each being EUR 501,500.
The convertible bonds may be converted in total into a maximum of
14,750,000 new investment shares of the company with the book
counter value of EUR 0.34 (not the exact value) each.
Subscription right and secondary subscription
The convertible bond loan is wholly offered for subscription to
NRJ International LLC.
The subscription right may not be transferred and no secondary
subscription shall take place.
The principal of the convertible bond loan and the conversion
rate of the convertible bonds
The maximum amount of the principal of the convertible bond loan
shall be in total EUR 5,015,000.00. The issue price is one
hundred (100) percent. The convertible bonds may be converted
into the maximum of 14,750,000 new shares of the company with
book accounting value of EUR 0.34 (not the exact value) each. The
conversion rate of the convertible bond loan corresponds to the
share subscription price of EUR 0.34 per share for each share
with the book accounting value of EUR 0.34 (not the exact value)
so that each full EUR 0.34 of the Loan may be converted into one
(1) investment share. The conversion rate has been agreed upon in
the negotiations between the company and NRJ International LLC.
Out of the shares to be converted an amount corresponding to the
par accounting value of the shares converted shall be booked in
the share capital, rest being premium. As a result of the
conversion of the convertible bond loan the share capital of the
company may increase by the maximum of EUR 4.961,543.87.
Loan period and repayment of the loan
The loan period begins from the subscription of the loan and ends
on the 31st of January 2006, when the loan and unpaid interest
accrued on it fall due for repayment in their entirety excluding
the loan amount converted into the shares of the company.
The company shall be entitled to repay the loan before its
maturity either as a whole or in part. If the Company announces
to the bearer of the convertible bond that it will repay the loan
amount of convertible bond, the bearer of the convertible bond
shall have fourteen (14) days time period, after receiving
Company's announcement, to demand that his convertible Bond is
converted into shares.
Subscription of the convertible bond loan
The subscription period of the Convertible Bond Loan I/2003
begins immediately after the shareholders' extraordinary meeting
of the 28th of March 2003 and ends on the 31st of March 2003. The
Board of Directors of the company shall decide upon the
acceptance of the subscriptions. The Convertible Bond Loan I/2003
is available for subscription in the headquarters of Benefon Oyj,
address Meriniitynkatu 11, 24100 Salo, during regular office
hours. The subscription shall be made by signing a separate
subscription list.
Terms of payment of the convertible bond loan
The loan amount subscribed for shall be paid to the bank account
of Benefon Oyj by the end of subscription period.
Issuance of the convertible bond loan
Convertible bonds shall be given for the convertible bond loan.
The Loan is not issued in the book entry system.
Conversion right
Convertible bonds may be converted into the shares of the company
either as a whole or in part. The conversion takes place during
the time period between 10th of April 2003 and 31st of January
2006 according to the terms and conditions of the Convertible
Bond Loan I/2002 attached.
Transferability of convertible bonds
Convertible Bonds are transferable according to the terms and
conditions of the Convertible Bond Loan I/2003 attached hereto.
The terms and conditions of the Loan
The terms and conditions of the Convertible Bond Loan I/2003 are
attached as appendix 1.
Insider ownership
The proportion of shares to be subscribed for based on conversion
of all convertible bonds to be issued is 151,13% of the company's
registered shares and 76,58% of the registered votes. NRJ
International is an insider in the company.
As a result conversion of the convertible bonds, the proportion
of the company's shares held by NRJ International LLC could rise
at maximum to 618,09% of company's registered share capital, and
313,21% of the respective votes, assuming that NRJ International
fully subscribes the directed issue and option rights offered to
it for subscription at the same extraordinary shareholders'
meeting of Benefon Oyj and fully exercises the said option rights
and additionally assuming that Xpediant LLC, an affiliate to NRJ
International LLC, fully subscribes the directed share issues
directed to it by the decision of Board of Directors of Benefon
on March 10, 2003.
Other matters
The Board of Directors proposes that it shall be authorized to
decide on any other matters and practical measures relating to
the convertible bond loan and the increase of the share capital
as a result of the possible conversion with the convertible
bonds.
The terms and conditions of the Convertible Bond Loan I/2003 are
attached as appendix 1.
4. Board of Directors' proposal for offering option rights to NRJ
International LLC
The Board of Directors proposes that the Shareholders'
Extraordinary General Meeting decides on the issuing of option
rights according to the terms attached.
In deviation from the pre-emptive subscription rights of the
shareholders, the options would be offered for subscription to
NRJ International LLC. The maximum number of options would be
29,500,000 and the maximum of twenty (20) options certificates,
each worth 1.475.000 option rights would be given.
The options would entitle subscription to a maximum of 29,500,000
investment shares of Benefon Oyj. The Board of Directors proposes
that the shareholders' pre-emptive right of subscription is
deviated from because the options are designed to be a part of
the total financing package agreed on between the Company and NRJ
International LLC, and they enable flexible additional financing
if concerned necessary. Thus, a weighty economic reason exists
for deviating from the pre-emptive subscription right.
The subscription price of each share, subscribed by exercising
the option right, has a book parity value of EUR 0.34 (not the
exact value) and a subscription price of EUR 0.34. The shares
would be paid for upon subscription. As a result of the
subscriptions, the company's share capital could rise by a
maximum of EUR 9,923,087.74.
The proportion of shares to be subscribed for based on all the
options to be issued is 302.26% of the company's registered
shares and 153.17% of the registered votes. NRJ International is
an insider in the Company.
As a result of the share subscriptions to be made on the basis of
the options, the proportion of the company's shares held by the
insiders could rise to 618.09% of the Company's current
registered share capital, and 313.21% of the respective votes,
assuming that NRJ International fully subscribes the directed
issue the convertible bond loan offered to it at the same
extraordinary shareholders' meeting and fully converts the said
convertible bonds into shares and additionally assuming that
Xpediant LLC, an affiliate to NRJ International LLC, fully
subscribes the directed share issues directed to it by the
decision of Board of Directors of Benefon on March 10, 2003.
The terms and conditions of the option rights are attached as
appendix 2.
5. Electing new members to the Board of Directors
The Board proposes that the Extraordinary Shareholders' Meeting
elects new Board of Directors, which includes five (5) members.
The current Board of Directors will resign when the new Board of
Directors is elected.
Resignation of the current Board of Directors and election of new
Board is conditional on the execution of the share capital
increase referred to in section 2 and Convertible Bond Loan
referred to in section 3.
Documents on view
Copies of the financial statements and the Board of Directors'
proposals and appendices are available for shareholders to view
from March 21, 2003 onwards, at the company headquarters in Salo,
Meriniitynkatu 11, 24100 Salo. The company will send copies of
the documents to shareholders upon request.
Right to participate in the meeting
Shareholders who have been registered as a shareholder in the
company's shareholder register maintained by the Finnish Central
Securities Depository Ltd by March 18, 2003 have the right to
participate in the meeting. In addition, shareholders whose
shares have not been transferred to the book-entry system, have
the right to participate in the Extraordinary General Meeting
provided that the shareholder had been registered in the company
share register before October 7, 1994, in which case the
shareholder must present at the Extraordinary General Meeting his
share certificate or other documentation indicating that title to
the shares has not been transferred to the book-entry system.
Should a shareholder, whose shares are in administrative
registration, want to use his/her voting rights in the
Shareholders' Meeting, such shareholder need to establish his/her
ownership and voting rights to the company in writing latest on
March, 18, 2003.
Notice of intention to participate
Shareholders who wish to participate in the Extraordinary General
Meeting must signify their intention to do so at latest on March
25, 2003, either by telephone +358-2-77400 (Tuija Svahnb"ck tai
Minna Suokas), by telefax +358-2-7332633, in writing to Benefon
Oyj, PL 84, 24101 Salo, Finland, or by email to:
tuija.svahnback@benefon.fi or minna.suokas@benefon.fi.
Shareholders are requested to present any powers of attorney
along with their notice of intention to participate.
Salo, March 10, 2003
BENEFON OYJ
Board of Directors
Jorma Nieminen
Chairman of the Board of Directors
CONTACT: Jukka Nieminen, President
Phone: +358-2-77400
Home Page: http://www.benefon.fi
===========
F R A N C E
===========
ALSTOM SA: To Reveal Plan for Transmission and Distribution Unit
----------------------------------------------------------------
Power and transport engineering group Alstom is expected to
announce a plan to sell its GBP1.17 billion transmission and
distribution division this week, according to the Sunday
Telegraph.
TCR-EU earlier reported that the world's largest maker of cruise
ships and builder of trains and power-generation equipment plans
to sell up to EUR1.15 billion (US$1.24 billion) in assets.
An Alstom spokesman confirmed the company intends to unload up to
EUR1 billion worth of businesses as well as a further EUR150
million of real estate.
It is known that the company began reviewing all six divisions
last year to see what businesses could go.
Alstom has reportedly hired BNP Paribas SA, Societe Generale SA
and Rothschild to advise it on the disposals. It says it has no
advisory team for its planned disposals but uses several
investment banks as needed.
The company's troubles came after the Chapter 11 filing of its
biggest customers, Renaissance Cruises Inc. The latter suffered
a sharp fall in demand for cruises after the September 11
terrorist attack in the US.
During Renaissance's filing for creditors protection, Alstom said
its exposure was nearly EUR700 million.
Proceeds of the disposal will be used to reduce the company's
EUR4 billion debt. Last year, Alstom sold EUR617 million of new
shares through a rights issue and has also raised about EUR450
million through the sale of some of its real estate assets.
The company's market cap, which has fallen more than 70% in the
last year, is about EUR836 million.
CONTACT: ALSTOM
25, Avenue Kleber
75116 Paris Cedex 16, France
Phone: +33-147552000
Fax: +33-147552861
Home Page: http://www.alstom.com
Contact: Investor Relations
Phone: + 33 (0) 1 47 55 25 78
Fax: + 33 (0) 1 47 55 28 61
E-mail: investor.relations@chq.alstom.com
CANAL PLUS: To Part With Jobs and Non-Core Businesses
-----------------------------------------------------
Several hundred jobs and non-core assets are set to go under the
restructuring plan of Vivendi Universal's loss-making television
arm, Canal Plus.
Canal Plus new chief executive Bertrand Meheur is expected to
inform employee representatives of the move this week, pending an
agreement with union leaders over redundancy terms, according to
the Financial Times. Up to 700 jobs are in line to go.
We have too many people, too many legal entities and too much
complexity," said a person familiar with the plan.
The restructuring is meant to trim down the group's EUR5 billion
(US$5.5 billion) debt, and stem annual losses of EUR325 million
in order to revive the television arm. The move is part of a
bigger drive to bring the parent company to profitability.
"We are in the process of streamlining the assets," the source
said. It is understood that Mr. Meheut have pointed out several
assets for sale, including Expand, the group's TV production
company, Numericable, its cable network, and operations in
Scandinavia and the Benelux region.
Expand is likely to go to a new owner, while Numericable could be
absorbed into one of France's other two cable networks. These
planned disposals follow the company's agreement to sell Canal
Plus' Italian arm, Telepiu, to News Corp.
Canal Plus's value went down by 50% last week after the French
conglomerate announced a EUR5.4-billion goodwill impairment in
the unit. An IPO or trade sale of the company has also been
ruled out after Vivendi decided to keep Canal Plus as one of its
remaining entertainment operations.
After the company's excess baggages are unloaded, Canal Plus
intends to focus on fewer pay-TV platforms and its CanalSatellite
business.
CONTACT: VIVENDI UNIVERSAL
Headquarters
42 Avenue de Friedland
75380 Paris Cedex 08
France
Phone: +33 1 71 71 10 00
Fax: +33 1 71 71 11 79
Contact:
Investor Relations
E-mail: investor-relations@groupvu.com
Daniel Scolan, Executive VP
Investor Relations
Phone: +33.1.71.71.12.33
E-mail: daniel.scolan@groupvu.com
Laurence DANIEL
IR Director, Europe
Phone: +33.1.71.71.12.33
E-mail: laurence.daniel@groupvu.com
Edouard LASSALLE
Associate Director, Europe
E-mail: edouard.lassalle@groupvu.com
SUEZ SA: Dismisses Head of Waste Management Subsidiary
------------------------------------------------------
Suez SA dismissed Ian Goodfellow as UK managing director of
Suez's Sita subsidiary after the group registered annual losses
of EUR863 million.
Per-Anders Hjort, currently in charge of Sita activities in
Sweden, is expected to replace Mr. Goodfellow in a move perceived
as the start of a shakeup in the business. But neither the
company nor Suez was willing to confirm Mr. Goodfellow's
departure, according to The Herald.
Sita handles waste from the Cabinet Office as well as holding
contracts for the Royal Mail's waste and similar deals with local
authorities. Despite being Britain's biggest waste management
company, Sita had difficulty integrating some of its acquisitions
such as the United Waste business. It also failed to pursue its
plan of building incinerators and develop landfill site because
of government restriction.
Suez SA is also struggling to restore investor confidence after
posting a loss as a result of a EUR500 million provision for its
Argentine subsidiary and a EUR795 million writedown of its stock-
listed assets.
The company's shares jumped 9% to EUR12.05 as it recommitted
itself to offload EUR10 billion worth of assets over the next two
years.
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G E R M A N Y
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BAYER AG: Seeks Compensation for Damages From Aventis
-----------------------------------------------------
Struggling German chemicals group Bayer AG is seeking
compensation for damages relating to its acquisition of Aventis
CropScience from Aventis and Schering AG.
The company alleged it has suffered the consequences of
inaccurate contractual representations and warranties involving
the transaction, according to AFX.
A spokesman for Bayer said, "I can confirm the details that have
been given in the US Securities and Exchange Commission filing by
Aventis."
Further, Aventis said in the filing that Bayer is also seeking
significant post-closing adjustment in the transaction both
parties closed in June 3, 2002. The deal involves the sale of
Aventis' and Schering's 76% and 24% stakes in Aventis CropScience
to Bayer for EUR7.25 billion, including EUR1.9 billion in debt.
The adjustment is permitted under Section 6 of the stock purchase
agreement of Bayer and Aventis.
"Aventis has recorded provisions that it believes will be
sufficient to cover potential liability to Bayer," said the
French pharmaceutical company.
Without giving further details, the spokesman said Bayer and
Aventis are now in discussions.
Bayer is currently facing multi-million dollar claims for damages
relating to its cholesterol-lowering drug, Lipobay or Baycol.
Its chemicals and polymers operations are also struggling as a
result of the downturn in manufacturing.
CONTACT: BAYER AG
Werk Leverkusen
51368 Leverkusen, Germany
Phone: +49-214-30-58992
Fax: +49-214-307-1985
Homepage: http://www.bayer-ag.de
BUSCH JAEGER: Entrepreneur Buys Business From Thomson
-----------------------------------------------------
Harold Tillman, chairman of the Savile Row men's wear business
Baird Menswear Brands (BMB), has bought the 130-year-old fashion
retailer Jaeger less than two months after Coats sold the
business to Richard Thomson.
The group's 52 stores, 15 discount outlets and 94 in-store
concessions changed hands for the second time in months after Mr.
Tillman, bought the brand for an undisclosed sum from former
Queens Park Rangers chairman Richard Thomson just six weeks after
the latter paid textiles firm Coats GBP1 million for the group
and its sister Viyella.
The entrepreneur, who was also behind the introduction of the
Jeff & Co clothing range at Sainsbury's said "Jaeger is one of
the most famous names in British fashion" and he intends to
return the company to its "former glory".
"It was an iconic brand in the 1960s and 1970s and we are
confident that, through a fresh approach backed by significant
investment, we can exploit its true potential and restore the
company to its former glory," he added.
According to The Telegraph, the deal is the latest step in Mr.
Tillman's financial rehabilitation, which follows the collapse of
his Honorbilt fashion empire in 1990 and two subsequent
unsuccessful attempts to have him disqualified as a company
director.
Mr. Tillman was quoted saying: "Yes, I'm back. I'm not a major
egotist but I believe that with my worldwide sourcing contacts I
can buy something like Jaeger and improve it."
He hopes that his connections from Marchpole, which owns the Yves
St Laurent license in the U.K., will pay off and assist him in
reinvigorating the brand.
Jaeger will have a close relationship with BMB, with Andrew
MacKenzie, BMB's finance director, as its acting chief executive.
The relationship is seen as "mutually beneficial" and Mr. Tillman
hopes it will eventually lead to BMB, which will advise on supply
and product sourcing, being awarded a marketing license for
Jaeger Menswear.
During the last decade the group has struggled to win back
customers despite initiatives aimed at revitalizing its image.
DEUTSCHE TELEKOM: Has Net Loss of EUR 24.6 Billion on Writedowns
----------------------------------------------------------------
Group revenue for full year increased by 11.1 percent to EUR 53.7
billion
- Net debt1 reduced from EUR 64.3 billion in the third quarter of
2002 to EUR 61.1 billion
- Group EBITDA1 (adjusted for special influences) increased from
EUR 15.1 billion to EUR 16.3 billion
- Net loss EUR 24.6 billion as a result of high level of non-
scheduled write-downs
- T-Com increased revenue by 2.6 percent to EUR 30.2 billion
- T-Mobile increased EBITDA1 by almost 61 percent to EUR 5.0
billion - T-Systems with weaker revenue but higher EBITDA
- T-Online improved EBITDA by EUR 0.3 billion to plus EUR 0.2
billion
Deutsche Telekom succeeded in closing the 2002 financial year
with positive developments in revenue and operating results
despite difficult general economic conditions. Revenue increased
considerably by 11 percent to EUR 53.7 billion. The strict debt
reduction policy led to a considerably lower level of net debt of
around EUR 61 billion at year end. The net loss for the full
financial year amounted to around EUR 24.6 billion. This loss is
mainly attributable to the one-time, non-cash, non-scheduled
write-downs resulting from the strategic review in the third
quarter of 2002.
"We are well aware of the scale of this figure. The result
reflects the grave situation that the company found itself in
last year. We are in no way trying to gloss over this", Kai-Uwe
Ricke, Chairman of the Board of Management, emphasized. "As you
know, we have devoted a great deal of time and effort to the
situation. We know what has to be done. And we will succeed."
T-Mobile main driver of revenue growth
Deutsche Telekom increased its revenue considerably by 11 percent
in 2002 from EUR 48.3 billion to EUR 53.7 billion. The excellent
developments of the fourth quarter, in which group revenue
increased by EUR 1.1 billion compared with the third quarter to
EUR 14.5 billion, made a major contribution to this growth. Three
divisions made particular contributions to this development: T-
Mobile with EUR 5.2 billion, T-Com with EUR 0.4 billion and T-
Online with EUR 0.3 billion. The revenue generated by the T-
Systems division decreased by around EUR 0.5 billion, or roughly
6 percent, in the generally difficult economic environment.
Excluding changes in its composition, the Group recorded solid
organic revenue growth of EUR 2.1 billion, or 4.3 percent, to EUR
50.4 billion.
EBITDA excluding special influences increased considerably in
fourth quarter
With EBITDA excluding special influences amounting to EUR 4.35
billion in the fourth quarter of 2002, Deutsche Telekom improved
once again on the previous quarter (EUR 4.2 billion). Group
EBITDA excluding special influences amounted to EUR 16.3 billion
for the full 2002 financial year, almost EUR 1.2 billion or 7.8
percent higher than in the previous year. EBITDA including
special influences amounted to EUR 16.1 billion. The difference
of around EUR 0.2 billion consists of EUR 0.5 billion relating to
proceeds from the sale of shares (Satelindo and T-Online) and EUR
0.7 billion for restructuring expenses at T-Com and T-Systems and
an additional accrual for pensions.
Net loss for the full year at the same level as after nine months
The Group's net loss for the full 2002 financial year amounted to
EUR 24.6 billion, only slightly higher than the net loss of EUR
24.5 billion recorded for the first nine months of the year. The
increase in the net loss compared with the previous year is
mainly attributable to the non-scheduled write-downs of EUR 21.4
billion resulting from the strategic review.
Net debt
In comparison with the third quarter of 2002, Deutsche Telekom
succeeded in reducing its net debt to EUR 61.1 billion. This
significant progress in reducing the company's debt is
attributable in part to asset sales already made (including the
sale of various real estate holdings, 120 million T-Online
shares, T-Systems ABS transaction) and the improvement of free
cash flow.
"Over the past 18 months, we have succeeded in reducing our net
debt by almost EUR 10 billion. Excluding the one-time payments of
EUR 8.3 billion, we would have been able to reduce our net debt
by around EUR 18 billion in 18 months", Dr. Karl-Gerhard Eick,
Chief Financial Officer, emphasized. "The average monthly level
of debt repayment achieved over this period of EUR 1 billion
should reassure everybody that we will succeed in reducing our
net debt to three times our 2003 EBITDA forecast by the end of
this year, based on net debt of EUR 61.1 billion at 31 December
2002."
A further aspect in the reduction of net debt is the continued
positive development of the dollar exchange rate.
T-Com - EBITDA increased in the fourth quarter
T-Com's total revenue increased by almost three percent, or EUR
0.8 billion, compared with the previous year to EUR 30.2 billion.
The main contributing factors to this development were the
Eastern European affiliates with an increase in revenue from EUR
2.8 billion to EUR 3.9 billion. Revenue from business within
Germany decreased by EUR 0.3 billion. A particularly pleasing
development was the increase in call revenues in the last two
quarters of 2002 which, combined with the growth of around twelve
percent in access revenues in the course of the year, mostly
stabilized the negative development of revenue. The decrease in
revenue, EUR 0.8 billion after the first nine months of 2002, was
considerably reduced and, in a comparison of the fourth quarters
of 2001 and 2002, actually reflects revenue growth.
When considering T-Com's total revenue, it must be remembered
that Hrvatski Telekomunikacije (HT) was only consolidated for the
fourth quarter of 2001, but for the entire 2002 financial year.
HT's contribution to total revenue increased from around EUR 0.2
billion in 2001 to around EUR 1 billion in 2002. Furthermore, the
Baden-Wrttemberg cable business was still included in the
figures for T-Com's business within Germany in full for the first
half of 2001. The deconsolidation of the Baden-Wrttemberg cable
TV business decreased T-Com's revenue by around EUR 0.1 billion.
T-Com's EBITDA excluding special influences increased slightly by
0.4 percent from EUR 10.1 billion to EUR 10.2 billion. EBITDA
including special influences decreased by 8.9 percent from EUR
10.9 billion to EUR 9.9 billion. Income before taxes (including
special influences) amounted to EUR 3.5 billion compared with EUR
4.6 billion in the previous year. T-Com recorded adjusted EBITDA
of EUR 2.6 billion in the fourth quarter of 2002, an increase
over the corresponding figure of EUR 2.5 billion for the third
quarter. The main special influence affecting EBITDA in the
fourth quarter of 2002 was the additional minimum liability of
EUR 0.2 billion relating to the company pension plan. Unadjusted
income before taxes amounted to EUR 3.5 billion.
The trend towards broadband access in the fixed network continues
unabated, resulting in increased demand for T-DSL and T-ISDN. The
number of T-DSL contracts marketed increased by almost 44
percent, or around one million, in the course of the year to more
than 3.1 million at the end of 2002. As a result, Germany
extended its leading position among western industrialized
countries. Despite the very high level already achieved, demand
for T-ISDN continued to develop positively. The number of
channels in operation in Germany increased from around 20.4
million to 22.4 million.
Disproportionately high EBITDA growth at T-Mobile
The T-Mobile division recorded strong growth of total revenue
over the full 2002 financial year of almost 35 percent or EUR 5.1
billion to EUR 19.7 billion and thus clearly underlined its
position as the growth driver in the Deutsche Telekom Group. Even
excluding RadioMobil and T-Mobile USA, consolidated for the full
year for the first time in 2002, and Ben, newly consolidated in
the fourth quarter of 2002, revenue increased by 16.8 percent.
EBITDA increased by 61 percent or EUR 1.9 billion to EUR 5.0
billion. T-Mobile USA recorded the strongest EBITDA growth,
turning negative EBITDA of EUR 0.3 billion into EBITDA plus EUR
0.5 billion. The loss before taxes increased by EUR 17.3 billion
from EUR 6.4 billion in 2001 to EUR 23.7 billion in 2002.
The number of subscribers served by T-Mobile majority
shareholdings increased from 46.7 million to 53.9 million in
2002. T-Mobile USA made a considerable contribution to this
marked growth in subscriber numbers, recording an increase over
the course of the year of 42 percent, more than 2.9 million net
additions, to 9.9 million subscribers. This made T-Mobile USA the
leader among U.S. mobile communications operators over the full
2002 financial year in terms of net subscriber additions. In the
fourth quarter of 2002 alone, net growth in the number of
subscribers served by T-Mobile USA was more than 1 million. The
number of contract subscribers increased by an even greater
amount, 1.1 million. At the end of 2002, contract subscribers
accounted for 86 percent of all T-Mobile USA subscribers,
compared with 74 percent one year before. T-Mobile USA achieved
this strong subscriber growth at the same time as improving the
structure of its subscriber base. The proportion of bad debt
losses relating to direct customer business decreased by almost
half compared with the previous year.
The number of T-Mobile subscribers in Europe also increased
considerably. In Germany, T-Mobile extended its market leadership
in comparison with the previous year with almost 24.6 million
subscribers. Subscriber growth over the full year amounted to 1.5
million, of which over 56 percent were contract subscribers. The
number of T-Mobile UK subscribers increased by around 2 million
over the course of the year to more than 12.4 million. At T-
Mobile UK, too, the customer acquisition strategy was clearly
focused on improving the existing subscriber structure. With
around 141,000 new contract subscribers in the fourth quarter of
2002, T-Mobile UK once more recorded a considerable improvement
compared with the previous quarter.
The number of subscribers at RadioMobil increased by more than
0.6 million in the past financial year to 3.5 million, and T-
Mobile Austria succeeded in keeping its number of subscribers
almost constant at more than 2.0 million, despite comprehensive
streamlining of its subscriber base. Ben in the Netherlands has
been fully consolidated since the fourth quarter of 2002. Ben had
1.4 million subscribers at the end of the year. The total number
of subscribers served by consolidated companies and minority
shareholdings of the Deutsche Telekom Group - including mobile
communications shareholdings not held by T-Mobile - increased to
81.7 million, which corresponds to a growth of more than 22
percent.
T-Systems increased its adjusted EBITDA despite negative economic
influences
T-Systems was not able to set itself apart from the generally
weak economic environment. Total revenue decreased by EUR 0.6
billion, or five percent, compared with the previous year to EUR
11.3 billion. Net revenue decreased by around six percent, or EUR
0.5 billion, to EUR 7.8 billion. Despite this decrease in
revenue, T-Systems recorded a growth in EBITDA excluding special
influences of around 30 percent, or EUR 0.3 billion, to EUR 1.15
billion. EBITDA including special influences decreased in the
period under review from EUR 0.9 billion to EUR 0.8 billion. The
special influences of EUR 0.4 billion affecting EBITDA in 2002
related mainly to restructuring expenses. The loss before taxes
increased from EUR 0.4 billion in 2001 to EUR 2 billion in 2002.
T-Online continued its profitable growth trend
The T-Online division (including DeTeMedien) increased its total
revenue by 26 percent, or almost EUR 0.4 billion, compared with
the previous year to EUR 1.8 billion. EBITDA improved over the
same period, from negative EBITDA of EUR 0.1 billion into
positive EBITDA of EUR 0.2 billion and thus demonstrates clearly
the division's successful orientation towards increasing its
profitability.
T-Online developed very pleasingly with customer growth of 1.5
million compared with the previous year and around 12.2 million
customers at the end of the year. Foreign subsidiaries accounted
for around 2.2 million of the total number of customers.
Other: PSA up and running
Total revenue generated by the area "Other" amounted to EUR 4.4
billion compared with EUR 5.1 billion in the previous year. The
decrease in revenue of around EUR 0.7 billion was a result of the
deconsolidation of DeTeSat (around EUR 0.1 billion) at 31
December 2001 and, in particular, the lower level of services
provided within the Group for other divisions. EBITDA adjusted to
exclude special influences decreased by EUR 1.1 billion compared
with the previous year to around EUR 30 million. The main reasons
for this are the decrease in revenue (EUR 0.7 billion), the costs
of T-Mobile rebranding amounting to around EUR 0.2 billion and
expenses of approximately EUR 0.2 billion related to the sale of
receivables.
The Personnel Service Agency (PSA) is now in operation and had
around 1,700 employees (calculated as full-time equivalents)
assigned to it at 31 December 2002. The PSA serves as a key
instrument for the placement of staff inside and outside the
Group while avoiding compulsory redundancies.
Free cash flow more than quadrupled
Despite the seasonal increase in investments, Deutsche Telekom
generated positive free cash flow of EUR 0.2 billion in the
fourth quarter of the year. Over the full financial year, free
cash flow thus increased to EUR 4.8 billion.
Cash generated from operations in the full financial year
increased by 2.4 percent to EUR 16.7 billion, while net cash
provided by operating activities, i.e. after net interest
payments, improved by 4.4 percent to EUR 12.5 billion.
At the same time, cash outflows for investments in property,
plant and equipment and intangible assets decreased by EUR 3.3
billion to EUR 7.6 billion. Free cash flow thus more than
quadrupled to the figure of EUR 4.8 billion already mentioned.
Depreciation and amortization
Depreciation and amortization during the year under review
increased by EUR 15.2 billion to a total of EUR 36.9 billion.
While depreciation of property, plant and equipment of EUR 9.5
billion remained at almost the same level as in the previous
year, amortization of intangible assets and mobile communications
licenses (including write-downs) increased from EUR 5.7 billion
to EUR 27.4 billion, mainly as a result of the strategic review
in the second half of the year.
To see financials: http://bankrupt.com/misc/DeutscheTelekom.htm
DEUTSCHE TELEKOM: T-Systems Plans to Sell Subsidiary Siris
----------------------------------------------------------
T-Systems to sell its French domestic telco business to LDCOM
T-Systems plans to sell its subsidiary Siris with its domestic
fixed-network activities in France to LDCOM (Louis Dreyfus
Communications), one of the leading French telecommunications
companies. LDCOM would in the future act as T-Systems' sales
partner in the French market. A proposal has been submitted to
employee representatives of the companies. The sale is subject to
the approval of the relevant French authorities. LDCOM would
acquire 100 percent of Siris' shares for a purchase price of
EUR25 million.
With this step, T-Systems plans to further focus on its core
business in France. "We are focused on customized IT and
telecommunications solutions for large multinational customers
and carriers," states Konrad F. Reiss, Deutsche Telekom Board
Member and T-Systems CEO. "From now on, this will be T-Systems'
top priority in France."
T-Systems will continue its IT services business in the French
market, regardless of the planned sale. LDCOM and T-Systems plan
to cooperate in the telecommunications services segment to
jointly serve international customers. The LDCOM group would gain
access to T-Systems' global services. In return, T-Systems would
have access to the fixed-network operator's high-performance
infrastructure.
T-Systems also operates one of the world's most modern
telecommunications networks (Telekom Global Net), connecting all
major trade centers worldwide. Via this network and its node in
Paris, T-Systems will continue to provide worldwide connectivity
to customer locations in France.
T-Systems is one of Europe's foremost ICT service providers. As
part of the Deutsche Telekom group, the company services the
segment with the largest business clients. In more than 20
countries, T-Systems employs a workforce of about 43,500. In 2002
the Telekom subsidiary realized sales of 11.3 billion Euros and
an adjusted EBITDA (earnings before interest, tax, depreciations
and amortizations) of 1.15 billion Euros.
T-Systems provides sustainable business cases for major clients
in the telecommunications, services & finance, public &
healthcare and manufacturing industries. For its clients, the
company optimizes processes, cuts costs and improves earnings. In
doing so, it makes targeted use of industry expertise and
cutting-edge technology. Its services range from integration of
new ICT solutions into existing client systems, through setup and
operation of desktop systems, data centers and networks, all the
way to telecommunications business with international carriers.
You will find more information about the company and its services
at http://www.T-Systems.deand http://www.t-systems.com
ING BHF-BANK: Moody's Downgrades Financial Strength Rating to D+
----------------------------------------------------------------
Moody's downgraded to D+ from C the financial strength rating of
Frankfurt-based ING BHF-Bank AG to reflect the ongoing weakness
of the bank's franchise in its core markets in Germany.
The rating has a negative outlook in anticipation of the
challenges the bank are likely to face in its effort to restore
some of its franchise strength within a very competitive,
difficult environment.
According to the rating agency, the action incorporates "the
decisive actions that top management has taken in the past few
months to improve profitability, to stem deteriorating asset
quality and ultimately restore its franchise in its core
operations of corporate and private banking as well as asset
management."
The bank's Aa3/P-1 debt and deposit ratings remain unchanged with
a stable outlook. All unsecured and Pfandbrief ratings of
Deutsche Hypothekenbank AG, a majority-owned subsidiary of ING
BHF-Bank AG, also remained unchanged.
ING BHF-Bank's businesses in Germany are corporate banking, asset
management and private banking. It had total consolidated assets
of EUR58 billion as of September 30, 2002.
KIRCHMEDIA GMBH: Creditors Request to Usher a Deal This Week
------------------------------------------------------------
Insolvent KirchMedia is expected to finally decide on who will
buy its remaining assets at the end of week after its creditors
requested the company to strike a deal with bidders.
"The management has been asked to sign a deal with one of the two
bidders until the end of this week," said Hartmut Schultz, a
spokesman for KirchMedia.
The transaction involves the company's 52.5% stake in broadcaster
ProSiebenSat1 and a film library business that German publisher
Bauer Verlag and HVB Group AG is interested in acquiring.
KirchMedia's managers provisionally agreed to sell the asset to
the consortium in December, but glitches in unloading the film
rights beckoned U.S. media billionaire Haim Saban and French
broadcaster Television Francaise 1 SA into bidding.
KirchMedia was put in administration after the collapse of its
parent Kirch Group under a mountain of debt load accumulated
during a failed venture into pay television.
MOBILCOM AG: Forecasts First Full-year Profit in Years
------------------------------------------------------
MobilCom CEO Thorsten Genz expects the company to book a profit
in 2003 even as the company prepares to announce hundreds of
millions in losses for 2002 later this month, FT Deutschland said
Monday.
"For the first half before interest, we will break the zero
line. In the whole year, we will be positive for the first time
in years," said Mr. Genz in an interview. He adds revenues in
2003 are expected to total as much as EUR2 billion (US$2.2
billion).
The company narrowly avoided bankruptcy last year when it finally
reached an agreement with France Telecom, its third-generation
mobile services partner.
The rescue pact will eventually see the French group taking over
the company's EUR7 billion debt in exchange for 90% of all
proceeds on any sale of 3G assets by MobilCom.
According to the report, the company is set to benefit from
reduced costs, with its exit from 3G services and the writing off
of the entire value of its 3G assets in 2002. This write-off
left MobilCom with a net loss of EUR2.86 billion in the third
quarter of the fiscal year. The company is also cutting
investment costs as well as an interest burden valued at EUR400
billion, which had previously depressed results, the report adds.
WGZ BANK: Moody's Downgrades Financial Strength Rating to C
-----------------------------------------------------------
Moody's downgraded the financial strength rating of WGZ
Westdeutsche Genossenschaftliche Zentralbank eG from C+ to C in
conclusion of a review started in October 2002 to assess WGZ's
relatively high level of loan loss provisioning over the last
years. The outlook for the ratings is stable.
In connection, the rating agency also downgraded from A1 to A2
the long-term deposit ratings of the bank. It, meanwhile,
maintained WGZ's P-1 deposit ratings.
Moody's warns that the bank is likely to face difficulties in
absorbing potential losses out of a legacy loan portfolio from
its expansion strategy at the end of the 1990s. The assessment
is taken in the context of the bank's modest recurring earnings.
The rating agency also noted that the Duesseldorf-bank bank
provided very conservatively for its non-performing loans. It
has also taken decisive measures in order to reduce exposure for
some troubled corporates in Germany. Moody's also recognized
WGZ's progress in having a stronger regional focus.
WGZ has pro-forma assets of around EUR 56 billion as of June 30,
2002, is the regional central bank for the cooperative primary
banks in the regions of Rheinland and Westfalen.
=============
I R E L A N D
=============
WGZ IRELAND: Moody's Retains Debt and Financial Strength Ratings
----------------------------------------------------------------
Moody's Investors Service has maintained WGZ-Ireland's long- and
short-term deposit and debt ratings of A2/Prime-1 and C-
financial strength rating.
The action is in conjunction with the downgrade of the long-term
deposit ratings and financial strength rating of Dusseldorf-based
WGZ Westdeutsche Genossenschaftliche Zentralbank from A1 to A2
and from C+ to C, respectively. The action concludes the review
started in October 2002 to assess WGZ's relatively high level of
loan loss provisioning over the last years.
Moody's warns that the bank is likely to face difficulties in
absorbing potential losses out of a legacy loan portfolio from
its expansion strategy at the end of the 1990s. The assessment
is taken in the context of the bank's modest recurring earnings.
The rating agency also noted that the Duesseldorf-bank bank
provided very conservatively for its non-performing loans. It
has also taken decisive measures in order to reduce expsoure for
some troubled corporates in Germany. Moody's also recognized
WGZ's progress in having a stronger regional focus.
=========
I T A L Y
=========
TELECOM ITALIA: Board Approves 2002 End-Of-Year Results
-------------------------------------------------------
The TIM Group Economic And Financial Results
- Revenues: EUR 10,867 million, +6.0%, with respect to the 2001
fiscal year
- Gross operating profit: EUR 5,039 million, +5.9%
- Operating income: EUR 3,358 million, +7.1%
- Profitability: gross operating profit/revenues ratio is 46.4%
(in line with 2001),
- Operating income/revenues ratio is 30.9% (30.6% in 2001)
- Consolidated net income attributable to the Parent company TIM:
EUR 1,165 million, +22.6% (net of the write-downs of
international stake holdings in particular Is-TIM)
- Operating free cash flow: EUR 2,932 million, (EUR 639 million,
higher than in 2001)
- Net borrowings: EUR 1,922 million (EUR 1,532 million as of
31.12.2001)
- Total mobile lines: 39.1 million (+12.2% on a same perimeter
basis).
TIM S.p.A ECONOMIC RESULTS
(net of the effects of BLU S.p.A.'s incorporation)
- Revenues: EUR8,915 million , +6.7%, with respect to the 2001
fiscal year
- Gross operating profit: EUR 4,529 million, +7.2%
- Gross operating profit/revenues ratio: 50.8%(50.6% in 2001)
- Operating income: EUR 3,323 million, +2.8%
- Mobile lines: 25.3 million, +5.7% with respect to 31.12.2001
- Net income posted by TIM S.p.A. for the 2002 fiscal year is EUR
264 million, following EUR 1,733 million in deductions for non-
recurrent charges (net of the corresponding tax benefit). These
charges mainly refer to the value adjustment of the stake in the
subsidiary TIM International N.V. (following the write-downs of
some of the company's international stake holdings )The end-of-
year results also include the positive effects, deriving from the
incorporation of Blu.
The Board of Directors of TIM (Telecom Italia Group), chaired by
the Chief Executive Officer Marco De Benedetti, has today
examined the results for fiscal year 2002.
TIM Group
It should be noted that the income and financial aggregate values
of the former company Blu S.p.A. (merged by incorporation into
TIM S.p.A in January 2002 for accounting and fiscal purposes) are
only included in the consolidated results of the TIM Group as of
the date of acquisition (October 7, 2002).
In the 2002 fiscal year the consolidated revenues of the TIM
Group amounted to EUR 10,867 million representing a 6% growth
with respect to the 2001 fiscal year (EUR 10,250 million). This
growth actually reached 11.9% if cleaned off of the effect of
exchange rate devaluations in 2002 mainly in Brazil and
Venezuela.
Gross operating profit amounted to EUR 5,039 million,
representing a 5.9% increase with respect to the preceding fiscal
year (EUR 4,760 million). Net of the foregoing exchange rates
devaluation, the increase in the gross operating profit stands at
8.6%. The gross operating profit/revenues ratio, at 46.4%, is in
line with the figure recorded in 2001.
Operating income amounting to EUR 3,358 million grew by 7.1%
compared to the 2001 fiscal year (EUR 3,136 million). The gross
operating profit/revenues ratio has improved to 30.9% against
30.6% recorded for the 2001 fiscal year.
Consolidated net income pertaining to the parent company TIM
amounted to EUR 1,165 million and recorded a 22.6% increase with
respect to the 2001 fiscal year (EUR 950 million). This result
reflects non-recurrent earnings for EUR 1,182 million relative to
extraordinary capital gains produced from the disposal of
minority shareholdings in the operators Bouygues Telecom,
Mobilkom Austria and Auna, mainly for tax benefits equal to EUR
337 million deriving from prepaid taxes and the tax deductibility
of the losses posted by the former Blu S.p.A. in the fiscal year
2002.
Non-recurring charges net of the relative tax benefits, amount to
EUR 1,424 million of which approximately EUR 1,410 million are
due to the write-off of the balance sheet value and allocations
to provisions for risks and charges for the associate company
Aria - IS TIM while the remaining amount is ascribed to the
write-down of Digitel Venezuela, Maxitel Brasil and other
adjustments.
Comparing the 2002 fiscal year results before extraordinaries and
taxes to the corresponding result posted in 2001, an improvement
of EUR 483 million (+19.3%) can be observed.
TIM Group's investments amounted to EUR 2,359 million with
respect to EUR 5,154 million for the 2001 fiscal year. The 2001
results reflected significant investments made for the
acquisition of licences by foreign subsidiaries. In the 2002
fiscal year investments mainly referred to technology and
improvements to the network; industrial investments amounted to
EUR 1,715 million while financial investments and investments in
goodwill amounted to EUR 644 million.
Operating free cash flow (Operating
income+Amortization/Depreciation- Industrial Investments-
Variations in working capital), at EUR 2,932 million, has shown
an improvement of EUR 639 million with respect to the 2001 fiscal
year as a result of the increase in operating income (+7.1%) and
a reduction in industrial investments made in 2002 with respect
to 2001.
Net borrowings amounted to EUR 1,922 million (EUR 1,532 as of
31.12.2001) following the payment dividends for EUR 3,617
million, inclusive of the anticipated payment made in December
2002.
The number of mobile lines of the TIM Group stood at about 39.1
million representing a 12.2% increase on a like for like
comparison with December 31, 2001 (34.9 million) excluding the
mobile lines of Bouygues T,l,com, the Mobilkom Austria Group and
Amena. (Auna's subsidiary mobile operator).
The TIM Group's personnel amounts to 18,702 units, an increase of
1,981 units with respect to December 31, 2001.
TIM S.p.A.
It should be noted that the results posted in the financial
statements of TIM S.p.A. for the 2002 fiscal year include, in
conformity to law, the income and financial results of the entire
2002 fiscal year of the former company Blu S.p.A.
In the 2002 fiscal year revenues stood at EUR 8,915 million (EUR
9,022 million including the contribution of the former Blu
S.p.A.), compared to EUR 8,357 million posted in the 2001 fiscal
year, representing a 6.7% growth. Value-added service (VAS)
revenues amounting to EUR 752 million, are 41% higher than in
2001.
ARPU (Average Revenue per User)in 2002 stood at EUR 28, an
increase of 1% with respect to the same indicator in 2001.
Gross operating profit reached EUR 4,529 million (EUR 4,404
million considering the contribution of the former Blu SpA)
representing a 7.2% growth with respect to the preceding year (?
4,225 million). The gross operating profit/ revenues ratio stands
at 50.8%, (50.6% in 2001).
Operating income amounted to EUR 3,323 million (EUR 3,153 million
including the contribution of the former Blu S.p.A.) representing
a 2.8% increase (EUR 3,231 million in 2001), while as a ratio to
revenues it reached 37.3% (38.7% in 2001). These results are net
of the fiscal amortization of the UMTS licence, which began in
January 2002 (EUR 121 million).
Net income stated in the statutory financial statements amounted
to EUR 264 million (EUR 1,907 million in 2001) after deduction of
non-recurrent charges for EUR 1,733 million, net of the relative
tax benefits. Such charges mainly refer to the write-downs of the
subsidiary TIM International N.V. and to the allocations to
provisions for risks and charges made in respect of the associate
company Aria IS-TIM.
The net income reflects tax benefits from the incorporation of
the former Blu SpA relative to the use of prepaid taxes and to
the deductibility of carried forward losses from preceding years
for a net gain of EUR 283 million in 2002 statutory accounts.
Investments in the period (net of variations in fixed assets
following the incorporation of former Blu S.p.A.'s balance sheet
totalled EUR 1,842 million, of which EUR 1,065 million for
industrial investments and EUR 777 million for financial
investments in subsidiaries.
Net borrowings as of 31.12.2002, net of the effects of the former
Blu S.p.A. amounted to EUR 1,492 million.
TIM, confirms its position as domestic market leader with about
25.3 million lines as of December 31, 2002 (+5.7% with respect to
December 31, 2001).
TIM S.p.A.'s personnel as of December 31, 2002 following the
incorporation of former Blu S.p.A. totalled 10,261 units.
Results of the main foreign subsidiaries and associate companies
of the TIM Group as of December 31, 2002
Subsidiaries
LATIN AMERICA
BRAZIL (average exchange rate real/euro 0.360892270)
TIM Brasil Group
The 2002 fiscal year recorded an increase in the performance of
the TIM Brasil Group's operations. It should be noted that the
company operating with GSM technology (TIM Celular formerly
Portale Sao Paulo, incorporated at the end of 2002 both Portale
Rio Norte and TIM Celular Centro Sul) launched its prepaid and
postpaid services on October 18, 2002.
The consolidated revenues of TIM Brasil, amounting to 2,851
million reais, registered a 21.7% year on year growth mainly as a
result of increased traffic volumes, which, in its turn, is the
result of the growing in the number of active lines (+17%) and in
interconnection tariffs.
The consolidated gross operating profit amounted to 747 million
reais: a 10.1% decrease with respect to the previous year due to
the costs sustained for the expansion of the TIM Brasil Group and
the start-up of the company operating with GSM technology.
The consolidated operating loss, at 43 million reais, is still
strongly conditioned by the start-up costs of the company
operating with GSM technology, however, the companies operating
with TDMA technology, recorded a 50% increase in operating
income.
Details of the main results of TIM Brasil Group operating
companies are as follows:
- The Tele Nordeste Celular Group, which operates mobile network
services in the north-eastern region of Brazil, posted revenues
for 984 million reais representing a 12.3% increase on the 2001
fiscal year.
Gross operating profit amounted to 523 million reais, a year on
year increase of 25.7%.
Operating income, amounting to 271 million reais, rose 26% with
respect to the 2001 fiscal year.
- The Tele Celular Sul Group, which operates mobile network
services in the southern region of Brazil, posted revenues in
2002 for 1,010 million reais, a year on year increase of 13.6%.
Gross operating profit for the 2002 fiscal year was 422 million
of reais, a year on year increase of 12.2%.
Operating income, at 192 million reais, increased 3.8% with
respect to 2001.
- Maxitel, which operates mobile network services in the areas of
Minas Gerais, Bahia and Sergipe, posted revenues in the 2002
fiscal year for 755 million reais a year on year increase of
29.7%.
The gross operating profit amounted to 293 million reais, a year
on year increase of 61.9%.
The operating income stood at 74 million reais against an
operating loss in 2001 (44 million reais).
TIM Celular, which provides GSM mobile network services in the
north of Brazil and in the states of Sao Paulo, Rio de Janeiro
and Espirito Santo, stated revenues for 108 million reais,
following the launch of its commercial services.
The company made a gross operating loss of 472 million reais and
an operating loss of 521 million reais reflecting the costs
sustained in the start-up phase.
PERU (average exchange rate nuevo sol/euro 0.300762734)
TIM Peru launched its commercial operations in January 2001. In
2002 it posted revenues for 308 million nuevo soles compared to
105 million nuevo soles in 2001.
The company made a gross operating loss of 95 million nuevo soles
compared to a gross operating loss of 173 million of nuevo soles
in 2001.
It stated an operating loss for the fiscal year of 01 million
nuevo soles compared to an operating loss of 238 million in 2001.
As the company is still in the start-up phase both gross
operating profit and operating income were negative.
VENEZUELA (spot exchange rate bolivar/euro 0.000679659 as the
company follows the accounting principles for high inflation
countries). In 2002 Corporacion Digitel posted revenues for
260,378 million bolivares: a year on year increase of 50.2%
(173,328 million bolivares in 2001).
Gross operating profit was 51,355 million bolivares compared to
10,139 million bolivares in 2001.
An operating loss of 30,070 million bolivares was posted for the
2002 fiscal year, compared to an operating loss of 21,466 million
in 2001.
In December TIM, through TIM International N.V., acquired 10% of
the share capital of Corporacion Digitel thus bringing its
shareholding up to 66.56%.
EUROPE
GREECE
Stet Hellas's performance in the Greek market in 2002 was
particularly noteworthy.
The company posted revenues for EUR 689 million, 31.7% higher
than in 2001 (EUR 523 million).
Gross operating profit stood at EUR 255 million, 35.6% higher
than in 2001 (EUR 188 million).
Operating income was EUR 131 million, 47.2% higher than in 2001
(EUR 89 million).
Associate companies (consolidated with the equity method)
TURKEY (spot exchange rate Turkish lira /euro 0.000000587 as the
company follows the accounting principles for high inflation
countries)Aria - IS TIM became operational at the end of March
2001. In 2002 the company posted revenues for 141,276 billion
Turkish lira.
Gross operating losses amounted to 207,609 billion Turkish lira.
The operating loss was 715,735 billion Turkish lira.
* * *
The Board of Directors has conferred powers upon the Chairman,
Deputy-Chairman and Chief Executive Officer to call the Ordinary
Shareholders' Meeting to pass resolutions for the approval of the
2002 financial statements and for the distribution of a dividend
gross withholding tax of EUR 0.0477 per ordinary share and EUR
0.0597 per savings share. Once authorised by the Shareholders'
Meeting the dividends will be paid as of April 25, 2003 (coupon
detachment on April 22, 2003).
The dividend shall allow:
- For a quota of EUR 0.0305 per ordinary share and of EUR 0.0425
per savings share, shareholders to benefit from a full tax credit
equal to 56.25% which may be used without limitations, pursuant
to section 14 of the Decree of the President of the Republic of
Italy Nų 917 of December 22, 1986 and following amendments.
- For the remaining EUR 0.0172 per ordinary and savings share, no
tax credit (pursuant to section 44, subsection 1 of Decree of the
President of the Republic of Italy Nų 917 of December 22, 1986
and following amendments) since this amount is being withdrawn
from the share premium reserve constitued by previous
contributions from Stakeholders.
The proposed distribution of dividend represents, in financial
terms, the second tranche of payment to shareholders, the first
tranche having been approved by the Shareholders' Meeting held on
December 11, 2002, amounting to an overall disbursement to
shareholders in line with the amount approved by the
Shareholders' Meeting of April 12, 2002.
The Ordinary Shareholders' Meeting will, furthermore, pass a
resolution increasing the number of members in the Board of
Directors, from thirteen to fifteen.
=====================
N E T H E R L A N D S
=====================
KONINKLIJKE AHOLD: Appoints Eustace as Chief Financial Officer
--------------------------------------------------------------
The Ahold Supervisory Board announces it has appointed Dudley
Eustace to the Corporate Executive Board as interim Chief
Financial Officer, effective immediately.
Remarks by Henny de Ruiter, Chairman of the Ahold Supervisory
board
'We are pleased that we have been able to attract a highly-
respected executive as interim-CFO,' said Henny de Ruiter,
Chairman of the Supervisory Board, commenting on the appointment.
'Dudley Eustace has an outstanding track record and an excellent
reputation in the financial markets and we look forward to
working with him. His commitment is evidence that Ahold is a
formidable industry player. Despite the current challenges we
face, our core food businesses around the world are in solid
shape and focused on their daily operations.'
Eustace, 66, is a British national. He is non-executive Chairman
of Smith & Nephew plc, a London-based global leader in advanced
medical devices. He will continue to fulfill his duties at Smith
& Nephew while overseeing the financial restructuring at Ahold.
Eustace was appointed Chairman of Smith & Nephew in January 2000,
following a year as Deputy Chairman. Prior to that, Eustace was
based in the Netherlands between 1992 and 1999 as Deputy Chairman
and Director of Finance at Royal Philips Electronics N.V. He was
previously Director of Finance at British Aerospace plc and
Treasurer of Alcan Aluminium Ltd.
Eustace is currently a non-executive director of KLM Royal Dutch
Airlines N.V., Royal KPN N.V., Hagemeyer N.V., and Aegon N.V.
Remarks by Dudley Eustace, newly-appointed interim CFO
'I am delighted to be able to assist Ahold,' said Eustace. 'My
priority is to stabilize the financial fundamentals of Ahold and
to assist in the recruitment of a permanent full-time Chief
Financial Officer for the business, hopefully by the end of the
year. The confirmation last week of the EUR3.1 billion credit
facility announced February 24 is a vote of confidence in the
company's long-term viability.'
CONTACT: KONINKLIJKE AHOLD
Albert Heijnweg, Zaandarn
P.O. Box 3050, 1500 HB Zaandarn
The Netherlands
Phone: +31 (0)75 659 5720
Fax: + 31 (0)75 659 8302
Homepage: http://www.ahold.com
KONINKLIJKE AHOLD: Contradicts U.S. CEO's Claim Over Resignations
-----------------------------------------------------------------
Dutch retailing giant, Ahold, refused to confirm Monday that the
resignations of Chairman Cees van der Hoeven and CFO Michael
Meurs were unrelated to the accounting scandal now besetting American
subsidiary, U.S. Foodservice.
The refusal contradicts the claim made by Foodservice CEO Jim
Miller to the unit's large customers late last week, highlighting
the rift between the Dutch parent and the U.S. subsidiary, the
Financial Times said.
In a disclosure two weeks ago, Ahold announced the resignations
of the two executives the day the US$500 million accounting
irregularity in the U.S. unit was revealed. In his letter,
however, Mr. Miller claimed the resignations were unrelated to
troubles at U.S. Foodservice.
"Their resignations had nothing to do with our company...[they
were] the result of events that occurred outside the United
States," Mr. Miller said.
But Ahold on Monday refused to verify that claim. "Mr. Miller's
business is under investigation... [Ahold] cannot stand by what
[Mr. Miller] said to the largest customers of U.S. Foodservice,"
Ahold told the Financial Times.
Meanwhile, Ahold says it would restate the earnings of ICA Ahold,
the Scandinavian joint venture, after auditors Deloitte & Touche
had gained access to information from management that was
previously unavailable to them. Both Deloitte and Ahold have
refused to comment on the exact nature of that information.
The paper says Deloitte would have the right to alter how it
accounted for ICA Ahold if it discovered that Ahold did not
effectively control the group.
Accounting rules require that Ahold must have complete managerial
control over ICA Ahold for it to fully consolidate the latter
into its own results.
Holding a 50% stake in the venture, Ahold said it had previously
deducted the shares and earnings of the minority ICA Ahold
holders in its results.
===========================
U N I T E D K I N G D O M
===========================
ABBEY NATIONAL: Posts Loss Before Tax of GBP984 MM in 2002
----------------------------------------------------------
CHAIRMAN'S STATEMENT
At the start of 2002, I spoke of the challenges we were facing as
a company. In the event, these have been far more severe than
expected.
Clearly, the significant losses incurred in 2002, do reflect the
harsh impact on Abbey National of extremely difficult markets.
The decline in equity markets has affected our Life businesses,
and the trading climate facing the Wholesale Bank has worsened in
terms of defaults and credit spreads. That said, we were not well
positioned for these market conditions.
During the year, I have been pleased to welcome Luqman Arnold, as
our new Chief Executive, and Stephen Hester, as Finance Director
(now Chief Operating Officer). Both have already had a positive
impact in addressing these challenges, and taking major steps to
reduce risk exposures to protect against future volatility. Also,
our focus back on our core markets is a radical strategic shift -
and we are channeling all our energies into turning the business
around.
We have a management team in place who are capable, experienced
and equipped to deal with the problems we face.
Our people throughout the organization are also critical to our
success, and I would like to thank them for their continued hard
work and commitment.
Despite our efforts, the fact remains that these results are
extremely unsatisfactory. On behalf of all the Board, I would
like to express our regret at the results and dividend cut that
we have announced. We are not happy about this, nor are we
underestimating the task ahead.
We have already achieved a lot in a short time, and are
determined to maintain this momentum. We have completely
restructured the organization, and have a clear strategy for the
future that focuses on what we do best - delivering UK personal
financial services. This remains an attractive market in terms of
returns and opportunity.
We have a great business with great potential - potential that we
need to leverage far more effectively in the future.
In all we do, we are governed by the goal of rebuilding and
maximizing value for our shareholders, working with all our
stakeholders to deliver earnings quality. This discipline will be
foremost in all decisions we take.
Lord Burns
Chairman
Overview
Following an intensive strategic review initiated in November,
the ongoing businesses will be focused solely on providing the
full range of personal financial services in the UK through
direct and intermediary channels. All businesses outside this
remit (other than treasury activities supporting Personal
Financial Services (PFS)) are to be managed for value and exit in
the Portfolio Business Unit (PBU).
In taking these and other actions, we will be removing the
majority of the risk inherent in current operations outside PFS
whilst also substantially reducing risk in the ongoing business
as well. Abbey National remains well capitalised, offering
stability and security to our 16 million customers in the U.K., who
will increasingly be our focus in the future.
This is a radical shift in strategy. It will allow us to channel
our energies on our core markets where we have demonstrable
strengths and where we have the greatest opportunity to succeed
and distinguish ourselves.
Financial and business highlights
Included in the loss before tax of GBP984m are a number of
material charges and accounting policy changes, including:
- embedded value re-basing and other related adjustments, of
GBP632m pre-tax in 2002, with total pre-tax prior year
restatements of GBP480m;
- goodwill impairments of GBP1,138m, (which have not affected
capital ratios); and
- provisioning and losses on asset disposals in the Wholesale
Bank totaling GBP902m.
The core ongoing personal financial services businesses remain
sound and generated 'trading' profit before tax of GBP1,219m and
earnings per share of 50.6 pence in 2002; although PFS earnings
in 2003 will be adversely affected by a lower stock of embedded
value following its re-basing to year-end market values, the
probability of some additional spread decline in the Retail Bank
and additional pension costs as a result of stock market
declines.
In terms of new business flows, the PFS business ended the year
with reasonable momentum, with highlights including:
- a 10.6% share of mortgage net lending in the second half and
full year deposit inflows of GBP1.9 billion;
- ISA and unit trust sales almost doubling;
- opening of almost half a million bank accounts and issuing over
a quarter of a million new credit cards;
- sales of general insurance up 20%; and
- sustained growth of protection sales, up 38% boosted by the
progress of Scottish Provident.
Abbey National has also made substantial strides in terms of risk
management. Actions taken include:
- a review of the Wholesale Bank with assistance from external
market specialists;
- a 23% reduction in risk weighted assets in the Wholesale Bank,
with assets allocated to the portfolio business unit further
reduced by GBP7.7 billion in the first six weeks of 2003.
Significant progress in reducing concentration risk is also being
made;
- major steps taken to reduce other risks in our life assurance
business from exposure to downward movements in equity markets,
including hedging programmes for product guarantee risks and
substantial reductions in the effective equity backing ratios of
the "with profits" funds (25% as at market levels on 19 February
2003);
- ceasing the manufacture of with-profits bonds and subsequently
reducing bonus rates in the light of the third successive year of
market falls;
- improved lending quality in the Retail Bank; and
- a range of activities to reduce risk including addressing
interest rate risk and pension fund risks. This includes the
closure of the defined benefits pension scheme to new starters in
2002 and a reduction in the scheme's equity exposures in early
2003.
Capital and dividends
The Board is proposing a final dividend of 7.35 pence, to give a
full year dividend in respect of 2002 of 25 pence per share. The
25 pence level represents an appropriate starting point based on
the trading potential of the ongoing PFS businesses, whilst
having regard for the non-cash elements of Life Assurance
reported earnings. It is Abbey National's intention to rebalance
the dividend in 2003 in order to maintain its historical target
split of payments between the interim and final dividend of one-
third/two thirds for future years.
For the future, we are targeting progressive dividend payouts.
However, until the re-structuring is further progressed and
underlying business performance improves, expected future
dividend growth rates and payout ratios cannot be finalised. We
believe that the steps we are taking are consistent with our
desire to ensure a strong capital position to protect against
market shocks, and to maintain stability and offer security to
our customers. At the same time our actions are materially
reducing the risks in the business against which capital is held.
At all times we intend to be disciplined in managing for
shareholder value. A net capital release from the PBU is
targeted. To the extent that surplus capital arises from our
actions, we favor shareholder distribution unless there is a
compelling strategic and economic case for reinvestment.
Strategy
Abbey National intends to maximize customer and shareholder
value. We are targeting excellence via an intense focus as the
largest 'pure-play' provider of personal financial services in
the U.K. While not yet in optimal shape, we nevertheless start
with a franchise of around 16 million customers, a top 5 position
in many relevant markets, a distinctive, trusted and powerful
brand and a broad distribution network.
Our goal is to deliver a compelling proposition to U.K. consumers,
who do not feel that they have been well served by the U.K. banking
industry. Through the highest level of service and advice to all,
we will deliver more value to customers - to earn their trust and
commitment. Work is underway to develop and implement this model.
To support this, we have moved away from a vertical, silo-based
organizational approach, to a flatter, functional structure. This
new structure is built around the customer, and will deliver
enhanced performance through a streamlining of operations and
enhanced focus on the economics of distribution and production. A
rigorous consolidation, rationalisation and sourcing review is
underway.
We will operate as "one company" based on function, with a single
leadership team, whilst reducing risk and realising capital from
non-core activities.
Cost reduction
We are targeting annualised cost savings exceeding GBP200m in our
PFS businesses, deliverable by the end of 2005. In addition,
extensive cost savings will be realised in the Portfolio Business
Unit as disposals and rundowns are executed.
In total, implementation costs are expected to lie in a similar
ratio to those of other cost programmes in the financial services
sector in recent years. The majority of the implementation spend
is expected to be incurred in 2003 and 2004. It is the intention
that some of the cost savings will be reinvested where critical
to the transformation of the business.
Portfolio Business Unit
As part of the strategic review, all businesses were challenged
in terms of their underlying potential, within the context of the
company's need to focus on its competitive strengths. As a
result, all international operations (excluding some
international funding and deposit taking activities) have been
deemed non-core, as has First National due to the lack of synergy
and brand compatibility.
It is important to stress that whilst we exit these operations,
some of these businesses remain profitable, and are open for
'business as usual' - they simply do not fit with the new focus.
The asset-based portfolios (loans, leasing and bonds),
representing a majority of the Wholesale Bank's risk, have also
been assigned to the PBU. This reflects application of the same
criteria and also the desire to align risk appetite with business
advantage and stakeholder needs going forward.
In 2003 and thereafter, a material fall in pre-provisions PBU
income would be dependent on the pace of the wind-down of the
asset based portfolios. In addition, dependent on market
conditions and the speed and manner of the asset run-off or
disposal process selected, further substantial credit related
losses could arise as risk is reduced and capital released.
All of the PBU portfolios and businesses will be managed to
maximize value to our shareholders, targeting the greatest net
capital release. Equally, it is important that this release of
capital and management resource is timely. As a result,
consideration is being given to a range of strategies which would
enable business and asset disposal, or run-off, of the majority
of assets in the PBU within the next three years.
The activities we are exiting are primarily those where we have
limited competitive advantage and therefore, if kept, would tend
to produce weak returns on capital and be especially vulnerable
to disproportionate losses in bear markets.
Progress to date
Abbey National has made considerable progress since the interim
stage and accelerated the transformation process since the
strategic review commenced in November.
The Wholesale Banking asset base and concentrations have been
significantly reduced, with excellent progress also made in the
first few weeks of 2003. We have stepped away from the
manufacture of with-profits bonds, replacing them with a version
of Prudential's Prudence Bond in our branch network and a soon to
be launched smoothed investment product for the intermediary
channels. We have taken major steps in mitigating shareholder and
customer exposure to further downward movements in equity markets
in relation to the stock of business previously written.
Important risk mitigation has also been accomplished in pensions
and interest-rate exposures.
In 2003, we have already contracted to sell the Consumer and
Retail Lending businesses of First National Bank (excluding Motor
Finance and Litigation Funding) for a premium to net assets of
GBP218m, which will dispose of an estimated GBP3.9 billion of
risk weighted assets on completion.
Since December, a transformation programme led by the Executive
team and 50 top managers has been executed and the new top-level
structure, strategy and implementation plan put in place. This
has allowed planned cost savings to be validated and is a key
enabler to future business improvement.
As shown by this release, we have also significantly increased
disclosure and transparency in our reporting - a discipline we
intend to maintain.
Key Performance Indicators (KPIs) and immediate goals
A key principle in the new organisation will be to increase
accountability and drive superior performance through greater
internal and external transparency. Over time, we will develop
and disclose performance measures that are aligned to the long-
term improvement in company value, and will be used to measure
performance internally.
The high level KPIs are:
- revenue per customer;
- operating costs per customer;
- new customer metrics;
- customer retention metrics; and
- passive customer metrics.
These KPIs are aimed at sales efficiency, profitability and
length of relationships. Market share will be a measure of our
success, not a driver of value per se.
Our priorities for the next six months include:
- implementation of the new company structure, with all roles
confirmed and initial KPIs defined and communicated;
- delivering tangible improvements in terms of sales and service,
supported by the launch of new CRM software 'One on One' and a
new advice model in testing phase;
- 'on track' performance versus the cost targets; and
- further substantial progress within the PBU.
Challenges ahead
"On behalf of the whole Board, I would like to express our regret
at the results and dividend cut that we have announced today.
However, we have absolute conviction that we are pursuing the
right strategy for Abbey National; for our customers, our
employees, and our shareholders. It will be a long, hard process
that we envisage spanning the next three years. We know that our
shareholders will want to see tangible progress along the way,
and we will be reporting regularly, the first such opportunity
being at the time of the pre-close statement in June. When we
have completed our three year strategy, we intend Abbey National
to be esteemed by all its stakeholders for its positive value
attributes. The strategy will focus all our resources on serving
the personal financial services needs of the customer - by
delivering greater value to our customers, we will earn more
value for shareholders. Our focus, as a scale institution, will
make us unique and will enhance business performance and
execution. The events of
2002 have also acted to focus minds, and this is already driving
an increased sense of determination and delivery within the
business. Our people are integral to our success and they are
responding positively.
We have aligned all our talent, investment and energies on a
clear, single and unifying goal under a suitable organisational
structure.
We are now wholly focused on delivering."
Luqman Arnold
Group Chief Executive
To see financials: http://bankrupt.com/misc/AbbeyNational.pdf
BRITISH ENERGY: Sale of Remaining U.S. Business Fell Through
------------------------------------------------------------
Talks about the sale of British Energy's remaining U.S. business,
the Amergen joint venture, collapsed on failure of the parties to
reach an agreeable price for the asset.
According to the nuclear generator, "none of the proposals
received adequately reflected the intrinsic value of Amergen".
The sale has to go through by a June 30 deadline in order for the
nuclear power firm to obtain a rescue deal with the government.
The company earlier unloaded Bruce Power as part of the
condition.
While warning of possible insolvency proceedings, British Energy
insisted it is confident it could still reach a restructuring
deal.
A City analyst said: "It's unlikely that this [failure] will
bring the whole rescue deal to its knees - unless the whole thing
has been on shaky ground from the start. But they're going to
have to sort something out quick. Perhaps they'll need to
restructure the sale altogether."
Indeed, after the collapse of the talks to sell the whole joint
venture with partner Exelon to a third party, British Energy is
now selling its stake alone.
A spokesman for the group said: "We have three months to find a
buyer for our 50% stake. There are people we were talking to
before who we can go back to."
Amergen owns and operates three nuclear power stations in the US.
British Energy's bondholders and major trade creditors, including
Royal Bank of Scotland, met Monday to approve the restructuring
package for the company.
CONTACT: BRITISH ENERGY PLC
3 Redwood Crescent, Peel Park
East Kilbride, Strathclyde G74 5PR,
United Kingdom
Phone: +44-135-526-2000
Fax: +44-135-556-5656
Home Page: http://www.british-energy.com
Contact:
Paul Heward, Investor Relations
Phone: 01355 262201
BRITISH ENERGY: Announces Extraordinary General Meeting
-------------------------------------------------------
Holders of the Outstanding
GBP109,861,000 5.94% Bonds Due 2003,
GBP163,444,000 6.077% Bonds Due 2006 and
GBP134,586,000 6.202% Bonds Due 2016
Notice Of Outcome - Meeting Adjourned For All Three Series
The Meetings of the holders of each of the above-mentioned series
of Bonds, convened by the Notices published on February 14, 2003,
were duly held on March 10, 2003.
All three Meetings were adjourned to 11.00 a.m (2003 Bonds),
11.20 a.m (2006 Bonds) and 11.40 a.m (2016 Bonds) London time on
24th March 2003 owing to a lack of the quorum required for the
Extraordinary Resolutions.
A notice of the adjourned meetings will be published in the
Financial Times on Wednesday, March 12, 2003.
CONTACT: Andrew Dowler
Financial Dynamics
Phone: 020 7831 3113
BUZZ: 100 Airline Staff May Lose Jobs After Buzz Takeover
---------------------------------------------------------
The jobs of up to 100 baggage handlers and other ground staff are
at risk from the imminent takeover by Ryanair of budget airline
Buzz.
Aviance, which employs the baggage handlers, aircraft loaders and
other operations staff, said the Buzz's decision to pull out of
the airport or reduce routes, coupled with other reductions,
meant it was not possible to sustain the number of jobs.
The company however said it would make every effort to redeploy
staff.
Meanwhile, union leaders are now holding meetings with management
in a bid to rescue the jobs at Stansted airport.
Aviance confirmed the report, saying it has entered into a period
of consultation with unions over the 98 potential job losses,
following the acquisition of Buzz and its withdrawal from the
airport.
Senior organizer of the GMB union Ed Blisset commented on this
matter: "We have already taken legal advice and explained our
members' rights to Ryanair. Hopefully, this meeting will progress
matters and we can find a way to keep our members' jobs intact."
Owned by Dutch airline KLM Royal, Buzz operated 21 routes from
London Stansted to points in Germany, Holland, France and Spain,
as well as two French domestic routes.
CONTACT: KLM ROYAL
Contact: Investor Relations
Home Page: http://investorrelations.klm.com
Phone: 31 20 649 3099
CONTACT: RYANAIR HOLDINGS PLC
Dublin Airport
Dublin, Ireland
Phone: +353-1-812-1212
Fax: +353-1-812-1213
Homepage: http://www.ryanair.ie
CABLE & WIRELESS: Discloses Financial Reporting Timetable
--------------------------------------------------------
Cable & Wireless on Monday announces that for the financial year
2003/04 it intends to move to issuing quarterly trading
statements after the end of each quarter and no update will be
issued this month. The Company will publish its Preliminary
Results for the 12 months ended March 31, 2003 on Wednesday, June
4, 2003.
Cable & Wireless will hold its Annual General Meeting on Friday,
July 25, 2003.
*****
Last year, the firm cut 3,500 jobs at its money-losing corporate
telecoms arm, C&W Global, and soon after announced that its
chairman-designate, David Nash, had quit after institutional
pressure.
CONTACT: CABLE & WIRELESS
Investor Relations
Samantha Ashworth
Phone: +44(0) 207 315 4460
Caroline Stewart
Phone: +44(0) 207 315 6225
Virginia Porter (US)
Phone: +1 646 735 4211
CORUS GROUP: Company Profile
----------------------------
NAME: Corus Group
30 Millbank
London SW1P 4WY
United Kingdom
PHONE: +44 (0) 207 717 4444
FAX: +44 (0) 207 717 4604
WEBSITE: http://www.corusgroup.com/
TYPE OF BUSINESS: Corus makes stainless steel, coated and
uncoated strip products, sections and plates, wire rod,
engineering steels, and semi-finished carbon steel products. It
also manufactures aluminum, including rolled and extrusion
products. Customers include the automotive, construction, and
heavy-machinery industries.
EXECUTIVES:
Sir Brian Moffat, Chairman, Non executive
Jim Leng, Deputy Chairman, Non-executive
Tony Pedder, Chief Executive
David Lloyd, Executive Director, Finance
Stuart Pettifor, Executive Director
Henk Vrins, Executive Director
Dr. Anthony Hayward, Non-executive director
Richard Turner, Non-executive director
Eric van Amerongen, Non-executive director
Maarten van Veen, Non-executive director
INVESTOR RELATIONS: E-Mail: investor@corusgroup.com
NUMBER OF EMPLOYEES: 51,600 as of end of January 2002
LATEST FINANCIAL STATEMENT:
http://bankrupt.com/misc/CorusGroup.pdf
THE TROUBLE: The group has suffered recently as a result of the
huge influx (at unmatchable prices) of steel and aluminum from
Asia and Eastern Europe.
It was hit by the strength of sterling against the euro and the
continuing weak prices for steel, which are close to 20-year lows
in many markets. (source: TCR-EU March 13, 2001)
SHAREHOLDERS:
Brandes Investment Parners LP (USA) 15.70%
Capital Group Inc (USA) 9.00%
FINANCIAL ADVISOR: CREDIT SUISSE FIRST BOSTON
1 Cabot Square
London E14 4QJ
United Kingdom
AUDITOR: PRICEWATERHOUSECOOPERS
1 Embankment Place
London WC2N 6NN
United Kingdom
CORUS GROUP: In Talks to Salvage Planned Sale of Aluminum Unit
--------------------------------------------------------------
Europe's No. 2 steelmaker Corus Group PLC was locked in crisis
talks over the sale of its aluminum arm to Pechiney of France
over the weekend.
The Sunday telegraph, without citing sources, reported that Corus
held the talks in an effort to salvage the planned EUR750 million
disposal of Nederland BV to Pechiney.
Originally agreed last October, the Dutch Workers Council and
Corus's Dutch supervisory board have vigorously opposed the
disposal of the aluminum division.
It is known that the Dutch workers are against the sale on
grounds that the management has failed to meet certain
obligations to the Dutch side of the business, including certain
investment pledges.
The sale is crucial to Corus, which was forced to issue two
profit warnings last year, as the extension of the group's
GBP1.2-billion syndicated loan facility hinges on the timely
disposal of the company's aluminum assets to Pechiney.
The Anglo-Dutch steel company is currently in the process of
negotiating the extension with bankers, HSBC, ABN Amro and CSFB,
reports say.
Bondholders and shareholders are pressuring the group to reduce
its debt and secure longer-term funding, having been unprofitable
four years after it was created from the merger of British Steel
and Hoogovens.
Divesting the aluminum division is an option for it to be able to
revive the business.
CONTACT: CORUS GROUP
Corporate Relations
Phone: +44 (0) 20 7717 4502/4505
Corus Investor Relations
Phone: +44 (0) 20 7717 4503/4504
Credit Suisse First Boston
Stuart Upcraft/Hugh Richards
Phone: +44 (0) 20 7888 8888
GLAXOSMITHKLINE PLC: Japanese Unit Has Undisclosed Income
---------------------------------------------------------
The Tokyo Regional Taxation Bureau discovered JPY65 billion of
undeclared income in Glaxo, the Japanese unit of British drug
maker GlaxoSmithLine.
According to Kyodo News, the financial arm of the world's second-
largest drug company retained profits in stock sales at its
affiliate in Singapore, and determined the profits as part of its
taxable income. The undisclosed amount ran for three years ended
December 2001.
Glaxo is a financing company within the GSK group that provides
funds to and invests in group companies. The case involves the
company's investment in GSK's manufacturing company, Glaxo Chem,
in Singapore, which does not tax profits from stock sales.
The taxation bureau demanded more than JPY20 billion (US$171
million) in surcharges from the firm. But GlaxoSmithKline
reportedly plans to contest the claims.
"We disagree with the assessment and are in discussions with the
tax authorities in Japan," Martin Sutton, a Glaxo representative,
said.
Parent GlaxoSmithKline failed to win total confidence of
investors despite reporting 2002 results at the top end of
expectations and reassuring the market that it will be able to
meet forecast of high single-digit earnings per share growth for
2003.
CONTACT: GLAXOSMITHKLINE PLC
U.S. Analyst/ Investor inquiries
Frank Murdolo
Phone: (215) 751 7002
Tom Curry
Phone: (215) 751 5419
European Analyst/Investor
Duncan Learmouth
Phone: (020) 8047 5540
Anita Kidgell
Phone: (020) 8047 5542
Philip Thomson
Phone: (020) 8047 5543
GLAXOSMITHKLINE: Court Dismisses AIDS Foundation Lawsuit
--------------------------------------------------------
GlaxoSmithKline applauds the decision by the U.S. District Court
for the Central District of California to dismiss a lawsuit filed
by the AIDS Healthcare Foundation (AHF) against GSK.
GSK had moved to dismiss the lawsuit on the basis that AHF's
claims were without merit, offered no new information and
attempted to reopen issues that have already been thoroughly
reviewed and decided by the courts.
After considering the arguments of both sides, Judge Terry J.
Hatter Jr. ruled in favor of GSK on March 5 and dismissed the
lawsuit.
"We are pleased that the court agreed with our position and
dismissed what was a frivolous and wasteful lawsuit," said Peter
Hare, vice president of GSK's HIV business. "The needs of
patients demand that our energies remain focused not on
litigation, but on research to find new treatments and on
developing positive relationships to help more patients access
existing treatments."
GSK is a leader in the research and development of HIV/AIDS
medicines. The company brought the first HIV/AIDS treatment -
Retrovir (AZT) - to patients and has worked for years with
government and advocacy groups to meet the needs of patients in
the U.S. and around the world. GSK was the first company to
reduce the price of its anti-retrovirals in developing countries,
and since May 2000 has offered Combivir - two HIV/AIDS medicines
in one pill - at a 90 percent savings over the price in the
developed world price. The company has provided $55 million to
help implement a wide variety of projects to assist people living
with AIDS, their families and their communities through a program
called Positive Action that was initiated in 1992. GSK will have
enrolled 16,000 patients in its clinical trials in developing
countries by the end of 2003.
GlaxoSmithKline, one of the world's leading research-based
pharmaceutical and health care companies, is committed to
improving the quality of human life by enabling people to do
more, feel better and live longer.
*****
In January, AIDS Healthcare Foundation (AHF), the largest AIDS
organization in the U.S., called the possible merger of British
pharmaceutical giant GlaxoSmithKline (GSK) with Bristol-Myers
Squibb (BMS) "a certain disaster for people with AIDS throughout
the world" and called on American and European authorities and
investors to block the potential marriage.
AIDS advocates noted that while Pfizer, the biggest drug maker in
the world, controls about 11 percent of the entire global
pharmaceutical market, GSK controls over 40% of the worldwide
market for HIV/AIDS medications.
"In contrast to the significant investment Bristol has made in
solving the global AIDS crisis, Glaxo has no dedicated AIDS fund
and refuses to make its drugs affordable or accessible," said
Michael Weinstein, President of AIDS Healthcare Foundation.
INVENSYS PLC: Standard & Poor's Lowers Long-Term Ratings to 'BB+'
-----------------------------------------------------------------
Standard & Poor's Ratings Services said it lowered its long-term
corporate credit and senior unsecured debt ratings on U.K.-based
engineering group Invensys PLC to 'BB+' from 'BBB-' following an
initial review. The ratings on the group remain on CreditWatch
with negative implications, where they were placed on Feb. 14,
2003, following a profit warning.
"The downgrade reflects the fact that Invensys' results for the
year to March 31, 2003, are likely to be below the levels
expected for the previous ratings on the group, and that, in the
medium term, results are likely to remain depressed," said
Standard & Poor's credit analyst Leigh Bailey. "There is also
concern that Invensys' business profile and market position may
have deteriorated, given the financial pressures faced by the
group and its vulnerability to challenges in its markets from
better capitalized competitors. Overall, Invensys' credit profile
is no longer in line with an investment-grade rating."
Invensys' profit warning on Feb. 14, 2003, stated that second-
half 2002 core operating profits could be as much as 25% less
than those of first-half 2002, due mainly to poor results at one
of its software systems businesses, Baan, and in some areas of
its energy management division. As a result, the group's credit
measures for the full year 2002 are likely to fall below
previously expected levels, which were already weak for the
ratings. The ratings on Invensys had previously factored in the
expectation that trading was not likely to decline overall in the
second half of financial 2002 and that credit measures would
improve over the course of the next 18 months to levels in line
with an investment-grade rating. The group's business profile is
likely to have weakened in recent months, as other major global
players appear to have gained market share, particularly in the
process and automation segments.
The ratings on Invensys remain on CreditWatch with negative
implications, indicating that they could fall further. To resolve
Invensys' CreditWatch status, Standard & Poor's will focus on the
strength of the group's business profile, including its market
position, and progress achieved by the management in the
execution of its business strategy. As part of the CreditWatch
review, Standard & Poor's will also assess whether the group's
rated bonds should remain at the same rating level as the long-
term corporate credit rating.
NEWCASTLE BUILDING: Moody's Changes Outlook of Ratings
------------------------------------------------------
Moody's Investors Service changed the outlook of Newcastle
Building Society's long-term deposit ratings and financial
strength ratings on the failure of the society to strengthen its
ability to generate other income.
The outlook of the Baa1 long-term deposit ratings, as well as the
C- financial strength ratings was moved to stable from positive.
According to the rating agency: "The outlook change reflects that
the fact that although the society has had some success in
leveraging of its core business of residential mortgages and
retail investments to create new but related business lines,
these initiatives have not as yet strengthened significantly the
society's ability to generate other income."
The outlook also reflects the relatively modest mortgage
origination of the society in 2002, and the concentration of the
growth in 2002 on the commercial book rather than the residential
book. The relatively modest growth in 2002 raised questions as
to the ability of Newcastle to compete with the larger mortgage
lenders, according to Moody's.
Newcastle Building Society, headquartered in Newcastle upon Tyne,
United Kingdom, had total on balance sheet assets of GBP2.6
billion (approximately Eur4.0 billion) as of end 2002.
PACE MICRO: Sugar Could Be Mulling a Bid
----------------------------------------
Entrepreneur Sir Alan Sugar could be considering buying Europe's
largest set-top box maker, Pace Micro Technology Plc, as
suggested by his secret building of shares in the company, AFX
News reports.
The news sent the company's share more than 15% higher on Monday.
A representative of Sir Alan confirmed that the investor had
acquired a stake in Pace through Amshold, his family-controlled
investment company, according to the Financial Times.
Amshold owns 29.95 of Amstrad as well as Viglen, a personal
computer manufacturer, and several properties in central London.
But investors reckon Sir Alan's intention is not yet clear. He
could be mulling on considering a bid or simply believing that
the company was undervalued. Pace's shares closed up 2.8p to
20.8p, giving it a market capitalization of GBP46.9 million.
In January, Pace Micro posted a GBP15.9 million loss before tax
and goodwill compared to a profit of GBP22.2 million in 2001 due
to a fall in demand of set-top boxes.
The company's primary focus is the development of innovative home
gateway (set-top box) solutions for operators, broadcasters,
telecommunications companies and retail markets worldwide.
Pace's head office is in Shipley West Yorkshire, with further
offices in Bracknell, Cambridge, the USA, France and Hong Kong.
PIZZAEXPRESS PLC: Might Hold Talks With TDR-Capricorn Consortium
----------------------------------------------------------------
The struggling restaurant chain, PizzaExpress PLC, has declined
to confirm The Sunday Telegraph's report that the company plans
to hold talks with TDR Capital and Capricon Ventures
International regarding a possible takeover this week.
According to the report, the said offer is expected to be
significantly higher than the 367 pence-per-share offered by Luke
Johnson and backed by Venice Bidder.
A PizzaExpress spokeswoman declined to confirm the story,
although she said: "PizzaExpress has made it quite clear that
there's a bid on the table that they've [the management]
recommended but they're more than happy to consider anything else
that may come in."
Meanwhile, a report from Pizza News said the TDR consortium is
backed by HBOS.
TDR, founded by Manjit Dale, reportedly wants to keep the
PizzaExpress business intact, including its overseas operations
and other non-core businesses. Whereas, Johnson indicated plans
to sell the overseas business under his plans.
Dale is an associate of Hugh Osmond, the entrepreneur who, along
with Johnson, founded and took PizzaExpress public.
CONTACT: PIZZAEXPRESS PLC
1 Union Business Park
Florence Way
Uxbridge
UB8 2LS
Contacts:
Nigel Colne, Chairman
David Page, Chief Executive
Paul Campbell, Group Finance Director
Phone: 01895 618618
Sue Pemberton, Citigate Dewe Rogerson
Phone: 020 7638 9571
ROYAL & SUNALLIANCE: Life Funds Likely to Need Cash Injection
-------------------------------------------------------------
Royal & SunAlliance may be forced to shell out additional funding
for its life insurance businesses after admitting last week that
the Financial Services Authority has started examining the
solvency of its life funds.
The admission came as the company confirmed a widely anticipated
dividend cut. According to the Independent News, the group's
operating profits for the year came at the bottom end of
expectations at GBP226 million, forcing the company to cut
dividend by 63% to 6p a share.
Last week, the group admitted that the Authority has expressed
concerns over the re-insurance deals and future profits used to
meet the solvency requirements of its life funds, which were
closed in November.
Aside from a GBP700 million shortfall in its capital
requirements, the paper anticipates the group to face mounting
bills in the coming months.
Accordingly, the company is line for a fine and compensation
payouts for mis-selling mortgage endowments. Last year, the
group was slapped with a record fine of GBP1.35 million for mis-
selling personal pensions, the report says.
In addition, the group may also be required to book liabilities
of more than GBP1 billion after failing to reach a settlement
with the Authority over its significant book of guaranteed
annuity options. Similar liabilities crippled Equitable Life,
and Royal may have to compensate policyholders, the
paper says.
The company said these "discussions could result in significant
financial consequences for the group, including the provision of
further financialsupport for subsidiaries."
Meanwhile, the group's staff pension fund also revealed last week
a GBP400 million deficit. The group plans to inject GBP70
million this year and ask staff to start contributing to the
scheme, the paper says.
Blaming its losses to the World Trade Center attacks, flooding
and asbestosis, the company is currently restructuring operations
to refocus its business to general insurance. The plan includes
cutting 12,000 jobs. The group will also dispose some assets,
most notably its subsidiary in Australia.
Bob Gunn, the acting chief executive of the company, said last
week disposal plans were progressing well, including the float of
its Australian business, but said the company "still had work to
do." He will be replaced by Andy Haste, the chief executive of
Axa Sun Life, in April, the report says.
TEXSTYLE WORLD: Founder Reid Buys Back Texstyle World Stores
------------------------------------------------------------
Founders and former managers of furniture retailer Texstyle World
bought back remnants of the company which fell into
administration in mid-December.
Eric and Mark Reid, from the Reid family who were ousted by
institutional shareholders in 1999, purchased the trading name
and 11 of the company's stores in a deal estimated to be worth
GBP4 million. The deal was able to safeguard 110 jobs.
Reid, who now runs Room 2 soft furnishing company, said: "As the
Reid family who successfully built up Texstyle World over 20
years, it gives us great satisfaction to secure the jobs of over
100 employees."
It is known that administrators for the Glasgow-based chain have
closed 20 stores since taking control of the group in December
with the loss of more than 200 jobs.
Reid further said they are "immensely excited and confident of
building Texstyle World, one of Scotland's favorite brands, back
to its former glory."
Meanwhile, administrators Kroll Buchler Phillips confirmed that
the remaining 13 shops still trading under its care would now be
sold in a break-up deal.
Fraser Gray, a partner for Kroll Buchler Phillips, said: "We are
also in negotiations with other parties for certain packages of
shops, either for a going concern sale or to add to their own
store portfolio.
"If we are able to secure another going concern sale, more jobs
will be saved in those stores. Even if we are only able to sell
stores to retailers to add to their own store portfolios, we hope
that many of the jobs lost will be recreated when the stores open
under the new owners' own brands," he added.
According to The Herald, the outlets purchased by the Reids
currently employ 110 people, all of whom have been transferred to
Room 2. The 13 trading stores still up for grabs have a total of
165 staff.
Texstyle World once employed more than 800 staff in 63 outlets
across the UK, including 27 in Scotland. In 2001 the group turned
over GBP63 million.
However, high debt levels and difficult trading conditions forced
US-owner Hilco into a closure program that saw the number of
outlets but to 48 by the time administrators were called in and
since then, Kroll has shut a further 24 shops on a site-by-site
basis.
The 11 sites acquired by the Reids, who founded Texstyle in 1980,
are Aberdeen, Ayr, Dumfries, Dunfermline, Elgin, Hamilton,
Inverness, Irvine, Kilmarnock, Motherwell, and Renfrew.
THISTLE HOTELS: To Avert BIL's Offer Through Asset Disposals
------------------------------------------------------------
Thistle Hotels plans to stop BIL International's GBP554 million
bid for the company by unloading three top London Hotels worth
GBP500 million, according to the Business.
The hotels that could go are the 801-bed Tower Hotel by Tower
Bridge, the 280-bed four-star Royal Horseguards Hotel near the
Houses of Parliament, and the 692-bed Marble Arch near Hyde Park
and Oxford Street.
Proceeds of the transaction are to be distributed as a special
dividend to shareholders, whose majority decision is crucial to
the success of the plan.
Singapore-based BIL International already has a 46% stake in the
company, yet, according to the report, shareholders, who deemed
BIL's offer as too low, could still outvote the bidder.
The Board of Thistle had earlier unanimously rejected the offer
saying, "BIL's offer of 115 pence per Thistle share is wholly
inadequate."
Thistle has long been considered a takeover target, with its
management coming under fire for poor performance, and a
reluctance to return cash to investors.
CONTACT: THISTLE HOTELS PLC
Phone: 020 7895 2304
Ian Burke, Chief Executive Officer
WOMBWELL FOUNDRY: Parent Company Rejects Rescue Package
-------------------------------------------------------
West Midlands-based construction and engineering firm Hill &
Smith Group rejected the rescue package for South Yorkshire-based
Wombwell Foundry, a steel manufacturer currently on a 90-day
notice of closure.
The parent company requested to reassess the business after
Wombwell lost a GBP4.5 million contract--almost half of its
annual turnover--to a Polish competitor.
To avert a total collapse, the foundry's 105 employees proposed
to turn the operation into a specialist manufacturer of wind
turbines. They raised GBP200,000 to help capitalize the company.
Renewable energy experts are reportedly amenable to the plan. In
fact, Renewables UK, the division of the Department of Trade &
Industry committed to providing investment opportunities in the
growth sector, is scheduled to visit the plant.
Several large companies interested in buying the turbines are
also said to be in talks with the company.
But despite the support, Hill & Smith rejected to bid on ground
that it is without "credibility."
According to Hill & Smith chief executive David Grove, "these
proposals appear to require us to make all the employees
redundant, with uncertain prospects as to how many would be taken
back on."
"It also appears to require the employees to invest in a business
which seems to have no real prospects of success. A very small
sum was also offered."
Refusing to raise false hopes, he said: "We did not think it
would be a responsible thing to do to take these particular
discussions [with employees] any further."
But company supporters accused Hill & Smith of adopting a narrow-
minded perspective, according to Yorkshire Today.
CONTACT: HILL & SMITH HOLDINGS
2 Highlands Court
Cranmore Avenue, Shirley
Solihull
B90 4LE
United Kingdom
Phone: (0121) 704 7430
Fax: (0121) 704 7439
Registered Office:
Springvale Business & Industrial Park
Bilston
West Midlands
WV14 0QL
Phone: (01902) 357910
Fax: (01902) 357919
E-mail: enquiries@hsholdings.co.uk
************
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.
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