/raid1/www/Hosts/bankrupt/TCREUR_Public/030326.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 26, 2003, Vol. 4, No. 60
Headlines
* B E L G I U M *
LERNOUT & HAUSPIE: Disclosure Statement Hearing Set for April 2
* F I N L A N D *
FINNAIR OYJ: Launches Extensive Cost Cutting Measures
SONG NETWORKS: To Push for Chairmanship of Roger Holtback
* F R A N C E *
ALSTOM: Sale of T&D Unit Could Be Completed December, Not July
FRANCE TELECOM: Confirms FTSE Treatment Changes in FTSE Indices
FRANCE TELECOM: Ratings, Outlook Affirmed After Capital Hike
FRANCE TELECOM: Ratings Placed on CreditWatch Positive
VIVENDI UNIVERSAL: Lays Out Plan to Diversify Financing Sources
* G E R M A N Y *
BIT BY BIT: Awaits Court Decision to Start Insolvency Measures
DEUTSCHE BA: TUI Says "No Interest" in Taking Over DBA
DRESDNER BANK: Due to Appoint Two New Board Members at Meeting
* I T A L Y *
ISTITUTO SIEROTERAPICO: Milan Court Issues Notice of Sale
FIAT SPA: Controlling Family Approves EUR250 MM Capital Increase
* N E T H E R L A N D S *
VERSATEL TELECOM: Merges German Operations With Regional Carrier
* R U S S I A *
SIBERIAN OIL: Outlook Revised to Stable on Slavneft Asset Split
* S W E D E N *
SCANDINAVIAN AIRLINE: Employees Seek Jobs From Other Airlines
* U N I T E D K I N G D O M *
AMP LIMITED: Announces Appointment of Non-Executive Directors
ASHTEAD: To Withdraw Dividend, Plans to Defer Interest Payment
ATLAS INVESMENTS: Joint Liquidators Issue Notice to Creditors
BAE SYSTEMS: Rating Lowered to 'BBB', Off Watch, Outlook Stable
BRITISH AIRWAYS: Denies Rumor of Merger With Netherland's KLM
BRITISH AIRWAYS: Moody's Places Notes and Stocks Under Review
BRITISH ENERGY: Standstill Resolutions on Bonds Approved
BRITISH ENERGY: Obtains Approval on Principles of Restructuring
EBOOKERS PLC: Annual Loss Before Tax Halved to GBP12.3 MM
FORMSCAN PLC: Continues to Post Operating Loss in Second Half
IMPRINT SEARCH: Posts Operating Loss of GBP1.27 MM for 2002
LAURA ASHLEY: Receives GBP18 MM Credit Facility From Asian Bank
MARCONI PLC: Settles Pension Fund Dispute With Former Director
MELROSE RESOURCES: Posts Loss of GBP2 MM on Ordinary Activities
MORGAN CRUCIBLE: Sells Soft Coatings to Trim Down Debt
SEYMOUR PIERCE: New Chairman Reports Progress of Review
TADPOLE TECHNOLOGY: Bernard Hulme Resigns as Director
TISSUE SCIENCE: Posts Reduced Net Loss for the Year of GBP2.3 MM
UNITED BISCUITS: Moody's Upgrades Ratings, Pins Stable Outlook
=============
B E L G I U M
=============
LERNOUT & HAUSPIE: Disclosure Statement Hearing Set for April 2
---------------------------------------------------------------
The Official Committee of Unsecured Creditors of Lernout &
Hauspie Speech Products N.V. delivered a Plan for the
liquidation and distribution of L&H NV's assets and its
accompanying Disclosure Statement to Judge Wizmur on March 11,
2002.
L&H NV has disposed of virtually all of its assets for cash or
other consideration, including Mendez S.A., the Medical
Transcription Business, and the Speech and Language Technologies
Business. As a result of L&H NV's dual plenary bankruptcy
proceedings in the United States and Belgium and the difference
between the insolvency laws of these jurisdictions, the Plan
will distribute L&H NV's non-Belgian assets to creditors in
accordance with the Bankruptcy Code.
All assets of L&H NV other than the Chapter 11 Assets will be
administered in the Belgian Case. The Plan provides that the
Chapter 11 Assets will be distributed to its creditor
constituencies. The Plan also contemplates both the liquidation
of any remaining Chapter 11 Assets that are non-Cash assets and
the formation of a litigation trust or similar vehicle to pursue
recoveries L&H NV may have against third parties arising out of
the events that preceded the Chapter 11 Case. Specifically, the
Litigation Trust Beneficial Interests will be distributed among
holders of certain Allowed Claims as:
(a) 93% of the Litigation Trust Beneficial Interests
will be distributed to holders of general, unsecured
claims against the Chapter 11 Assets; and
(b) 7% will be distributed to holders of claims arising
out of or in connection with the PIERS and Old
Convertible Subordinated Notes.
Since Distributions may require the Plan Administrator to
liquidate certain of the Chapter 11 Assets that are non-cash
assets, like securities -- including, but not limited to, the
common stock of Dictaphone, which L&H NV received in connection
with the Dictaphone Plan, additional time may be required to
finalize Distributions on account of all Allowed Claims.
Classification and Treatment of Claims
A. Administrative Expense Claims
Each holder of an Allowed Administrative Expense Claim will be
paid Cash in full by Post-Effective Date L&H:
(i) upon the Effective Date or as soon as practicable
after the Effective Date,
(ii) as soon as practicable after the Claim becomes an
Allowed Administrative Expense Claim if the date of
allowance is later than the Effective Date, or
(iii) upon other terms as may be mutually agreed by the
holder of an Allowed Administrative Expense Claim
and Post-Effective Date L&H.
All post-Effective Date professional fees and related expenses
accrued by Professionals in connection with the Plan and the
Chapter 11 Assets will be paid by Post Effective Date L&H within
ten Business Days of the submission by any Professional of an
invoice to Post Effective Date L&H.
In the event that Post Effective Date L&H objects to the payment
of a Professional's post-Effective Date invoice, in whole or
part, and the parties cannot resolve the objection after good
faith negotiation, Judge Wizmur will retain jurisdiction to
review the disputed invoice and make a determination as to the
extent to which the invoice will be paid by Post Effective Date
L&H.
B. Tax Claims
On the Effective Date, a holder of an Allowed Priority Tax Claim
will be entitled to receive in full satisfaction, settlement,
and release of, and in exchange for the Allowed Priority Tax
Claim:
(a) deferred Cash payments in an aggregate principal
amount equal to the amount of the Allowed Priority
Tax Claim plus interest, to the extent required
under applicable law, on the unpaid portion at the
legal rate of interest -- excluding any default
interest rate -- or, in the absence of a legal rate
of interest, at a rate of 4% per annum, from the
Effective Date through the date of payment, which
date will not extend beyond the sixth anniversary
of the Effective Date, or
(b) such other treatment as to which Post-Effective Date
L&H and the holder will have agreed upon in writing,
with the Bankruptcy Court approval. If deferred
Cash payments are made to a holder of an Allowed
Priority Tax Claim, the remaining unpaid portion
of the Allowed Claim will be paid on or before the
sixth anniversary of the Effective Date, together
with any accrued and unpaid interest to the date
of payment; provided, however, that Post-Effective
Date L&H reserves the right to pay any Allowed
Priority Tax Claim, or any remaining balance of
an Allowed Priority Tax Claim, in full at any time
on or after the Effective Date without premium or
penalty.
C. Classified Claims
For purposes of all confirmation issues, including voting,
confirmation and distribution, all Claims against the Chapter 11
Assets - except for Administrative Expense Claims and Priority
Tax Claims -- and Equity Interests in the Debtor are classified
as:
Class Class Title
----- -----------
1 Priority Non-Tax Claims
2 Secured Claims
3 Unsecured Claims
4 PIERS/Old Convertible Subordinated Notes Claims
5 Common Stock
6 Securities Laws Claims
7 Other Equity Interests
All Classes other than Classes 1 and 2 are impaired and entitled
to vote.
Class 3 Unsecured Claims include Claims under the Belgian
Revolving Credit Facility, all prepetition trade Claims relating
to the Chapter 11 Assets, the Belgian Claims and other
prepetition general unsecured Claims relating to the Chapter 11
Assets. Class 7 consists of all Equity Interests in L&H NV not
otherwise classified in Classes 5 and 6, including the interests
of holders of Old Stock Options.
Estimated Estimated
Aggregate Percentage
Amount of Recovery
Allowed of Allowed
Class Treatment Claims Claims
----- ----------------------------- --------- -----------
1 Unimpaired; paid Cash in full Not given 100%
on Effective Date or as agreed
2 Unimpaired; paid in full; Not given 100%
Claimants will receive first
net proceeds from the sale
of any of its Collateral to
the extent of the principal
amount of its Claim. To the
extent permitted under
applicable law, the Claimant
will receive contractual,
non-default rate of interest
on the Allowed Secured Claim.
Until each Secured Claim is
paid in full, the Claimant
will retain the Liens securing
each Claim.
Full payment to each secured
creditor will be made on or
before December 31, 2003.
3 Impaired. Subject to certain Not given Not given
limitations, on the Effective
Date, and thereafter for each
Distribution of Available Cash,
each Claimant will receive a
Ratable Proportion of the
Available Cash and 93% of the
Litigation Trust Beneficial
Interests. No interest will
be paid on any Class 3
Unsecured Claim.
Limitations on Amount of
Distributions to Holders of
Allowed Unsecured Claims.
Claimants will not receive any
Distributions after they have
received 100% repayment of the
principal amount of their
Allowed Class 3 Unsecured
Claims. Any distributions by
Dictaphone or Reorganized
Dictaphone under the Dictaphone
Plan, as the case may be, to
the Lenders on account of the
Dictaphone Guaranty will be
included in determining whether
the Lenders have received 100%
repayment of their claims
relating to the Belgian
Revolving Credit Facility.
The Lenders, however, may assert
the full amount of their Allowed
Class 3 Unsecured Claims until
such time as they have received
100% repayment of the principal
amount of their Allowed Class 3
Unsecured claims under the
Belgian Revolving Credit Facility
-- after taking into account
distributions under the Plan and
the Dictaphone Plan. After all
holders of Allowed Class 3
Unsecured Claims have received
100% repayment of the principal
amount of their Allowed
Unsecured Claims, all further
Distributions of Available Cash
and Litigation Trust Beneficial
Interests will be distributed
to holders of Allowed Class 4
PIERS/Old Convertible
Subordinated Notes Claims.
4 Impaired. On the Effective $189,360,000 N/A
Date, and thereafter, after
Claimants in this Class with
Allowed Class 3 General
Unsecured Claims have received
Distributions equal to 100% of
their Allowed Claims, for each
Distribution of Excess
Available Cash, after full
Distribution to Class 3, each
holder of a PIERS/Old
Convertible Subordinated Notes
Claim will receive a Ratable
Proportion of Excess Available
Cash and 7% of the Litigation
Trust Beneficial Interests. No
interest will be paid on any
Class 4 PIERS/Old Convertible
Subordinated Notes Claim.
5 Impaired; deemed to have N/A 0%
rejected the Plan. Holders
of Allowed Common Stock Equity
Interests will receive no
Distribution under the Plan.
6 Impaired; deemed to have N/A 0%
rejected the Plan. Holders
of an Allowed Securities Laws
Claim will receive no
Distributions under the Plan.
7 Impaired; deemed to have N/A 0%
rejected the Plan and not
entitled to vote. A holder
of any Equity Interest in L&H
NV not otherwise classified
in L&H NV Classes 5 and 6 will
receive no distributions under
the Plan on account of the
Equity Interest.
For Plan purposes, a "Ratable Portion" is the ratio -- expressed
as a percentage -- that the amount of the Allowed Claim bears to
the aggregate amount of Allowed Claims of the same Class plus
all Disputed Claims in the Class.
"Available Cash" means at any time, the Cash held by Post-
Effective Date L&H on account of the Chapter 11 Assets --
including the net proceeds from any sales of Chapter 11 Assets
and any Distributions received, either directly or derivatively,
from L&H Holdings pursuant to the L&H Holdings Plan or from
Reorganized Dictaphone pursuant to the Dictaphone Plan, along
with the non-cash proceeds of any Chapter 11 Asset Transfers;
provided, however, that the non-cash proceeds will include the
common stock of Reorganized Dictaphone distributed to L&H
NV pursuant to the Dictaphone Plan, minus:
(i) the amount of Cash necessary to satisfy or reserve
for all Allowed Class 2 Secured Claims,
Administrative Expense Claims, Priority Tax Claims,
Class 1 Priority Non-Tax Claims, and Cash held in
any Disputed Claims Reserve,
(ii) the amount of Cash determined from time to time by
the Plan Administrator to be necessary to fund
adequately the administration of the Plan and
Post-Effective Date L&H on and after the Effective
Date, and
(iii) the Litigation Trust Reserve and the Litigation
Monitoring Committee Reserve.
Means Of Implementation Of The Plan
On the Effective Date, these events will occur -- and will be
deemed to have occurred simultaneously:
(1) the Litigation Trust Agreement will become
effective;
(2) the Litigation Trust will be formed and will assume
its obligations under the Plan; and
(3) the Equity Interests -- including the Old Capital
Stock -- of L&H NV will be extinguished as they
relate to the Chapter 11 Assets.
The Litigation Trust
The Litigation Trust will be established as of the Effective
Date of the Plan, and the Litigation Trustee will be appointed
on that Date.
A. Acquisition of Assigned Causes of Action
On the Effective Date, Post-Effective Date L&H and the Debtor
will be deemed to have, and will have, irrevocably assigned and
transferred to the Litigation Trust all of their rights, title
and interest in and to any and all of the Assigned Causes of
Action and any proceeds received by the Debtor or Post Effective
Date L&H. Neither Post-Effective Date L&H nor the Debtor will
have any further title or interest in any of the Assigned Causes
of Action, and neither the Debtor nor Post-Effective Date L&H
will receive any portion of any amounts recovered on account of
any of the Assigned Causes of Action.
All of the Assigned Causes of Action that belong to or could
have been raised by or on the Debtor's behalf have been
transferred and assigned to the Litigation Trust. Post-
Effective Date L&H and the Litigation Trust, as the case may be,
as the successors to the Debtor, will retain and may prosecute
any of these as a defense or counterclaim to any Claim,
Counterclaim or action, including, but not limited to, any
rights under Section 502(d) of the Bankruptcy Code. All other
Causes of Action are being retained by Post-Effective Date L&H.
B. Establishment of Litigation Trust Beneficial Interest
Registers
The Litigation Trust will maintain a register of the persons or
entities granted Litigation Trust Beneficial Interests and will
be entitled to treat as the owner of any interest for all
purposes the person or entity in whose name the Litigation Trust
Beneficial Interest is registered. Litigation Trust Beneficial
Interests will be uncertified.
C. Litigation Trust Beneficial Interests -- Disputed Claims
Upon a Disputed Claim becoming an Allowed Claim, Post-Effective
Date L&H will notify the Litigation Trust, and the holder of the
Allowed Claim will be granted the Litigation Trust Beneficial
Interests reserved for the Claim.
D. Limitations on Transferability
No holder of a Litigation Trust Beneficial Interest will be
entitled to transfer the interest. The irrevocable transfer of
the Assigned Causes of Action to the Litigation Trust will be
treated as an irrevocable deemed transfer of the Assigned Causes
of Action to the holders of Allowed Claims followed by an
irrevocable deemed contribution of the Assigned Causes of Action
by the holders of Allowed Claims to the Litigation Trust.
E. Funding the Litigation Trust
On the Effective Date, Post Effective Date L&H will pay to the
Litigation Trust $1,000,000 for the establishment of a reserve
to pay the fees, expenses and costs of the Litigation Trust and
the Litigation Trustee. In addition, on the Effective Date,
Post Effective Date L&H will pay to the Litigation Trust
$100,000 for the establishment of a reserve to pay the fees,
expenses and costs of the Litigation Monitoring Committee.
To the extent that the Litigation Trustee and the Litigation
Monitoring Committee from time to time reasonably agree that the
amounts of the Litigation Trust Reserve and/or the Litigation
Monitoring Committee Reserve are in excess of the amounts
reasonably anticipated to be incurred by the Litigation Trust
and the Litigation Trustee in the pursuit of their duties and
obligations under the Plan, these excess amounts will be
returned to the Plan Administrator and will be treated as
Available Cash for Distributions to holders of Allowed Claims.
To the extent that the Litigation Monitoring Committee
reasonably determines that the amount of the Litigation Trust
Reserve is not sufficient for the Litigation Trustee to pursue
its duties and obligations hereunder, the Litigation Monitoring
Committee may request from Post-Effective Date L&H additional
funding for the Litigation Trust Reserve, and the consent of
Post-Effective Date L&H with respect to the request for
additional funding for the Litigation Trust Reserve will not be
withheld unreasonably. Except as specifically set forth in
the Plan and the Litigation Trust Agreement, Post-Effective Date
L&H will have no obligation to the Litigation Trust or any
holder of an interest in the Trust, other than its obligations
to reasonably cooperate as a party to the Assigned Causes of
Action assigned to the Litigation Trust and to fund the
Litigation Trust and the Litigation Monitoring Committee
Reserves.
In addition, the Litigation Trustee may, with the Litigation
Monitoring Committee's written consent, borrow funds to finance
the operations of the Litigation Trust, which borrowing(s) may
include equity participation features.
F. Application of Proceeds and Expenses
Upon receipt of the proceeds of any Assigned Causes of Action
assigned to the Litigation Trust, the Litigation Trustee will
determine whether to distribute the proceeds to holders of
Litigation Trust Beneficial Interests. Prior to any
Distribution, the Litigation Trustee will apply the proceeds,
net of amounts paid or deductions made by reason of set-off to
the Litigation Trustee or by reason of reduction in judgment
or reimbursement obligations of the Litigation Trustee:
(i) after utilizing amounts in the Litigation Trust
Reserve and the Litigation Monitoring Committee
Reserve, to the payment of any associated taxes
and unpaid administrative expenses of the Litigation
Trust, the Litigation Trustee and the Litigation
Monitoring Committee, then
(ii) pro rata to the payment of the reasonable, unpaid
fees and expenses incurred in employing
professionals for the Litigation Trustee and
the Litigation Monitoring Committee, and the
compensation and expenses of the Litigation Trustee,
and
(iii) to either the Litigation Trust Reserve or the
Litigation Monitoring Committee Reserve for the
reasonably anticipated amount of any future expenses
and obligations to the extent the amounts in the
reserves are insufficient.
G. Distribution of Litigation Proceeds
Subject to certain limitations, any proceeds from the Assigned
Causes of Action distributed by the Litigation Trustee, net of
amounts paid or reductions made by reason of set-off and after
payment or reserve in full of the Litigation Administrative
Costs of the Litigation Trust will be distributed, based on each
holder's Ratable Proportion:
(a) with respect to the holders of Litigation Trust
Beneficial Interests who received the interests
on account of a Belgian Claim, the Curators will
distribute the Litigation Proceeds, and
(b) with respect to all other holders of Litigation
Trust Beneficial Interests, the Litigation Trustee
will distribute the Litigation Proceeds.
H. Distribution by Curators and Litigation Trustee
The Curators and the Litigation Trustee, as the case may be,
will distribute the Litigation Proceeds "at such times as the
Curators and the Litigation Trustee deem appropriate," but only
after paying all outstanding Litigation Administrative Costs and
reserving for any additional reasonable Litigation
Administrative Costs that may be incurred.
Until all holders of Allowed Claims receive full payment of
their Allowed Claims, the aggregate Distributions on account of
any holder of an Allowed Claim will not exceed 100% of the
amount of the Allowed Claim. Any Litigation Proceeds otherwise
distributable to a holder of an Allowed Claim in excess of the
Maximum Recovery Amount will be redistributed to holders holding
the same class of Claims or, if all the holders have received
100% of the amount of the Allowed Claims, to holders of Allowed
Claims in proportion to the allocation of Distributions between
the various Classes of Claims against the Chapter 11 Assets.
I. Litigation Reserve
The Litigation Trust will withhold from the amounts to be
distributed to holders of Litigation Trust Beneficial Interests
amounts sufficient to be distributed on account of the
Litigation Trust Beneficial Interests that may be granted to
holders of Claims that are Disputed Claims as of the date of
distribution of proceeds. To the extent the Disputed Claims
ultimately become Allowed Claims, and Litigation Trust
Beneficial Interests are granted to the holders of the Claims,
payments with respect to the interest will be made from the
Litigation Reserve.
The Litigation Trustee, in consultation with the Litigation
Monitoring Committee, will determine the amount to reserve in
the Litigation Reserve based on the amount of Disputed Claims
determined or estimated for the purposes of the Disputed Claims
Reserve.
J. Distributions After Disallowance
If any proceeds remain in the Litigation Reserve after all
objections to Disputed Claims have been resolved, the remaining
amounts will be distributed as soon as practicable in accordance
with the provisions regarding the distribution of Litigation
Proceeds to the holders of Litigation Trust Beneficial
Interests.
K. Term
The term of the Litigation Trust begins on the Effective Date
and will continue until the fifth anniversary of that date,
unless sooner terminated in accordance with the terms of the
Litigation Trust Agreement; provided, however, that the term of
the Litigation Trust may be extended for no more than five
successive periods of two years each in accordance with the
provisions in the Litigation Trust Agreement.
L. Compensation of the Litigation Trustee
The Litigation Trustee will receive compensation for services to
the Litigation Trust as agreed upon by the Litigation Trustee
and the Litigation Monitoring Committee, and will be entitled to
reimbursement of reasonable expenses incurred in performing its
duties out of the assets of the Litigation Trust.
M. Indemnification and Exculpation of the Litigation Trustee and
Litigation Monitoring Committee
From and after the Effective Date, the Litigation Trustee and
members of the Litigation Monitoring Committee, and each of
their post-Effective Date directors, members, officers, will be
exculpated and indemnified as provided in the Litigation Trust
Agreement. Both Litigation Trustee and the Litigation
Monitoring Committee, and each of their post-Effective Date
directors, members, officers, employees, agents and attorneys,
as the case may be, from and after the Effective Date, is
exculpated in the Plan by all Persons, holders of Claims and
Equity Interests, Entities, and parties-in-interest receiving
Distributions under the Plan, from any and all claims, causes of
action, and other assertions of liability arising out of its
discharge of the powers and duties conferred upon it by the
Plan, the Litigation Trust Agreement, or any order of the
Bankruptcy Court entered pursuant to or in furtherance of the
Plan, or applicable law, except solely for actions or omissions
arising out of its gross negligence, willful misconduct or
breach of its fiduciary duties.
No holder of a Claim or an Equity Interest, or representative
thereof, will have or pursue any claim or cause of action:
(a) against the Litigation Trustee or the Litigation
Monitoring Committee -- or their directors,
members, officers, employees, agents and attorneys,
as the case may be -- for Distributions made in
accordance with the Plan, or for implementing the
provisions of the Plan, or
(b) against any holder of a Claim for receiving or
retaining payments or other Distributions as
provided for by the Plan.
Both the Litigation Trustee and the Litigation Monitoring
Committee will not be liable for any action taken or omitted in
good faith and reasonably believed by it to be authorized within
the discretion or rights or powers conferred upon it by the Plan
or the Litigation Trust Agreement. In performing its duties
under the Plan and the Litigation Trust Agreement, each of the
Litigation Trustee and the Litigation Monitoring Committee will
have no liability for any action taken by the Litigation Trustee
and the Litigation Monitoring Committee in good faith in
accordance with the advice of counsel, accountants, appraisers
and other professionals retained by it, Post-Effective Date L&H,
or the Litigation Trust.
The Litigation Trustee and the Litigation Monitoring Committee
may rely without independent investigation on copies of orders
of the Bankruptcy Court reasonably believed by it to be genuine,
and will have no liability for actions taken in good faith in
reliance thereon. None of the provisions of the Plan will
require the Litigation Trustee or the Litigation Monitoring
Committee to expend or risk their own funds or otherwise incur
personal financial liability in the performance of any of their
duties or in the exercise of any of its rights and powers.
Each of the Litigation Trustee and the Litigation Monitoring
Committee may rely without inquiry upon writings delivered to
it, which it reasonably believes in good faith to be genuine and
to have been given by a proper Person.
M. Monitoring of Litigation Trust
On or prior to the Confirmation Date, the Committee will select
three Persons or Entities to serve as representatives of the
Litigation Trust.
The Litigation Monitoring Committee will monitor and review
settlement, abandonment and other disposition proposals proposed
to or agreed to by the Litigation Trustee with respect to the
Assigned Causes of Action and to consult with the Litigation
Trustee regarding the settlement, abandonment, disposition and
prosecution of the Causes of Action. The Litigation Monitoring
Committee will, to the extent it deems necessary, retain counsel
to assist it.
Exclusivity Period
Subject to further Bankruptcy Court order, the Committee will
retain the exclusive right to amend the Plan and solicit
acceptances thereof until the Effective Date -- or until the
earliest date on which the Effective Date can no longer occur.
The Committee Post-Confirmation
The Committee will cease to exist on the Effective Date, but
retains standing to appear at any hearing regarding the
allowance of Professional Fees; as appropriate, may interpose
objections to the Professional Fees, and is entitled to obtain
reimbursement for the reasonable fees and expenses of its
professionals relating to these events.
Appointment of Scott L. Baena to Administer Plan
On the Effective Date, Scott L. Baena will be appointed to serve
as the sole officer and director of Post-Effective Date L&H
under the Plan Administration Agreement. Sufficient funds will
be retained by Post-Effective Date L&H through the Final
Distribution Date to fund Mr. Baena's retention and the
performance of his duties and that of Post-Effective Date L&H
under the Plan.
Mr. Baena will be exclusively responsible for making all
Distributions of Cash and Litigation Trust Beneficial Interests
under the Plan, other than Distributions of Cash and Litigation
Trust Beneficial Interests to holders of the Belgian Claims,
which Distributions will be made by the Curators.
Periodic Distributions
Post-Effective Date L&H will make Distributions as provided
under the Plan from the net proceeds it has obtained or obtains
from the Transfers of the Chapter 11 Assets for a period of up
to five years after the Effective Date. The Post Effective Date
L&H will make Distributions of Cash, Available Cash, and
Litigation Trust Beneficial Interests on account of any portion
of, or in the full amount of Allowed Claims as soon as
reasonably practicable after the Effective Date and, thereafter,
on the first Business Day of each calendar semester. However,
except with respect to the final Distribution, Post-Effective
Date L&H will not make any Distributions unless the amount of
Available Cash exceeds $1,000,000.
The Distributions will continue until Post Effective Date L&H
has Transferred all of its assets and there is no additional
Available Cash for Distributions under the Plan. To the extent
that the Chapter 11 Assets consist of neither Cash nor Cash
equivalents, Post-Effective Date L&H will endeavor to distribute
the non-Cash consideration in such manner as to give effect to
the distribution scheme contemplated under the Plan.
Post-Effective Date L&H will have absolute discretion to pursue
or not to pursue any and all claims, rights, defenses, or Causes
of Action that it retains pursuant to the Plan, as it determines
in the exercise of its business judgment, and will have no
liability for the outcome of its decision.
Disputed Claims Under The Plan
As soon as practicable, but in no event later than 180 days
after the Effective Date, unless otherwise ordered by the
Bankruptcy Court, objections to Claims and Equity Interests will
be filed with the Bankruptcy Court and served on the holders of
each Claim or Equity Interest to which objections are made.
On and after the Effective Date, except as to applications for
allowances of Professional Fees or as otherwise ordered by the
Bankruptcy Court, the filing, litigation, settlement, or
withdrawal of all objections to Claims and Equity Interests,
including pending objections, will be the responsibility of Post
Effective Date L&H. Any Claim, other than a Claim for
Professional Fees, which is not an Allowed Claim will be
determined, resolved, or litigated by Post Effective Date L&H by
and through the Plan Administrator. Prior to the Effective
Date, the filing, litigation, settlement, or withdrawal of all
objections will be the Debtor's responsibility.
No Distributions Pending Allowance
Notwithstanding any other provision, if any portion of a Claim
is a Disputed Claim, no payment or Distribution will be made on
account of the portion of any Claim that is a Disputed Claim
unless and until the Disputed Claim becomes an Allowed Claim,
but the payment or Distribution provided under the Plan will be
made on account of the portion of any Claim that is an Allowed
Claim.
Withholding of Allocated Distributions
Post-Effective Date L&H will withhold from the property to be
distributed under the Plan for the benefit of holders of
Disputed Claims Distributions in an amount sufficient to be
distributed on account of the Disputed Claims, which
Distributions will be deposited in the applicable Disputed
Claims Reserve.
Post-Effective Date L&H
From and after the Effective Date, Post-Effective Date L&H will
continue in existence for the purposes of:
(a) administering the Plan and to take all steps and
execute all instruments and documents necessary to
effectuate the Plan;
(b) selling or otherwise disposing of the Chapter 11
Assets and winding up affairs relating to the
Chapter 11 Assets as expeditiously as reasonably
possible;
(c) taking any actions to liquidate, and maximize the
value of, the Chapter 11 Assets;
(d) assigning all Assigned Causes of Action, and all
claims, interests, rights and privileges of
L&H NV relating to the Litigation Trust for
enforcement, prosecution and settlement by the
Litigation Trustee in accordance with the terms of
the Plan and the Litigation Trust Agreement;
provided, however, that Post-Effective Date L&H
will keep an interest in the Assigned Causes of
Action solely to assert a defense to a Claim or
Equity Interest based on the Assigned Causes
of Action;
(e) reconciling Claims and resolving Disputed Claims,
and administering the Claims allowance and
disallowance processes set forth in the Plan,
including objecting, prosecuting, litigating,
reconciling, settling and resolving Claims and
Disputed Claims in accordance with the Plan;
(f) making decisions regarding the retention,
engagement, payment and replacement of
professionals, employees and consultants;
(g) cooperating with the Litigation Trustee, the
Litigation Trust, and the Litigation Monitoring
Committee with regard to the pursuit of the
Assigned Causes of Action;
(h) in conjunction with Litigation Trustee, providing
quarterly reports to the Litigation Monitoring
Committee as to budgets, cash receipts and
disbursements, asset sales or other dispositions,
claims reconciliation, Litigation Proceeds and
Distributions under the Plan;
(i) administering the Distributions under the Plan,
including:
-- making Distributions in accordance with the
terms of the Plan,
-- establishing and maintaining the various
Disputed Claims Reserves, and
-- filing with the Bankruptcy Court semi-annual
reports regarding the Distributions to be
made to the holders of Allowed Claims;
(j) exercising other powers as necessary or prudent
to carry out the provisions of the Plan;
(k) investing any Cash in any reserves or pending
distribution in accordance with reasonable
business judgment for any such Entity;
(l) filing appropriate tax returns; and
(m) taking other actions as may be necessary or
appropriate to effectuate this Plan.
Each of the Plan Administrator, Post Effective Date L&H, the
Litigation Trust, and the Litigation Trustee may incur and pay
any reasonable and necessary expenses in performing these
functions, subject to the terms of the Plan.
Plan Injunction
Except as otherwise provided in the Confirmation Order --
including any right to receive Distributions under the Plan --
or a separate order of the Bankruptcy Court, as of the Effective
Date, all Entities that have held, currently hold or may hold a
Claim or other debt or liability that would be discharged or an
Equity Interest or other right of an equity security holder that
is terminated and canceled pursuant to the terms of the Plan,
are permanently enjoined from taking any of these actions on
account of any discharged Claims, debts or liabilities or
terminated and canceled Equity Interests or rights:
(1) commencing or continuing in any manner any action
or other proceeding against Post-Effective Date L&H,
the Chapter 11 Assets or properties and interests in
properties of each of the Plan Entities;
(2) enforcing, attaching, collecting or recovering in
any manner any judgment, award, decree or order
against Post-Effective Date L&H, the Estate or
properties and interests in properties of each of
these;
(3) creating, perfecting or enforcing any lien or
encumbrance against Post-Effective Date L&H,
the Chapter 11 Assets or properties and
interests in properties of each of these Plan
Entities;
(4) asserting a set-off, right of subrogation or
recoupment of any kind against any obligation due
to Post-Effective Date L&H, the Chapter 11 Assets
or properties and interests in properties of each
of these; and
(5) commencing or continuing any action, in any manner,
in any place that does not comply with or is
inconsistent with the provisions of the Plan and
the Confirmation Order.
This injunction extends to all successors of the Debtor and the
Committee and its members. Unless otherwise stated in the
Confirmation Order, all injunctions or stays provided for in the
Chapter 11 Case pursuant to Sections 105 or 362 of the
Bankruptcy Code, or otherwise, and in existence on the
Confirmation Date, will remain in full force and effect until
the Effective Date.
More Exculpation
Except to the extent of any willful misconduct or gross
negligence, none of L&H NV, Post-Effective Date L&H, or any of
the L&H NV Parties -- but solely in their capacities as L&H NV
Parties -- will have or incur any liability to any holder of a
Claim or Equity Interest for any act or omission in connection
with, related to, or arising out of:
(a) the Chapter 11 Case,
(b) the pursuit of confirmation of the Plan,
(c) the consummation of the Plan or the administration
of the Plan or the property to be distributed under
the Plan,
(d) the Plan, and
(e) the negotiation, formulation and preparation of
the Plan and any of the terms, settlements and
compromises reflected in the Plan, and, in all
respects, the Debtor, Post-Effective Date L&H,
and each of the L&H NV Parties will be entitled
to rely upon the advice of counsel with respect
to their duties and responsibilities under the
Plan; provided, however, that this exculpation
will not apply:
(x) with respect to the L&H NV Parties, to
acts or omissions that occurred prior to
the Petition Date, and
(y) solely with respect to Post-Effective Date
L&H, the Litigation Trust, the Plan
Administrator, the Litigation Trustee or
to the Curators, to acts or omissions that
occur after the Effective Date.
Release Of Certain Intercompany Claims
As of the Effective Date, L&H NV, Post-Effective Date L&H, and
each of their successors and successors-in-interest, release any
and all Claims, other claims or Causes of Action that they have,
may have, or claim to have, which are property of, assertable on
behalf of, or derivative of the Estate against L&H Holdings or
its Affiliates -- other than L&H NV -- in accordance with that
certain Mutual Release Agreement among L&H Holdings and L&H NV
dated June 26, 2002, which was approved by the Bankruptcy Court
on August 13, 2002 and which became effective on the effective
date of the L&H Holdings Plan.
However, the mutual releases between L&H NV and L&H Holdings do
not include:
(a) a release of certain claims relating to intercompany
allocations of shared costs, including management
costs, corporate marketing costs, professional fees
and expenses, DIP fees, interest and related
expenses, and insurance costs -- which allocations
have or will be approved by the Bankruptcy Court,
and
(b) the U.S. Merger Claims and the Other U.S. Claims
assigned to L&H NV pursuant to the Stipulation And
Order approving L&H NV's and Holdings' settlement
with the Baker Parties dated January 31, 2002.
Furthermore, these releases include, other than the Assigned
Claims, any and all claims relating to that certain Agreement
And Plan Of Merger dated as of March 27, 2000, by and among L&H
NV, L&H Holdings, Dragon Systems, Inc. and the principal
stockholders of Dragon Systems, Inc., any claims of breach of
warranty or representations relating thereto, and any remaining
intercompany claims between L&H Holdings and L&H NV.
The Alternatives
The Committee believes that the Plan they have presented affords
holders of Claims the greatest opportunity for realization on
the Chapter 11 Assets. If the Plan is not confirmed, however,
the theoretical alternatives include liquidation of L&H NV under
Chapter 7 of the Bankruptcy Code, or alternative plans of
reorganization or liquidation under Chapter 11.
Thorough consideration of these alternatives to the Plan has led
the Committee to conclude that the Plan, in comparison, provides
a greater recovery to creditors on a more expeditious timetable,
and in a manner that minimizes certain inherent risk in any
other course of action available in the Chapter 11 Case.
A. Liquidation Under Chapter 7
If no plan is confirmed, the Chapter 11 Case may be converted to
a case under Chapter 7 of the Bankruptcy Code. In a Chapter 7
case, a trustee or trustees would be elected or appointed to
liquidate the assets of L&H NV. It is impossible to predict
precisely how the proceeds of the liquidation would be
distributed to the holders of Claims against and Equity
Interests in L&H NV.
The Committee believes that in a liquidation under Chapter 7,
before creditors received any distribution, additional
administrative expenses involved in the appointment of a trustee
or trustees and attorneys, accountants and other professionals
to assist such trustee(s) would cause a substantial diminution
in the value of the Estate. The assets available for
distribution to creditors would be reduced by the additional
expenses and by Claims, some of which would be entitled to
priority. Moreover, Section 1145 of the Bankruptcy Code could
not be invoked.
B. Alternative Plan Of Reorganization Or Liquidation
If the Plan is not confirmed, L&H NV, the Committee, or if the
Bankruptcy Court were not to grant further extensions of L&H
NV's and the Committee's current co-exclusive periods in which
to file and solicit a plan of reorganization, any other party-
in-interest in these cases could propose a different plan or
plans.
The Committee has determined that confirmation of the Plan will
provide each holder of an Allowed Claim in an impaired class
under the Plan with a substantially greater recovery than would
be received by a holder in a Chapter 7 liquidation because of:
(a) additional administrative expenses resulting from
the appointment of and services to be rendered by
trustees and attorneys and other professionals to
assist the trustees,
(b) the relative lack of familiarity with L&H NV's
assets that would inevitably hinder the
professionals in the management of the estate,
(c) additional expenses and claims, some of which would
be entitled to priority, that would be generated
during the liquidation, and
(d) realization of lower value of the Chapter 11 assets
than under the Plan, if the claims are ultimately
successful after protracted litigation.
In addition, distributions would be substantially delayed in a
Chapter 7 liquidation because, among other things, of the need
to litigate or otherwise resolve many of the claims settled by
the Plan. In the event the Plan is not confirmed, or the Chapter
11 Case is converted to a case under Chapter 7 of the Bankruptcy
Code, the Committee believes that the inaction or action, as the
case may be, will cause L&H NV to incur substantial expense and
otherwise serve only to prolong unnecessarily the Chapter 11
Case and negatively affect creditors' recoveries on their
Claims.
Non-consensual Confirmation
In the event that any of Classes 3 and 4 fail to accept the
Plan, the Committee reserves the right to:
(i) modify the Plan, and/or
(ii) request that the Bankruptcy Court confirm the
Plan under the cram-down provision notwithstanding
a lack of acceptance by finding that the Plan
provides fair and equitable treatment to, and
does not discriminate unfairly against, any impaired
Class of Claims and Equity Interests voting to
reject the Plan.
The Belgian Complications
If the Plan is not confirmed, creditors and equity interest
holders will be subject to the risks associated with the Belgian
Case. For example, few non-U.S. entities and individuals have
been identified who have filed Claims solely in the Belgian Case
alleging fraud, deceit, or misrepresentation by L&H NV or its
representatives in connection with transactions by virtue of
which the claimants purchased or otherwise acquired Common
Stock. Similarly situated U.S. claims would be subject to
mandatory subordination under Section 510(b) of the Bankruptcy
Code, but because the Foreign Stock Fraud Claimants have filed
claims only in the Belgian Case, and are otherwise not subject
to the jurisdiction of the Bankruptcy Court, these claims may
not be subject to subordination under Section 510(b).
Moreover, there is no provision precisely analogous to Section
510(b) under Belgian law, which would mandate subordination of
the claims in the Belgian Case, and the Belgian Court has relied
on the inclusion of a Section 510(b)-type provision in the
Belgian Plan to refuse to approve such plan. There also is a
risk that the Foreign Stock Fraud Claimants will receive payment
in full on their claims in the Belgian Case pari passu with the
rest of L&H NV's unsecured creditors. Such a result would have
a dilutive effect on the pool of assets available to L&H NV
creditors that is inconsistent with U.S. law.
At this point only ten Foreign Stock Fraud Claimants have been
identified, and their claims are, in total, less than
$2,600,000. However further similar claims could be filed in the
Belgian Case of which the Committee and L&H NV are currently
unaware, which could have a significant dilutive impact on
recoveries to creditors with non-Foreign Stock Fraud Claims
* * *
Judge Judith Wizmur sets a hearing to consider the adequacy of
the information in the Committee's Disclosure Statement on April
2, 2003. Objections to the Committee's Disclosure Statement must
be filed and served no later than March 26, 2003.
(L&H/Dictaphone Bankruptcy News, Issue No. 38; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
=============
F I N L A N D
=============
FINNAIR OYJ: Launches Extensive Cost Cutting Measures
-----------------------------------------------------
Finnair is launching extensive adjustment measures to improve its
profitability and business prospects in the current crisis of the
air travel industry. The annual savings target is EUR160 million.
The necessary solutions will be carried out for the most
part by the end of the year. The total effects on the result will
be seen as of 2005. As a part of its adjustment measures Finnair
has today started proceedings with personnel groups in accordance
with the Act on Co-operation within Undertakings.
The savings targets represent approximately ten percent of all
operational expenses for Finnair Group. Personnel expenses
represent approximately 60 million euro of the total savings
amount. This is equivalent to a cut of approximately 1200 jobs in
the Group during two years. Some 200 hundred jobs will be cut in
Finnair Group travel agencies where proceedings in accordance
with the Act were started earlier this month. In air traffic
related business units the need is for a cut of approximately
1000 jobs. The way in which the reductions in personnel expenses
will be realised will be formulated as the proceedings advance.
Demand in air travel has been weak for some time and the tense
market situation has eaten into the industry's profitability.
"The change in the market situation requires the improvement of
the Group's competitiveness by sustainable and permanent means.
Streamlining the cost structure is a prerequisite for
safeguarding Finnair's vitality in the future," says President
and CEO Keijo Suila.
Personnel expenses account for approximately 30 percent of
Finnair's expenses, with variable costs making up 38 percent and
other operating expenses 32 percent. The cost-cutting programme
aims for permanent structural changes in both the personnel and
organisational structure. In proportion to Finnair's capacity
plans for the next few years, the savings target means a 15
percent improvement in unit costs.
As Finnair carries out the adjustment programme, its strategy
remains unchanged: sustainable and profitable growth as well as
focusing on core businesses.
Finnair Oyj
Communications
CONTACT: FINNAIR OYJ
Taneli Hassinen, Financial Communications
Phone: +358 9 818 4976
SONG NETWORKS: To Push for Chairmanship of Roger Holtback
---------------------------------------------------------
Song Networks Holding AB announces that Roger Holtback, with a
background in Volvo, SEB and Bure and today chairman of the board
and managing director of Holtback & Partner AB, will at the
Annual General Meeting on April 9, be proposed as chairman of the
board of Song Networks Holding AB.
Further, Lars Gronberg, present Chairman of the board, is
proposed to be reelected as ordinary member of the board.
Proposed as new ordinary members of the board of Song Networks
Holding AB are Martha Josefsson, previously CIO (chief investment
officer) of among others DnB Asset Management and Carlsson
Investment Management, Kjell Nilsson, previously managing
director and CEO of Trelleborg AB, Lennart Asander, vice
president of Vattenfall AB and previously chairman of the board
of Arrowhead AB, Raj Raithatha, CEO of Versatel International and
Tomas Franz,n, CEO of Song Networks Holding AB.
Mr Holtback is also chairman of the board of the listed companies
Capio AB and Gunnebo AB, and member of the board of several other
companies.
" Song Networks is after its comprehensive restructuring a
financially solid company at a, on a long-term basis, growing
market. I hope that - with my experience from the industrial as
well as the financial sector - be able to actively contribute to
the next phase of Song's development", says Roger Holtback.
About Song Networks,
Song Networks is a data and telecommunications operator with
activities in Sweden, Finland, Norway and Denmark. The Company's
business concept is to offer the best broadband solution for data
communication, internet and voice to businesses in the Nordic
region. This means that Song Networks supplies communication
solutions that are attractively customized for each corporate
customer. The Company was founded in 1995 in Sweden and has
approximately 800 employees. The head office is located in
Stockholm and there are an additional 34 offices located in the
Nordic region. http://www.songnetworks.net
CONTACT: SONG NETWORKS HOLDING AB
Tomas Franzen, Chief Executive Officer
Phone: +46 8 5631 0111
Mobile: +46 701 810 111
E-mail: tomas.franzen@songnetworks.net
===========
F R A N C E
===========
ALSTOM: Sale of T&D Unit Could Be Completed December, Not July
--------------------------------------------------------------
Altom could complete the sale of its transmission and
distribution division "in December at the earliest," and not in
July as disclosed by union sources to Dow Jones.
A union source reportedly said the head of the division, Philippe
Joubert, advised union representatives "he wanted the sale done
by July because that's when the annual general shareholders
meeting is." The meeting will be on July 2.
But a spokesman denied a July date had been given. He declined
to comment when asked if a buyer could be identified as early as
July, with the official sale not completed until December. He
was as well without comment on the number of potential buyers the
division had so far, according to the report.
Alstom put the profitable division up for sale earlier this month
as part of a EUR3-billion asset disposal program to trim down
EUR5 billion in debt, adapt to significantly weakening power
market, as well as pay for costly repairs to some gas turbines
sold in the late 1990s.
The T&D division makes transformers for transmitting and
distributing electrical energy. It is the most profitable of
Alstom's four divisions, with an operating margin last year of
6.4%.
FRANCE TELECOM: Confirms FTSE Treatment Changes in FTSE Indices
---------------------------------------------------------------
Following Monday's rights issue announcement by France Telecom
(France) (which is due to trade 'ex rights' Tuesday), the number
of shares in FTSE indices will be adjusted to reflect the
effective underlying terms (19 new shares for every 20 existing
at the price of 14.5 Euros). Today's closing price will also be
adjusted accordingly.
Please note that the resulting new share total reflects the non
take-up by shares currently held in the company's treasury:
INDEX
CHANGE EFFECTIVE FROMSTART OF
TRADING
FTSE All-World Index France Telecom
(France, 5176177) will remain in 25 March
2003 the index with an increased shares
in issue total of 2,224,364,449 and an
unchanged investibility weighting of 30%.
FTSE World Index Ex-Multinationals
France Telecom will be treated as above.
March 25, 2003
FTSE Global Sector - Media
France Telecom will be treated as above.
March 25, 2003
FTSE Eurotop 300 France Telecom will be treated as above.
March 25, 2003
FTSE Eurotop 100 France Telecom will be treated as above.
March 25, 2003
FTSE Euro 100 France Telecom will be treated as above.
March 25, 2003
FTSE ExUK 100 France Telecom will be treated as above.
March 25, 2003
FTSE4Good Global Index France Telecom will be treated as above.
March 25, 2003
FTSE4Good Global 100 Index
France Telecom will be treated as above.
March 25, 2003
FTSE4Good Europe Index France Telecom will be treated as above.
March 25,
2003FTSE4Good Europe 50 Index
France Telecom will be treated as above.
March 25, 2003
*****
France Telecom offered EUR15 billion euros ($16 billion) of stock
to shareholders as part of Chief Executive Officer Thierry
Breton's program to cut its EUR68 billion debt by the end of
2005. Banks and the government guaranteed the sale.
Shareholders were allowed to buy more stock for EUR14.5, a 28%
discount to Friday's close.
FRANCE TELECOM: Ratings, Outlook Affirmed After Capital Hike
------------------------------------------------------------
Fitch Ratings, the international rating agency, has affirmed
France Telecom's Senior Unsecured rating of 'BBB-' ('BBB minus')
with a Positive Outlook after the announcement of a EUR15 billion
capital increase aimed at significantly de-leveraging FT's
balance sheet.
This capital increase is very likely to be successful as the
French state announced its intention to subscribe to the capital
increase, directly or indirectly, through ERAP ('AAA'/ Stable /
'F1+') for EUR9bn, pro rata to its shareholding and the remaining
EUR6bn has been underwritten by a bank syndicate. No rating
actions are taken, because the prospect of this capital increase
is already factored in Fitch's ratings and the Positive Outlook.
Although further improvements of cash generation and credit
measures are required to upgrade the rating, the proceeds of the
capital increase will enhance FT's leverage and coverage ratios
to a level more commensurate with an investment grade rating.
Fitch withdrew its 'BBB-' ('BBB minus') Senior Unsecured rating
of France Telecom from Rating Watch Negative and affirmed it with
a Stable Outlook on 12 September 2002 after the announcement of
the French state's support to a substantial strengthening of FT's
equity base. The long-term Outlook was changed to Positive from
Stable on 5 December 2002 when FT announced its "Ambition FT
2005" including a EUR15bn capital increase.
Fitch will continue to monitor the improvement of FT's credit
measures, which should see the rating more in line with an
investment grade rating. Everything else held constant, the
proceeds from the capital increase should cut EUR15bn to FT's
reported net debt of EUR68bn at YE02. On a pro forma basis,
taking into account FY02 EBITDA of EUR14.9bn, leverage as
measured by net debt to EBITDA should fall to 3.6x from 4.6x.
FT's objective is to achieve a Net Debt/EBITDA ratio below 3x by
the end of 2003, thanks to EBITDA margin improvement, net free
cash generation (EUR3bn targeted in FY03) and disposals of non-
core assets, such as the minority stake in Wind. Looking forward,
key factors for the agency to consider a rating upgrade will be
FT's ability to generate a significant free cash flow in order to
reduce its debt on its own resources, as well as its ability to
improve its credit measures on lease, securitization, vendor
credits and a French GAAP adjusted basis.
CONTACT: FITCH RATINGS
Raymond Hill
London
Phone: +44 (0) 20 7417 4314
Olivier de Combarieu
Phone: +33 (01) 44 29 91 26
FRANCE TELECOM: Ratings Placed on CreditWatch Positive
------------------------------------------------------
Standard & Poor's Ratings Services said Monday that it has placed
its 'BBB-' long-term and 'A-3' short-term corporate credit
ratings on French telecommunications provider France Telecom S.A.
(FT) on CreditWatch with positive implications, following news
earlier in the day that the group has launched a fully
underwritten EUR15 billion rights issue.
The 'BBB-' long-term corporate credit rating on FT's mobile
telephone subsidiary Orange S.A. was also placed on CreditWatch
with positive implications.
"The rights issue--which is fully underwritten by a syndicate of
banks and the French state (the group's 56% shareholder)--will
have a strong, immediate positive impact on FT's credit
measures," said Standard & Poor's credit analyst Guy Deslondes.
The launch early in 2003 will enable an approximate EUR500
million reduction in the group's interest burden for the year.
The issue will further strengthen FT's liquidity and financial
flexibility, fully freeing up the EUR15 billion in syndicated
credit lines already in place.
"The equity injection, combined with recent asset disposals
(EUR2.5 billion since the beginning of the year, including the
latest sale of Wind SpA for EUR1.5 billion), better-than-expected
operating performance in recent quarters, and improved operating
forecasts for 2003, will enable FT to significantly improve its
debt-protection measures from the lows recorded at year-end 2001
and 2002," added Mr. Deslondes.
Standard & Poor's believes that the group could achieve a ratio
of consolidated net debt to EBITDA of between 3.0x and 3.5x at
year-end 2003 (adjusted for operating leases and securitization),
depending on the level of free operating cash flow generated
during the year; this would be a dramatic improvement over the
year-end 2002 ratio of 4.9x.
Management's commitment to improve free cash flow radically over
the next three years (mainly through streamlining operating costs
and capital expenditures) should also enhance the group's credit
potential over time.
Standard & Poor's will meet very soon with FT's senior and
operating management to review the current execution of the
group's so-called "TOP" plan--aimed at generating EUR15 billion
of net cash flow to be used for debt reduction--and its projected
impact on FT's operating performance and credit measures over the
next two years. Standard & Poor's expects to resolve the
CreditWatch status within the next six weeks.
VIVENDI UNIVERSAL: Lays Out Plan to Diversify Financing Sources
---------------------------------------------------------------
Refinancings For Vivendi Universal:
-- EUR1 billion High Yield Offering
-- Commitments for a EUR2.5 billion three-year Bank Loan Facility
Refinancings For Vivendi Universal Entertainment
-- Refinancing of the VUE Bridge Loan
-- Successful $500 million issue of 7-year high yield notes for
Orlando Theme Parks
Vivendi Universal announced Monday significant steps to extend
the maturity of its existing debt and diversify its financing
sources, both for the parent company and its subsidiary Vivendi
Universal Entertainment (VUE).
1) The refinancings for Vivendi Universal (the parent company)
consist of:
-- The launch of a private offering of E1.0 billion of 7-year
high yield notes denominated in euros and dollars;
-- The signing of a commitment for a EUR2.5 billion three-year
Bank Loan Facility.
The High Yield Offering and Bank Loan Facility will extend the
group's average debt maturity, provide substantial additional
liquidity to the group, and enhance the stability of its capital
structure. Net of cancellations and expected repayments of
existing debt with a short-term maturity, these transactions are
expected to add approximately EUR1.0 billion in additional
liquidity initially and EUR3.5 billion by December 31, 2004
(before fees and expenses).
The net proceeds from the offering of the notes will be paid to
Vivendi Universal once the conditions to the availability of the
Bank Loan Facility have been met.
2) VUE is to refinance a $1.6 billion bridge loan through:
-- A five-year transaction on securitization of receivables for
an amount of approximately $700 million, scheduled to close by
the end of March;
-- A five-year institutional term loan facility of $500 million,
in respect of which commitments have been signed for a $300
million underwriting; and
-- If necessary, an extension of the maturity to December 31,
2003, for the remaining portion of the existing bridge loan, for
an amount underwritten up to $420 million.
In addition, UCDP (Universal City Development Partners, Ltd) has
successfully priced on March 21, 2003, a $500 million 7-year high
yield issuance at Orlando Theme Parks, which will refinance
existing debt that has shorter maturities.
Jean-Rene Fourtou, Chairman and Chief Executive Officer, said:
"Vivendi Universal has been engaged in a significant asset
disposal program for the past nine months. The transactions
announced today will give the group greater flexibility to
continue with this program. By seizing the opportunities offered
by the capital markets, Vivendi Universal will restructure its
debt advantageously. However, these opportunities do not in any
way affect our targets of E7 billion of disposals in 2003 and a
debt reduction to below E11 billion by the end of the year. We
remain confident of our ability to return to investment grade as
soon as possible."
=============
G E R M A N Y
=============
BIT BY BIT: Awaits Court Decision to Start Insolvency Measures
--------------------------------------------------------------
Venture capital company Bit By Bit Holding AG announced that it
has motioned to open insolvency proceedings at a Berlin court on
February 17, 2003.
However, the court still has to decide whether it will start
insolvency proceedings on the company that is formerly known as
bit by bit Software AG.
An insolvency administrator is still to be appointed by the
court.
The company was founded in 1992 as orgWare GmbH Software
Marketing. It is designed and developed the software program
'orgAnice', which runs under all windows based systems and is
aimed to organize all office tasks including document management,
filing and administration.
Bit By Bit also offers specialized software for lawyers and legal
offices, as well as online support and file transfer.
CONTACT: BIT BY BIY HOLDING AG
Wittenbergplatz 3
10789 Berlin
Germany
Phone: +49 30 2350490
Homepage: http://www.bitbybit.ag
Contact: Franz Niedermaier, Chairman
DEUTSCHE BA: TUI Says "No Interest" in Taking Over DBA
------------------------------------------------------
Europe's largest travel company, TUI AG, has denied rumors that
it will buy British Airway's German arm Deutsche BA.
TUI spokesman Nikolai Juchem said the company has "no interest"
in the loss-making airlines, dismissing a published report and
recent speculation that it was in takeover talks.
According to DZ Bank analyst Raimon Kaufeld, TUI does not need to
buy DBA to fulfill expansion plans for its discount airline
Hapag-LLoyd Express.
In fact, if DBA "disappears from the market, other airlines like
Hapag-LLoyd Express could step in and profit," he added.
It is known that Hapag-Lloyd Express, which began service in
December, plans to increase its fleet this spring to 10 jets from
four. Chief Executive Michael Frenzel has said the airline could
have 40 planes by 2005, "if everything goes well."
A takeover could be interesting though if conditions were right
and DBA employees withdraws demands that led to the breakdown of
takeover talks with UK no-frills airline easyJet.
Recently, easyJet announced that it has terminated its option to
acquire DBA from British Airways due to the rigidity of German
labor laws and a substantial deterioration in the financial
performance of all airlines in the German market.
CONTACT: DEUTSCHE BA LUFTVERKEHRSGESELLSCHAFT MBH
Abteilung Kundenbeziehungen
Postfach 23 16 24
85325 Munchen
Fax: 089/975 91 998
DRESDNER BANK: Due to Appoint Two New Board Members at Meeting
--------------------------------------------------------------
Rumors that Allianz Holding AG's Dresdner Bank unit will appoint
two new members to its management board have persisted despite
strong denials from Dresdner spokesman Ebergard Seitz.
Dow Jones Newswires cited sources saying the unit will likely
appoint Andrew Pisker and Karl Ralf Jung to its management board
at its extraordinary supervisory board meeting Tuesday. This
follows German weekly magazine Focus's report on Sunday thatt
Henning Schulte-Noelle, Dresdner's supervisory board chairman,
will recommend the appointment of Mr. Pisker and Mr. Jung to the
management board, to succeed Chief Executive Bernd Fahrholz, who
quit last week.
Both reports indicated that Pisker, responsible for investment
banking in the bank's corporates and markets division, and Jung,
responsible for corporate banking in the same division, will be
responsible for corporates and markets on Dresdner's management
board.
Sources added that there would be no further departures from the
management board after Mr Fahrholz's resignation last week.
Dresdner Bank's spokesman declined to comment.
CONTACT: DRESDNER BANK AG
Jurgen-Ponto-Platz 1
D-60301 Frankfurt/Main, Germany
Phone: +49-(0) 69/2 63-0
Fax numbers: General enquiries
+49-(0) 69/2 63-48 31
+49-(0) 69/2 63-40 04
=========
I T A L Y
=========
ISTITUTO SIEROTERAPICO: Milan Court Issues Notice of Sale
---------------------------------------------------------
Law-Court of Milan Notice of Sale by Auction Bankruptcy No. 58781
Istituto Sieroterapico Melanese
Municipality of Milan
Fallimento Edilgest srl no. 62855
The undersigned Registrar hereby gives notice that on May 14,
2003 at 10 am before the Delegate Judge Ms. Marianna Galloto in
her offices in the Law-Court of Milan, Second Bankruptcy Section,
the sale of the area and premises of the Entities in the epigraph
as described below in the present physical and legal state will
take place, by auction and in one single lot, as a whole and not
in parts, in accordance with articles 576 and those following
within the civil code procedure.
The immovable property complex covers an area of 98.043 sqm in
Milan and is divided as follows:
To the West: other property in maps 365 - 364 - 363 and Roggia
Boniforti;
To the North: continuing Roggia Boniforti and other property in
map 111;
To the East: Via Segantini and Piazza Belfanti;
To the South: Piazza Belfanti, Viale Lifuria, school complex "IT
IS GIORGI" (property of the Province of Milan) and continuing
Viali Liguria.
The Individual Property Shares are on Page 520 of the Cadastre of
Milan with the maps listed as follows (clockwise from west): no.s
378-255-241-195-194-177-178-179-180-181-182-196-197-199-409-410-
237-411-414-413-417-418-419-420-421-423-428-425-431-316-427-429-
426-430.
Conditions of Sale:
(1.) Basic price:
-- 35,642,188.33 (thirty-five million, six hundred and
forty-two thousand, one hundred and eighty-eight/33).
Higher offers: the first higher offer cannot be ofless than
357,811.67 (three hundred and fifty-seven thousand, eight hundred
and eleven/67); any further offers cannot be of less than
250,000.00 (two hundred and fifty thousand/00).
(2.) The bidders must deposit their application on stamped paper,
with their offer of purchase, in the Registry by 12,30 pm on May
12, 2003 and deposit a cautionary fee equal to 10% (ten percent)
of the basic price and 548.00 (five hundred and forty eight/00)
for estimated expenses by means of non-transferable bank cheques
addressed ot the Cancelleria Esecuzioni Immobiliari of the Law-
Court of Milan. Furthermore, the request must contain a
declaration of the bidder, in which he acknowledges the present
physical and juridical state of the property.
(3.) The definitive highest bidder must deposit the remaining
amount, as well as legal and transferal charges, subtracting the
amount already paid as a deposit, within sixty days from the date
of adjudication, to the curator, Lawyer Roberto Pincione, at this
offices in Milan, P.tta Guastalla 11, by means of non-
transferable bank cheques addressed to Fallimento Istituto
Sieroterapico Milanese.
(4.) All expenses regarding the sale, transcriptions, mortgage
cancellations, et cetera (excluding ICI) will be borne by the
purchasing party.
For a better examination of the area and property, please refer
to the reports by the C.T.U (Giorgio Vigano') for Fallimento
Istituto Sieroterapico Milanese and the Municipality of Milan;
and to the reports by the C.T.U (Dario Previ) for Fallimento
Edilgest, all of which are included in the acts.
CONTACT: CANCELLERIA ESECUZIONI IMMOBILIARI OF THE LAW-COURT OF
MILAN
Or
OFFICES OF FALLIMENTO ISTITUTO SIEROTERAPICO MILANESE
Via Segantini 75, Milan.
Phone: 0039 02 58100644
0039 02 89403636
Fax: 0039 02 89401535
E-mail: fall58781ism@libero.it
FIAT SPA: Controlling Family Approves EUR250 MM Capital Increase
----------------------------------------------------------------
Fiat's controlling family, the Agnellis, approved a capital
increase of EUR250 million (US$265 million) for Fiat through the
family trust cvcGiovanni Agnelli & C.
The capital increase involves calls for EUR167 million in cash
and the issue of EUR83 million convertible bonds.
The 80 members that comprise Fiat's founding family are expected
to subscribe to the increase, which would help them tackle the
EUR2-billion portion of a capital hike for Fiat.
Early in the month, the Agneilli family outlined a plan that
would concentrate its direct holdings in Fiat SpA in one holding
company, Ifil, by consolidating the ownership that was split
between Ifil and IFI, another holding company that in turn
controls Ifil. The Agnellis own 30% of Fiat through the trust,
and another 4% through Fiat-owned companies.
Fiat said it plans to hold the capital increase in the next 18
months, but refused to draw a precise timetable for the move.
Last year, the industrial group sustained net loss of EUR4
billion due to losses and write-offs at Fiat Auto, its automobile
division.
Fiat Auto had an operating loss of EUR1.3 billion last year and
is expected to lose around EUR700 million this year. It is not
expected to break even until 2004 when new models begin to
improve margins.
=====================
N E T H E R L A N D S
=====================
VERSATEL TELECOM: Merges German Operations With Regional Carrier
----------------------------------------------------------------
Versatel Telecom International N.V. on Monday announced that it
has reached agreement with ARQUES-Group, a Munich based
investment holding that owns Tesion Telekommunikation GmbH and
its wholly owned subsidiary, Completel GmbH, to merge their
German entities. Upon the closing of the transaction, which is
expected to occur shortly, Versatel Deutschland Holding GmbH
(VDH) will acquire 100 percent of the outstanding stock in
Tesion and Completel Germany.
Arques will acquire a 15 percent stake in VDH. The assets of
Tesion and Completel Germany include 4,400 km of pan-German
backbone network, 3,600 km of regional network in Baden-
Wuerttemberg and 1,100 km local access fiber optic network in the
cities of Hamburg, Munich, Berlin, Nunberg and the Ruhr area of
Germany. Versatel expects that this transaction will
approximately double Versatel's current revenue in Germany and it
will be accretive to EBITDA for 2003.
In addition, the current working capital position of Tesion and
Completel Germany combined is positive and they are debt free.
The acquisition will provide Versatel with the scope and scale to
become a major service provider in Germany.
In addition, Versatel will gain a foothold in the highly
industrialized and commercially attractive region of Southwestern
Germany, including the cities of Munich, Stuttgart and Nurnberg.
Furthermore, the companies will provide Versatel with a local
market presence in Berlin and solidify Versatel's current market
presence in the Ruhr area by adding local access network and
customers in the cities of Essen and Dortmund. Together, Tesion
and Completel Germany currently have 270 operational central
offices in their target markets and have
over 80,000 customers.
Consideration
The consideration for the acquisition will consist of a
combination of approximately EUR 14.5 million in cash (after
netting EUR 10.5 million of cash currently on the companies'
balance sheets) and a 15 percent stake in VDH. The
15 percent stake of Arques in VDH will have a put-call provision
that can be exercised approximately 3 years from the completion
of the transaction and which has a strike price based on public
EBITDA trading multiples of Versatel with a minimum of EUR 15
million. As part of the VDH shareholder agreement between Arques
and Versatel, Arques has agreed to fund the growth and operations
of VDH on a pro rata basis of its shareholdings and is committed
to the success of the German operations. Versatel and Arques
believe there are significant opportunities to profitably grow
the combined business through both organic means and
acquisitions.
Fully Funded Business Plan
After giving effect to this transaction, Versatel believes that
its business plan is fully funded without a need for third party
financing. In addition, given its significant cash balance and
funding position, Versatel may explore other potential growth
opportunities in the future, which could include further
acquisitions of customer bases, distressed assets or going
concerns in its core markets of The Netherlands, Belgium and
Germany.
Integration
Versatel and Arques have a dedicated integration team consisting
of both Versatel personnel, as well as personnel from Arques and
the newly acquired companies. This integration team has
significant experience given the successful integration process
that Versatel has recently completed with its German subsidiaries
and the highly efficient integration process that Arques has
undertaken with Tesion and Completel Germany. The parties have
already created a detailed plan to efficiently integrate certain
network, IT and billing facilities, while limiting the impact on
the commercial operations of both the new and old German
operations.
Tesion
Tesion, based in Stuttgart, is a leading regional provider of
voice, data and Internet services to the business and residential
community in the German State of Baden-Wuerttemberg. Tesion
offers a portfolio of telecommunications services including IP-
VPN, ISDN and copper based solutions. Tesion operates over 4,400
km of pan-German backbone network and 3,600 km of a regional
dense local access network in Baden-
Wuerttemberg.
Completel Germany
Completel Germany, based in Munich, is a specialized supplier of
fiber-based city networks in first and second tier cities in
Germany. Leveraging its own local access fiber networks,
Completel Germany offers a full portfolio of voice, data and
Internet services to the business market. Completel Germany owns
and operates 1,100 km of fiber optic networks in the cities of
Berlin, Hamburg, Essen, Dortmund, Gelsenkirchen, Duisburg,
Nrnberg, Fuerth, Erlangen and Munich.
Arques
Arques, based in Starnberg near Munich, is one of the leading
German investment holdings, focusing on businesses in difficult
markets, as well as, special situations such as strategic
reorientation and restructurings.
Over the last 10 years, Arques has successfully acquired more
than 35 medium-sized businesses in Germany, Austria and
Switzerland, and transformed them into leading players in their
respective markets.
Versatel Telecom International N.V. (Euronext: VRSA). Versatel,
based in Amsterdam, is a competitive communications network
operator and a leading alternative to the former monopoly
telecommunications carriers in its target market of the Benelux
and regional Germany. Founded in October 1995, the Company holds
full telecommunication licenses in The Netherlands, Belgium and
Germany and has over 79,000 business customers and over 1,200
employees. Versatel operates a facilities-based local access
broadband network that uses the latest network technologies to
provide business customers with high bandwidth voice, data and
Internet services. Versatel is a publicly traded ompany on
Euronext Amsterdam under the symbol "VRSA".
CONTACTS: VERSATEL TELECOM
AJ Sauer
Investor Relations & Corporate Finance Manager
Phone: +31-20-750-1231
E-mail: aj.sauer@Versatel.nl
Anoeska van Leeuwen
Director Corporate Communications
Phone: +31-20-750-1322
E-mail: anoeska.vanleeuwen@Versatel.nl
ARQUES
Dr. Peter Low
Managing Director
Phone: +49-8151-651-0
E-mail: loew@arques.de
Dr. Dirk Markus
Vice-President
Phone: +49-8151-651-0
E-mail: dirk.markus@arques.de
===========
R U S S I A
===========
SIBERIAN OIL: Outlook Revised to Stable on Slavneft Asset Split
---------------------------------------------------------------
Standard & Poor's Ratings Services said Monday it revised its
outlook on Russia's fifth-largest oil company OAO Siberian Oil
Co. (Sibneft) to stable from negative. At the same time, Standard
& Poor's affirmed its 'B+' long-term corporate credit and senior
unsecured debt ratings on Sibneft. This follows Sibneft's equal
split of the assets of OAO NK Slavneft with TNK International
Ltd. (TNK;B+/Watch Pos/--), the holding company of Russia-based
oil companies Tyumen Oil Co. OAO and Onako, and Sibneft's sale of
minority stakes in Onako and Onako's key production subsidiary
Orenburgneft.
In a related action, Standard & Poor's raised its national scale
rating on the company to 'ruAA-' from 'ruA+'.
"Sibneft is expected to absorb Slavneft's assets without assuming
any new debt or undertaking any additional investments," said
Standard & Poor's credit analyst Elena Anankina. "Sibneft's cash
flows from operations, which are expected to be generated before
any dividend is paid, and the sale of the Onako and Orenburgneft
stakes, will help to keep the company's total debt in 2003 less
than $2.6 billion."
The rating actions reflect the benefits of the even split of
Slavneft's assets with TNK, the sale of the minority stakes in
Onako and Orenburgneft, and Sibneft's strong operating and
financial performance in 2002. The ratings on Sibneft, however,
are constrained by the company's aggressive financial policies,
as illustrated by its massive dividend payouts on its 2001 and
2002 income.
Sibneft's appetite for sizable mergers and acquisitions, which
could result in large increases in its leverage; exposure to
volatile oil prices; and record of aggressive dividend payouts
also limit the potential for higher ratings.
Sibneft significantly leveraged itself in 2002, to finance its
participation in the acquisition of Slavneft--on a 50 to 50 basis
with TNK--for $1.86 billion. Sibneft also faces significant
capital requirements to finance further production growth of its
core assets and diversification, and its dividend payout is very
high. In addition, in common with other Russian oil companies,
Sibneft is exposed to international oil price volatility,
transportation bottlenecks, nontransparent industry regulation,
low domestic crude prices, and sovereign risks of the Russian
Federation (local currency BB+/Stable/B; foreign currency
BB/Stable/B), where substantially all of its assets are located.
The ratings on Sibneft are supported by its:
-- Stronger-than-expected 2002 preliminary operating and
financial indicators;
-- Strong profitability and cash flow generation;
-- Vertical integration; and
-- High exports.
"Standard & Poor's will closely monitor Sibneft's financing
transactions and the effect of the recent participation in the
acquisition of Slavneft's assets and the divestment of its
minority stakes in Onako and Orenburgneft," added Ms. Anankina.
===========
S W E D E N
===========
SCANDINAVIAN AIRLINE: Employees Seek Jobs From Other Airlines
-------------------------------------------------------------
A large number of pilots from Scandinavian Airlines Systems are
approaching Ryanair Holding and other airlines for jobs, Rynair's
communications director, Paul Fitzsimmons, told daily Berlingske
Tidende.
Half of the 10 to 20 job interviews in the past weeks have been
with pilots from SAS, according to the director. The same
proportion holds true for unprocessed applications.
The exodus follows SAS announcement that it is going to reduce
capacity, ground some aircraft, and fire 300 pilots to cut costs.
SAS was hit hard by the plunge in air traffic, especially
business travel demand, during the past couple of years. It
posted narrowing full-year losses and expects a weak economy to
put pressure on revenues.
SAS posted a fourth-quarter pre-tax loss of SEK683 million (US$
79.98 million), while its full-year pre-tax loss narrowed to
SEK450 million from a loss of SEK1.1 billion a year ago. Full-
year sales rose to 64.9 billion crowns from 51.4 billion in 2001.
CONTACT: SAS AB
Frosundaviks Alle 1, Solna
S-195 87 Stockholm, Sweden
Phone: +46-8-797-00-00
Fax: +46-8-797-12-10
Homepage: http://www.scandinavian.net
Contacts: Harald Norvik, Chairman
Bo Erik Berggren, Vice Chairman
===========================
U N I T E D K I N G D O M
===========================
AMP LIMITED: Announces Appointment of Non-Executive Directors
-------------------------------------------------------------
The AMP Board has announced the appointment of two new non-
executive Directors to the AMP Board.
The Directors, who both have extensive Board and senior
management experience, are Pat Handley, formerly Chief Financial
Officer of Westpac; and Meredith Hellicar, who has broad busness
andBoard experience. Resumes are attached.
Meredith Hellicar's appointment is effective immediately, while
Pat Handley will be joining the Board April 2, 2003.
AMP Chairman Peter Wilcox said he was pleased the company had
attracted two Directors with the diverse backgrounds, experiences
and skills necessary to participate effectively with the new
Board.
"Both Directors have carried out intensive due diligence on AMP
prior to their decision and have been given full access to all
financial informationa," Mr Wilcox said.
"This has the important benefit of enabling them to make an
immediate contribution."
MrWilcox said that after reviewing a number of excellent
candidates, the Board had focused on Mr Handley and Ms Hellicar
because of their board managerial skills and experience in
dealing with challenging situations. This was as much a
determining factor as their experience of financial services.
"Pat Hadnley has hands-on experience as both an executive and
Director, and demonstrated leadership and the ability to deal
with difficult decisions," said Mr Wilcox.
He also noted, "Meredith Hellicar has exceptional experience as both an
executive and Director, and demonstrated leadership and the
ability to deal with difficult decisions."
To avoid the potential for conflicts of interest, Mr Handley has
today resigned from his position on the Suncorp Metway Board.
Mr Wilcox said the Board had moved quickly to appoint new
Directors to ensure that shareholders would have the opportunity
to vote on their appointment at the forthcoming Annual General
Meeting on May 15, 2003.
This means shareholders will vote on the appointment of seven
Directors at the Annual General Meeting. There are eight
candidates and the order in which they will appear on the proxy
form is:
-- Lord Killearn
-- Peter Wilcox
-- Roger Yates
-- Richard Grellman
-- Andrew Mohl
-- Stephen Mayne
-- Pat Handley
-- Meredith Hellicar
The order of candidates was determined by a ballot which was
conducted by independent legal advisers.
The appointment of new Directors follows the Board restructure
announced on February 25, 2003. The restructure is aimed at
creating a new Board with a fresh approach to reinvigorate the
company.
Paul Mazoudier has resigned from the Board Monday, while the
leaving dates for Sir Malcolm Bates and Ian Renard are yet to be
determined.
CONTACT: AMP LIMITED
Level 24, 33 Alfred Street
Sydney NSW 2000 Australia
ABN 49 079 354 519
Contact: Mark O'Brien, Investor Inquiries
Phone: 9257 7053
ASHTEAD: To Withdraw Dividend, Plans to Defer Interest Payment
--------------------------------------------------------------
Plant hire group Ashtead announced on Monday it would withdraw
the interim dividend of 0.62 p it declared in January for the six
months ended October 31, 2002.
Further aggravating worries in the troubled company is the plan
to defer a separate interest payment on a GBP130 million
convertible bond due at the start of next month to Rentokil
Initial.
The notices came with the announcement that it has paid the
interest due under its senior credit facility that was deferred
two weeks ago pending an investigation into its books.
The investigation was launched due to suspicions of errors in its
U.S. business Sunbelt Rentals.
Surrey-based Ashtead revealed this month that a senior member of
its financial staff in the U.S. had been suspended in relation to
what appears as an understatement of costs by GBP5 million.
Ashtead then advised that annual profits for the group are likely
to be "well below" market expectations.
The company's U.K. division A-Plant remains healthy, and is
expecting small increase in year-on-year profits during the
second half of the financial year.
ATLAS INVESMENTS: Joint Liquidators Issue Notice to Creditors
-------------------------------------------------------------
In the matter of Atlas Investments Limited and in the matter of
the Insolvency Rules 1986
In accordance with rule 4.106 of the Insolvency Rules 1986 notice
is hereby given that Simon Peter Bower and Michael John Hore of
RSM Robson Rhodes, 186 city Road, London EC1V 2NU were appointed
Joint Liquidators of the above company by the members on March 4,
2003.
Notice is hereby given that the creditors of the above named
company are required on or before April 21, 2003 to send their
names and addresses, with particulars of their debts and claims
to the undersigned Simon Peter Bower and Michael John Hore of RSM
Robson Rhodes, 186 City Road, London EC1V 2NU the Joint
Liquidators of the company, and if so required by notice in
writing from the Joint Liquidators either personally or by their
solicitors, to come in and prove their debts or claims at such
time and place as shall be excluded from the benefit of any
distribution made before such debts are proven.
Note: This notice is purely formal and all creditors have been
or should be paid in full.
BAE SYSTEMS: Rating Lowered to 'BBB', Off Watch, Outlook Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services said that it lowered its
ratings, including lowering the long-term corporate credit rating
to 'BBB' from 'A-', on BAE Systems PLC. The ratings on the
Farnborough, U.K.-based defense supplier are removed from
CreditWatch, where they were placed Dec. 12, 2002. The outlook is
stable.
The 'A-2' short-term corporate credit and commercial paper
ratings were not on CreditWatch, and are affirmed. About GBP3
billion of debt is outstanding.
"The downgrade reflects BAE Systems' poor profitability, weak
cash flow generation, a decline in historically strong liquidity,
and a sizable pension deficit," said Standard & Poor's credit
analyst Roman Szuper. The company's credit profile continues to
benefit from a strong competitive position in the global defense
market, an industry with generally favorable credit
characteristics.
BAE Systems has incurred net losses in the past three years, with
a GBP686 million net loss in 2002 stemming primarily from pretax
charges of GBP750 million to cover cost overruns on the Nimrod
marine patrol aircraft and the Astute attack submarine contracts.
A recent agreement with the U.K. Ministry of Defence on these two
important programs will cap any future potential losses faced by
the firm by separating the design and development phase of each
program from the production phase.
Looking ahead, only modest profitability is expected. In
addition, negative free cash flow forecast for 2003 will reduce
further historically ample cash balances, which have been a major
factor supporting the prior rating. As a result, most credit
protection measures will remain subpar at least in the near term.
Standard & Poor's expects funds from operations to
debt to be in the low-20% area and debt to capital in the mid-to
high-30% range; the ratios are not significantly better when
adjusted for cash in excess of GBP500 million, considered to be
an operating requirement.
Including unfunded pension liabilities as debt, debt to capital
increases to the 55%-60% range. Profitability and cash flow
protection ratios are also adversely affected to a significant
extent by the pension plans deficit and performance. The full
impact will be quantified once the company's 2002 annual report
becomes available. At Dec. 31, 2002, BAE had a sizable shortfall
in post-retirement pension assets versus related net liabilities
of GBP2.2 billion, sharply higher compared with the deficit a
year earlier. There were no cash funding requirements for 2002,
and they are expected to be modest at GBP30 million in 2003 and
GBP60 million in 2004, with future requirements subject partly to
actuarial valuations set for April 2004 and 2005. U.K.-based
plans represent a dominant portion of BAE Systems' pension
exposure. However, pension contributions attributable to the
firm's growing U.S. operations are considered an allowable cost
under cost-plus type contracts, allowing recovery of the amounts
contributed.
The ratings are based on BAE Systems' strong competitive
positions in the worldwide defense market, partly offset by weak
profitability and cash flow generation.
BRITISH AIRWAYS: Denies Rumor of Merger With Netherland's KLM
-------------------------------------------------------------
British Airways PLC denied a report in the Independent On Sunday
which said BA Chief Executive Rod Eddington had met KLM Royal
Dutch Ailines boss Leo van Wijk over the weekend to rekindle
merger talks.
A BA spokesman told Dow Jones Newswires that the two officers
"meet quite often, firstly because Rod is the CEO of BA and
secondly he is head of the Association of European Airlines."
In addition, BA is a member of the One World alliance, in which
KLM is interested in joining. It is known that KLM has been in
talks with a range of airlines and alliances for some time about
joining such an international grouping.
A merger would also be very distracting for both airlines as they
face severe cost cutting in response to falling demand for air
travel.
BA has suspended its daily service from London to Kuwait on
Wednesday and is set to suspend flights from London to Tel Aviv
later this week, while KLM temporarily suspended services to a
number of its destinations in the Middle East.
An attempt to merge the two airlines two years ago also failed
due to issues such as cost cutting and nationality.
According to Dow Jones, international airlines are only allowed
to fly into different countries because of air treaties
negotiated between that government and the carrier's own
government.
The European Court of Justice has ruled last year that some of
these treaties are illegal and the EU Commission had hoped this
ruling will kick-start mergers; analysts, however, don't expect
any change in the near future, according to the report.
CONTACT: BRITISH AIRWAYS PLC
Waterside, Harmondsworth
London UB7 0GB, United Kingdom
Phone: +44-20-8562-4444
Fax: +44-20-8759-4314
Toll Free: 800-545-7644
Homepage: http://www.british-airways.com
KLM ROYAL
Contact: Investor Relations
Home Page: http://investorrelations.klm.com
Phone: 31 20 649 3099
BRITISH AIRWAYS: Moody's Places Notes and Stocks Under Review
-------------------------------------------------------------
The outbreak of the war with Iraq and weak business trends prompted
Moody's to place British Airways' senior unsecured notes and
stocks under review for possible downgrade.
Ratings placed under review are GBP100 million 10.875% senior
unsecured notes due 2008 Ba2, GBP250 million 7.25% senior
unsecured notes due 2016 Ba2, $115 million 5.25% senior unsecured
industrial revenue notes due 2032 Ba2, Euro 300 million 6.75%
perpetual guaranteed non cum. preferred stock due 2004 to B1
(issued by British Airways Finance (Jersey) LP), and senior
implied rating Ba1.
The rating agency says war in Iraq is expected to further weaken
air traffic and demand. This is besides the safety and
confidence issues affecting its main profit generator, the North
Atlantic routes.
It says further: "The situation is aggravated by demanding
underlying industry trends, including the weakening air traffic
and fare pressure especially in the high premium segment as well
as on the intercontinental."
These, together with strong competition and general economic
slowdown, are expected to constrain the airline's cash flow
generation ability at least in the short term.
Moody's says the review will focus on how the company put cost
protecting measures, and protect its strong position in its core
markets.
BRITISH ENERGY: Standstill Resolutions on Bonds Approved
--------------------------------------------------------
On February 14, 2003, British Energy announced that the Company
was convening meetings of the holders of each of its outstanding
GBP109,861,000 5.949 per cent.
Bonds due 2003 (the '2003 Bonds'), GBP163,444,000 6.077 per cent.
Bonds due 2006 (the '2006 Bonds') and GBP134,586,000 6.202 per
cent. Bonds due 2016 (the '2016 Bonds') (together the 'Bonds') in
order formally to incorporate the standstill arrangements into
the terms of the Bonds for all Bondholders.
These meetings were duly held on March 24, 2003. The standstill
resolutions proposed at the meetings of the 2003, 2006 Bonds and
2016 Bonds were duly passed with holders of respectively, 85.05%,
81.49% and 80.32% of the bonds outstanding voting in favor and no
votes against.
CONTACT: Andrew Dowler
Phone: 020 7831 3113
BRITISH ENERGY: Obtains Approval on Principles of Restructuring
---------------------------------------------------------------
On 14th February 2003, British Energy announced that:
-- it had reached agreement on a binding basis with Significant
Creditors including certain Bondholders, on the terms of a
standstill; and
-- it had reached a non-binding agreement with Significant
Creditors including certain Bondholders on the principles of the
Company's restructuring, subject in each case to certain
approvals required by March 24, 2003 and certain Enron US
Bankruptcy Court approvals required by May 14, 2003.
The necessary approvals required by March 24, 2003 have now been
obtained and the standstill agreement is now effective between
the Company, British Nuclear Fuels plc, the Eggborough bank
syndicate, The Royal Bank of Scotland, Teeside Power Limited and
TotalFinaElf Gas and Power Limited. The Enron board approvals
have been obtained and the required US Bankruptcy Court approvals
are expected to be obtained and the standstill is expected to
become binding on Enron Capital & Trade Europe Finance LLC by May
14, 2003.
As announced earlier Monday the Company had also convened
meetings of the holders of each of its outstanding GBP109,861,000
5.949 per cent. Bonds due 2003 (the '2003 Bonds'), GBP163,444,000
6.077 per cent. Bonds due 2006 (the '2006 Bonds') and
GBP134,586,000 6.202 per cent. Bonds due 2016 (the '2016' Bonds')
(together the 'Bonds') in order formally to incorporate the
standstill arrangements into the terms of the Bonds. These
meetings were duly held on March 24, 2003. The
standstill resolutions proposed at the meetings of the 2003, 2006
Bonds and 2016 Bonds were duly passed with holders of,
respectively, 85.05%, 81.49% and 80.32% of the bonds outstanding
voting in favour and no votes against. Accordingly the
standstill is now binding on all Bondholders.
CONTACT: BRITISH ENERGY
Andrew Dowler
Phone: 020 7831 3113
EBOOKERS PLC: Annual Loss Before Tax Halved to GBP12.3 MM
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-- ebookers announces 55% turnover increase
-- India back office continues to reduce costs
Ebookers plc, the pan-European online travel agency, on Monday
announced financial results for the Full Year and Quarter
4 ended December 31, 2002.
Highlights (UK GAAP)
-- Annual gross sales up 52% to GBP273m and turnover (gross
profit)(1) up 55% to GBP31m
(FY2001 gross sales GBP180m, turnover (gross profit) GBP20m)
-- Quarter 4 gross sales up 62% to GBP63.9m and turnover (gross
profit) up 63% to GBP8.0m
(Q4 2001 gross sales GBP39.4m, turnover (gross profit) GBP4.9m)
-- India back office helps reduce annual operating expenses
despite sales growth
(Total operating expenses FY2002 GBP44.6m, FY 2001 GBP46.6m)
-- Annual loss before tax halved from GBP25.6m in 2001 to
GBP12.3m in 2002.
Quarter 4 loss before tax reduced from GBP5.9m in 2001 to GBP3.3m
in 2002
-- Annual adjusted loss before tax(3) reduced from GBP19.3m in
2001 to GBP5.2m in 2002 in line with market expectations. Quarter
4 adjusted loss before tax reduced from GBP4.1m in 2001 to
GBP0.5m in 2002
-- Positive adjusted EBITDA(2) maintained in Quarter 4 despite
weak seasonality and in line with market expectations
(Q4 2002 GBP0.1m , Q3 2002 GBP0.2m, Q4 2001 - GBP2.9m)
-- Travelbag integration on schedule for timings and savings
Dinesh Dhamija CEO ebookers plc comments:
'The growth we have achieved this year demonstrates the strength
of our business model and the opportunity for the internet in our
industry. Our Indian back office has also shown our ability to
reduce cost significantly.
We are making swift progress with the Travelbag Integration, and,
there too, we will be looking to secure internet growth and
reduce costs.
Although the current economic and geopolitical environment is
uncertain we will continue to focus on growth and cost reduction,
on driving internet sales through Travelbag and Bridge the World,
and are confident about our prospects for 2003.'
1. The presentation of turnover has been changed from a gross to
a net basis.
See note 5.
2. Adjusted EBITDA is defined in note 7.
3. Defined as loss on ordinary activities before taxation
amortisation, stock compensation charges, national insurance on
share options and exceptional items. See note 7.
Chairman's statement
In 2002 we saw strong growth and reduced costs. Gross sales grew
to GBP273m from GBP180m in 2001, an increase of 52%, nearly all
of which was organic (not from acquisitions). These figures are
all the more noteworthy given the continued slowdown in much of
the rest of the travel industry caused by the tragedy of 9/11 and
global economic slowdown. As well as undergoing strong growth,
ebookers has made major advances in its bid to be the lowest-cost
provider in European online travel. We believe our Business
Process Outsourcing ('BPO') facility in New Delhi, India provides
us with a distinct cost advantage over our competitors. Fourteen
separate functions are carried out there by a graduate workforce
on competitive local salaries. Group-wide, adjusted operating
expenses in 2002(Defined in note 7) were equivalent to 12% of
gross sales, compared to 20% in 2001. With increased scale, our
BPO facility, and new technology, we are firmly focused on
reducing our cost base relative to our sales.
Board
It was with regret that in January 2003 we said goodbye to Sanjiv
Talwar, ebookers' second employee, and our Managing Director who
has been advised to take a break from his career for health
reasons. Overall, however, the period since our last annual
results announcement has seen a major strengthening of our
management team with the appointment of seasoned industry
professionals with large company experience. Earlier in the year,
Nigel Addison Smith joined ebookers as Chief Financial Officer
following periods of service at First Choice, Air 2000 and KPMG.
John Donaldson, former CEO of Thomas Cook, also joined us as a
Non-Executive Director. Following our acquisition of Travelbag,
we welcome to the Board Peter Liney as UK Managing Director and
Executive Director. Peter Liney worked for British Airways from
1988 to 1999, where he held various senior positions including
Head of Leisure Sales for the United Kingdom and General Manager,
Asia Pacific Alliances. Other senior non-board appointments
included Peter Bradshaw as UK Finance Director in February 2003
from Travelbag, Philip Dale, who joined as Chief Information
Officer in April 2002, from Priceline.com, and Thomas Meyjes who
joined us in November 2002 as Regional Director from KLM. In
addition, I am delighted that all of Travelbag's senior
management have joined the Group.
Outlook
We were pleased to see a return to strong trading in January
after the weak trading at the end of last year. However, as war
in Iraq became more likely, we experienced a dampening effect on
our U.K. sales and turnover (gross profit).
We reacted to this weakening of sales by reducing our cost base
and therefore still expect to report a satisfactory first
quarter. Travelbag's financials will be consolidated from
February 2003 and given the difficult trading environment, we are
satisfied with their trading performance to date.
The commencement of hostilities against Iraq on March 19, 2003
will inevitability have an impact on sales and profitability for
the remaining days of the first quarter. Looking forward, no one
knows how long the current political situation will remain.
However, whilst having contingency plans in place should actions
in the Middle East become protracted we are focused on taking
advantage of the anticipated recovery in the market after
hostilities end. After both the first Gulf War and 9/11 our
business experienced rapid recovery as European consumers swiftly
regained their confidence in booking leisure travel. Following
9/11, our Internet business showed particularly rapid recovery
and growth rates accelerated over the following quarters.
We view our prospects for 2003 and beyond with optimism. We are
in an excellent position to benefit from the continued shift of
consumers onto online sales channels. Of course, the year will
not be without business challenges - the integration of
Travelbag, the growth of our capacity in Delhi and the continued
development of our website technology - but I believe that our
management and staff have the enthusiasm and capability to deal
with these.
Operating review
Acquisition of Travelbag
In February 2003 we successfully completed the GBP55m acquisition
of Travelbag in furtherance of the acquisition strategy we
announced in the first half of 2002.
At that time, we announced our intention to make large-scale
acquisitions of mainly offline travel companies in order to meet
our target of GBP1bn of annualized gross sales within 2004
through both acquisitive and organic growth (i.e. during a
quarter in 2004 we aim to achieve gross sales in excess of GBP
250m). Also, to secure the following benefits:
-- increased scale, leading to higher margins through better
buying and negotiating power with suppliers;
-- cost synergies through the use of ebookers' Indian BPO
facility, which reduces processing and administrative costs of an
acquired entity;
-- increasing the growth rate of the acquired businesses by
taking them online using ebookers' technology and expertise; and
-- improved range and depth of supplier product relationships.
Travelbag is a profitable travel agency and in the top three of
the United Kingdom non-package, non-business sector. In its
current financial year, ending March 2003, we estimate that it
will have approximately GBP200m of annual gross sales compared to
GBP273m for ebookers in 2002. It has a greater long-haul focus
than ebookers. Approximately 98% of its sales are long and mid-
haul, particularly to the high-value Australia and New Zealand
markets. Its gross margin during the financial year ending March
2003 is estimated to be approximately 14% with an average
transaction value of GBP1,450, compared to 11.5% and GBP582 for
ebookers in the United Kingdom for 2002. Travelbag sells over the
telephone, through a network of 12 shops, and through its
websites: http://www.travelbag.co.uk
http://www.bridgetheworld.comand http://www.travelbag-
adventures.com
An Integration Committee was formed in February 2003 and has
already made significant progress in planning major cost and
revenue synergies from the integration of Travelbag into the
Group. The aims of the Committee are to:
-- translate increased scale into increased buying power by
leveraging combined gross sales of nearly GBP500m;
-- maximize group-wide product synergies. ebookers is strong on
travel to the United States. Travelbag is strong on Australia/New
Zealand and adventure travel;
-- achieve internet growth with the Travelbag brands. Travelbag's
traditional focus has been on offline sales channels such as the
telephone. Ebookers aims to use its technology to transform the
customer and transactional experience of Travelbag's websites and
assist it to achieve higher growth rates than achieved
historically. ebookers has considerable experience of growing the
internet sales of offline travel businesses and 'online booking
incentives' to encourage traditionally offline customers to
transfer to the internet; and
-- realise significant operating synergies through the merger of
the head offices of Travelbag and ebookers in the United Kingdom,
and the transfer of certain Travelbag processes to ebookers'
Indian BPO facility, as was done in 2002 following the
integration of Flightbookers.
Indian BPO(Back Office) Facility
ebookers' 22,000-square-feet Indian BPO facility is a competitive
advantage and underlines our commitment to becoming the lowest-
cost provider in the European online travel industry. It gives us
the capacity to take on increases in internet and telephone sales
at lower cost. With a highly-qualified graduate workforce,
undergoing structured programmes of training, in some areas such
as call centre conversion, Indian staff are already achieving
standards on a par with their European colleagues. During the
second half of 2002, the Indian BPO facility became fully
operational with staff numbering 400 by the end of December.
Staff carry out various processes including email sales, customer
service, competitor pricing analysis, accounting and IT
development. The Indian BPO facility provides multiple data and
power backup to ensure activities are continued uninterrupted on
a 24/7 basis. No import or excise duty is charged on capital
goods and our subsidiary is exempt from corporate income tax
until 2010.
In its establishment phase, the majority of processes carried out
in the Indian BPO facility have been for ebookers' UK operations.
However, other operating countries are now starting to transfer
functions where appropriate. For example, France outsourced email
and back office functions to India in 2002 as well as
transferring some call centre functions to ebookers' multilingual
hub in Dublin. Finland, too, is making significant use of the
Indian BPO facility and initial migration of call centre
functions to India started in August 2002.
A second call centre team started in January 2003 with many back
office functions expected to be transferred in the first half of
2003. In future, ebookers anticipates that incremental cost
savings from India will become far more significant as scale
increases. The Indian BPO facility is already gearing up to take
on additional workload following the acquisition of Travelbag.
Product development
As a result of our 20-year heritage and the relationships we have
established during that time, we believe that we have one of the
widest travel product ranges on the web in Europe. By negotiating
directly with travel suppliers we help airlines, hotels, cruise
and car hire companies sell their capacity while offering our
customers savings of up to 75% on standard prices. The benefit
for ebookers is that these 'merchant fares' are attractive to
customers, yet have high margins and carry no inventory risk.
In 2002, our product teams throughout Europe focused on
increasing the size and attractiveness of our product range while
supporting Group profitability targets. A major focus has been to
improve margins and customer spend by selling more high-value
directly negotiated non-air products on websites and through our
call centres, and in particular by 'cross selling' these products
with flights. Our merchant hotel and car hire products offer
excellent value to the customer, yet can give us margins up to
three times higher than an airfare.
To support this objective, in 2002, we launched specialist
sections on our websites including Luxurybookers, Hotelbookers
and ebookers Sports in the United Kingdom. Product presentation
was also improved through the launch of destination and themed
microsites for example, a new Australasia section, and areas for
ski, snowboarding and golf holidays.
Sales and marketing
ebookers continues to implement a sales and marketing strategy
based on cost-effective execution while maintaining high growth.
In 2002, sales and marketing spend was equivalent to 5.7% of
gross sales as compared to 10.6% in 2001.
We utilised both online and offline marketing tools in 2002 to
encourage consumers to book via the internet. ebookers' main
approach in 2002 was to use targeted niche marketing rather than
mass media such as television. Online, ebookers continues to
develop partnerships and affiliations with major portals and
search engines including Yahoo, Lycos, Google, Overture,
espotting, BT Looksmart and Tiscali, Wanadoo.nl in the
Netherlands, Bluewin in Switzerland and startsriden.no in Norway.
A marketing aim of 2002 was to develop the sale of high-value
high-margin specialist products, therefore we have launched
dedicated email newsletters to support the new specialist
sections on the ebookers website including sports and luxury
mailings.
Offline we employed a diverse and innovative marketing mix
ranging from public relations to print newspapers to the radio.
For example, in 2002 we carried out a London Underground and
poster advertising campaign in the United Kingdom, advertised on
trains to Oslo airport and launched a 'new look' poster campaign
in Ireland. We also took part in numerous promotions. For
example, in the Netherlands we had promotions with well-known
fast food, music retail and soft drinks brands, and advertised on
one of the country's biggest radio stations.
ebookers' call centre strategy is also supporting cost and
profitability targets. In 2002 in the United Kingdom and Ireland,
ebookers implemented a new call routing strategy. Higher-margin
and high-value complex enquiries are routed to more experienced
European sales staff, while lower margin point to point or short
haul enquiries are routed to our Indian BPO facility.
Technology
In 2002, we continued to invest in implementing group-wide IT
systems, giving us the ability to process large volumes of multi-
product automated web-based sales, combined with efficient
information, financial and reporting systems. A
new web-based middle office system is being implemented in the
United Kingdom and Ireland and is currently expected to be
extended across further ebookers' operations. We also invested in
a new back office accounting system which has already gone live
in the UK and India. In India we have the added advantage of much
lower software licensing costs on our accounting packages.
During 2002 customer-facing technology development supported
margin improvement and sales growth objectives. We launched an
improved hotel booking engine and the first stage of a dynamic
packaging system enabling customers to save money by buying
flight and hotel modules together as a package.
Strategy for 2003
Our strategy for 2003 aims for high growth, while maintaining our
commitment to be one of the lowest-cost providers in the European
online travel industry. During 2003 we aim to:
-- fully integrate Travelbag and maximise revenue and cost
synergies;
-- increase our revenues by selling more high-margin non-air
products such as cars and hotels through new technology and
improved negotiation with product suppliers;
-- encourage more bookings on our websites by continually
improving usability and functionality and to improve the website
technology of the brands we have acquired;
-- continually improve our product range and differentiate our
brands from the competition by offering the widest range of
products at the best prices;
-- keep costs low by increasing our use of automation technology;
-- maximize the use of our low-cost Indian BPO facility by
transferring all functions for which it is profitable and
practicable to do so; and
-- consider further acquisitions, particularly in continental
Europe, provided that these acquisitions are in line with
ebookers' stated acquisition strategy and benefit its
shareholders.
We look forward to implementing the above strategy and delivering
another year of significant operational progress.
Financial Review
2002 was a successful year and we made strong progress towards
achieving profitability. We met two key financial targets,
generating cash for the first time in Quarter 1 and reaching
positive adjusted EBITDA (see note 7) in Quarter 3.
Summary
ebookers delivered strong growth in turnover (gross profit) (see
note 5) in 2002 while maintaining margins. Total operating
expenses decreased from GBP46.6m in 2001 to GBP44.6m in 2002.
Adjusted operating expenses (see note 7) decreased
as a percentage of gross sales from 20% in 2001 to 12% in 2002.
During the second half of the year our investment in our Indian
BPO facility made a significant contribution to this falling cost
base, underlining ebookers' commitment to being the lowest-cost
provider in the European online travel industry.
In Quarter 4, turnover (gross profit) increased to GBP8.0m, up
63% on Quarter 4 2001. At the same time Quarter 4 costs reduced
significantly against the preceding quarter, again indicative of
the effect of our Indian BPO. Adjusted operating expenses for
Quarter 4 decreased from GBP9.1m in Q3 2002 to GBP8.0m in Q4
2002.
Gross sales
Gross sales increased from GBP179.8m in 2001 to GBP273.5m in
2002, an increase of 52%. This was nearly all organic (non-
acquisition) growth, driven primarily by continued consumer
internet take-up, better call centre conversion rates, as well as
an increase in average spend supported by our marketing strategy
that aims to push customers towards higher value products.
Turnover (gross profit)
Turnover (gross profit) also reached a record level of GBP31.4m,
up 55% on last year's restated figure of GBP20.3m. The gross
profit margin on gross sales remained strong at 11.5% in 2002
compared to 11.3% in 2001.
Due to our increasing size and reach, ebookers is becoming
increasingly important as a distribution platform and has
negotiated incentives with many key suppliers. The overall effect
of these incentives is to help compensate for the erosion in
basic margin (commission) on published fares. In addition, the
majority of ebookers' sales are negotiated merchant fares for
which ebookers marks up its own margins and are therefore not
subject to commission cutting.
In 2002 approximately 71% of ebookers' gross sales were due to
merchant fares (2001: 72%).
In Quarter 4, turnover (gross profit) increased from GBP4.9m in
Q4 2001 to GBP8.0m in Q4 2002. The gross profit margin on gross
sales was 12.6% in Q4 2002 compared to 12.5% in Q4 2001. Quarter
4 2001 had particularly high margins due to increased distressed
inventory after the 9/11 terrorist attacks, therefore the margin
increase achieved in Q4 2002 is particularly encouraging.
Operating expenses
2002 has been a successful year for cost reduction in both
absolute and relative terms. Adjusted operating expenses (see
note 7) were GBP33.5m in 2002 compared to GBP36.3m in 2001. As a
percentage of gross sales, this represents an improvement from
20% in 2001 to 12% in 2002. This improvement was achieved despite
dual costs incurred over the year during the establishment phase
of our Indian BPO facility. In 2003 ebookers will continue to
implement its strategy of moving functions to India whenever
possible. Total operating expenses decreased from GBP46.6m in
2001 to GBP44.6m in 2002.
Quarter 4 costs decreased significantly against the preceding
quarter, indicative of the effect of our Indian BPO. Adjusted
operating expenses for Quarter 4 decreased from GBP9.1m in Q3
2002 to GBP8.0 m in Q4 2002 (Q4 2001 GBP7.9m). Total operating
expenses in Q4 2002 was GBP11.6m compared with GBP10.8m in Q4
2001.
The increase was due mainly to increased stock compensation
expenses and national insurance charges on stock options in Q4
2002.
Sales and marketing costs
Sales and marketing costs were GBP15.7m in 2002 compared to
GBP19.0m in 2001, a decrease of 17%, despite strong gross sales
growth of 52%. This resulted from the impact of ebookers' Indian
BPO facility and also a more cost-effective marketing strategy.
In Q4 2002 sales and marketing costs were GBP3.3m compared with
GBP3.8m in Q4 2001, a decrease of 12%.
Administrative expenses
Technology costs in 2002 were GBP3.1m compared with GBP2.6m in
2001. As a percentage of gross sales this represents an
improvement from 1.4% in 2001 to 1.1% in 2002. The absolute
increase reflects greater focus on developing automation and
website technology, such as improvements to booking engine
software. The main element of technology costs is staff and
consultancy costs, along with ongoing costs associated with
technology running and maintenance including communication and
hosting expenses. In Q4 2002 technology costs were GBP0.9m
compared with GBP0.5m in Q4 2001.
General administrative expenses decreased to GBP14.6m in 2002
compared to GBP14.7m in 2001 despite the growth in the business.
General administrative expenses as a percentage of gross sales
were reduced from 8.2% in 2001 to 5.4% in 2002.
This results from the business' ongoing focus on cost control and
the impact of ebookers' low-cost Indian BPO facility. Key items
of general administrative expenses include salary costs for non-
sales and marketing and technology staff, building costs,
telecommunication costs, and professional fees. In Q4 2002
general administrative expenses were GBP3.7m compared to GBP3.5m
in Q4 2001, a decrease as a percentage of gross sales from 9.0%
in 2001 to 5.8% in 2002.
Administrative expenses in Q4 2002 also included GBP0.5m
resulting from the amortisation of profit on a sale and leaseback
transaction of IT equipment.
Depreciation increased by 12.9% to GBP4.5m in 2002, compared to
GBP4.0m in 2001, partly as a result of the sale and leaseback
transaction described above, which while generating profits of
GBP0.5 million reported above, also gave rise to a GBP0.3m higher
depreciation charge. As a percentage of gross sales, depreciation
decreased from 2.2% in 2001 to 1.7% in 2002.
Administrative expenses in Q4 2002 also included GBP1.1m relating
to National Insurance liability for the potential exercise of
stock options. This resulted from the increase in share price
during the period.
Stock compensation cost increased from GBP0.8m in 2001 to GBP1.2m
in 2002. This increased stock compensation cost results from an
increase in the charge for variable scheme options (within which
the number of options changes as the issued share capital
changes). Stock compensation cost was GBP0.5m for Q4 2002
compared to a credit of GBP0.2m for Q4 2001.
Amortisation cost remained at same levels as last year with only
a 1.3% increase from GBP4.7m in 2001 to GBP4.8m in 2002.
Adjusted EBITDA
Adjusted EBITDA (see note 7) improved from negative GBP16.0m in
2001 to negative GBP2.0m in 2002. We achieved our first quarterly
positive adjusted EBITDA milestone in the Quarter 3. In Q4 2002
Adjusted EBITDA was a profit of GBP0.1m compared to a loss of
GBP2.9m in Q4 2001.
Operating loss and loss on ordinary activities before taxation
As a result of the above, operating loss reduced from GBP26.3m in
2001 to GBP13.2m in 2002. Our loss on ordinary activities before
taxation improved from GBP25.6m in 2001 to GBP12.3m in 2002. In
Q4 2002 operating loss was GBP3.6m compared with GBP 5.9m in Q4
2001. Loss on ordinary activities before taxation was GBP3.3m in
Q4 2002 compared with GBP5.9m in Q4 2001.
Treasury
As at 31 December 2002, ebookers had net cash of GBP21.3m
compared with GBP20.1m at 31 December 2001. The above results led
to a cash inflow for 2002 of GBP1.0m compared to a cash outflow
of GBP13.1m in 2001.
Loss per share
Basic and diluted loss per share decreased from 55.49p in 2001 to
25.62p in 2002. In Q4 2002 basic and diluted loss per share was
7p compared to 13p in Q4 2001.
1. The presentation of turnover has been changed from a gross to
a net basis, see note 5.
To See Financial Statements:
http://bankrupt.com/misc/Ebookers.htm
CONTACT: Ebookers Plc
Oliver Strong
Phone: +44 (0) 20 7489 2239
E-mail: oliver.strong@ebookers.com
Phone: +44 (0) 7771 934 153
CUBITT CONSULTING (UK)
Peter Ogden
Phone: +44 (0) 20 7367 5100
E-mail: peter.ogden@cubitt.com
FORMSCAN PLC: Continues to Post Operating Loss in Second Half
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Interim results for the six months ended January 31, 2003
Chairman's Statement
The Board is pleased to report on the continuing progress of the
Group for the 6 months ended January 31, 2003. A loss for the
period belies the improvement in business momentum, which has
continued from the end of last year. We are somewhat behind plan,
but this is essentially due to a delay in confirming one large
order in the interim period. We expect to complete contract
negotiations with this customer in the short term.
We recently announced our largest single order for Integrity
verification devices to date, a contract valued at over
GBP500,000 to deliver our solutions to the second largest forms
printing company in Japan. This, together with a steady increase
in other business, supports our view that a return to profit for
the year is realistic.
For the six months ended January 31, 2003, the Company recorded
an operating loss of GBP220,000 (2002 H1: loss of GBP225,000) on
turnover of GBP2.2 million (GBP1.9 million for the equivalent
period last year). A full six months of activity from the
Inspectron business is included this year, compared with three
weeks of activity from January 9, 2002 (the date of the
Inspectron acquisition) in the corresponding six-month period a
year ago. Interim losses per share were reduced to 2.07 pence
(2002 H1: loss GBP2.10 pence per share). The board does not
propose payment of an interim dividend for the period.
During the year since the Inspectron acquisition, we have
consistently been turning inventory into cash, as indicated by
the overall stock level reduction. This will continue, especially
as a result of the Japanese order recently announced.
Actual cash balances at January 2003 were GBP279,000 (GBP141,000
in 2002). Net assets were GBP831,000 (GBP1.3 million in 2002).
Operational Review
Over the past 6 months, our overall sales effort has been
strengthened and we repositioned the skill set of the team. This,
together with priority targeting of higher value orders, has
resulted in an expanding order pipeline, both in numbers of
potential orders and order value. Larger orders generally take
longer to achieve, which is reflected in the modest slippage of
this first period. However, we are ensuring that all our
operations are fully prepared for the on-time and on-budget
delivery of future large orders.
During this first half we have also achieved Integrity orders in
France and Belgium, and we are currently training our new sales
partners in Germany. We now have firm prospects for Continuity
in the USA. Without losing sight of the ongoing mainstream
business needs, we plan to make a modest start at exploiting
these prospects, as well as expanding our level of Integrity
exposure in Europe.
As our confidence continues to strengthen, we are spending more
on trade shows, and speculative joint development, where we see a
'pull' of interest from potential partners. The short-term focus
continues to be on revenue producing development, and increased
sales efforts. Other business expenses continue to be tightly
monitored.
Our software development continues, primarily to consolidate new
customer wishes and latest technology into our growing library of
solutions. The sales team is slowly being cross-trained on both
Integrity and Continuity, and we are currently seeking more pre-
sales staff to support the generally increased level of activity.
Current Trading
Our typical trading pattern consists of regular business, and
some larger 'lumpy ' contracts every year. We are currently
experiencing a steady flow of regular business, and are actively
involved in closing two or three larger deals. By virtue of their
size and complexity, it is difficult to forecast accurately when
they will fall, but experience tells us how to put a confidence
level on these larger items.
Our order flow and larger deal pipeline is in line with our plan,
and we maintain the focus of closing and delivering these deals,
whilst aggressively seeking new prospects to maintain our strong
pipeline.
Since August we have taken three more orders for our Continuity
solution for various U.K. Police forces, and other forces around
the country expect to place orders this year.
We have just received payment for our earlier Chinese Integrity
installation, and expect more business to follow. We have learned
to be patient with this kind of new venture, and do not depend on
repeat orders from China for our day-to-day plans.
In America, the combined Inspectron/Formscan team have been
working well as one since last summer, and the combination of the
Inspectron sales team with Formscan's Sentinel value-added
software solutions is showing benefits in the increased number of
sales proposals being delivered.
Future Prospects
Although we see no clear signs of a slow-down, our optimism must
be measured in the context of the outside world; the
international nature of our business appears to be naturally
hedging us against downturns in one particular area.
Formscan's solutions are niche in nature, and they affect
mission-critical parts of our customers' businesses. For this
reason, we feel that a continued improvement in our ability to
see the benefits of our past few years' restructuring can be
expected.
Allan Harle, Chairman
To See Financial Statements:
http://bankrupt.com/misc/Formscan.htm
IMPRINT SEARCH: Posts Operating Loss of GBP1.27 MM for 2002
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Preliminary Results For Year Ended December 31, 2002
Imprint Search & Selection plc is pleased to announce its
preliminary results for the year ended December 31, 2002.
Highlights
-- Turnover growth despite the poor market conditions
-- Month end profitability achieved
-- Cash neutral trading in the final quarter of the year
-- Year-end cash balance of GBP1.05 million
-- Continued development of a quality client base
-- Encouraging outlook for 2003
Pierce Casey, Chairman, Imprint Search & Selection plc,
commented:
'Imprint achieved month end profitability in 2002 despite the
continuing poor market conditions. During the final quarter,
trading was cash neutral and we ended the year with cash balances
of over GBP1 million. For a business in its first full year of
trading this is an exceptional performance. Our client base now
includes 44 S&P100, STOXX50 and FTSE100 companies. The
combination of our improving financial performance and a growing
high quality client base gives us confidence for 2003.'
CHAIRMAN'S STATEMENT
INTRODUCTION
Although the external economic environment remains difficult,
Imprint has continued to make sound progress in executing its
strategy of establishing a branded multi-disciplined
international search & selection business.
Our principal focuses over the year have been client development,
revenue generation and financial control. I am, therefore,
pleased to report that the Group had over 130 clients that
generated revenue during the year and achieved its primary
objective of reaching month end profitability. Additionally,
the Group was cash neutral through the final quarter of 2002.
RESULTS
The results for the year are summarized as follows:
Year ended 13 months ended
31December 2002 31December 2001
GBP000 GBP000
Turnover 3,480 873
Operating costs (4,746) (3,032)
Operating loss (1,266) (2,159)
Interest income 65 138
Loss before taxation (1,201) (2,021)
Loss per share (7.0)p (14.0)p
Our balance sheet remains strong with net assets totalling GBP2.2
million and cash of over GBP1 million.
FUTURE PROSPECTS
We are optimistic about Imprint's prospects, despite the current
weak market, because we believe our substantial increase in
market share achieved in 2002, in the face of a severe cyclical
downturn, should allow us to benefit significantly when the
market improves.
Pierce Casey, Chairman
23 March 2003
CHIEF EXECUTIVE'S REVIEW
INTRODUCTION
The year under review represents Imprint's first full year of
trading. I am encouraged by our progress to date in terms of
both the size and quality of the client base we have established
and the significant, and continuing, improvement to our monthly
financial results, particularly, in view of the continued
challenging state of our markets.
BUSINESS REVIEW
We have maintained tight control over our costs and reduced our
monthly overhead significantly during the second half of the
year. Despite this, we have continued to increase our client
base and gain market share. During the year ended 31 December
2002 our fee earning client base included 11 S&P100 companies, 16
Dow Jones STOXX50 (the 50 largest companies in Europe), and 17
members of the FTSE 100 as well as a number of other significant
public and private companies.
Additionally, the volume of repeat business with our key clients
has increased progressively through the year. We are also
beginning to see the benefits of our multi-disciplined model, as
the number of clients serviced by more than one division has
increased substantially during the second half of the year.
This is being reflected in our improving monthly financial
results.
UK
The UK business is benefiting from our diversified model, which
affords us limited exposure to any one sector of our market
place. This is most notable in the financial services sector
where market conditions continued to deteriorate during the year;
however, we have maintained a broad range of recruitment
offerings, each of which continued to win mandates with global
investment banks.
Our commerce divisions have been particularly successful in
securing repeat mandates from their blue chip corporate client
bases. Consequently, all of our operating divisions have
contributed to both the Group's top line growth and improved
earnings. Turnover totalled GBP3.20 million (2001 - GBP873,000)
and operating losses amounted to GBP904,000 (2001 - GBP2.16
million).
Asia
Our Asian subsidiary commenced trading in January 2002 and, after
its initial start up period, traded satisfactorily through to the
end of the third quarter of the year. Unfortunately, trading
deteriorated somewhat during the final quarter of the year due to
the continued challenging state of the Hong Kong market and
increased price sensitivity in Shanghai. We have responded to
this by reducing our monthly cost base by over 40% during the
second half of the year. However, operating losses for the year
amounted to GBP362,000 (including pre-trading expenses and start
up costs) on turnover of GBP283,000.
STRATEGY
Our strategy continues to be to ensure that our brands are
represented in all of our target markets so as to facilitate the
rapid leverage of the business when market conditions improve.
Consequently, in the short term, we plan to grow our operating
base by further diversifying our service offerings so as to
ensure that there is no replication of our existing resources.
To this end, we have broadened the scope of our WoodHamill
branded Executive Search division to include corporate as well as
banking positions. This will enable us to more easily attract
fee earners with a track record of successfully originating and
executing, higher margin, board level mandates, and will also
promote further client development for the benefit of the Group
as a whole.
As valuations continue to decline and as our organic foundations
are now in place and capable of supporting an enlarged business,
we recognize that appropriate acquisitions may be feasible.
However, our strategy will continue to be cautious.
CURRENT TRADING & FUTURE PROSPECTS
Trading in the first quarter of 2003 has been satisfactory. Our
pipeline for the second quarter is encouraging and, therefore, we
are confident that we will continue to grow our client base.
Looking ahead, we anticipate modest profitability for the full
year, in the absence of a further significant deterioration in
our markets.
Brian Hamill, Chief Executive Officer
23 March 2003
FINANCIAL REVIEW
TRADING RESULTS
The Group's turnover for the year totaled GBP3.48 million (2001 -
GBP873,000) and was wholly derived from search and selection
activities. Year on year comparisons are distorted by 2001
comprising only 8 trading months and the operational scaling of
the business that occurred during the final quarter of 2001 and
the first quarter of 2002.
The operating loss for the year amounted to GBP1.27 million (2001
- GBP2.16 million). The Group's monthly fixed overhead at the
end of 2002 amounted to approximately GBP310,000. The Group's
total headcount at the year-end stood at 49, of whom 29 were fee
earners.
FINANCIAL POSITION
The financial position of the business has been tightly
controlled. The Group's balance sheet remains strong with net
assets of GBP2.16 million (2001 - GBP3.37 million) and cash of
GBP1.05 million (2001 - GBP3.52 million). The net reduction in
cash and short-term deposits for the year of GBP2.47 million is
principally derived from:
-- operating losses of GBP1.27 million;
-- increases in working capital of GBP769,000 resulting from the
increased activity levels. Trade debtor days at the year end
amounted to 34 days; and
-- the payment of a rent deposit on the Group's London offices of
GBP582,000.
John Hunter, Chief Financial Officer
March 23, 2003
CONTACT: IMPRINT SEARCH & SELECTION PLC
Phone: 020 7287 8585
Brian Hamill, Chief Executive Officer
John Hunter, Chief Financial Officer
BUCHANAN COMMUNICATIONS
Phone: 020 7466 5000
Tim Anderson
Isabel Petre
LAURA ASHLEY: Receives GBP18 MM Credit Facility From Asian Bank
---------------------------------------------------------------
A Malaysian bank has granted a GBP18 million credit facility to
Laura Ashley, the retailer that recently warned it would slump
into the red after dismal January trading left it short of
targets for a second time in as many months.
Yorkshire law firm Keeble Hawson, led by partner Sharon Needle,
acted for Bumiputra-Commerce bank in arranging the credit
facility for the troubled retailer.
Earlier, the clothing and home furnishings group said
expectations for the financial year to January 25 were now for an
underlying loss of around GBP5 million.
TCR-Europe reported that this difference is due to a combination
of three principal factors arising out of the year end process:
first, lower sales and margins in January 2003 than had been
anticipated; second, a higher write-down of stock arising, in
part, out of the year end closing process and, in part, from
improved stock reconciliation processes and third, an increase in
accruals and other accounting year end adjustments.
On a positive note, Ms. Needle believes that "Bumiputra
Commerce's involvement reflects their confidence in the recovery
of Laura Ashley," adding that the "deal was structured to support
this."
CONTACT: LAURA ASHLEY
David Cook, Chief Financial Officer
Phone: 020 7880 5100
BRUNSWICK
Phone: 020 7404 5959
Katya Reynier
MARCONI PLC: Settles Pension Fund Dispute With Former Director
--------------------------------------------------------------
Marconi Plc and former finance director John Mayo settled a
pension fund dispute with the company paying an amount believed
to be GBP800,000, according to the Times.
Mr. Mayo was able to claim in the settlement roughly half the
GBP1.6 million he was demanding from Marconi in November as a
top-up payment, despite threats from directors led by former
chairman Derek Bonham that they will bring matters to the court.
The executive, who led the company into severe profits warning in
July, was also able to receive in full a severance payment of
GBP1 million after his ouster.
While both sides reportedly called the terms of the settlement
amicable, shareholders who saw the value of their holdings fall
are expected to be aggrieved.
Mr. Mayo, in conjunction with Lord Simpson of Dunkeld, former
chief executive, orchestrated the transformation of the then-
called GEC, from a diversified industrial group into telecom equipment
maker Marconi when demand for telecom equipment was
still high. But orders fell when the company is supposed to have
been converted into a telecom equipment maker.
MELROSE RESOURCES: Posts Loss of GBP2 MM on Ordinary Activities
---------------------------------------------------------------
Preliminary Announcement of Results for the year ended December
31, 2002
Melrose Resources plc, the oil and gas exploration and production
company with interests in Bulgaria, Egypt and the U.S., today
announces its preliminary results for the year ended 31 December
2002:
HIGHLIGHTS
Significant developments
-- Significant exploration success on El Mansoura Concession;
-- First production from South Bilqas development;
-- Galata development finance contracts signed and development
underway;
-- Disposal of Wyoming Ethanol;
Financial summary
-- Turnover of GBP7.1 million (2001 - GBP14.2 million);
-- EBITDA of GBP0.5 million (2001 - GBP3.4 million);
-- Loss on ordinary activities after taxation of GBP2,232,000
(2001 - GBP415,000 profit);
-- Rights Issue to raise up to GBP14 million to reduce borrowings
and provide additional working capital;
- -Pro-forma net asset value per share of GBP2.88 (2001 -
GBP2.56).
Commenting on this, Robert Adair, Chairman, said:
'During the last year we have made significant progress both in
Bulgaria and in Egypt. Commencement of development of the Galata
Gas Field is a major step forward which will transform the
Group's earnings profile from 2004 onwards and, in Egypt, we have
now established two significant exploration plays which should
start to contribute significantly to earnings this year. The
South Batra discovery is particularly exciting and of great
significance. The current share price represents a very
substantial discount to the appraised net asset value of the
Company and, in my view, does not yet reflect any of the upside
value from these discoveries in Egypt. I am looking to the future
with great confidence and excitement.'
To See Financial Statements:
http://bankrupt.com/misc/Melrose.htm
CONTACT: MELROSE RESOURCES PLC
Robert Adair, Chairman
Phone: 0131 225 6678
David Curry, Chief Executive
Phone: 0131 225 6678
Chris Thomas, Corporate Development Director
Phone: 0207 462 1600
BINNS & CO PR LIMITED
Judith Parry/Sophie Morton
Phone: 0113 242 1171
MORGAN CRUCIBLE: Sells Soft Coatings to Trim Down Debt
------------------------------------------------------
The Morgan Crucible Company plc has reached agreement to dispose
of the business and assets of six of its Engineered Soft Coatings
facilities, owned by Morgan Chemical Products Inc, in the United
States to Metal Improvement Company, Inc, a subsidiary of
Curtiss-Wright Corporation.
The sale is made on a debt and cash free basis, for a total
consideration of US$21.0 million, (GBP13.5 million) of which
US$16.7 million (GBP10.7 million) will be paid in cash at closing
with the balance from receivables.
The Coatings facilities being sold comprise net assets of
approximately US$10.3 million (GBP6.6 million) and in the year
ended 4 January 2003 generated operating profit of US$ 3.3
million (GBP2.1 million). They apply specialist-engineered
coatings to products for a variety of industries.
The proceeds from the disposal will be used by Morgan to reduce
Group net debt, which was GBP251.6 million at January 4, 2003.
Warren Knowlton, Morgan's Chief Executive, commented:
"Following the successful refinancing of Morgan announced
recently, our immediate focus remains on cash management and the
program of cost reduction that is already well advanced. This
disposal is the first step in our program of non-core business
disposals, aimed at reducing group debt, announced last year"
CONTACT: MORGAN CRUCIBLE
Nigel Young
Phone: 01753 837000
BRUNSWICK
Harry Chathli
Phone: 020 7404 5959
SEYMOUR PIERCE: New Chairman Reports Progress of Review
-------------------------------------------------------
The various businesses comprising Seymour Pierce Group are
operating in market conditions, which are worse than those
prevailing when we released our Financial Statements for the year
ended September 30, 2002. They are particularly affected by the
uncertainty caused by the apparent immediate prospect of war with
Iraq. In comparison with some of our competitors our position is
stronger, due to the high level of our cash balances. The record
falls in the London stock market last month continue to undermine
confidence and have made trading more difficult. We have managed
our businesses in a prudent fashion with a view to preserving
value for all our shareholders.
Since assuming the responsibilities of chief executive in October
2002, I have been undertaking a strategic review of our various
businesses. We have taken action to deal with the two companies
in the Group, which have been incurring unsustainable losses over
recent months. The activities of Pavilion Capital have either
been restructured or are in the process of being wound up. On
Friday we exchanged a conditional contract for the disposal of
Seymour Pierce Bell Limited, a private client stockbroking firm.
Once this transaction has been completed, headcount will have
been reduced by more than 20% since 30th September last year. We
continue to pursue discussions with a number of parties in
respect of other realization opportunities.
The Board announced at the end of November a bid approach, which
might or might not lead to an offer for the Company. This
approach is being carefully explored and a further announcement
will be made in due course.
Keith Harris
3 February 2003
CONTACT: SEYMOUR PIERCE
29/30 Cornhill
London
EC3V 3NF
Phone: 020 7648 8700
Fax: 020 7648 8740
E-mail: enquiries@seymourpierce.com
TADPOLE TECHNOLOGY: Bernard Hulme Resigns as Director
-----------------------------------------------------
Mr. Bernard Hulme has resigned with immediate effect as a
Director and Group Chief Executive. During his tenure of office,
Mr. Hulme has overseen the Group's transformation from a niche
hardware vendor to an enterprise software developer. He will be
available to provide advice to the company as required during the
next six months.
Mr. David Lee, Non-Executive Chairman, becomes Executive
Chairman.
Since November 2002, the Board and its advisers have been
conducting a strategic review of the Endeavors' business. The
objectives are to position Endeavors and its product portfolio to
address targeted markets and to identify strategic partners that
can help translate Magi's technological strengths into commercial
success. Mr. Keith Bigsby, Director and Chief Financial Officer,
assumes responsibility for Endeavors Technology, Inc. and the on-
going review, reporting to Mr. Lee.
Dr. Mark Ketteman, General Manager of Tadpole-Cartesia, continues
to be responsible for the Cartesia business unit, reporting to
Mr. Lee.
Current trading and the outlook for the year ending 30 September
2003 remain in line with the Board's expectations.
*****
Tadpole Technology in January posts operating loss before
goodwill amortisation and foreign exchange of GBP0.5 million for
year ended September 30, 2002. The goodwill of GBP3.8 million
includes an impairment of GBP2.9 million in connection with the
disposal of the hardware division after the year end.
Following the successful completion of the sale of the hardware
business, Graham Brown, who served as president of the business
unit has resigned as a director.
TISSUE SCIENCE: Posts Reduced Net Loss for the Year of GBP2.3 MM
----------------------------------------------------------------
Preliminary Results for the year ended December 31, 2002
Strong growth in revenues in 2002 - targeting positive operating
cash flow by the end of 2003
Tissue Science Laboratories plc, the medical devices company
specialising in human tissue replacement and repair products
derived from porcine dermis, announces its Preliminary Results
for the year ended December 31, 2002.
Financial Highlights
-- Continued strong growth in revenues for 2002, with product
sales increasing by 90% to GBP3.1m (12 months to 31 December
2001: GBP1.6m)
-- Improved gross margins of 48% (12 months to 31 December 2001:
11%)
-- Reduced net loss for the year of GBP2.3 m (12 months to 31
December 2001: GBP3.4m including exceptional expenses of GBP0.4m)
- significantly better than market expectations
-- Solid cash position maintained, with cash at the year end of
GBP5.4m (2001: GBP8.7m); the Company currently foresees no
requirement to seek external funding before reaching cash
generation
-- Targeting positive operating cash flow by the end of 2003.
Current trading in line with expectations
Operational Highlights
-- Strong growth of urology/gynaecology sales through CR Bard in
US and Europe; Pelvicol now represents annual worldwide sales for
CR Bard of $10m (2001: $5m) - CR Bard to further increase sales
force time and spend in 2003
-- US marketing operation and commission-only sales force for
hernia market established and expanded - recruitment ongoing and
on track to achieve national US coverage by 1Q 2003. Significant
growth opportunity identified in hernia repair and current demand
from surgeons encouraging
-- Italian distributor signed-up in 2002; further distribution
partner agreements expected in 2003
-- 510k approval received in November 2002 for Permacol Surgical
Implant for treatment of Rotator Cuff injuries of the shoulder.
Initial launch in the UK, with a marketing partner being sought
for other territories
-- Initial launch of PermacolTM Injection Urethral Bulking Agent
in August 2002 in the UK
-- Completion and European regulatory validation achieved in
November 2002 for new production facility in Swillington. Product
shipped to customers in the US and Europe
Commenting on the results, Martin Hunt, CEO of TSL, said:
'This was our first full year as a publicly quoted company and
has been one of substantial progress. We have made a significant
investment in the business as planned and as a result, we are
seeing the returns through increased revenues and margins in our
core surgical and implant market, the launch of our first
injectable product and the completion and commissioning of our
new manufacturing unit. We continue to build the product
platform to support further growth and we remain on course to
achieve profitability without having to return to the market for
external funding.'
To See Financial Statements:
http://bankrupt.com/misc/Tissue_Science.htm
CONTACT: TSL PLC
Phone: 01252 333 002
Martin Hunt, Chief Executive
FINANCIAL DYNAMICS
Phone: 020 7831 3113
Melanie Toyne-Sewell / Samantha Robbins
UNITED BISCUITS: Moody's Upgrades Ratings, Pins Stable Outlook
--------------------------------------------------------------
Moody's Investors Service upgraded United Biscuits Finance plc's
senior implied rating from Ba3 to Ba2 to reflect the company's
improving but high financial leverage.
The rating also reflects "strong competitive positions in highly
concentrated markets, stable and gradually strengthening cash
flows and comfort gained by the company's track record and
experienced management team."
Moody's also upgraded United Biscuits Finance plc's senior
subordinated unsecured rating for its two existing notes from B2
to B1, and long term senior unsecured issuer rating from B2 to
B1.
Concurrently, Moody's also assigned a Ba2 senior secured bank
credit rating to the new GBP 475 million syndicated bank
facilities of Regentrealm Limited.
Regentrealm Limited's existing senior secured bank credit rating
will be withdrawn, on the other hand, since the existing bank
facilities are refinanced by a new refinancing.
The outlook for all ratings is stable.
Additionally, the rating reflects "maturity of its core biscuits
and snacks operations in the U.K. and to some extent in Northern
Europe as well as significant dependence upon a small number of
powerful customers."
The ratings considered pension plan liabilities from UB's pension
plan exposure to the depressed equity markets. Moody's says UB
is likely to increase pension contributions should the equities
market remain weak.
*************
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter -- Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Trenton, NJ
USA, and Beard Group, Inc., Washington, DC USA. Kimberly
MacAdam, Larri-Nil Veloso, Ma. Cristina Canson, and Laedevee
Gonzales, Editors.
Copyright 2003. All rights reserved. ISSN 1529-2754.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
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Information contained herein is obtained from sources believed to
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The TCR Europe subscription rate is US$575 per half-year,
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contact Christopher Beard at 240/629-3300.
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