/raid1/www/Hosts/bankrupt/TCREUR_Public/030407.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
Monday, April 7, 2003, Vol. 4, No. 68
Headlines
* B E L G I U M *
LERNOUT & HAUSPIE: Committee Demands Confirmation Hearing Date
* C Y P R U S *
CHICKO TRADING: Notice to Creditors to Identify Claims
COASTMILL MANAGEMENT: Notice to Creditors to Identify Claims
DORCHESTERGATE TRADING: Notice to Creditors to Identify Claims
HICKSVILLE MANAGEMENT: Notice to Creditors to Identify Claims
* C Z E C H R E P U B L I C *
SKODA PRAHA: Jobs Threatened Under Restructuring Program
UNION BANKA: Moves to Overturn CNB's Decision to Revoke License
UNION BANKA: Doubts Authenticity of Bankruptcy Declaration
* F I N L A N D *
BENEFON OJY: Comments on Publicized Information About Company
TELIASONERA: Finland Enters Negotiations to Reduce Workforce
* F R A N C E *
ALCATEL: Announces Finalization of Sale and Lease Back
FRANCE TELECOM: Rights Offering Receives Warm Welcome
VIVENDI UNIVERSAL: Admits Share Dealing of Ousted Chairman
* G E R M A N Y *
GERLING INSURANCE: Subsidiaries Remain on Watch Developing
MAN AG: MAN Nutzfahrzeuge Arm Restructures German Sales
* N E T H E R L A N D S *
KONINKLIJKE AHOLD: SEC Involves Large Suppliers in Inquiry
KLM ROYAL: March Overall Load Factor Drops by 4.6% Points
* P O L A N D *
CENTROZAP S.A.: Files for Bankruptcy Due to Heavy Tax Debts
* R U S S I A *
JSC CENTRAL: Rating Raised to 'CCC+' Due to Consolidation
* U N I T E D K I N G D O M *
ABERDEEN ASSET: Refutes Statement of Real Estate Opportunities
ABERDEEN ASSET: Conflict With REO Likely to Land in Court
AORTECH INTERNATIONAL: Swedish Investor Increases Holdings
BRITISH AIRWAYS: Threat of War Affects Forward Bookings
BRITISH ENERGY: Issues Output Statement for March
BRITISH ENERGY: Will the Government Do Another Railtrack?
EQUITABLE LIFE: Announces Appointment of Brinn as Director
GREAT NORTHERN: Cash Flow Problems Forces Liquidation
MYTRAVEL GROUP: Disposes Foreign Exchange Wholesale Business
PIZZAEXPRESS PLC: ING GondolaExpress Recommends Cash Offer
PIZZAEXPRESS PLC: Venice Bidder Retracts Reply to GondolaExpress
THISTLE HOTELS: Issues Response to Financial Times Article
=============
B E L G I U M
=============
LERNOUT & HAUSPIE: Committee Demands Confirmation Hearing Date
--------------------------------------------------------------
The Official Committee of Unsecured Creditors of Lernout &
Hauspie Speech Products, NV, represented by Frances A. Monaco,
Esq., and Joseph J. Bodnar, Esq., at Monzack & Monaco PA, ask
Judge Wizmur to:
(1) approve the Committee's Disclosure Statement;
(2) set a date for the confirmation hearing;
(3) set a deadline by which any objections to
confirmation must be filed;
(4) set a date by which motions for temporary
allowance of claims for voting purposes under
Rule 3018 of the Federal Rules of Bankruptcy
Procedure must be filed;
(5) determine the treatment of certain
unliquidated, contingent or disputed claims for
notice, voting and distribution purposes only;
(6) establish the Record Date for the mailing of
materials and for voting purposes;
(7) approve the form of notice of the hearing on
plan confirmation and the publication notice;
(8) approve the procedures for distribution of
solicitation packages and the solicitation of
votes on the Plan;
(9) approve the contents of the solicitation
packages;
(10) approve the form of Ballot;
(11) set the voting deadline for receipt of the ballots;
(12) establish the procedures for tabulating the votes;
and
(13) establish procedures relating to executory contracts
and unexpired leases.
Approval of the Disclosure Statement
Mr. Bodnar notes that the Court has broad discretion to
determine whether the Committee's Disclosure Statement has
adequate information under the circumstances of L&H NV's case.
Mr. Bodnar assures Judge Wizmur that the content of the
Disclosure Statement meets the necessary standards, because it:
(a) describes L&H NV's operations prior to the
commencement of these cases;
(b) describes the events leading up to the
commencement of this Chapter 11 case and the
Belgian insolvency proceeding;
(c) describes the significant events in this
case and the Belgian case, the various parties-
in-interest, DIP financing, professional fees,
claims against the estate, significant asset
sales, material litigation, and employee issues;
(d) contains a summary of the Plan;
(e) outlines the voting procedures, requirements and
deadlines; and
(f) explains the consequences of confirmation, and
the alternatives to confirmation.
Confirmation Hearing Date
The Committee asks Judge Wizmur to fix May 29, 2003, at 10:00
a.m. New York time as the date and time for the commencement of
the hearing on confirmation of the Committee's Plan. The
Committee points out that this date provides more than the 25-
day notice period required. The Committee also notes that the
confirmation hearing may be continued from time to time, and
seeks the Court's authority to modify the Plan before, during,
or as a result of the confirmation hearing without further
notice.
Objections to Confirmation of the Plan
The Committee also asks Judge Wizmur to set May 19, 2003, at
4:00 p.m. New York time as the last date for filing and serving
objections to confirmation of the Plan. Objections should be
served on each of co- counsel for the Committee, co-counsel for
L&H NV, and the United States Trustee. Mr. Bodnar notes that
this date is ten calendar days prior to the proposed date for
the confirmation hearing, and 33 days after the proposed mailing
of solicitation packages.
Deadline for Temporary Allowance of Claims For Voting
Certain claims are the subject of objections. As a result,
these claims will not be deemed "allowed" for purposes of
voting, and are therefore not counted when determining whether
the requisite number of acceptances has been obtained for
confirmation purposes. Therefore, the Committee asks Judge
Wizmur to set May 5, 2003, at 4:00 p.m. New York time as the
last date for filing and serving motions under Bankruptcy Rule
3018 for temporary allowance of objected-to claims for voting
purposes. The Committee further asks Judge Wizmur to set May 9,
2003, at 10:00 a.m. New York time as the date and time on which
such motions can be determined if not previously resolved. The
Committee asks the Court to consider only those motions, which
are timely filed and served by these dates.
Persons wishing to change their votes must file motions to that
effect by May 23, 2003 at noon New York time.
Treatment of Certain Claims for Voting,
Noticing and Distribution
Any creditor whose claim is not scheduled by the Debtor, or is
scheduled and described as contingent, unliquidated or disputed
will not be treated as a creditor with respect to that claim for
purposes of voting and distribution unless the creditor timely
files a proof of claim. Notwithstanding the Order previously
entered setting a deadline for the filing of proofs of claim, a
number of claimants whose claims were scheduled by the Debtor as
contingent, unliquidated or disputed failed to file timely
proofs of claim. Thus, the Committee asks Judge Wizmur to
specifically order that any creditor in this situation will not
be treated as a creditor for the purpose of receiving
distributions under or voting on the Plan. The Committee also
asks the Court not to treat these creditors as creditors for
purpose of receiving notices, other than by publication.
The Committee objects -- solely for voting purposes -- to any
claim that is:
(1) classified in Class 3 Unsecured Claims, and that is
(2) in an unliquidated amount or that purports to be
contingent or disputed; and
(3) that has not previously been the subject of an
objection.
The Committee asks Judge Wizmur to temporarily allow these
claims for purposes of satisfying the "numerosity" requirement
for confirmation and, in essence, set the claim amount at zero
for the "amount" purposes of determining confirmation, subject
to each claimant's right to ask the Court to temporarily set a
dollar amount by motion.
The Committee asks Judge Wizmur to exercise her equitable
authority to order that:
(1) the Class 3 Unsecured Claims are deemed to have
been objected to by virtue of this Motion; and
(2) service of the Notice of Confirmation Hearing, which
will also describe the objection, constitutes
adequate and sufficient notice of the objection.
Moreover, the Committee asks Judge Wizmur to order that, unless
the holder of a Class 3 claim brings a timely motion asking for
temporary allowance of the claim in an amount deemed proper by
the Court, any ballot cast by the claimholder will be counted in
the numerosity and amount requirements.
The Committee asks Judge Wizmur to expressly except from this
procedure any claim, whether classified as a Class 3 claim or
otherwise, as to which a separate objection other than the
objection in this Motion has been brought.
Record Date
The Committee asks Judge Wizmur to set March 14, 2003, as the
official record date by which the holders of stocks, bonds,
debentures, notes and other securities are determined, rather
than the date on which an order is entered approving the
Disclosure Statement as otherwise provided, for purposes of
determining the holders of claims entitled to receive
solicitation packages and holders of claims entitled to vote to
accept or reject the Plan.
Voting Agent
The Committee intends to retain Donlin Recano as its voting and
information agent for purposes of mailing solicitation packages
and receiving, tabulating and reporting on ballots cast for or
against the Plan by holders of claims. As Voting Agent, Donlin
will be responsible for:
(1) tabulating ballots and submitting appropriate voting
reports and declarations; and
(2) responding to inquiries from claimants and equity
interest holders relating to the Plan, the
Disclosure Statement, the Ballots, and related
materials.
The Committee asks the Court to permit L&H NV to compensate and
reimburse Donlin Recano's expenses as Voting Agent without
further notice or separate application.
Notices and Transmittal to Claimants
The Committee proposes to transmit to each claimant by mail
copies of:
(1) the Notice of Confirmation Hearing;
(2) the Disclosure Statement;
(3) the Plan;
(4) the Disclosure Statement Approval Order; and
(5) a customized ballot.
Claimants receiving these solicitation packages include:
(a) claimants holding claims unimpaired by the Plan;
(b) claimants holding administrative expense claims;
(c) claimants holding claims entitled to vote; and
(d) claimants holding claims not entitled to vote
under the Plan, although impaired by it -- holders
of Securities Laws claims.
Transmittal of these packages to the holders of public security
claims will be sent in a manner customary in the securities
industry. This will include mailing of solicitation packages to
the holders of Old Convertible Notes no later than April 16,
2003. As to PIERS claims, a single solicitation package will be
sent to Wilmington Trust Company as trustee. No notices will be
sent to any entity to whom the notice of the filing deadline for
proofs of claim was returned as "undeliverable as addressed",
"moved -- left no forwarding address" or "forwarding order
expired".
Furthermore, the Committee does not intend to mail solicitation
packages to holders of Class 5 or Class 7 Equity Interests.
These interest holders will not receive any distribution under
the Plan and are not entitled to vote, but instead are deemed to
have rejected the Plan. Given the number of Equity Interest
holders in L&H NV -- a company that formerly had a multi-billion
dollar market capitalization -- the Committee submits that
noticing all holders would be costly and unnecessarily deplete
the estate.
Publication Notice
The Committee seeks the Court's permission to give publication
notice of the voting deadline, the confirmation hearing date,
the record date, the confirmation objection deadline, and the
Bankruptcy Rule 3018 dates by causing these to be published no
later than May 2, 2003, in The Wall Street Journal. The
Committee believes that this publication notice will be
sufficient to provide notice to all parties not otherwise
receiving notice.
Voting Deadline
To be counted, ballots must be received by May 19, 2003, at 4:00
p.m. New York Time -- this is 33 days after transmittal of the
solicitation packages.
Counting Ballots
The Committee proposes that any ballot timely received that
contains sufficient information to permit the identification of
the claimant and is cast as an acceptance of the Plan be
counted. The Committee also suggests that these ballots not be
counted:
(1) any ballot received after the Voting Deadline;
(2) any ballot that is illegible or contains
insufficient information to permit identification of
the claimant;
(3) any ballot timely received that indicates neither
acceptance or rejection of the Plan;
(4) any ballot cast by a creditor who has not timely
filed a proof of claim with respect to the claim
being voted, and whose claim is not scheduled, or is
scheduled as contingent, unliquidated or disputed,
or a creditor whose claim is the subject of a
pending objection;
(5) any ballot cast by a person who does not hold a
claim in the class that is entitled to vote; and
(6) any ballot timely received that indicates both
acceptance and rejection of the Plan.
Changing Votes
Notwithstanding Bankruptcy Rule 3018, the Committee proposes
that whenever two or more ballots are cast voting the same claim
before the Voting Deadline, the last ballot received before the
Voting Deadline will be deemed to reflect the voter's intent and
will supersede any prior ballots. This procedure will spare the
Court and the Committee the time and expense of responding to
motions brought under Bankruptcy Rule 3018 attempting to show
cause for changing votes.
Cure Costs
The Plan provides for the rejection, as of the Effective Date,
of all executory contracts and unexpired leases to which L&H NV
is a party except for those specifically listed in an Assumption
and Assignment Schedule yet to be filed. The Committee promises
to file and serve on all parties to executory contracts or
unexpired leases a schedule setting out the amount of cure
payments to be made on those contracts and leases to be assumed.
(L&H/Dictaphone Bankruptcy News, Issue No. 39; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
===========
C Y P R U S
===========
CHICKO TRADING: Notice to Creditors to Identify Claims
------------------------------------------------------
In the matter of Chicko Trading & Investments Limited and in the
matter of the Cyprus Companies Law Cap 113
Notice is hereby given that the creditors of the above-named
company which is being voluntarily wound up are required on or
before April 29, 2003 to send in their full names, their full
names, their addresses and descriptions, full particulars of
their debts or claims and the names and addresses of their
solicitors (if any) to the undersigned Michael C, Georghiou, of
Abacus Financial Services, City House, 2nd Floor, 19 Th. Dervis
Street, CY-1066 Nicosa, P.O.Box 25549, CY-1310 Nicosia, Cyprus,
the liquidator of the said company, and if so required by notice
in writing from the said liquidator, to come in and prove their
said debts or claims at such time and place as shall be specified
in such notice, or in default thereof they will be excluded from
the benefit of any distribution made before such debts are
proved.
CONTACT: ABACUS FINANCIAL SERVICES
Michael C. Georghiou, Liquidator
COASTMILL MANAGEMENT: Notice to Creditors to Identify Claims
--------------------------------------------------------------
In the matter of Coastmill Management Limited and in the matter
of the Cyprus Companies Law Cap 113
Notice is hereby given that the creditors of the above-named
company which is being voluntarily wound up are required on or
before April 29, 2003 to send in their full names, their full
names, their addresses and descriptions, full particulars of
their debts or claims and the names and addresses of their
solicitors (if any) to the undersigned Michael C, Georghiou, of
Abacus Financial Services, City House, 2nd Floor, 19 Th. Dervis
Street, CY-1066 Nicosa, P.O.Box 25549, CY-1310 Nicosia, Cyprus,
the liquidator of the said company, and if so required by notice
in writing from the said liquidator, to come in and prove their
said debts or claims at such time and place as shall be specified
in such notice, or in default thereof they will be excluded from
the benefit of any distribution made before such debts are
proved.
CONTACT: ABACUS FINANCIAL SERVICES
Michael C. Georghiou, Liquidator
DORCHESTERGATE TRADING: Notice to Creditors to Identify Claims
--------------------------------------------------------------
In the matter of Dorchestergate Trading Limited and in the matter
of the Cyprus Companies Law Cap 113
Notice is hereby given that the creditors of the above-named
company which is being voluntarily wound up are required on or
before April 29, 2003 to send in their full names, their full
names, their addresses and descriptions, full particulars of
their debts or claims and the names and addresses of their
solicitors (if any) to the undersigned Michael C, Georghiou, of
Abacus Financial Services, City House, 2nd Floor, 19 Th. Dervis
Street, CY-1066 Nicosa, P.O.Box 25549, CY-1310 Nicosia, Cyprus,
the liquidator of the said company, and if so required by notice
in writing from the said liquidator, to come in and prove their
said debts or claims at such time and place as shall be specified
in such notice, or in default thereof they will be excluded from
the benefit of any distribution made before such debts are
proved.
CONTACT: ABACUS FINANCIAL SERVICES
Michael C. Georghiou, Liquidator
HICKSVILLE MANAGEMENT: Notice to Creditors to Identify Claims
--------------------------------------------------------------
In the matter of Hicksville Management Limited and in the matter
of the Cyprus Companies Law Cap 113
Notice is hereby given that the creditors of the above-named
company which is being voluntarily wound up are required on or
before April 29, 2003 to send in their full names, their full
names, their addresses and descriptions, full particulars of
their debts or claims and the names and addresses of their
solicitors (if any) to the undersigned Michael C, Georghiou, of
Abacus Financial Services, City House, 2nd Floor, 19 Th. Dervis
Street, CY-1066 Nicosa, P.O.Box 25549, CY-1310 Nicosia, Cyprus,
the liquidator of the said company, and if so required by notice
in writing from the said liquidator, to come in and prove their
said debts or claims at such time and place as shall be specified
in such notice, or in default thereof they will be excluded from
the benefit of any distribution made before such debts are
proved.
CONTACT: ABACUS FINANCIAL SERVICES
Michael C. Georghiou, Liquidator
===========================
C Z E C H R E P U B L I C
============================
SKODA PRAHA: Jobs Threatened Under Restructuring Program
--------------------------------------------------------
Power plant contractor Skoda Praha is likely to announce
widespread job cuts to counter financing problems, waves of legal
disputes, and falling orders.
Some 450 jobs are threatened under the company's restructuring
plan, put in place by shareholders at a meeting in March.
Chief executive Jiri Hurych said the company will guarantee only
200 of 650 jobs at the company.
The stabilization plan aims to save CZK200 million (US$6.7
million) this year at a cost of CZK36 million, mostly in the form
of redundancy payments, according to Mr. Hurych. The company
wants to cut operating costs by 35% this year.
"The financial situation of Skoda was very serious from the point
of view of planned cash flow at the beginning of this year," said
Jana Vargova, a spokesperson for the company.
Skoda Praha, which recently announced losses of CZK56 million on
2002 sales of CZK7.1 billion, expects order to fall to CZK3
billion this year.
The drop in demand will likely ensue from a fall in orders from
its main customer, power producer CEZ.
"The main projects are about to finish, and the orders from CEZ
no longer make up the majority. This year, orders from CEZ
represent less then 20% of planned sales," the spokesperson said.
The Prague Post said both CEZ and Skoda admitted CEZ can "single-
handedly" bankrupt Skoda if it calls in its debts of almost CZK1
billion.
The amount relates to penalties for delays at nuclear power plant
Temelin in Bohemia. The project's second unit opened in June
2002, over a year behind schedule.
CEZ proposes taking a further equity stake in Skoda Praha instead
of cash penalties, but Skoda has so far refused that idea, the
report says.
The dispute is only one of Skoda's up to 400 court cases, by
Hurych's estimate. The figure includes the dispute with Skoda
Holding over rights to the name Skoda.
Skoda Praha's shareholders include the National Property Fund (55
percent), CEZ (30 percent) and trading firm Skodaexport (10
percent).
UNION BANKA: Moves to Overturn CNB's Decision to Revoke License
---------------------------------------------------------------
The board of directors of Union Banka appealed CNB's
decision to revoke its license, saying the bank is undergoing a
restructuring which should secure its future soon.
CNB revoked the license because the rescue plan previously
submitted by the bank is unrealistic.
The plan counted on receiving CZK12 billion from the Insured
Deposits Fund to be repaid over five years, with the provision
that UB would keep its license.
Under the scheme, UB would pay out client deposits of up to CZK5
million over the same period, and clients with deposits above
that would receive shares in UB. The restructured UB would then
function as an investment bank.
But the Czech banking law only allows for the fund to guarantee
client deposits if a bank cannot meet its obligations.
Goldman Sachs, with Hana Vyslouzilova as consultant, is helping
the company in its restructuring.
In a recent report, Czech Happenings said investment bank Goldman
Sachs is willing to invest into the restructuring of the Ostrava-
based bank.
The size of the investment has not been disclosed but Best
Communications, the PR agent of owner Invesmart, said it was in
the order of billions of crowns.
Italian Invesmart and Goldman Sachs had reportedly signed an
agreement to preserve the bank's value.
Goldman Sachs believes that UB's restructuring is a better option
for creditors, depositors and staff of the bank than the
bankruptcy, the report said.
CONTACT: UNION BANKA
ul. 30 dubna c. 35
70200 Ostrava
Phone: 596108111
Fax: 596120134
Home Page: http://www.union.cz
E-mail: union@union.cz
GOLDMAN SACHS INTERNATIONAL
Peterborough Court
133 Fleet Street
London EC4A 2BB
England, United Kingdom
Phone: 44-20-7774-1000
UNION BANKA: Doubts Authenticity of Bankruptcy Declaration
----------------------------------------------------------
The board of directors of Union Banka says there might be flaws
in the argument supporting the declaration of the bank's
bankruptcy.
The board claims there are discrepancies between documents
deposited with Judge Jiri Berka and statements by notary Josef
Burda.
The notary allegedly authenticated a general meeting where the
bank's headquarters was changed to Most and its name to Ceska
revitalizacni.
According to Prague Business Journal, Invesmart and Union Group
on April 1 announced the address and name change together with
the launching of a bankruptcy proceeding for the bank.
The notary has denied his presence at the meeting, and
"questioned the authenticity of the notarial record on the basis
of which the court declared bankruptcy," the bank said.
The CNB does not have any information about any such general
meeting having taken place. The changes have not been entered
in the Register of Companies yet, the report said.
The Regional Court in Usti nad Labem declared Ceska revitalizacni
bankrupt last week.
Burda reportedly filed a criminal complaint against an unknown
perpetrator. Czech Happenings was unable to reach Burda for
comment, however.
According to lawyer Narcis Tomasek, the filing for bankruptcy
deviates from the normal procedure of declaring bankruptcy before
moving to change the name and address.
According to the articles of association of Union banka only a
general meeting can decide about a change of name and change of
headquarters.
The board has asked the Regional Court in Usti nad Labem for a
remedial decision.
CNB, which promised to cooperate with other concerned state
institutions to clarify the issue, informed the Supreme State
Attorney about the situation at Union banka, CNB spokeswoman
Alice Frisaufova said.
Daniel Castvaj, spokesman for bankruptcy assets administrator
Daniel Thonat, said the declaration of bankruptcy will not affect
payments of insured deposits to clients.
CONTACT: UNION BANKA
ul. 30 dubna c. 35
70200 Ostrava
Phone: 596108111
Fax: 596120134
Home Page: http://www.union.cz
E-mail: union@union.cz
=============
F I N L A N D
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BENEFON OJY: Comments on Publicized Information About Company
-------------------------------------------------------------
Benefon Oyj chairman Jorma Nieminen said:
"In this morning, there has been public information about the
company seemingly based on the press interview of Mr. Peter
Chlubek of NRJ International LLC. Because the information is not
by the company, the company considers it appropriate to comment
the information:
"The company has not received a notification by NRJI that they
would have reversed their decision, released by them in public
earlier this week, to withdraw from their 10.38 Meuro
subscription commitments in the on-going directed equity issue of
Benefon."
*****
Reports say NRJ International, which offered to invest more than
EUR10 milion in Benefon, has withdrawn its subscription
commitments in the company's directed share issue.
According to Finnish Helsingin Sanomat, the withdrawal follows
the entrance of "unknown" Lebanese investor Philippe Frangie to
the bidding process. Mr. Frangie reportedly offered Benefon
EUR12 million.
TELIASONERA: Finland Enters Negotiations to Reduce Workforce
------------------------------------------------------------
TeliaSonera Finland has initiated the formal employee/employer
negotiations, which is estimated to materialize in a reduction of
approximately 400 jobs. The negotiation processes will affect the
entire profit center TeliaSonera Finland excluding the customer
call centers. The process is expected to be ended in May 2003,
after which the final outcome of this process can be seen.
TeliaSonera Sweden has today also initiated discussions with the
trade unions about efficiency measures in Sweden.
Following the merger between Telia and Sonera in December 2002,
and the new division of responsibilities within the Group, an
extensive overhaul has been made of the profit center TeliaSonera
Finland in order to establish the number of jobs needed in the
segment oriented working approach and in order to achieve a
competitive cost level throughout the company. The number of jobs
in Finland will be reduced following a need to reduce overlap. In
connection with this TeliaSonera Finland has today initiated
negotiations with the trade unions to establish how many people
will be affected by the job reductions.
The efficiency measures are part of both the synergies following
the merger and the stand-alone improvement possibilities in
TeliaSonera Finland.
The introduction of a customer-driven structure, organized
through the business segments Consumer, Business and Large
Corporate instead of the previous product-oriented business
segments has significantly improved the efficiency of the
company. Several synergy decisions have been taken during the
first months of integration between Telia and Sonera, such as the
new corporate and competence center structure.
"In the highly competitive Finnish telecom market it is important
that we continuously ensure that we have a cost level that is
competitive and in relation to the level of service and added
value that customers expect", says Anni Vepslinen, President of
TeliaSonera Finland.
CONTACT: TELIASONERA
Anni Vepsalainen, President
Phone: +358 2040 58810
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F R A N C E
===========
ALCATEL: Announces Finalization of Sale and Lease Back
------------------------------------------------------
In line with the previously announced 2003 divesture program of
over Euro 1 billion of non core assets, Alcatel announced the
finalization at the end of March 2003 of the sale and lease back
of its headquarters in Paris, France and the sale of its plant in
Hoboken, Belgium. These transactions follow the sale and lease
back of its headquarters in Madrid, Spain.
Alcatel's headquarters in Paris were sold to KanAm
Grundapitalanlagegesellschaft mbH, a German syndicator of open
ended real estate funds with a leaseback period of 12 years.
Alcatel's production plant in Hoboken was sold to Scanfil Oyj, a
global contract manufacturer and systems supplier for
communication and industrial electronics.
Alcatel's headquarters in Madrid were sold to Colony Capital
group, an American syndicator of real estate funds.
Financial terms of these transactions are not disclosed.
About Alcatel
Alcatel provides end-to-end communications solutions, enabling
carriers, service providers and enterprises to deliver content to
any type of user, anywhere in the world. Leveraging its long-term
leadership in telecommunications networks equipment as well as
its expertise in applications and network services, Alcatel
enables its customers to focus on optimizing their service
offerings and revenue streams. With sales of EURO 16.5 billion in
2002, Alcatel operates in more than 130 countries.
FRANCE TELECOM: Rights Offering Receives Warm Welcome
-----------------------------------------------------
France Telecom investors assured of the installment of a new
management team to turn the business around are increasing their
subscription of the company's EUR15 billion (US$16 billion)
rights offer.
"Investors have tremendous confidence in management and the sale
comes at a time when there's renewed interest in the industry,''
said James Enck, an analyst at Daiwa Securities SMBC Europe.
The shares are being sold at EUR14.5, a quarter less than their
market price.
The French government, which owns 56% of the company, will buy
EUR9 billion of the shares.
Marcel Tixier, president of the Association Nationale des
Actionnaires de France, has been advising members to buy the
shares as a short-term investment. The shareholders group
represents people with a combined 5,000 France Telecom shares.
"Our advice is to subscribe now and then gradually sell the
shares to close the curtain on this affair,'' Tixier said.
France Telecom's stock lost two-thirds of its value last year.
At its peak in 2000, the stock was valued at EUR219.
Proceeds of the offering are intended to help the company trim
down its EUR68 billion of borrowings by about 40% before the end
of 2005. Chief Executive Officer Thierry Breton targets to cut
down costs by EUR15 billion come 2005.
At the steering of Mr. Breton, France Telecom became the second-
best performer this year on France's CAC40 Index after Alcatel
SA. Shares in the company also gained 28% this year, with the
12% made after the share sale was announced on March 24. The
stock has more than doubled since he was named CEO.
Mr. Breton, who replaced Michel Bon as chief executive officer in
October, was also able to raise EUR9 billion in the bond market
and secured a US$5 billion credit line since his appointment. He
has also disposed more than EUR2.5 billion in assets.
Investors expect the new shares on the market to boost France
Telecom's value in stock market indexes. This will in turn
encourage fund managers to buy more.
CONTACT: FRANCE TELECOM
6, Place d'Alleray
75505 Paris Cedex 15, France
Phone: +33-1-44-44-22-22
Fax: +33-1-44-44-95-95
Homepage: http://www.francetelecom.fr
Contacts: Thierry Breton, Chairman
Michel Combes, Executive Committee, Finance
VIVENDI UNIVERSAL: Admits Share Dealing of Ousted Chairman
----------------------------------------------------------
Vivendi Univeral admitted that ousted chief executive Jean-Marie
Messier sold a number of shares in the first half of 2002
contrary to what it declared in its filing to the French
stockmarket watchdog last year.
A new filing with the COB indicates that Mr. Messier, who led the
company almost into collapse during that time, sold 231,000
shares worth between EUR5 million and EUR14 million (US$5.4
million to US$15 million).
The filing shows he owned 361,377 shares at June 30, 2002,
compared to 592,810 shares at December 31, 2001.
Mr. Messier is known to have denied several times having sold any
shares--a statement taken by Vivendi and reported at its
disclosures.
He insisted on borrowing EUR5.3 million from Societe Generale to
exercise stock options in December 2001.
Mr. Messier did not respond to requests for clarification,
according to the Financial Times.
The information is likely to strike a bell to class action
lawyers, and Liberty Media, which two weeks ago accused Mr.
Messier, among others, of "outright fraud, misrepresentation and
concealment," according to the report.
It was also revealed that Mr. Messier received EUR5.6 million
(US$6.1 million) in 2002, representing an increase of 10% in his
pay since 2001.
Vivendi last month announced the largest loss in French history
for the second year, with EUR23.3 billion into the red.
CONTACT: VIVENDI UNIVERSAL
(Investor Relations)
(Paris)
Daniel Scolan
Phone: +33 (1).71.71.1470
or
Laurence Daniel
Phone: +33 (1).71.71.1233
or (New York)
Eileen McLaughlin
Phone: 212/572-8961
=============
G E R M A N Y
=============
GERLING INSURANCE: Subsidiaries Remain on Watch Developing
----------------------------------------------------------
Standard & Poor's Ratings Services on Thursday commented on its
CreditWatch placement of the primary insurance operations of the
Germany-based Gerling insurance group. The 'BB+' long-term
counterparty credit and insurer financial strength ratings
on Gerling-Konzern Allgemeine Versicherungs-AG (GKA) and Gerling-
Konzern Lebensversicherungs-AG (GKL) remain on CreditWatch with
developing implications, where they were placed on Oct. 29, 2002.
"The update follows the announcement that the negotiations
between Gerling and HDI Haftpflichtverband der Deutschen
Industrie VaG (HDI; AA-/Watch Neg/--) for HDI to acquire GKA and
GKL have been terminated," said Standard & Poor's credit analyst
J"rg Ritthaler.
In addition, the update follows the ruling by a German
administrative court stating that German insurance law does not
provide the German regulator with a legal basis to block the sale
of the group's reinsurance operations, Gerling-Konzern Globale
Rckversicherungs-AG (GKG), to private investor
Dr. Achim Kann, although this has subsequently been appealed by
the regulator. (GKG's non-life operations were placed into run-
off in October
2002.)
On Feb. 26, 2003, Standard & Poor's lowered its ratings on GKA
and GKL to their current level, reflecting the German regulator's
objections as well as additional pressure on the group's already
weakened capitalization represented by the German regulator's
decision, which would have meant retaining GKG within the Gerling
group.
Although the German court ruling increases the likelihood that
Gerling management will ultimately be able to proceed with the
sale of the reinsurance operations, the group is still likely to
seek the approval from other regulatory bodies, particularly in
the U.S. and the U.K., before it completes the sale to Dr. Kann.
"Successful implementation of the sale of the reinsurance
operations is a key consideration for the group's capitalization
and regulatory solvency coverage, which is already under
significant pressure," said Mr. Ritthaler. Moreover, a disposal
will increase the likelihood of finding a suitable partner for
the group's primary insurance operations. In any event, Gerling
management needs to find a strong partner for either the Gerling
group as a whole or for its primary insurance operations in the
medium term, to alleviate the strains on its capital position.
"The ratings on GKA and GKL might be raised to secure levels if
it becomes clear that all impediments to the successful
completion of the sale to Dr. Kann have been removed," said Mr.
Ritthaler. Failing this, the ratings on GKA and GKL could be
lowered further, mainly reflecting concerns about the group's
capital strength.
Standard & Poor's will further update the CreditWatch placement
as the regulatory position develops. In addition, Standard &
Poor's will perform a detailed review of 2002 year-end results
and will continue to closely monitor capitalization and solvency,
both at the group and operating entity levels.
MAN AG: MAN Nutzfahrzeuge Arm Restructures German Sales
-------------------------------------------------------
MAN Nutzfahrzeuge to restructure German sales and service
organization as legally independent business unit as of May 2003.
Talks with employee representatives already in progress.
The corporate strategy of restructuring into business units
responsible for their own results began a year ago and is being
consistently continued. The new company, MAN Nutzfahrzeuge
Vertrieb GmbH, will have 5,200 employees and 900 apprentices.
Setting up the sales and service sector as a legally independent
company was necessitated in particular by new EU rules, the new
Block Exemption Regulation. The new rules will bring more
competition into the sales and service landscape by restricting
the possibilities of protecting brand-specific operations. In
this context service outlets will be able to apply to serve other
brands in addition to the one they have so far.
In the course of this new independence a switch from the wage and
salary tariff as agreed for the metalworking industry to that of
the German motor vehicle trade, which is better suited to the
needs of this line of business, is envisaged. The arrangements
for this changeover are to be agreed with the joint works council
yet to be constituted for the new company.
"In making this part of the company independent MAN
Nutzfahrzeuge, thanks to its strong customer orientation and its
extensive network, has a good chance of further strengthening its
market position and securing jobs within the separate
organisation", said Peter Erichreineke, the future Managing
Director of the sales and service company.
=====================
N E T H E R L A N D S
=====================
KONINKLIJKE AHOLD: SEC Involves Large Suppliers in Inquiry
----------------------------------------------------------
The U.S. Securities and Exchange Commissioned has requested at
least five of the largest suppliers of U.S. Foodservice, Ahold's
unit, to supply information related to both companies.
The suppliers were Kraft Foods, General Mills, HJ Heinz, Sara Lee
and ConAgra Foods.
The regulator is currently investigating the second largest food
service group in the U.S. in relation to more than US$500 million
overstatement of profits in its books. The overruns relate to
accounting for vendor allowances, or volume-related rebates or
discounts from suppliers.
The companies admitted having been contacted by the SEC, and
signed in to cooperate.
They also cleared their names in the issue. A spokeswoman for
Kraft Foods said it had conducted all of its business with Ahold
appropriately, while Sara Lee and ConAgra denied impropriety in
their dealings with U.S. Foodservice, the Financial Times said.
The discrepancies in the amounts U.S. Foodservice claimed to have
lent some suppliers were discovered during the audit of Ahold's
2002 finances when Deloitte Touche Tohmatsu, wrote to suppliers
to confirm the amounts.
CONTACT: KONINKLIJKE AHOLD
Albert Heijnwe 1, Zaandarn
P.O. Box 3050, 1500 HB Zaanbarn
The Netherlands
Phone: +31 (0)75 659 5720
Fax: +31 (0)75 659 8302
Homepage: http://www.ahold.com
SARA LEE
For analysts
Aaron Hoffman
Phone: 312.558.8739
KRAFT FOODS
Investor Relations
Three Lakes Drive
Northfield, IL 60093
Phone: 1-917-663-3194
Home Page: http://www.kraft.com/
GENERAL MILLS
P.O. Box 1113, Minneapolis, MN 55440
Phone: 763-764-7600
HJ HEINZ
Investor Relations
Phone: (412) 456-5700
E-mail: investor.relations@hjheinz.com
CONAGRA FOODS, INC.
One ConAgra Drive
Omaha, NE 68102-5001
Phone: 402-595-4000
KLM ROYAL: March Overall Load Factor Drops by 4.6% Points
---------------------------------------------------------
Overall
In March, overall load factor decreased by 4.6 percentage points
year-on-year to 78.4 percent. Overall traffic decreased by 1
percent, while capacity was up 4 percent on last year. As of
March 24, KLM implemented various capacity adjustments to reflect
the diminishing demand arising as a consequence of the war in
Iraq. March traffic was also affected by the initial effects of
the decline in demand as a result of the SARS virus.
Passenger traffic
Passenger load factor decreased by 7.4 percentage points to 77.1
percent. Passenger traffic was down 3 percent, while passenger
capacity increased by 6 percent year-on-year. On the North
Atlantic, load factor dropped 7.5 percentage points to 81.2
percent. This is the result of a traffic increase of 4 percent
and a year-on-year capacity increase of 13 percent. On the Asia
Pacific, load factor decreased by 10.3 percentage points to 79.8
percent. Traffic decreased by 2 percent, while capacity was 10
percent higher year-on-year. Traffic on the Middle East route was
down by 32 percent, while capacity adjustments resulted in a
decrease of 16 percent. As a consequence load factor dropped 16.3
percentage points to 66.4 percent. All other intercontinental
route areas have reported similar load factor decreases in March.
In Europe, traffic decreased by 2 percent on 4 percent higher
capacity. This resulted in a load factor drop of 4.3 percentage
points to 70.2 percent.
Cargo traffic
Cargo load factor decreased by 3 percentage points to 74.6
percent. Cargo traffic increased by 1 percent year-on-year on 4
percent higher capacity. On the Asia Pacific routes traffic
increased with 1 percent on a 4 percent capacity increase. The
North Atlantic routes show 1 percent higher traffic, with 6
percent higher capacity.
===========
P O L A N D
===========
CENTROZAP S.A.: Files for Bankruptcy Due to Heavy Tax Debts
-----------------------------------------------------------
The board of Centrozap S.A. has decided to declare the steel and
engineering company bankrupt due to heavy tax debts.
According to the Warsaw Business Journal, the decision of the
stock-listed company comes after its creditors filed two similar
motions with the court.
Centrozap spokesperson Ilona Saft was quoted saying: "In the
situation whereby there was no chance of securing the necessary
capital to finance the company's activities, we had no other
choice."
After three years of restructuring, Centrozap's fate was
determined when Voest Alpine Industrieanlagenbau withdrew its
down payment of EUR4.3 million for its planned PLN120 million
joint contract with the company in Russia.
The steel and engineering company has a ZL118 million debt with
the tax office. It was able to pay PLN40 million as well as
negotiate payment of a further PLN50 million.
===========
R U S S I A
===========
JSC CENTRAL: Rating Raised to 'CCC+' Due to Consolidation
---------------------------------------------------------
Standard & Poor's Ratings Services said it raised its long-term
corporate credit rating on Russia-based fixed-line
telecommunications service provider JSC Central
Telecommunications Co. (CTC) to 'CCC+' from 'CCC'.
The rating action reflects the net benefits of the merger of CTC
with 16 other fixed-line incumbents in the region of Russia
around Moscow, which are controlled by the state-owned holding
Svyazinvest. The outlook is stable.
"Compared with the rated predecessor of the same name, the new
company should benefit from its larger scale by receiving better
terms from vendors of telecoms equipment and other economies of
scale," said Standard & Poor's credit analyst Simon Redmond. "The
merger will also give it a stronger market position that is less
vulnerable to weaknesses in a particular area or customer
segment, and further facilitate access to capital markets," added
Mr. Redmond.
These gains are partly offset by the fact that the enlarged
service area is weaker and will require integration work and
additional investments to reconcile and improve network
characteristics to a more uniform level across the whole area.
Standard & Poor's believes the company's network modernization,
management improvement, and structural reorganization will prove
difficult and costly. CTC's credit quality could improve,
however, if the company can meet these challenges while
containing the increase in its debt burden.
===========================
U N I T E D K I N G D O M
===========================
ABERDEEN ASSET: Refutes Statement of Real Estate Opportunities
-----------------------------------------------------------
Aberdeen Asset Management PLC notes the announcement by Real
Estate Opportunities Limited (REO). REO has no grounds to
terminate Aberdeen's Management and Secretarial Agreement.
Whilst sympathetic towards all investors who have suffered from
price falls in the asset classes held in REO's Income Portfolio,
Aberdeen has at all times properly performed all its obligations
under the Agreement. Aberdeen totally refutes REO's claim in
respect of management of the REO Income Portfolio, and is
disappointed that discussions with REO failed to resolve these
differences. Aberdeen will vigorously defend its position and
continue to press for payment of the fees that are due under the
Agreement together with damages for wrongful termination of the
Agreement.
*****
The statement is in response to REO's announcement that it holds
Aberdeen responsible for its more than GBP165 million (US$257
million) of losses.
The split capital investment trust company said it "will be
taking appropriate steps to seek recovery" of a substantial
proportion of these losses.
REO indicated to replace Aberdeen with Invesco Perpetual as
manager of its trust's assets. It also withheld around GBP8
million in management fees.
CONTACT: GAVIN ANDERSON & COMPANY
Neil Bennett/Lindsey Harrison
Phone: 020 7554 1400
ABERDEEN ASSET: Conflict With REO Likely to Land in Court
---------------------------------------------------------
The row between Aberdeen Asset Management and directors of Real
Estate Opportunities, a split capital investment trust company
whose assets are managed by Aberdeen, are likely to end up in
court, the Financial Times says.
This was after REO said it "will be taking appropriate steps to
seek recovery" of a substantial proportion of its GBP165 million
(US$257 million) losses attributed to the group. Aberdeen
responded with a similarly strong statement to "defend its
position."
Aberdeen dismissed REO's statement as "a last-ditch negotiating
tactic."
"We haven't gone this far without being prepared to see it
through to the end," a REO source countered.
Late last year, the trust commissioned Slaughter & May, the
London law firm, to review the management of its assets.
As a result of the conflict, Aberdeen lost the chance to manage
REO's GBP500 million worth of assets.
The impending legal action from REO--which analysts expect to
open further actions from other trusts--is seen as another blow
to the firm at the center of a split capital scandal.
The Financial Services Authority is investigating whether
managers of split trusts indeed connived to prop up their share
prices.
Aberdeen also carries a GBP220-million debt obligation. It
planned to raise up to GBP100 million from the sale of its
property arm to pay some of the debts, but the process went
beyond its March deadline.
The firm is also bound to reimburse 7,000 investors who lost more
than half their money in Progressive Growth Unit Trust, a unit
trust that invested purely in shares in splits. Analysts have
estimated this alone could cost between GBP35 million and GBP80
million.
Aberdeen leads 19 of 130 split capital trusts in the region.
AORTECH INTERNATIONAL: Swedish Investor Increases Holdings
----------------------------------------------------------
Swedish value investor Peter Gyllenhammer showed his confidence
in medical device firm Aortech by increasing his stake in the
troubled company to almost 10% last week.
"I'm impressed by Aortech's vastly improved risk-reward
potential. They've done some things lately that I think are very
good for shareholders who bought at the right price," he said.
Mr. Gyllenhammer bought 2.7 million shares in the Bellshill-based
company a day after Aortech said it will close down operations in
Scotland and abort plans to commercialize its "tri-leaflet" heart
valve business.
The acquisition brought Mr. Gyllenhammer's shares to 3.7 million,
representing a 9.8% stake in the company.
He declined to comment in detail about his increased interest in
Aortech, according to The Herald. But a source close to him
insisted Mr. Gyllenhammer is not planning to take over Aortech.
He, however, did not rule out the possibility that the investor
will increase his stake in the near future.
Defending the move the source said, "Aortech now has the
potential to become a profitable niche player, since it has
gotten rid of the useless, cash-burning part of the business."
Mr. Gyllenhammer, who has a reputation on sinking money into
undervalued firms, also has a 20% stake in Murray Financial
Corporation. The company's founder and managing director has
been pressured for months to step down from his post.
Ian Cameron, Aortech's finance director, yesterday said: "We
haven't spoken to Peter Gyllenhammer, but we're taking his move
as a positive, in that he likes what we're doing with the
company."
CONTACT: AORTECH INTERNATIONAL PLC
Phone: 01698 746 699
Bill Strachan, Chief Executive
Ian Cameron, Finance Director
BRITISH AIRWAYS: Threat of War Affects Forward Bookings
-------------------------------------------------------
Summary of the headline figures
In March 2003, overall load factor fell 4.2 points to 65.4 per
cent. Passenger capacity, measured in Available Seat Kilometers,
was 3.1 per cent below March 2002 and traffic, measured in
Revenue Passenger Kilometers, was lower by 11.4 per cent. This
resulted in a passenger load factor down 6.6 points versus last
year, to 69.2 per cent. The fall in traffic comprised a 23.8 per
cent reduction in premium traffic and a 9.2 per cent decrease in
non-premium traffic. These numbers were impacted by the timing of
Easter versus last year. Cargo, measured in Cargo Ton Kilometers,
fell by 4.0 per cent.
For the January - March quarter, ASKs reduced by 3.1 per cent,
with RPKs falling by 6.5 per cent. This resulted in a decrease in
passenger load factor of 2.5 points, to 69.5 points. This
comprised a 15.7 per cent fall in premium traffic and 4.8 per
cent fall in non-premium traffic. CTKs fell by 1.1 per cent.
Market conditions
Revenue and forward bookings have been impacted by the threat
and outbreak of war with Iraq. The reductions are in line with
company expectations. There is currently limited forward
visibility on revenue and traffic reflecting the war, economic
uncertainty, competitor activity and the impact of SARS. The
latter has already affected bookings, in particular, on Far East
routes.
Costs
As a result of Yen appreciation against sterling, there will be a
non-cash accounting charge of GBP18 million in the fourth quarter
financial results. Fuel costs for the financial year ending 31
March 2004 are still expected to be approximately GBP100 million
higher than for the year ended 31 March 2003. The company is
currently some 70% hedged in quarter one and some 45% hedged in
quarter two.
Strategic Developments
British Airways announced a package of measures in response to
the impact on its business of the conflict in Iraq. Following the
actual and anticipated downturn in passenger traffic, the airline
implemented a reduced flying program and an acceleration of its
Future Size and Shape restructuring program. The measures
include:
-- An overall capacity reduction of four per cent in April and
May, involving reduced frequencies and the use of smaller
aircraft.
-- The Future Size and Shape program's overall manpower reduction
target of 13,000 by March 2004 accelerated to September this
year.
-- An extension of the company's unpaid leave scheme for staff.
-- A review of all capital expenditure and external spend.
British Airways announced the suspension of its daily service
between London Heathrow and Kuwait, until further notice, from
March 19, following Foreign and Commonwealth Office travel
advice. In addition, only one flight a day is being operated to
Tel Aviv instead of the usual twice daily schedule.
British Airways re-launched its Executive Club loyalty programme
to make the scheme simpler, with more ways to spend BA Miles and
better incentives for loyal customers to take effect from July 1,
2003.
Easyjet notified British Airways that it will not exercise the
option to buy its German subsidiary, dba (formally Deutsche BA).
EasyJet has paid the airline GBP6.1 million during the purchase
option period. The company will continue to work towards the
long-term future of dba and it remains business as usual for
customers and staff. British Airways will continue to develop dba
as a no-frills carrier.
British Airways and SN Brussels Airlines received approval from
the European Commission to continue their commercial relationship
agreed in July 2002. It enables the two airlines to codeshare on
selected flights and offer reciprocal frequent flyer benefits for
customers. To date, the airlines now codeshare on six routes in
Europe. SN Brussels puts its code on British Airways operated
services between London Heathrow, London Gatwick, Southampton and
Brussels. At the same time, British Airways applies its code to
SN Brussels operated services between Birmingham, Newcastle,
Bristol and Brussels.
To See Monthly Traffic and Capacity Statistics:
http://bankrupt.com/misc/Monthly_Traffic.htm
BRITISH ENERGY: Issues Output Statement for March
-------------------------------------------------
A summary of net output from all of British Energy's power
stations in March 2003 is given in the table below, together with
comparative data for the previous financial year:
2001/02
March Year to Date
Load
Output Load Output Factor
(TWh) Factor (TWh) (%)
UK Nuclear 5.48 77 67.57 81
UK Other 0.66 46 7.11 42
Amergen* 1.78 100 18.66 89
(50% owned)
2002/03
February Year to Date
Load
Output Load Output Factor
(TWh) Factor (TWh) (%)
UK Nuclear 5.59 79 58.2 76
UK Other 0.45 31 5.67 33
Bruce Power* 1.86 100 20.20 95
(82.42% owned)
Amergen 1.7 100 18.3 94.5
(50% owned)
NOTES:
* AmerGen
Total capacity was increased following the upgrading in
Clinton's capacity in spring 2002 to 1017 MWe and theupgrading in
TMI unit 1 capacity to 840 MWe in autumn 2001 following a turbine
replacement.
OVERVIEW
The UK nuclear plants achieved the revised output target,
announced in August 2002, of 63 TWh (plus or minus 1 TWh).
The output figure for AmerGen remained in line with plan.
PLANNED OUTAGES
UK Nuclear
-- A statutory outage continued at Dungeness B.
-- Off-load refuelling was carried out on one reactor each at
Dungeness B, Heysham 1 and Hartlepool.
-- Low load refuelling was carried out on one reactor each at
Hinkley Point B, Hunterston B and Heysham 2.
UNPLANNED OUTAGES
UK Nuclear
-- There were a number of minor unplanned outages at several
stations in the period.
CONTACT: BRITISH ENERGY
Keith Gilroy, Investor Relations
Phone: 01355 262 253
BRITISH ENERGY: Will the Government Do Another Railtrack?
---------------------------------------------------------
The year is 1996. With the global economy showing no signs of
letting up in its astronomic expansion, the future appeared
somewhat secure four years before the turn of the century.
Riding on the back of the so-called 'tech boom,' stocks were
shooting straight up with investors unmindful of when it will
peak. Everything was positive.
In London, the Conservative party naturally thought that the time
was ripe for the government to privatize some state enterprises.
Excess funds were abundant and the appetite for acquisition and
investment was at its all-time high. In addition, the move was
good PR stuff for the cracking Conservative party, desperate to
stay in power amidst the galloping strides of Tony Blair's New
Labour.
And so the decision was made. Railtrack, the nation's track and
train operator, and British Energy, the country's largest power
producer, were to be auctioned. True enough, the market quickly
gobbled up the two and they predictably became fixtures in
Footsie's Top 100 index. In 1998, Railtrack reached the
pinnacle, trading at 1,768 pence, while British Energy recorded a
56% rise in profit before tax, giving it enough cash to return
GBP432 million to shareholders at 60p per share.
Now, seven years later, something has obviously gone terribly
wrong.
To be sure, it is not the decision to privatize that is to blame.
Britain, for all its fervent faith in the West's "free
enterprise" doctrine, is essentially a protectionist state. The
privatization of Railtrack and British Energy -- two of the
nation's key infrastructures -- was a good way to showcase its
professed belief in Adam Smith, its world-renowned, homegrown
political economist-cum-philosopher.
Railtrack's woes can be traced to mismanagement and 'bad luck.'
In 2000, the year before it went into administration, Railtrack
figured in a fatal accident, now known as the Hatfield crash.
This came before Britons could even finish grieving for those who
perished in the Paddington rail disaster just a year earlier.
This series of accidents ultimately exposed the poor maintenance
of the country's rail system and hastened Railtrack's demise.
The reason for British Energy's problems, on the other hand, is
more mundane. Choosing to operate in the wholesale market, the
company entered the competitive power industry handicapped and
vulnerable to price fluctuations. Unlike main rivals, Scottish
Power and PowerGen, British Energy has no retail arm to rely on
during sharp falls in wholesale prices. In contrast, the two
rivals have the flexibility to offset losses in their wholesale
operations by upping retail prices. Unable to compete further,
British Energy eventually sought government help last year.
The Railtrack Experiment
Railtrack's woes in 2001 presented the government with a novel
problem and afforded it a chance to tinker with varied solutions.
Ultimately, the Labour government adopted the plan of then
Transport Secretary Stephen Byers, who suggested a rather radical
and quixotic idea: Force Railtrack into administration and
replace it with a new government-backed company free of
commercial interest.
Mr. Byers envisioned a new rail operator content on plowing back
profits into track maintenance and enhancement of rail
infrastructures. The plan seemed creditable, but the execution
nearly turned out to be disastrous.
In early 2001, Railtrack warned that it could run out of money by
September that year. The government quickly granted Railtrack's
request for GBP1.5 billion in aid, and in May pledged another
GBP2 billion. This move instantly stabilized Railtrack's
operations.
But sometime before October, Mr. Byers concocted his bright but
radical idea, which sharply contradicted market expectations and
disrupted what was already seen as a steady recovery of
Railtrack. Complicating the matter further was the timing of Mr.
Byers' decision. He bared the plan just after the close of
trading in the London Stock Exchange and on a Friday at that.
The events that followed were messy. Bitter investors prepared
suits accusing Mr. Byers of maliciously deceiving the market that
all was well with Railtrack, when in fact he had already firmed
up his resolve to force the company into administration.
Financiers also threatened to boycott the government's private
financing initiatives. Eventually, the controversy cost Mr.
Byers his post in the cabinet, denying him the chance to
personally oversee his handiwork.
Today, Railtrack successor, Network Rail, appears to be fairing
well. It now maintains over 20,000 miles of tracks across the
U.K., provides access to over 2,500 stations, and maintains an
assortment of bridges, tunnels, level crossings and signaling
systems. It survives on GBP9 billion in bank loans guaranteed by
the government and has debts of about GBP6.5 billion carried over
from Railtrack's old bill.
Government's Dilemma: To Do A Railtrack Part II Or Not
Still smarting from the backlash that followed its intervention
in Railtrack's affairs, the government appears to be taking a
different approach in the case of British Energy. At least for
now, it has limited aid in the form of a GBP650 million emergency
loan, approved late last year. This loan was recently extended
to September 2004, but the amount was reduced to GBP200 million.
British Energy is no small player in the local power industry.
With eight nuclear power plants, it is in fact the nation's
largest energy producer. Its survival is therefore crucial.
At the moment, the company's restructuring plan appears viable,
but it fails to solve the main problem -- the lack of a retail
arm. It only plans to hedge 60% of its capacity by forging
special arrangements with energy supply companies. Recently, it
candidly admitted that it may have to seek insolvency if the plan
fails.
But will the government allow this? Will it not revisit a
strategy already tested in the Railtrack experiment?
For all the hullabaloos it created, the fact remains that the
decision in Railtrack has, for now, saved a vital industry from
certain demise. British Energy is equally vital and if the
government is not willing to repeat the Railtrack experience,
what will it offer?
Perhaps, another experiment?
EQUITABLE LIFE: Announces Appointment of Brinn as Director
----------------------------------------------------------
Equitable Life Finance plc on Thursday announces the appointment
of Nigel Brinn, Finance and Investment Director of Equitable Life
Assurance Society, as a director.
He replaces Stephen Anderson who has resigned as a Director of
ELF plc.
*****
Equitable Life announced in January the appointment of Nigel
Brinn to head up the firm's finance and investments function.
During that time, the company said Mr. Brinn will become an
executive director of Equitable Life Assurance Society and join
the Society's Board as Finance and Investments Director, subject
to regulatory approval.
Equitable's exposure in a test case over those guaranteed annuity
rates --said to be worth more than GBP1.5 billion--nearly
resulted to the collapse of the company in 2000.
CONTACT: EQUITABLE LIFE
City Place House, 55 Basinghall St.
London EC2V 5DR, United Kingdom
Phone: +44-20-7606-6611
Fax: +44-20-7796-4824
Home Page: http://www.equitable.co.uk
Contact:
Vanni Treves, Chairman
Charles Thomson, Chief Executive
Charles Bellringer, Chief Finance and Investment
Officer
GREAT NORTHERN: Cash Flow Problems Forces Liquidation
-----------------------------------------------------
The Great Northern Wine Company, established over 10 years ago by
partners John Senior and Gavin Barlow, fell into liquidation
after being hit by cash flow problems. The demise occurred despite
healthy Christmas sales in both its retail and wholesale divisions.
According to the Ripon-based company, the scare of foot and mouth
disease, the September 11 tragedy and the current war in Iraq are
to blame for its downturn.
The firm supplies wine to the Restaurant Trade, Free-Houses and
the general public and specializes in company accounts. It also
prides itself in personal approach to company needs.
Aside from supplying wines from the well known viticultural areas
of Europe, it has a Ripon shop that sells a range of
international and locally produced cheeses and preserves.
Mr. Barlow told The Scotsman that the promise of a quick recovery
following the foot and mouth crisis in 2000 wasn't realized.
Trading, which was expected to "return to normal in 2001," failed
to return to previous levels, he added.
"The events of September 11 also had an effect," he said.
He further explained that despite a good trading in Christmas,
February and March had proved to be slow months as people
tightened their budgets.
"With the Stock Exchange as it is and worries over the war in
Iraq people don't seem to be spending as much," Mr. Barlow said.
"The restaurants and hotels are also suffering which in turn
affects us."
Moreover, Mr Barlow confirmed the company would be sold on as a
going concern, and that two or three parties had already showed
an interest.
The company, which employs six staff, will continue to trade for
the next three weeks.
CONTACT: GREAT NORTHERN WINE COMPANY
Granary Wharf, The Canal Basin, Leeds,
West Yorkshire, LS1 4BR
Phone: (0113) 246 1200 (Leeds)
Fax: (0113) 246 1209
Phone: (01765) 606767 (Ripon)
Fax: (01765) 606767
E-mail: gnwines@the-internet-pages.co.uk
MYTRAVEL GROUP: Disposes Foreign Exchange Wholesale Business
------------------------------------------------------------
MyTravel Group plc announces the sale of the entire share capital
of MyTravel Financial Services Limited (MTFS) to Travelex plc
and, through its U.K. retail travel agency business (MyTravel
Retail), the entering into of various agreements with the
Travelex Group relating to the future operation of MyTravel
Retail's foreign exchange supply business (FX Business
Arrangement).
The total up-front consideration under these agreements is
GBP20.8m. GBP8m of this relates to the sale of MTFS and was paid
by Travelex into a joint escrow account at completion, and the
balance of GBP12.8m relates to the up-front payment under the FX
Business Arrangement, which was paid in cash at completion. The
escrow amount will be released to the MyTravel Group at the
latest by the first anniversary of completion, provided that
Travelex is not then entitled to terminate the FX Business
Arrangement.
MTFS's principal business is the wholesale supply of foreign
currency to MyTravel Retail. The net assets of MTFS amount to
GBP1.4m after a dividend of GBP6.6m paid from the distributable
reserves of MTFS prior to the transaction. In the year ended 30
September 2002, MTFS's profit after tax was GBP3.8m.
Under the terms of the FX Business Arrangement, MyTravel Retail
has agreed that, for a maximum term of ten years, MTFS will
operate MyTravel Retail's foreign exchange supply business and
that MyTravel Retail will act as agent for that business.
MyTravel Retail will receive, in addition to the up-front
payment, a share of revenues arising from the supply and sale of
foreign exchange to MyTravel Retail's customers.
The transaction enables the MyTravel Group to realise its
investment in a non-core business at an attractive value, whilst
also continuing to generate revenue from the provision of retail
foreign exchange services by means of the FX Business
Arrangement. The immediate effect of the transaction is to reduce
the MyTravel Group's net indebtedness by GBP12.8m, with a further
reduction of GBP8m upon release of the escrow amount.
*****
MTFS
MTFS was formed as a separate company within the MyTravel Group
in October 2000 to take over the operations of the in-house
travel money business of Going Places. MyTravel Group will
continue to offer its customers retail foreign exchange services
under the FX Business Arrangement entered into with the Travelex
Group. MTFS is based in Woking, Surrey and employs 110 people
UK-wide.
CONTACT: BRUNSWICK
Phone: 020 7404 5959
Fiona Antcliffe
Sophie Fitton
PIZZAEXPRESS PLC: ING GondolaExpress Recommends Cash Offer
----------------------------------------------------------
Summary
-- The Boards of GondolaExpress and PizzaExpress are pleased to
announce the terms of a recommended cash offer of 387 pence per
PizzaExpress Share, to be made by ING Barings on behalf of
GondolaExpress, for the entire issued and to be issued ordinary
share capital of PizzaExpress. The Offer represents a premium of
20 pence per PizzaExpress Share to the Venice Bidder Offer Price.
A Loan Note Alternative will also be provided
-- The Offer values the Existing Issued Share Capital of
PizzaExpress at approximately GBP277.8 million. The Offer Price
of 387 pence per PizzaExpress Share represents premia of
approximately:
-- 2.0 per cent. on the Closing Price of 379.5 pence on 2 April
2003, the last Business Day prior to the date of this
announcement;
-- 5.4 per cent. on 367 pence, being the Venice Bidder Offer
Price; and
-- 47.1 per cent. on the Closing Price of 263 pence (adjusted
to exclude the interim dividend of 3 pence (net) per PizzaExpress
Share) on 13 December 2002, the last Business Day prior to the
announcement by PizzaExpress that it had received a number of
approaches which may or may not lead to an offer being made for
the Company
-- The Offer has been recommended by both the Independent
Directors and the Executive Directors of PizzaExpress and the
Executive Directors have irrevocably undertaken to accept the
Offer in respect of their own beneficial holdings, which amount
to, in aggregate, 500,768 PizzaExpress Shares, representing
approximately 0.7 per cent. of the Existing Issued Share Capital
of PizzaExpress
-- As at the date of this announcement, GondolaExpress and
parties acting in concert with it have received either an
irrevocable undertaking or a letter of intent to accept the Offer
in respect of, in aggregate, 1 0,253,327 PizzaExpress Shares,
representing approximately 14.3 per cent. of the Existing Issued
Share Capital of PizzaExpress
-- The Offer is being funded by the cash resources of
GondolaExpress and debt facilities provided by Bank of Scotland
-- GondolaExpress is a newly-incorporated company which has been
specifically formed for the purpose of making the Offer.
GondolaExpress is ultimately owned by a limited partnership in
which Capricorn and a fund managed by TDR Capital are investors
-- TDR Capital is a private equity partnership between Manjit
Dale, Stephen Robertson and Tudor Capital (U.K.) Ltd (a
subsidiary of Tudor Group Holdings LLC), which specialises in
European mid-market buyouts
-- Capricorn is a European-managed global investment group, which
invests in the restaurant, food and beverage sector, and in the
insurance and niche financial services sectors. It is the largest
investor in Nando's International, which owns or is the
franchisor of some 400 restaurants world-wide, including 63 in
the U.K., and is committed to expanding its restaurant interests in
the U.K. and internationally over the long term
Nigel Colne, Chairman of PizzaExpress, commented:
'Following the announcement on 16 December 2002 that PizzaExpress
had received a number of approaches that may or may not lead to
an offer for the company and the subsequent offer made by Venice
Bidder, I am now delighted to announce that the terms of a higher
cash offer for PizzaExpress have been agreed with GondolaExpress.
The Board of PizzaExpress believes that the Offer is fair and
reasonable and recommend it to Shareholders.'
Manjit Dale, co-founder of TDR Capital, commented:
'This is a fair price for a high quality business, and we are
delighted that a number of PizzaExpress's institutional
shareholders have recognized this and have given either an
irrevocable undertaking or a letter of intent to accept the
offer. PizzaExpress is an excellent first investment for TDR
Capital and this Offer demonstrates our appetite for mid-market
European buyouts where we believe we can add real value.'
Robbie Enthoven, of Capricorn, commented:
'We believe PizzaExpress is quite simply the premier pizza brand
in the U.K. and we feel we can work closely with the company in the
private arena to bring a fresh approach to a number of the
difficult issues it is facing at this stage in its development.'
*****
ING Barings, which is regulated in the United Kingdom by The
Financial Services Authority, is acting exclusively for
GondolaExpress and no one else in connection with the Offer and
will not be responsible to anyone other than GondolaExpress for
providing the protections afforded to its customers or for
providing advice in relation to the Offer or in relation to the
contents of this announcement or any transaction or arrangement
referred to herein.
Credit Suisse First Boston is acting exclusively for PizzaExpress
and no one else in connection with the Offer and will not be
responsible to anyone other than PizzaExpress for providing the
protections afforded to its customers or for providing advice in
relation to the Offer.
To See Recommended Cash Offer:
http://bankrupt.com/misc/Recommended_Cash_Offer.htm
CONTACT: TDR CAPITAL
Phone: 020 7399 4200
Manjit Dale
Stephen Robertson
CAPRICORN
Phone: 020 7326 8440
Robbie Enthoven
Charles Luyckx
ING BARINGS
Phone: 020 7767 1000
(Financial adviser and broker to GondolaExpress)
Tom Quigley
Simon Newton
Adam Fraser-Harris
GAVIN ANDERSON & CO
Phone: 020 7554 1400
(PR adviser to GondolaExpress)
Neil Bennett
Ken Cronin
PIZZAEXPRESS
Phone: 01895 618 618
David Page
CREDIT SUISSE FIRST BOSTON
Phone: 020 7888 8888
(Financial adviser and broker to PizzaExpress)
Stuart Upcraft
Alastair Cochran
Richard Probert
CITIGATE DEWE ROGERSON
Phone: 020 7638 9571
(PR adviser to PizzaExpress)
Sue Pemberton
PIZZAEXPRESS PLC: Venice Bidder Retracts Reply to GondolaExpress
----------------------------------------------------------------
At the request of the Panel, the Board of Venice Bidder retracts
the announcement made earlier in response to the offer
announcement made by GondolaExpress PLC.
The Board of Venice Bidder wishes to clarify its position namely
that it is considering its options in the light of the offer
announced by GondolaExpress PLC.
*****
Earlier Announcement: Possible Higher Offer
Venice Bidder notes the announcement made by GondolaExpress PLC
of its firm intention to make an offer of 387 pence per
PizzaExpress Share for the whole of the issued and to be issued
share capital of PizzaExpress.
Venice Bidder is considering whether to increase its offer for
PizzaExpress to a premium to the offer price announced by
GondolaExpress PLC.
Venice Bidder, together with persons deemed to be acting in
concert with it, own or control, in aggregate, 8.7 per cent. of
the issued ordinary share capital of Pizza Express.
CONTACT: FINANCIAL DYNAMICS
Phone: 020 7831 3113
Fergus Wheeler
THISTLE HOTELS: Issues Response to Financial Times Article
----------------------------------------------------------
The Board of Thistle* notes the Financial Times article of this
morning which reported that Thistle was 'claiming institutions
were resisting any offer below 140p'. Thistle confirms that,
whilst this may represent the views of certain institutions,
Thistle has made no claim in this regard.
* The Board of Thistle for these purposes comprises all of the
directors of Thistle other than Tan Sri Quek Leng Chan and Mr
Arun Amarsi, who in view of their positions as Chairman and CEO,
respectively, of BIL International Limited ('BIL') have not
participated in the deliberations of the board in relation to
BIL's offer to acquire all of the shares in Thistle not already
owned by BIL.
*************
S U B S C R I P T I O N I N F O R M A T I O N
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Copyright 2003. All rights reserved. ISSN 1529-2754.
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