/raid1/www/Hosts/bankrupt/TCREUR_Public/030409.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, April 9, 2003, Vol. 4, No. 70
Headlines
* B E L G I U M *
LERNOUT & HAUSPIE: Wants to Extend Service for Avoidance Actions
* D E N M A R K *
MAERSK AIR: Reports Loss of DKK197 Million for 2002
* F I N L A N D *
BENEFON OYJ: No New Subscriptions in Directed Share Issue
* F R A N C E *
GIAT INDUSTRIES: Set to Cut Down Workforce to More Than Half
METALEUROP SA: Banks Suspends Support, Shares to Halt Trading
RHODIA SA: Board Rejects Proposal to Terminate Tirouflet
VIVENDI UNIVERSAL: Management Under Fire From Small Shareholders
* G E R M A N Y *
BERTELSMANN AG: Taylor & Francis to Formally Enter Bid
FRESENIUS AG: Moody's Assigns Rating to New Senior Notes
MUNICH RE: Might Not Need a Capital Increase in the Long Term
* I R E L A N D *
ESG RE: Issues Restated Results for Past Two Years
* I T A L Y *
FIAT SPA: Rating Unaffected by Disposal of Aerospace Unit
FIAT SPA: Agrees to Sell Aerospace Unit to The Carlyle Group
* L U X E M B O U R G *
VANTICO GROUP: Senior Lenders Grant Extension to Waivers
* N E T H E R L A N D S *
GETRONICS N.V.: Investigation Put on Hold by Mutual Agreement
JOMED N.V.: Court Prolongs Preliminary Suspension of Payments
KONINKLIJKE AHOLD: Berman DeValerio Files Fraud Lawsuit
KONINKLIJKE AHOLD: Sara Lee Discovers Inaccurate Confirmations
* P O L A N D *
ELEKTRIM SA: Announces Resolutions Adopted at Assembly
* R U S S I A *
ROSNEFT: Standard & Poor's Affirms 'B' Ratings of Company
* S W E D E N *
CELLPOINT INC.: Voluntarily Files for Relief Under Chapter 11
SAS GROUP: SARS Compounds Weak Economy, and Conflict in Iraq
SCANDINAVIAN AIRLINE: Low Bookings Prompted Cuts in Routes
* S W I T Z E R L A N D *
ABB LTD.: Sale of Oil, Gas and Petrochemical Unit to Take Time
CREDIT SUISSE: S&P Cuts 5 Class Ratings to Low-B & Junk Levels
HELVETIA PATRIA: Makes First Loss, Proposes to Cut Dividend
SWISS LIFE: Issues Ruling of Investigation on Long-term Strategy
* U N I T E D K I N G D O M *
CABLE & WIRELESS: Former Executive Holds to GBP1.5 MM Claim
GLOYSTARNE: Sell-off to New Wave Logistics Protects Jobs
SHELLYS SHOES: Stylo Acquires Chain for Only GBP1.5 Million
SSL INTERNATIONAL: Slater Ends Long-time Career With Group
TKA TALLENT: Announce Plans to Further Trim Down Workforce
TXU EUROPE: Schedules Earnings Release, Conference Call
WORLD SPORTS: Requests Voluntary Liquidation for Subsidiary
=============
B E L G I U M
=============
LERNOUT & HAUSPIE: Wants to Extend Service for Avoidance Actions
----------------------------------------------------------------
Lernout & Hauspie Speech Products N.V., as plaintiff in the
numerous Avoidance Actions filed in these cases, represented by
Donna L. Harris, Esq., at Morris Nichols Arsht & Tunnell, asks
Judge Wizmur to extend the time within which L&H must effect
service of the summonses and complaints with respect to the
Avoidance Actions for an additional 180 days.
Ms. Harris reminds Judge Wizmur that, in late November 2002, L&H
NV filed complaints against the Defendants in the Avoidance
Actions seeking to avoid and recover certain payments made by
L&H NV prior to its bankruptcy filing as preferential and/or
fraudulent transfers. Approximately 54 of the Avoidance Action
defendants have no address in the United States, and must
therefore be served in other countries. These complaints remain
unserved.
Twenty-four summonses have been issued and service attempted
with respect to defendants maintaining contacts in the United
States. However, a number of these defendants are also domiciled
outside of the United States, such that these complaints may
also need to be reserved in other countries.
On March 11, 2003, the Committee filed a plan of reorganization,
which, if confirmed, would vest authority to maintain and
prosecute the Avoidance Actions with a litigation trust
controlled by a litigation trustee appointed by the Committee.
Rule 4(m) of the Federal Rules of Civil Procedure generally
requires that adversary complaints be served upon the defendants
to the actions within 120 days of the date on which the
complaints are filed. While this rule contains an exception to
the 120-day limit for "service in a foreign country," a few
courts have held that service must at least be attempted within
120 days of the filing of the complaints in order for the
exclusion to apply. Accordingly, L&H NV believes that it is
prudent to obtain a Court order extending the time by which
service of process must be effected upon the defendants in the
Adversary Actions.
The granting of additional time to effect service of original
process is expressly provided for by Rule 9006(b) of the Federal
Rules of Bankruptcy Procedure. Courts should be liberal in
granting extensions of time sought before the period to act has
elapsed, as long as the moving party has not been guilty of
negligence or bad faith and the privilege of extensions has not
been abused.
In determining whether to extend the time for service of a
complaint under Civil Rule 4(m), the Third Circuit has set forth
a two-step inquiry. First, upon the showing of good cause for
the delayed service, the court must extend the time period.
Second, if there is no good cause, the court may exercise its
discretion to extend the time period. L&H NV asserts that good
cause exists for extending the time within which it must effect
service of process on the defendants in the Avoidance Actions
or, alternatively, that the Court should exercise its discretion
to extend the time, given the current state of L&H NV's
bankruptcy proceeding; and L&H NV's inability to obtain access
to many of the documents needed to assess the strength of the
Avoidance Actions and, hence, the decision whether to pursue
them.
As a result of the two-year statute of limitations to commence
certain causes of action, L&H NV was required to commence the
Avoidance Actions by November 29, 2002 to avoid a potential
forfeiture of those claims. At the time, L&H NV had on file with
the Court a First Amended Disclosure Statement Pursuant To
Section 1125 Of Bankruptcy Code With Respect To First Amended
Plan Of Liquidation Of Lernout & Hauspie Speech Products N.V.
Under Chapter 11 Of Bankruptcy Code, which, like the Proposed
Plan recently filed by the Committee, contemplated that the
Avoidance Actions would be assigned to a litigation trust and
prosecuted by a litigation trustee appointed by the Committee.
Given the added burden and expense attendant to litigation
involving defendants domiciled in foreign countries, and, in
particular, those that must be served under the Hague
Convention, L&H NV believes that the decision as to whether to
pursue these claims, and at what expense, should be made by the
litigation trustee.
Perhaps even more importantly, L&H NV has been unable to obtain
many of its financial records needed to prosecute the Avoidance
Actions because the Belgian police seized the documents.
Although the Debtor's counsel has been working with the Belgian
curators to obtain those documents, and has sent a letter of
request to be presented to the Belgian Court, it is not clear
when the documents will be released. These records will no
doubt be helpful in the decision as to which of the various
Avoidance Actions to pursue, and at what expense.
By not requiring service at this time, the defendants are not
required to engage counsel and undertake the time and expense of
defending against a proceeding that, after review of the
financial records bearing upon the merits of the claims and
likely defenses to the Avoidance Actions, ultimately may not be
pursued. In addition, this is the first request by the Debtor
to extend the deadline. Therefore, it is unlikely that the
request will prejudice any of the defendants. (L&H/Dictaphone
Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
=============
D E N M A R K
=============
MAERSK AIR: Reports Loss of DKK197 Million for 2002
---------------------------------------------------
Maersk Air A/S is parent company in the Maersk Air Group.
The activities of the Group in 2002 have included the following:
-- International scheduled routes
-- Domestic scheduled routes
-- Charter operations
-- Aircraft leasing and trading
-- Air Freight General Sales Agency
-- Contracted flights for parcels carrier
-- Operation of freight cargo terminal
-- Maintenance of aircraft
-- Revenue accounting services
The parent company registered a loss of DKK 197 million for the
year, compared with a loss of DKK 341 million last year. The
result is not satisfactory, however in line with the expectations
for 2002.
The result was significantly influenced, positively by profits on
sale of aircraft and the sale of Cargo Center Copenhagen
building, and negatively by unsatisfactory results for Maersk Air
Ltd and write-downs of fleet values.
Global economic recession influenced American and European
airline companies once again in 2002. Increased competition from
low-price airline companies has resulted in increased sale of
lower priced tickets by traditional airlines, which has reduced
the demand for full-price tickets. Maersk Air has consequently
adjusted its price concept and adopted a more targeted marketing
campaign during the year, with the result that passenger volume
on international routes increased satisfactorily both compared
with expectations and in comparison with 2001, but at somewhat
lower ticket prices.
A large number of measures have been taken in Maersk Air A/S to
make the organization more productive and to achieve cost
savings. In this connection it was decided to discontinue the
loss-making domestic routes to Billund and Bornholm in the
spring, and aircraft capacity was subsequently leased out with
improved results. In connection with the winter program, the
route to Istanbul was discontinued due to its weak result, and
capacity was used on two new routes to Barcelona and Munich,
resulting in improved earnings.
In connection with cost reduction measures, a part of aircraft
maintenance and revenue accounting operations were transferred to
Maersk Air's newly established affiliated companies in Estonia.
Cost savings in this connection will be realized in 2003 due to
the lower cost level in Estonia.
Productivity improvements have been realized in crew management,
and savings in other direct operational costs. Significant funds
and time were spent on the maintenance and development of Maersk
Air's intellectual resources, including simulator training for
pilots, security and customer service courses for cabin staff,
and ad hoc crisis practice for the entire staff, with a view to
achieving the highest safety and customer service quality
standards.
Charter operations increased over 2001 and more aircraft were
deployed than planned, but hourly rates were under pressure. In
the fourth quarter the market weakened somewhat, and as a
consequence a number of charter flights were cancelled. Income
from leasing of aircraft was lower than expected but considerably
higher than in 2001. The result for Maersk Air Cargo was
satisfactory and better than expectations.
During the year the Maersk Air Group took delivery of two ex-
factory Boeing 737-700 aircraft and four new Canadair CRJ 700 and
one Canadair CRJ 200 aircraft. Three of the older Canadair CRJ
200 aircraft were traded-in to the factory, and two Boeing 737-
700 aircraft were sold and leased back for a six-year period,
with a satisfactory result. One Fokker 50 aircraft was
redelivered to the owner. Maersk Air's own aircraft fleet
continues to be among the youngest in the world, and Boeing's
737-700 New Generation aircraft are among the most
environmentally friendly aircraft in terms of minimizing
atmospheric pollution.
The global recession, combined with a drop in the USD exchange
rate towards year-end, resulted in a decline in the value of the
fleet. In this connection specific additional write-downs were
made. During the year the company's financial risks were hedged
with satisfactory results for fuel purchases and interest on
aircraft loans, but with less satisfactory results for other net
USD operational costs.
Star Air's freight flight operations for United Parcel Service
(UPS) in Europe continued with satisfactory regularity and with a
better result than in 2001. Three larger Boeing 757-200 freighter
aircraft were added to the fleet and four smaller Boeing 727-100
freighters were redelivered to UPS.
The result for Maersk Air Ltd was very unsatisfactory, primarily
due to fewer passengers and significantly lower ticket prices,
resulting from aggressive competition from English low-price
airlines. An expansion of the route net in the second quarter did
not generate the expected additional revenue. Due to these
unsatisfactory results, and to unfavorable future prospects,
Maersk Air A/S has decided to dispose of Maersk Air Ltd.
Maersk Air's associated company, AS Estonian Air, has experienced
a satisfactory increase in passenger volume and a better result
than expected, and better than in 2001. In the autumn one Fokker
50 aircraft was replaced with one Boeing 737-500 aircraft. This
improved the company's product and increased capacity and was
well received by passengers, with a consequent increase in the
financial result.
During the year, Maersk Air established a holding company in
Estonia, AS Baltic Maersk Air Holding, with two subsidiary
companies, AS Maersk Air Maintenance Estonia and AS Maersk Air
Services Estonia, to perform aircraft maintenance and revenue
accounting services. The group showed a satisfactory result. Due
to establishment costs the group showed a small loss for 2002.
The Novia Group, which performs passenger and cargo handling
activities, has been in solvent liquidation since February 2002.
At the year-end the company's cargo handling activities were sold
to SAS, and the remaining activities were disposed of in January.
The Maersk Air Group's involvement in Novia is thus terminated.
The Novia Group is not included in the consolidated accounts.
Cargo Center Copenhagen A/S sold the freight terminal building at
Copenhagen airport to an investment company with a profit on sale
of DKK 80 million. The Group's total assets at year-end were DKK
4,518 million. (2001: DKK 4,934 million). Group equity at year-
end was DKK 464 million (2001: DKK 597 million.), and equity
represents 10.3% of the total liabilities (2001: 12.1%).
The impact on Group equity of the change to the new Danish
accounting legislation was a reduction at 31 December 2002 of DKK
169 million (2001: a reduction of DKK 274 million).
Forecast for 2003
Based on the degree of uncertainty there is in the world - not
least within the aviation industry - the result for 2003 is also
expected to be unsatisfactory.
Cooperation with SAS terminates in November 2003, after which
date Maersk Air will be free to cooperate with other airline
companies. There is significant uncertainty attaching to the
result for the Group's activities in England, after the decision
to dispose of Maersk Air Ltd.
To see financials: http://bankrupt.com/misc/MaerskAir.pdf
=============
F I N L A N D
=============
BENEFON OYJ: No New Subscriptions in Directed Share Issue
---------------------------------------------------------
As informed in bulletin of Friday, April 4, 2003 Benefon Oyj
announces that it has not by 16.30 Monday received payment by Dr.
Philippe Frangie for his share subscription. Dr. Frangie has
committed to pay his approximately 12 Meuros share subscription
latest on Thursday, April 10, 2003.
In addition Benefon Oyj announces that it has on Monday received
new offer from NRJ International LLC concerning the financing
solution of Benefon.
The amount of financing according to NRJ's new offer corresponds
the original amount of approximately 10 Meuros financing. The new
offer does not change NRJ's decision to withdraw from its
investment through the ongoing issue but instead would require
summoning a new shareholders' meeting.
Benefon states that its primary target is to achieve a positive
financing solution through the ongoing issue. In case the ongoing
issue would not solve company's financial problems Benefon is
willing to take all options into consideration when considering
further actions.
===========
F R A N C E
===========
GIAT INDUSTRIES: Set to Cut Down Workforce to More Than Half
------------------------------------------------------------
The management of France's state-owned weapons maker, Giat
Industries, is expected to announce job cuts of more than half of
the company's 6,000-strong workforce over the next two years.
The announcement is believed to involve the closure of two plants
in central France, according to The Guardian.
Speaking after a board meeting held Monday afternoon, union
leaders revealed that Giat was planning to slash the size of the
workforce to 2,500 in an effort to counter falling order book and
bleak international prospects.
Andre Golliard of CFDT, France's second largest trade union, said
the plants in line for closure are at Cusset and Saint-Chamond.
Plans to demonstrate against the cuts are being laid out by
unions. Workers at several of the company's nine plants already
stage protests. The actions are also aimed urging the government
take action to provide an acceptable alternative.
French media have reported that the government will provide the
company with a EUR1 billion cash injection as part of the
restructuring program, which is the sixth in a series implemented
by the struggling arms maker since 1988.
Under the terms of the restructuring program, Giat will be split
into two units, with all its unprofitable business being put into
a special holding structure.
Hit by poor sales of two of its main products (the France's main
battle tank Leclerc and the Famas assault rifle), Giat posted a
loss of EUR118 million last year. Sales were only EUR777
million, down by almost a quarter on 1998. Its order book also
slumped from EUR3 billion to EUR2.4 billion over the same period.
Giat makes tanks, artillery, armored vehicles, guns, munitions
and small caliber firearms and has a number of joint ventures
with other European arms makers.
METALEUROP SA: Banks Suspends Support, Shares to Halt Trading
-------------------------------------------------------------
The banks commits to maintain the Metaleurop S.A. short-term
credit lines, which amount to 41 million euros as of end on March
31st, 2003. Metaleurop S.A. has not obtained from the banks a
commitment to continue after this date.
Assuming the maintaining of the present credit lines, the
treasury forecast shows that Metaleurop S.A. should be able to
finance its activities until mid April 2003. The company is
looking at the means to finance its treasury shortage for the
period following this date.
Due to these uncertain elements and to the uncertainty
surrounding the procedure in the Tribunal de Grande Instance of
Bethune concerning the extension of bankruptcy liquidation of
Metaleurop Nord to Metaleurop S.A.; and after having consult the
regulatory authorities it appears wise to halt trading in
Metaleurop's shares until the decision of the Tribunal de Grande
Instance of Bethune on April 11, 2003.
After the decision of the Tribunal de Grande Instance of B,thune,
Metaleurop S.A. will issue a press release on the legal and
financial consequences of this decision and on its treasury
forecast.
CONTACT: METALEUROPE SA
Pascal Ragot
Direct phone: 33 1 42 99 47 73
Mobile: 33 6 85 72 35 43
RHODIA SA: Board Rejects Proposal to Terminate Tirouflet
--------------------------------------------------------
The Board of Directors of Rhodia met on Friday April 4, 2003, at
3:00 p.m.
(1) The Board of Directors reviewed the drafts resolution to be
presented to the Annual Shareholders' Meeting of Rhodia to be
convened on April 29, 2003.
The Board of Directors decided not to accept the draft resolution
submitted for consideration at the Annual Shareholders' Meeting
by Mr. Hughes de Lasteyrie du Saillant in his capacity as legal
representative of Valauret SA, calling for the early termination
of Jean-Pierre Tirouflet's membership of the Board of Directors
of Rhodia. The Board advises Rhodia's shareholders' to reject
this draft resolution by voting against it at the Annual
Shareholders' Meeting.
The Board also sought to assure the stability of Rhodia,
particularly during the current difficult economic conditions,
confirming its confidence in the management team and its CEO,
Jean-Pierre Tirouflet, for implementing the current strategy
supported by the Board and in avoiding the break up of the Group.
The Board of Directors decided not to approve the draft
resolution ratifying the appointment of Mr. Edouard Stern as a
director.
The Board of Directors decided to submit to the Annual
Shareholders' Meeting the appointment of PricewaterhouseCoopers
as Statutory Auditor of Rhodia for the next six years.
(2) The Board of Directors received an updated report on the
Group's activities. As anticipated by Rhodia when it published
its annual results on February 5, 2003, this report highlighted
the difficulties encountered during the first quarter of this
year as a result of the combined impact of the high price of
petrochemical raw materials, a weakening in demand, and a decline
in the value of the U.S. dollar.
Compared with the results for the first quarter of 2002, restated
to allow for changes in the reporting entity and to reflect
current foreign currency exchange rates, Rhodia now anticipates
4.3% growth in sales for the first quarter of 2003 (restated Q1
2002 sales figure: EUR1,368 million) and a decline in EBITDA of
approximately 20% (restated Q1 2002 EBITDA: EUR139 million).
Current forecasts for the second quarter of this year anticipate
an improvement in the business environment, compared with the
first quarter of 2003, despite persistently high raw material
prices.
For the year as a whole, the Group maintains its target of
reducing the Net Debt/EBITDA ratio to less than 2.5.
Rhodia will publish its results for the first quarter of 2003 on
Tuesday April 29, 2003 before trading starts on the Paris Stock
Market.
Rhodia is one of the world's leading manufacturers of specialty
chemicals. Providing a wide range of innovative products and
services to the consumer care, food, industrial care,
pharmaceuticals, agrochemicals, automotive, electronics and
fibers markets, Rhodia offers its customers tailor-made solutions
based on the cross-fertilization of technologies, people and
expertise. Rhodia subscribes to the principles of Sustainable
Development communicating its commitments and performance openly
with stakeholders. Rhodia generated net sales of EUR6.6 billion
in 2002 and employs 24,500 people worldwide. Rhodia is listed on
the Paris and New York stock exchanges.
CONTACT: RHODIA SA
Investor Relations
Marie-Christine Aulagnon
Phone: 33-1 55 38 43 01
Fabrizio Olivares
Phone: 33-1 55 38 41 26
VIVENDI UNIVERSAL: Management Under Fire From Small Shareholders
----------------------------------------------------------------
A group of Vivendi Universal SA small shareholders are urging the
management of the French media group to resign to give way to
five of their own candidates for the board.
The party, who is seeking support from company investors, told
Vivendi on April 2 they will back their own candidates at the
company's annual general meeting on April 29.
Fredirik-Karel Canoy, lawyer for the group, said, "We no longer
have faith in (Chief Executive Jean-Rene) Fourtou and his team."
"All of them have to go, the entire board...The most important
thing is to take control and get back the money that small
investors lost," he said.
But their move might not be heard on the meeting.
A Vivendi spokesman said they were not able to make it to the
deadline to pass the resolution on March 27.
They argued, however, that the rule isn't valid because Vivendi's
announcement of the planned AGM was incorrectly made.
Undeterred by the possible problem, Association des Petits
Porteurs Actifs, or Appac, continued to gather votes from Vivendi
Universal investors.
The party plans to push the appointment of Mr. Canoy, and Appac
Chairman Didier Cornardeau. They will represent the shareholders
together with other candidates, which are engineers and managers
from small French companies--Michel Varale, Vincent Derlon and
Gerard Sabbah.
There was no indication as to how many shares the group
represents, according to Dow Jones.
Vivendi demerited the move saying Appac and Canoy are
disseminating false information that could be harmful to the
company.
=============
G E R M A N Y
=============
BERTELSMANN AG: Taylor & Francis to Formally Enter Bid
------------------------------------------------------
British science publisher Taylor & Francis will formally enter
his bid for Bertelsmann's scientific books and journals business
this week, according to the Independent News. David Smith is
leading the company in the transaction.
The publisher has teamed up with private equity house Apax and is
expected to compete strongly with Cinven and Candover, with whom
it recently lost a GBP380 million acquisition of Kluwer Academic
Publishing.
Richard Menzies-Gow, an analyst at Dresdner Kleinwort
Wasserstein, said: "Taylor & Francis have the management and can
extract synergies. They have definitely got a better go at it as
they're working with Apax."
Yet, according to Mr. Menzies-Gow: "Their problem is that Cinven
overpaid for Kluwer, so they really have to get this business
[Springer] in order to put the two together."
He also added that the Cinven/Candover alliance may make a bid
for Taylor & Francis if it gets Bertelsmann Springer, according
to the Independent News.
Taylor & Francis, meanwhile, may opt for a rights issue if it
wins the process.
The company is understood to be the only trade buyer. Other
bidders are believed to be private equity houses, including a
consortium of CVC Capital Partners and Blackstone Group.
BC Partners, Charterhouse and Soros Private Equity Partners could
also be mulling a bid, according to speculations. Reed Elsevier
might also be interested despite its regulatory problems.
Bertelsmann Springer, which is valued at GBP700 million, is
sought after for being cash-generative and resilient to economic
downturns as all its peers in its sector.
Bertelsmann is expecting a firm bid for the business by the end
of the week. It wants to complete the sale process conducted by
Merrill Lynch by summer.
FRESENIUS AG: Moody's Assigns Rating to New Senior Notes
--------------------------------------------------------
Moody's Investors Service assigns a P(Ba1) rating to the proposed
EUR300 million equivalent in senior notes of healthcare group
Fresenius AG. The rating agency also confirmed the company's
senior implied and unsecured issuer rating at Ba1. The outlook
for all ratings is stable.
The group consists of three business divisions: FMC, Fresenius
Kabi, and Fresenius ProServe.
The offering will be used to refinance the group's debt, which
stands at approximately EUR3.5 billion (net) as of December 31,
2002.
Fresenius AG, the parent, holds EUR800 million of the debt, which
comprises unsecured bond and bank debt as well as shorter dated
commercial paper.
All debt at the parent, including the proposed new issuance of
EUR 300.0 million senior notes, ranks pari-passu.
The new notes are supported by first demand senior unsecured
guarantees from its two main wholly owned subsidiaries, Kabi and
ProServe.
Moody's says the rating reflects Fresenius's position and
leadership in the market, and expectations of strongly improving
operating and free cash flow post-restructuring and litigation,
as well as of benefit arising from strong demographic trends.
Offsetting these are the group's moderately leveraged balance
sheet; uncertainties relating to the company's deleveraging
capacity and potential changes to third-party reimbursement in
the U.S.; likelihood of continued acquisitive expansion, risks
associated with expansion in developing geographic regions; and
heavy reliance on Fresenius's majority owned subsidiary,
Fresenius Medical Care as the main recovery means in a downside
scenario.
MUNICH RE: Might Not Need a Capital Increase in the Long Term
-------------------------------------------------------------
Munich Re Chief Financial Officer Joerg Schneider said a
sustained level of current equity markets would make unnecessary
a capital increase for the company soon or even in the long-term.
"(A capital increase) is definitely not planned. If shares remain
constant or rise, I believe that we can survive without a capital
increase long term," Mr. Schneider told Sueddeutsche Zeitung.
Shares in the company nose-dived amid fears that its planned
subordinated bond issuance would not be sufficient to augment its
cash position. Observers speculated the reinsurer would have to
reinforce the issuance with a share offering, just as Allianz
did.
He declined to comment on the size of the bond issue, which
reports suggest could be between EUR3 billion to EUR3.5 billion.
Mr. Schneider conceded, however, that "in view of the huge swings
on world equity markets no one can rule out that capital increase
will be needed at some point."
Meanwhile, he said he still has no idea whether Munich Re made a
profit or a loss in the first quarter because the company is yet
to make large writedowns--in the range of triple-digit million of
euro, the company said two weeks ago.
But he assured "the operating result in reinsurance is
excellent."
Munich Re made writedowns of EUR5.7 billion for 2002, largely due
to Munich Re's holdings in Allianz and HVB Group AG.
=============
I R E L A N D
=============
ESG RE: Issues Restated Results for Past Two Years
--------------------------------------------------
ESG Re Limited (ESREF.PK) reported the following:
-- restated results for the year ended December 31, 2001
-- revised results for the quarter ended September 30, 2002 and
-- results for the year ended December 31, 2002.
RESTATEMENT OF 2001 RESULTS
In August 2002 we restated our financial statements for the year
ended December 31, 2001 as a result of our Foreign Currency
Translation account and filed an amended SEC Form 10-K for the
year 2001. In a press release dated December 23, 2002 and in an
SEC Form 8-K filed on December 27, 2002, we announced that we
anticipated a further restatement of our financial statements for
the year ended December 31, 2001 due to the accounting treatment
for a co-reinsurance contract entered into with ACE INA Overseas
Insurance company Ltd. ("ACE"). We are now restating our 2001
results for this ACE adjustment and reporting a further amendment
in respect to the foreign currency translation account (See below
for more detailed discussion). The following table summarizes the
impact of these restatements on our financial results for the
year ended December 31, 2001:
To See Table:
http://bankrupt.com/misc/ESG_Re_Table.htm
The amounts indicated above for the ACE contract are the same as
we reported in our December 2002 press release.
We anticipate filing an amended Annual Report on Form 10-K for
the year ended December 31, 2001 with the Securities and Exchange
Commission to reflect these adjustments in the near future.
Explanation of Restatement of Foreign Currency Translation
During the second quarter of 2002, we determined that foreign
currency translation adjustments, included in accumulated other
comprehensive income and other expenses, had been misstated by
$3,992 thousand due to the internal system that consolidates the
financial results of our subsidiaries. At the time we were unable
to determine the periods in which the adjustments should have
occurred. Therefore, we restated our financial statements for the
fiscal year ended December 31, 2001 in order to reflect a fourth
quarter adjustment to the foreign currency translation account.
The restated accounts were filed in our Annual Report on Form 10-
K (Amendment No. 3) filed on August 22, 2002.
Following further investigation, we have subsequently determined
that the adjustment of $3,992 thousand occurred in the following
years:
U.S. dollars in thousands
1999 $ 488
2000 4,071
2001 (567)
$ 3,992
We have thus further restated our financial statements for the
fiscal year December 31, 2001 in order to reflect the correct
foreign currency translation adjustments, included in accumulated
other comprehensive income, other expenses, and consolidated
statements of changes in shareholders' equity. Accordingly, the
results reported on our amended Annual Report on Form 10-K/A
(Amendment No. 3) will differ from and not be comparable with the
results reported in our Annual Report being disseminated.
The foreign currency translation account includes adjustments
arising from the process of translating the financial statements
of non-U.S. dollar subsidiaries into U.S. dollars. Assets and
liabilities of these subsidiaries are translated into U.S.
dollars at the exchange rate in effect at the balance sheet date.
Revenues and expenses ("statement of operations") for these
subsidiaries are translated into U.S. dollars using weighted
average exchange rates for the period. Retained earnings, share
capital and investments in subsidiaries are translated at
historic rates. Translation adjustments are included in the
equity section of the balance sheet.
Explanation of Restatement of Co-Reinsurance Agreement with ACE
We signed a co-reinsurance contract with ACE in November 2001
that became effective retroactively as of January 1, 2001. Under
SFAS 113, the premiums written during the retroactive period were
deemed to be written on our own account with the co-reinsurance
to ACE treated as a retroactive retrocession arrangement.
However, we did not show premiums earned, losses and loss
adjustment expenses and acquisition costs in our reported
revenues and expenses, in respect of the retroactive period, in
the third and fourth quarters of 2001 and the first and second
quarters of 2002. During the quarter ended September 30, 2002 we
restated our figures for the correct accounting treatment of this
contract. In accordance with SFAS 113, we did not recognize any
of the profits of the ACE share of the reinsurance contract in
our statement of operations and hence, there was no impact on our
reported net income or net loss in any affected period.
RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2002
The SEC Form 10-Q for the third quarter ended September 30, 2002
will be filed today [March 31, 2003]. The results show an
increase of $0.3 million from the previously reported loss of
$1.4 million to a total loss of $1.7 million for the quarter.
This increase was a result of a write off of an amount owing from
a Latin American cedant.
The accounting disagreements cited by Deloitte & Touche after
their resignation on November 22, 2002 have been resolved by the
company in conjunction with our newly appointed auditors, BDO
International. None of these disagreements impacted the results
of the third quarter of 2002. For further information in respect
to the resolution of these issues please refer to our Annual
Report and Consolidated Financial Statements for the years ended
December 31, 2002 and December 31, 2001. Our Annual Report and
audited Consolidated Financial Statements for the years ended
December 31, 2002 and December 31, 2001 will be available on our
website (www.esg-world.com) on March 31, 2003.
RESULTS FOR THE YEAR ENDED DECEMBER 31, 2002
The financial results for year 2002 show an overall loss of $51.2
million. This loss was primarily the result of:
A technical underwriting loss of $16.4 million stemming from:
Deterioration in the results for the legacy underwriting years of
1997, 1998, 1999 and 2000 of $24.0 million, primarily from losses
on Norwegian personal accident business written by the former
Chief Marketing Officer from our now closed German operation; and
$5.1 million as a result of a write-off of deferred acquisition
costs on an Australian contract that was terminated by a client
solely due to the rating downgrade in November resulting from the
resignation of Deloitte & Touche.
and
Administrative costs of $42.1 which were adversely impacted by a
number of non-recurring events:
An increase of $6.8 million in the legal reserve as a result of
recent developments for various matters in arbitration and
litigation.
A foreign exchange loss of $3.8 million in the second quarter as
a result of the adverse movement of the Norwegian Kroner against
the U.S. Dollar.
An increase in legal and audit fees of approximately $2.0 million
associated with the restatement of prior periods for the foreign
exchange translation account and the Deloitte resignation.
Taxation charges of $1.5 million including the write down of a
deferred tax asset in the amount of $1.3 million.
Investment income amounted to $7.1 million for the year
representing a yield of 5.6% on the average portfolio of $126.6
million.
Management fee income amounted to $2.3 million, consisting
primarily of fees earned on those premiums managed on behalf of
our co-reinsurers.
The year 2002 resulted in an overall net loss of $4.32 per share.
In assessing 2002, Alasdair Davis, CEO, stated that "We have now
completed the implementation and where necessary the
reimplementation of the infrastructure systems and processes to
support the Company. Working through the legacy issues has taken
one year longer than we originally anticipated. We are at a point
where the open treaties for the early underwriting years are less
than two dozen. We now feel we are at a point where the remaining
legacy liabilities are known and quantified. Treaty matters in
litigation and/or arbitration are significantly fewer in number
than this time one year ago."
Looking forward, Mr. Davis continued by saying that "Our focus in
2003 is in the production and retention of business that meets
not only our profit criteria but also our requirements for
win/win business partnerships." Mr. Davis took the opportunity to
thank both our current clients and employees for standing firm
with the company through the last several difficult months. He
commented that our balance sheet is solid and our capital is
sufficient for the business we want to write in 2003. The plan is
to achieve a breakeven financial result in 2003 and we are on
course to meet this objective for the year.
Our Annual Report for the year 2002 will be available on our
website (www.esg-world.com) on March 31, 2003.
Recent Developments
Market Information
From December 12, 1997 to November 20, 2002, our common stock was
traded on NASDAQ under the symbol ESREF. On November 20, 2002,
the trading symbol was changed to ESREE to reflect the unfiled
status of our Quarterly Report on SEC Form 10-Q for the quarter
ended September 30, 2002.
On November 25, 2002, the company received a Nasdaq Staff
Determination letter indicating that, as a result of the
Company's failure to timely file its Report on SEC Form 10-Q for
the period ended September 30, 2002, the Company's securities
would be delisted from the Nasdaq Stock Market Inc., effective at
the opening of business on December 3, 2002. The company
requested an oral hearing before a Nasdaq Listing Qualifications
Panel (the "Panel") to review the Staff Determination, which
request stayed the delisting of the Company's securities.
Thereafter, on December 17, 2002, the company was notified that
it failed to maintain a closing bid price of at least $1.00 per
share for 30 consecutive trading days, and that it should discuss
its plan to remedy that additional deficiency at the hearing. The
hearing was held on December 20, 2002. By letter dated January
31, 2003, the company was advised that the Panel had determined
that the Company's securities would be delisted from The Nasdaq
Stock Market effective with the opening of business on Tuesday,
February 4, 2003. The reason given for the decision was the
failure to timely file the Company's quarterly report on SEC Form
10-Q for the quarter ended September 30, 2002. In addition, the
Panel cited as a reason for its delisting decision, the Company's
failure to file any of the amendments to previously filed reports
under the Securities Exchange Act of 1934, as amended, for any of
the anticipated restatements of certain information in its
financial statements. Nasdaq's delisting decision will not be
appealed.
On March 17, 2003 we filed with the SEC our certification on SEC
Form 15 to deregister our common stock under the Securities
Exchange Act of 1934, as amended ("the Exchange Act"). Upon
filing, our obligations to file reports SEC Form 10-K, SEC Form
10-Q and other periodic reports that were not yet due was
immediately suspended. Our certification to deregister is
expected to become final within 90 days of filing. If the SEC
determines to deny our certification within such 90 day period,
we would have 60 days to bring all periodic reports due current.
We intend to continue to make available to our shareholders
quarterly and annual financial information in substantially the
same form as presently made available. We also intend to
generally comply with the corporate governance regulations and
guidelines that would be applicable if our common stock was still
registered under the Exchange Act and listed on Nasdaq.
The Company's securities are being quoted through the Pink Sheets
stock quotation service. We anticipate that Carr Securities
Corp., Port Washington, NY, and Morgan Keegan & Co., Inc.,
Birmingham, AL, will continue to quote our common stock although
no assurance can be made that any market maker will continue to
quote ESG's common stock or that a trading market will develop.
Appointment of Director
On March 7, 2003, Mr. Peter Collery was appointed as a non-
executive director. Mr. Collery is currently President of SC
Fundamental ICC, which manages the SC Fundamental Value Fund
Common Shares. This fund and its affiliates own 10.6% of our
outstanding Common shares.
Odyssey Re
In February 2000, Odyssey Re (Sphere Drake) instituted an action
in England against a broker, Stirling Cooke Brown, and others,
alleging fraud and conspiracy on the reinsurance placement of
1997 and 1998 Personal Accident and Workers Compensation "carve
out" business with Odyssey Re (Sphere Drake). During 1998, ESG
accepted a 25% quota share reinsurance treaty with Odyssey Re
(Sphere Drake). This treaty with Odyssey Re (Sphere Drake)
terminated as of December 31, 1998, but we renewed our
participation for 1999 directly with the underwriting agent
involved in the 1998 year. In December 1999, we gave notice to
rescind our contract with Odyssey Re (UK) for misrepresentation
and failure to disclose material facts. On November 29, 2000, we
filed suit in the High Court to seek a judicial confirmation of
our rescission. On February 5, 2001, Odyssey Re (Sphere Drake)
filed a response. In December 2002, Odyssey Re (Sphere Drake)
accepted our rescission of this treaty in return for a
contribution to its legal fees. Therefore, we have no further
liability on this contract.
We have also given notice we intend to rescind the 1999 account.
This matter is in discovery and is now set for arbitration in
late 2003. The outcome of the pending litigation between Odyssey
Re (Sphere Drake) and Stirling Cooke Brown and others will have
an impact on this arbitration.
Comparative Results
For the three months ended December 31, 2002, we had a net loss
of $24.7 million compared to a net loss of $6.1 million for the
fourth quarter of 2001. The net loss per share for the three
months ended December 31, 2002 was $2.09 compared with a net loss
per share of $0.52 for the fourth quarter 2001. The net operating
loss for the fourth quarter 2002, which excludes realized
investment gains, was $2.15 per share. Net operating loss for the
fourth quarter 2001, which excludes realized investment gains and
losses and loss on equity investments, was $0.25 per share.
For the year ended December 31, 2002, we had a net loss of $51.2
million compared to a net loss of $15.9 million for the year
ended December 31, 2001. The net loss per share for the year
ended December 31, 2002 was $4.32 compared with a net loss per
share of $1.35 for the year ended December 31, 2001. The net
operating loss for the year ended December 31, 2002, which
excludes realized investment gains/losses, was $4.28 per share.
Net operating loss for the year ended December 31, 2001, which
excludes realized investment gains and losses and loss on equity
investments, was $0.86 per share.
Premiums
For the three months ended December 31, 2002, we underwrote a
book of $26.9 million of gross premiums, of which $(0.7) million
related to co-reinsurers and $1.7 million was retroceded, thereby
assuming $25.9 million for our own account. For the three months
ended December 31, 2001, we underwrote a book of $59.6 million
gross premiums, of which $21.4 million related to co-reinsurers
and $0.4 million retroceded, thereby assuming $37.8 million for
our own account.
For the year ended December 31, 2002, we underwrote a book of
$117.2 million of gross premiums, of which $(9.0) million related
to co-reinsurers and $14.1 million was retroceded, thereby
assuming $112.1 million for our own account. For the year ended
December 31, 2001, we underwrote a book of $181.7 million gross
premiums, of which $47.3 million related to co-reinsurers and
$20.8 million was retroceded, thereby assuming $113.6 million for
our own account.
Revenues
Total revenues for the three months ended December 31, 2002 were
$35.5 million, consisting of net premiums earned of $32.8
million, net investment income of $1.6 million, net realized
investment gains of $0.7 million and management fee revenue of
$0.4 million. For the three months ended December 31, 2001, total
revenues were $47.7 million, consisting of net premiums earned of
$47.3 million, net investment income of $2.9 million, realized
investment losses of $3.2 million, and management fee revenue of
$0.6 million.
Total revenues for the year ended December 31, 2002 were $143.6
million, consisting of net premiums earned of $134.7 million, net
investment income of $7.1 million, net realized investment losses
of $0.5 million and management fee revenue of $2.3 million. For
the year ended December 31, 2001, total revenues were $164.2
million, consisting of net premiums earned of $156.9 million, net
investment income of $12.2 million, realized investment losses of
$5.7 million and management fee revenue of $0.9 million.
Expenses
For the three months ended December 31, 2002, expenses were $58.7
million, consisting of $25.4 million of losses and loss expense,
$16.4 million of acquisition costs, and $16.9 million of
operating expenses. Total expenses for the three months ended
December 31, 2001 were $55.1 million, consisting of $35.0 million
of losses and loss expenses, $13.0 million of acquisition costs,
and $7.1 million of operating expenses.
For the year ended December 31, 2002, expenses were $193.2
million, consisting of $101.4 million of losses and loss expense,
$49.8 million of acquisition costs, and $42.1 million of
operating expenses. For the year ended December 31, 2001,
expenses were $181.4 million, consisting of $107.1 million of
losses and loss expenses, $47.0 million of acquisition costs, and
$27.3 million of operating expenses.
The increase in operating expenses for the three months and year
ended December 31, 2002, is primarily due to (i) an increase in
our legal reserve of $6.8 million, (ii) increase audit and
professional fees of approximately $2.0 million resulting from
the resignation of Deloitte & Touche and (iii) foreign exchange
losses of $3.8 million arising in the first six months of the
year due to the strengthening of the Norwegian Kroner against the
U.S. Dollar.
During the third quarter 2002 we initiated a foreign exchange
hedging strategy and policy designed to minimize the impact of
currency rate fluctuations on our balance sheet.
Book Value
At December 31, 2002, total assets were $396.9 million and
shareholders' equity was $46.7 million, or $4.20 per common
share. At December 31, 2001, shareholders' equity was $95.1
million or $8.04 per common share.
Operating Ratios
ESG Reinsurance
The loss and acquisition expense ratios for the three months
ended December 31, 2002 and 2001, were 114.7% and 106.3%,
respectively.
The combined ratio for the three months ended December 31, 2002
was 167.3%, compared to 129.9% for the three months ended
December 31, 2001. The operating expense ratio for the fourth
quarter 2002 was 52.6%, compared to 23.6% for the fourth quarter
2001.
The loss and acquisition expense ratios for the years ended
December 31, 2002 and 2001, were 115.4% and 101.3%, respectively.
The combined ratio for the year ended December 31, 2002 was
144.7%, compared to 119.2% for the year ended December 31, 2001.
The operating expense ratio for the year 2002 was 29.3%, compared
to 17.9% for the year 2001.
ESG Direct
The loss and acquisition expense ratios for the three months
ended December 31, 2002 and 2001, were 170.1% and 37.3%
respectively. The increase in the 2002 loss ratio results solely
from the termination of the Australian contract and resulting
write off of deferred acquisition costs.
The combined ratio for the three months ended December 31, 2002
was 221.8%, compared to 71.7% for the three months ended December
31, 2001. The operating expenses ratio for the fourth quarter
2002 was 51.7%, compared to 34.4% for the fourth quarter 2001.
The loss and acquisition expense ratios for the years ended
December 31, 2002 and 2001 were 97.0% and 74.1% respectively.
The combined ratio for the year ended December 31, 2002 was
137.1%, compared to 111.1% for the year ended December 31, 2001.
The operating expense ratio for the year 2002 was 40.1%, compared
to 37.0% for the year 2001.
Audited Financial Statements
BDO International has completed their audit of the 2002 and 2001
Consolidated Financial Statements and has expressed an
unqualified opinion. The Annual Report and audited Consolidated
Financial Statements will be available on our website (www.esg-
world.com) on March 31, 2003.
Annual General Meeting of Shareholders
The shareholders will receive a copy of the 2002 and 2001 Annual
Report and audited Consolidated Financial Statements, along with
the notice of the Annual General Meeting, proxy statement and
form of proxy, at the end of June in connection with the annual
general meeting of shareholders. This meeting is tentatively
scheduled for August 4, 2003.
Further Information
The company will respond to questions submitted in relation to
these year 2002 results. Please contact Investor Relations.
=========
I T A L Y
=========
FIAT SPA: Rating Unaffected by Disposal of Aerospace Unit
---------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings and
outlook on Italy-based industrial group Fiat SpA FIA.MI (Fiat;
BB+/Negative/B) were not affected by the group's announcement
regarding the likely disposal of aerospace activities by its
subsidiary FiatAvio SpA.
This transaction--which is based on an enterprise value of EUR1.6
billion ($1.7 billion) and will help reduce Fiat's consolidated
net debt--was taken into account by Standard & Poor's prior to
resolving the CreditWatch placement on the group on March 5,
2003.
"Standard & Poor's continues to monitor Fiat's success at
implementing challenging internal restructuring measures," said
Standard & Poor's credit analyst Virginie Casin.
FIAT SPA: Agrees to Sell Aerospace Unit to The Carlyle Group
------------------------------------------------------------
U.S.-based Fiat SpA confirmed on Monday it has agreed to sell its
aerospace unit, Fiat Avio, to private-equity company The Carlyle
Group, for an 'enterprise value' of EUR1.6 billion (US$1.72
billion).
The parties signed a memorandum of understanding that involves
Finmeccanica SpA, 32% owned by the government, taking part as an
"industrial partner," the Italian industrial group said.
The news sent Fiat's shares up 3.3% at EUR6.08 each in morning
trading Monday.
Carlyle is set to carrying out a due-diligence process that will
start in the next few days and last for about five weeks.
Fiat SpA, which recently posted a EUR4 billion loss, is divesting
several of its assets to raise cash for its troubled unit Fiat
Auto. It needs to have as much as EUR5 billion if it wants to
save the group's struggling auto business.
Fiat Auto, meanwhile, 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.
===================
L U X E M B O U R G
===================
VANTICO GROUP: Senior Lenders Grant Extension to Waivers
--------------------------------------------------------
Vantico Group S.A. announces that the company's senior lenders
have granted an extension to existing waivers to enable the
company to complete the restructuring proposal as described in
the Company's press release dated 21 March 2003.
The waivers are in respect of certain provisions of the company's
senior credit facilities and are subject to continued
satisfaction of certain conditions. The extension is effective
until May 16, 2003.About Vantico Vantico was created through a
management buy-out of the Performance Polymers Division of Ciba
S.C., backed by Morgan Grenfell Private Equity. Vantico operates
as a global leader in providing solutions in the field of
innovative coatings, structural composites, adhesives, tooling
materials, and electrical and electronic insulation for the
automotive, electronic, electrical, aerospace and consumer-
durable industries.
Vantico is incorporated in Luxembourg and operates globally in
two Divisions: Polymer Specialties, and Adhesives, Tooling and
Optronics.
Close Brothers Corporate Finance is acting for Vantico Holding
S.A. and its in connection with the Restructuring and no-one else
and will not be responsible to anyone other than Vantico Holding
S.A. and its subsidiaries for providing the protections offered
to clients of Close Brothers Corporate Finance.
CONTACT: VANTICO
Helmut Strametz, Chief Executive Officer
Phone: +44 (0) 20 8814 7940
Fax: +44 (0) 20 8814 7962
E-mail: helmut.strametz@vantico.com
Justin Court, Chief Financial Officer
Phone: +44 (0) 20 8814 7940
Fax: +44 (0) 20 8814 7950
E-mail: justin.court@vantico.com
CLOSE BROTHERS CORPORATE FINANCE
Financial Adviser to Vantico
Richard Grainger
Phone: +44 (0) 20 7655 3100
Fax: +44 (0) 20 7655 8906
E-mail: richard.grainger@cbcf.com
Jason Clarke
Phone: +44 (0) 20 7655 3100
Fax: +44 (0) 20 7655 8906
E-mail: jason.clarke@cbcf.com
=====================
N E T H E R L A N D S
=====================
GETRONICS N.V.: Investigation Put on Hold by Mutual Agreement
-------------------------------------------------------------
Getronics N.V. announces that the procedure before the
"Ondernemingskamer" ("Enterprise Division") of the Amsterdam
Court of Appeal regarding an investigation into the affairs of
the company has been put on hold ("is aangehouden"), with the
agreement of all the parties involved.
No new date has been set for the continuation of the procedure.
Getronics N.V. expects to be consulted about the continuation of
the procedure, if any, by the other parties involved.
Klaas Wagenaar, Vice Chairman of Getronics, comments: "The
company welcomes this development. Getronics is now sailing in
calmer waters and we remain focused on providing high quality ICT
services to our clients."
*****
Earlier, TCR-Europe reported that bondholders who claimed they
represent 20% of total outstanding bond capital of the company
are demanding that they be provided with detailed information on
Getronic's plans to save the business.
They were asking the court to fine Getronics EUR1 million a day
on failure to provide the information.
CONTACT: GETRONICS N.V.
Getronics Investor Relations
Phone: +31 20 586 1964
Fax: +31 20 586 1455
E-mail: investor.relations@getronics.com
JOMED N.V.: Court Prolongs Preliminary Suspension of Payments
-------------------------------------------------------------
JOMED N.V., a medical technology company incorporated in The
Netherlands and listed on the SWX Swiss Exchange reports on the
results of creditors' meeting in Amsterdam. JOMED was granted a
prolongation of the preliminary suspension of payments until May
2, 2003 when the next creditors' meeting will take place before
the Amsterdam District Court.
At a formal creditors' meeting held before the Court, the
administrators, Rutger J. Schimmelpenninck and Matthieu Ph. Van
Sint Truiden, JOMED N.V. and its attending creditors were
consulted regarding the conversion of the currently running
preliminary suspension of payments proceedings into definitive
suspension of payments proceedings. The Administrators supported
the company's expressed confidence in its ability of finalizing
the currently ongoing restructuring process and to repay its
creditors in the future. This could be done by either re-
financing and/or asset-divestments. The company stressed -
although it presently has a negative cash flow of around ? 2 to
2,5 million per month - that its overall value in a prolonged
suspension of payments situation would be significantly higher
than in a bankruptcy situation. A prolonged suspension of
payments would be in the interest of the collectivity of the
company's creditors.
Some of the larger creditors did not share this view. These
creditors expressed their intention to vote against definitive
suspension of payments proceedings because of the negative cash
flow. This would have led to a bankruptcy of the company.
The Court ruled that at this moment a bankruptcy would not be in
the interest of the company and the collectivity of its
creditors. Therefore the voting on the conversion of the
currently preliminary suspension of payments into definitive
suspension of payments is to be postponed until Friday May 2,
2003 at 10am CET.
This enables JOMED and the administrators to continue the
restructuring process with an aim of achieving the best possible
financial solution for the current problems of the company and
the collectivity of its creditors. Discussions are ongoing with
all parties and the company is striving for completing the deals
before May 2, 2003.
JOMED in brief
JOMED is the leading European developer and manufacturer of
products for minimally invasive vascular intervention. It
currently provides a range of over 2,000 products in over 70
countries. JOMED's shares are listed on the main segment of the
SWX Swiss Exchange (SWX: JOM). For more information, please visit
www.jomed.com.
CONTACT: JOMED N.V.
Jorgen Peterson, Acting CEO
Phone: +46 42 490 6014
Lars-Johan Cederbrant, Acting CFO
Phone: +46 42 490 6048
KONINKLIJKE AHOLD: Berman DeValerio Files Fraud Lawsuit
-------------------------------------------------------
Koninklijke Ahold N.V. (Royal Ahold) and two former officers are
subjects of a securities fraud lawsuit that accuses the company
of issuing false and misleading financial statements to the
public, Berman DeValerio Pease Tabacco Burt & Pucillo said.
The complaint was filed March 3 in the U.S. District Court for
the Southern District of New York. Plaintiffs seek damages for
violations of federal securities laws on behalf of all investors
who bought Ahold securities from March 6, 2001 through and
including February 21, 2003 (the Class Period).
Berman DeValerio has represented investors in class actions for
over 20 years. To review the complaint and learn more about
becoming a lead plaintiff, please visit the firm's website at
http://www.bermanesq.com
The lawsuit claims that Ahold and its officers issued false and
misleading financial statements that misrepresented the company's
true revenue and earnings, causing its securities to trade at
artificially inflated prices.
Ahold stunned investors on February 24, 2003 when it announced
that:
(i) the company's U.S. Foodservice subsidiary had materially
overstated its income by close to $500 million by improperly
including higher promotional allowances, provided by suppliers to
promote their products, than the company actually received in
payment;
(ii) the company's Disco subsidiary had engaged in certain
transactions that were possibly illegal and were improperly
accounted for; and
(iii) the company's historical financial statements would be
restated to proportionally consolidate, under Dutch GAAP and U.S.
GAAP, several of the company's joint ventures.
Moreover, the company also revealed that its CEO and CFO had
resigned and that the Company's independent auditors had
suspended their fiscal year 2002 audit pending completion of the
investigations into the foregoing accounting irregularities.
As a result of this news, the price of Ahold ADRs fell $6.53 per
share, or more than 61%, to close at $4.16, on heaving volume. On
February 26, 2003, it was announced that the U.S. Securities and
Exchange Commission and the U.S. Attorney's Office were
investigating Ahold.
If you purchased Ahold securities during the period March 6, 2001
through and including February 21, 2003, you may wish to contact
the following attorney at Berman DeValerio Pease Tabacco Burt &
Pucillo to discuss your rights and interests.
Julie A. Richmond, Esq.
One Liberty Square
Boston, MA 02109
(800) 516-9926 or (617) 542-8300
law@bermanesq.com
If you wish to apply to be lead plaintiff in this action, a
motion must be filed on your behalf with the court no later than
April 28, 2003. You may contact the attorneys at Berman DeValerio
to discuss your rights regarding the appointment of lead
plaintiff and your interest in the class action. You may also
retain counsel of your choice. To be a member of the class,
however, you need not take any action at this time.
Berman DeValerio Pease Tabacco Burt & Pucillo prosecutes class
actions nationwide on behalf of institutions and individuals,
chiefly victims of securities fraud, antitrust law violations,
and consumer fraud. The firm consists of 33 attorneys in Boston,
San Francisco, and West Palm Beach, Florida.
CONTACT: BERMAN DEVALERIO PEASE TABACCO BURT & PUCILLO
Julie A. Richmond, Esq.
Phone: (800) 516-9926
(617) 542-8300
KONINKLIJKE AHOLD: Sara Lee Discovers Inaccurate Confirmations
--------------------------------------------------------------
-- Company's internal review finds three sales people confirmed
inaccurate U.S. Foodservice payment records
-- Sara Lee is not a focus of the SEC investigation; company's
financial results are not affected
Sara Lee Corporation announced that an internal review of its
relationship with Royal Ahold's U.S. Foodservice unit has
revealed that three salespeople independently confirmed to U.S.
Foodservice's auditor, Deloitte & Touche, inaccurate amounts
payable to U.S. Foodservice. These amounts were inconsistent with
the formal reporting of rebate balances that Sara Lee provided on
a monthly basis to U.S. Foodservice. Documents indicate that
these individuals improperly responded to direct requests from
senior U.S. Foodservice executives to confirm rebates and
balances due from Sara Lee that were inaccurate and higher than
what was owed. Sara Lee is providing its findings and related
materials to the Securities and Exchange Commission (SEC) in
conjunction with the SEC's ongoing investigation into this
matter.
"While this is a serious matter, we want to emphasize that Sara
Lee is not the focus of this investigation, and this discovery in
no way affects our financial results. Sara Lee's accounting for
our business with U.S. Foodservice is both accurate and
appropriate," said C. Steven McMillan, chairman, president and
chief executive officer of Sara Lee Corporation. "We will
continue to cooperate fully with the SEC's investigation into
accounting practices at the U.S. Foodservice unit of Royal
Ahold."
Sara Lee emphasized that these three salespeople, who have been
relieved of their sales responsibilities, were not authorized to
make these confirmations. The company acknowledged that the
letters could have been used improperly by certain U.S.
Foodservice personnel to indicate higher than actual earnings.
Sara Lee Corporation (http://www.saralee.com)is one of the
world's leading branded consumer packaged goods companies,
selling its products in nearly 200 countries. The company has
three global businesses - Food and Beverage, Intimates and
Underwear, and Household Products - through which it manufactures
and markets products of exceptional quality and value under
leading, well-known brand names such as Sara Lee, Earth Grains,
Jimmy Dean, Douwe Egberts, Chock full o'Nuts, Hanes, Playtex,
Bali, Dim, Kiwi, Ambi-Pur and Sanex.
CONTACT: Analysts
Aaron Hoffman
Phone: 312.558.8739
===========
P O L A N D
===========
ELEKTRIM SA: Announces Resolutions Adopted at Assembly
------------------------------------------------------
The Management Board of Elektrim S.A. informs that on April 4 the
Extraordinary Assembly of Shareholders adopted the following
resolutions:
Resolution no 1 of the extraordinary general assembly of Elektrim
S.A. regarding determining the number of the Supervisory Board's
members
The Extraordinary General Assembly resolves to determine the
number of members of Supervisory Members on 8 persons.
Resolution of group No 1 of the shareholders' of Elektrim S.A.
Acting according to Art. 385 5 in connection with Art. 385 3
of the Commercial Companies Code, as an effect of voting in group
No 1, to which the following shareholders were appointed:
Polsat Media S.A. who represented 7.998.466 of shares entitled to
appoint 1 member of the Supervisory Board, the following persons
were appointed as members of the Supervisory Board:
(1) Mr. Zygmunt Solorz - Zak.
Resolution of group No 2 of the shareholders' of Elektrim S.A.
Acting according to Art. 385 5 in connection with Art. 385 3
of the Commercial Companies Code, as an effect of voting in group
No 2, to which the following shareholders were appointed:
Vivendi Universal Merging Markets Development S.A. who jointly
represented 8.259.616 of shares entitled to appoint 1 member of
the Supervisory Board, the following persons were appointed as
members of the Supervisory Board:
(1) Mr. Michel Picot
Resolution of the extraordinary general assembly of Elektrim S.A.
regarding filling of the positions in the Supervisory Board not
filled by the groups of shareholders
Extraordinary General Assembly resolves to appoint to the
Supervisory Board the following persons:
(1) Piotr Nurowski;
(2) Zbigniew Jakubas;
(3) Ewa Bryx-Soltysik;
(4) Leszek Maciusowicz;
(5) Krzysztof Pawelec;
(6) Wojciech Filochowski;
Resolution no 2 of the extraordinary general assembly of Elektrim
S.A. regarding appointment of the Chairman of the Supervisory
Board
Acting according to 13 section 2 of the Company's Statute
Extraordinary General Assembly resolves to appoint Mr Zygmunt
Solorz - Zak the Chairman of the Supervisory Board .
===========
R U S S I A
===========
ROSNEFT: Standard & Poor's Affirms 'B' Ratings of Company
---------------------------------------------------------
Standard & Poor's Ratings Services said it affirmed its 'B'
corporate credit and senior unsecured debt ratings on Russia-
based OJSC Oil Company Rosneft (Rosneft), following the decision
of its bondholders to change the eurobond covenants. The outlook
is negative.
"Rosneft's bank debt includes tight financial covenants, as well
as those just renegotiated with bondholders. Therefore, the
company's ability to avoid technical default continues to depend
on the success of covenants renegotiation with its banks," said
Standard & Poor's credit analyst Elena Anankina. "Moreover, the
ratings and outlook on Rosneft already incorporated Standard &
Poor's expectation that Rosneft would be able to avoid technical
default on its eurobonds. Beyond the covenant renegotiation, the
ratings and outlook continue largely to reflect the company's
aggressive investment and financial policy."
Rosneft is already significantly leveraged, has large capital
requirements to invest in continuing production growth and
modernizing refineries, and has an ambitious policy to grow
through external acquisitions. Because of an acquisition in early
2003, Rosneft's total debt significantly increased, and the
company was close to technical breach of its covenants on
eurobonds and on bank debt, hence the current renegotiation.
In addition, Rosneft faces the sovereign risks of the Russian
Federation, where essentially all its assets are based. The
company is exposed to nontransparent regulation of the oil
industry in Russia, transportation bottlenecks, and a domestic
fuel price that is significantly lower than the international
one. Rosneft's profitability and cash flows are significantly
exposed to crude oil price volatility, and the cost base is no
better than the industry average.
The ratings on the company continue to be supported by:
-Large reserves (at Dec. 31, 2001, the company had proven
reserves of 2.6 billion barrels, as audited by De Golyer and
MacNaughton), supporting strong production growth, which
increased by 8% in 2002;
-Access to foreign currency revenues from exports of crude oil
and refined products (43% and 40% of 2001 production,
respectively);
-Vertical integration into refining; and
-Growing control over key operating subsidiaries.
Rosneft's liquidity is tight, because of the risk of technical
violation of the covenants on its bank debt. In addition, a very
large portion of Rosneft's crude exports is pledged against bank
facilities. Nevertheless, Rosneft benefits from successful
renegotiation of its eurobond covenants, as Standard & Poor's
expected. The company also benefits from improving access to
domestic and international finance, reflecting the progress of
the Russian economy.
Rosneft has an aggressive financial policy and its ability to
avoid technical default will depend on the successful
renegotiation of financial covenants on its bank debt. Standard &
Poor's expects the company to successfully renegotiate the
covenants with the banks. If such a process were to fail or be
subject to litigation, the ratings on Rosneft may be lowered, if
necessary by more than one notch. Standard & Poor's is, however,
unaware of any litigation with the creditors that may result in a
downgrade of the company. "Even if the company obtains the banks'
approval, as Standard & Poor's expects, the concern about the
company's financial policy remains," added Ms. Anankina.
Standard & Poor's will closely monitor any developments with bank
debt covenant renegotiations and will carefully analyze the
company's financial policy.
===========
S W E D E N
===========
CELLPOINT INC.: Voluntarily Files for Relief Under Chapter 11
-------------------------------------------------------------
CellPoint Inc., a global provider of mobile location software
technology and platforms, announced that CellPoint Inc. has filed
a voluntary petition for relief under Chapter 11 of the United
States Bankruptcy Code with the United States Bankruptcy Court
for the District of Nevada.
The Chapter 11 petition will allow the company to continue
operation while management develops a formal reorganization plan
and business model. The case has been designated case number 03-
51091 GWZ.
CellPoint Inc. (OTC - CLPT.PK ) is a leading global provider of
location determination technology and carrier-class middleware,
which enable mobile network operators to rapidly deploy revenue
generating location-based services for consumer and business
users, and to address mobile E911/E112 security requirements.
CellPoint's two core products, Mobile Location System (MLS) and
Mobile Location Broker (MLB), provide an open standard platform
adapted for multi-vendor networks with secure integration of
third-party applications and content. CellPoint's location
platform has a seamless migration path from GSM/GPRS to 3G,
supports 500,000 location requests per hour and can easily be
scaled-up to handle increased traffic throughput.
CellPoint's early entry and experience with European mobile
operators has allowed the development of products and features
that address key requirements such as active and idle mode
positioning, location roaming, multiple location determination
technologies and consumer privacy.
CellPoint is a global company headquartered in Kista, Sweden. For
more information, please visit http://www.cellpoint.com
CellPointT and CellPoint SystemsT are trademarks of CellPoint
Inc. Forward-looking statements in this release are made pursuant
to the safe harbor provisions of the Private Securities
Litigation Act of 1995. Actual results may differ materially from
those projected in any forward-looking statement. Investors are
cautioned that such forward-looking statements involve risk and
uncertainties, which may cause actual results to differ from
those described.
CONTACT: CellPoint Inc.
Atlantic House
Imperial Way
Reading
RG2 0TD
UK
Phone: +44 1189 036 130
Fax: +44 1189 036 100
SAS GROUP: SARS Compounds Weak Economy, and Conflict in Iraq
------------------------------------------------------------
-- The SAS Group transported a total of 2,6 million passengers in
March 2003 vs 2,8 million in 2002, a decrease of 6,0%.
-- Total traffic (RPK) decreased by only 4,5%.
-- Overall group passenger load factor decreased by 5,9 p.u to
61,5% for March 2003 vs. 2002.
Market trends and yield development
The current macroeconomic environment remains very challenging
for all airlines in the group. In addition to the weak economies,
the conflict in Iraq and the situation with the SARS virus is
currently affecting bookings and putting additional pressure on
traffic development. Indications of passenger yield development
in February show continued pressure on yields for Scandinavian
Airlines as a result of negative mix, campaigns and other market
activities. Yield (unit revenues) for February 2003 was down 13%
vs February 2002. It must be noted that the yield is also
significantly affected by more capacity on intercontinental
routes with lower yields. Yields on the European routes were down
5-6% in February.
The yield development in February/ March is in line with the
figures reported for the previous months, however the demand and
traffic volumes have weakened further and as a result capacity
has been reduced by 5-10% in Scandinavian Airlines, Braathens and
Spanair. Forceful measures are initiated to offset the negative
development in passenger volumes and yield. The direct effects
from the Iraq situation is very limited on domestic and
Intrascandinavian traffic, but noticable on the U.S and U.K
routes. The situation with the SARS virus in Asia is also putting
pressure on bookings to/ from the region and adds additional
uncertainties to the current situation. The outlook remains
negative.
SCANDINAVIAN AIRLINE: Low Bookings Prompted Cuts in Routes
----------------------------------------------------------
Scandinavian Airlines Systems (SAS) moves to counter the sharp
decline in passenger traffic by cutting 19 domestic routes within
Norway and three international routes.
The cuts will take effect from April 22 to June 20 and will
involve eight roundtrips a week between Oslo and Bergen, eight
weekly roundtrips between Oslo and Trondheim and three between
Oslo and Stavanger. Some 34 departures from Scandinavia are also
in line for axing.
Further trim down will also be made in the carrier's departures a
week from Oslo to Dublin and two from Oslo to Manchester.
The company says it may restore services in these routes if
passenger demands pick up.
SAS spokeswoman Siv Meisingseth explained: "We have chosen to cut
down on the number of departures that have shown low demand and
which have several possibilities for re-routing."
"That way, the fewest number of passengers possible are
affected," she added.
=====================
S W I T Z E R L A N D
=====================
ABB LTD.: Sale of Oil, Gas and Petrochemical Unit to Take Time
--------------------------------------------------------------
ABB is unlikely to announce the disposal of its oil, gas and
petrochemical (OPG) unit soon because of the considerable size
and complexity of the business, sources told Reuters.
The unit generates annual sales of US$3.9 billion, and has
upstream business Vetco Gray, as its most attractive part.
"We are in the due diligence phase of the negotiations," said ABB
spokesman Thomas Schmidt. "There are several interested parties
and we are confident to close the deal (by the end of the year),"
he added.
U.S. firm Halliburton HAL.N and France's Technip-Coflexip TECF.PA
is seen as possible bidders for the OPG business.
ABB wants to sell the business as a whole, although it does not
rule out splitting the units.
While a buyer for Vetco Gray, which has a double-digit operating
margins, is expected to come easily, interest in the offshore
systems unit might not come as quickly. The operation is
involved in the declining North Sea oil sector.
Analysts say a trigger for the deal could be a US$1.2 billion
settlement for asbestos-related injury claims related to the
group's Combustion Engineering unit.
ABB will use the proceeds of the sale, estimated at up to $1.4
billion, to pay down its $8 billion debt.
CREDIT SUISSE: S&P Cuts 5 Class Ratings to Low-B & Junk Levels
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on five
classes of Credit Suisse First Boston Mortgage Securities
Corp.'s commercial mortgage pass-through certificates series
2001-FL2. Additionally, the ratings on four of these classes are
placed on CreditWatch negative. Concurrently, ratings are raised
on four classes and ratings are affirmed on 10 other classes
from the same issuer.
The raised and affirmed ratings reflect the paydown of the
pool's certificate balance. The lowered ratings are the result
of the pool's overall debt service coverage (DSC) decline since
issuance and the weakened operating performance of five loans.
The CreditWatch placement of the four downgraded classes
reflects the interest shortfalls that are occurring in various
classes whose interest recovery is expected in the next few
months. If the interest recoveries should extend beyond that
period, the ratings on some or all of the shorted classes will
be set to 'D'. Of the $333,025 of interest that was shorted in
March, 2003, $246,000 was due to special servicer recovery and
workout fees, prepayment interest of $72,520 and $14,505 related
to appraisal subordinated entitlement reduction amounts (ASERs),
and legal fees.
At issuance, the principal balance of the pool was $619.0
million, compared to the current balance of $428.8 million (or a
reduction of 30%). There are presently 17 floating rate,
interest only balloon loans outstanding, down from 31 at
issuance. The current DSC for the remaining loans is 1.45x,
compared to 1.72x at issuance. At issuance, the DSC for all the
loans was 1.70x. The property concentrations include hotel (46%
of total principal balance), office (28%), and retail (14%). At
issuance, the property type breakdown was hotel (38%), office
(20%), and retail (23%). Louisiana and Florida have the largest
state concentrations at 28% and 22%, respectively, of total
current principal balance.
All 17 loans are whole loans. In the San Thomas Business Park
Loan, the trust owns a 16.6% interest ($20 million) in a
participation loan that totals $120 million. The trust's portion
participates pari passu with an $80 million senior interest held
in the Credit Suisse First Boston Mortgage Securities Corp.
2000-Fl1 transaction. The remaining $20 million junior
participation interest is held by a third party.
There are currently 12 loans that are being specially serviced
or are on the servicer's watchlist. Four of the loans, or $72.8
million (17% of total principal balance), are specially
serviced, while eight loans, or $248.3 million (58% of total
principal balance), are on the watchlist.
Three of the five loans (represents 97% of the five loans
principal balance) that are contributing to the lowered ratings
include:
-- Ritz Carlton-New Orleans (loan balance of $120 million,
28% of total pool principal balance). The property is located in
the French Quarter of New Orleans. It consists of four
buildings, including the 453-room Ritz Carlton hotel, two
independent hotels, retail, a parking garage, and health spa. In
2000, there was a gut renovation and rehabilitation of the
property. Occupancy/Average Daily Rate (ADR) of the Ritz Carlton
(contributes 76% of the loan's operating cash flow) was 61%/$222
at Dec. 31, 2002. The loan's operating cash flow declined to
$8.09 million at Dec. 31, 2002 from $18.1 million at issuance.
The New Orleans lodging market has been affected by the decline
in business travel and the oversupply of hotels. Of the 25 major
lodging markets tracked by Smith Travel, New Orleans had the
greatest ADR (17.8%) and RevPar (12.8%) year-to-date declines
from February 2002 through February 2003.
-- Hotel Royal Plaza (loan balance of $35 million, 8.2% of
total pool principal balance). The Hotel Royal Plaza loan is
collateralized by a 394-room property located in Lake Buena
Vista, Fla. (close to Walt Disney World). The property has been
affected by the slowdown in business and leisure travel. Net
cash flow declined to $1.57 million (as last reported) from
$4.36 million at issuance. The occupancy/ADR at issuance was
75%/$122.30. Occupancy/ADR, as last reported was 59%/$97.85.
These levels are in line with the Orlando lodging market, which
on a year-to-date basis through February 2003 had an average
occupancy of 60% and an ADR of $97.53. The special servicer
approved a modification reducing the loan's interest rate. The
loan is expected to be returned to the servicer in the next few
months.
-- Main Street 200/300 Office (loan balance of $ $15.2
million, 3.5% of total pool principal balance). The loan
consists of a 127,000 square foot office building located in
Novi, Mich. The loan was transferred to special servicing in
January 2002 due to a payment default. It is currently 77%
occupied with a DSC of .52x. The loan is currently REO and an
appraisal reduction of $545,000 was taken. Net cash flow
declined to $660,000 on a six-month 2002 annualized basis,
compared to $1.70 million at issuance. The special servicer
expects a loss on the loan's liquidation.
Standard & Poor's stressed the five loans to arrive at value
reductions based on current cash flow amounts. The lowered
ratings reflect that analysis. Standard & Poor's will continue
to closely monitor the operating performance of these five
individual loans, as well as the other specially serviced and
watchlist loans.
RATINGS RAISED
Credit Suisse First Boston Mortgage Securities Corp.
Commercial mortgage pass-through certs series 2001-FL2
Rating
Class To From Credit Support (%)
B AAA AA 47.5
C AA+ A 39.5
D AA A- 37.1
E A BBB+ 31.7
RATING LOWERED
Credit Suisse First Boston Mortgage Securities Corp.
Commercial mortgage pass-through certs series 2001-FL2
Rating
Class To From Credit Support (%)
J BB- BB 17.3
RATINGS LOWERED AND PLACED ON CREDITWATCH
Credit Suisse First Boston Mortgage Securities Corp.
Commercial mortgage pass-through certs series 2001-FL2
Rating
Class To From Credit Support (%)
K B/Watch Neg BB- 15.1
L B-/Watch Neg B+ 13.3
M CCC+/Watch Neg B 11.2
N CCC/Watch Neg B- 10.4
RATINGS AFFIRMED
Credit Suisse First Boston Mortgage Securities Corp.
Commercial mortgage pass-through certs series 2001-FL2
Class Rating Credit Support (%)
A AAA 55.5
F BBB 28.1
G BBB- 24.1
H BB+ 19.4
AX-1 AAA N/A
AX-2 AAA N/A
A-Y1 AAA N/A
A-Y2 AAA N/A
A-Y3 AAA N/A
A-Y4 AAA N/A
HELVETIA PATRIA: Makes First Loss, Proposes to Cut Dividend
-----------------------------------------------------------
Swiss insurance company Helvetia Patria reported a loss of CHF362
million (US$266.66 million) in 2002--its first ever--due to
impairment charges on depressed equity values and losses in its
Swiss business.
The Baloise company, which is Switzerland's fifth insurer, posted
a record loss of CHF634 million.
The result, which exceeded analysts' estimate, compares sharply
with that of last year, which showed a profit of CHF101 million.
The plunge prompted Helvetia to propose cutting its dividend to
CHF2, and to ask shareholders to approve a cash increase of up to
50% of existing capital.
The company intends to use the amount to fund organic growth and
possible acquisitions at home and abroad. It as well plans to
make the sum a reserve in case the value of equities slide
further amidst weak markets.
Swiss insurance companies are currently unable to make the
returns to cover guaranteed minimum interest rates on group life
policies, and as a result have to cover the gap from their own
reserves.
SWISS LIFE: Issues Ruling of Investigation on Long-term Strategy
----------------------------------------------------------------
Long-term Strategy: Statement concerning the ruling of the
Federal Office of Private Insurance
After more than four months of investigation, Swiss
Life/Rentenanstalt welcomes the conclusion of the inquiry into
matters concerning Long Term Strategy AG (LTS) conducted by the
Federal Office of Private Insurance (FOPI).
Swiss Life/Rentenanstalt made an important contribution to these
proceedings by providing the results of its own investigations,
as well as detailed documentation concerning LTS.
The review by the Federal Office of Private Insurance confirms
the following:
-- LTS was correctly represented in Swiss Life/Rentenanstalt's
annual financial statements for 2000 and 2001
-- LTS and its corporate bodies were properly entered in the
register of companies, which could be examined by anyone
-- the LTS scheme, as approved by the Board of Directors'
Committee, took the form of an investment company in compliance
with Swiss law
-- the activities of LTS generated a profit for Swiss
Life/Rentenanstalt from which its insured persons also benefited.
A study by independent external experts commissioned by Swiss
Life/Rentenanstalt further concluded that the Board of Directors'
Committee fulfilled its duty of supervision, and all costs
arising in connection with LTS were reimbursed to the company by
LTS and its shareholders
As to the question of whether the Board of Directors' Committee
breached its duty of supervision, the conclusions of this expert
opinion contradict the statement by the Federal Office for
Private Insurance. The possibility of contesting the FOPI
decision on this point will be explored following receipt of the
formal ruling.
Yet another legal opinion drawn up by external experts came to
the conclusion that, based on what is known at this time, there
are no legal grounds for Swiss Life/Rentenanstalt to bring civil
suit against the former members of the Corporate Executive Board
who participated in LTS. However, Swiss Life/Rentenanstalt
intends to reconsider this point based on the Federal Office of
Private Insurance ruling and to exhaust all available legal
remedies.
The company's reputation has been damaged by LTS to an extent
exceeding its substantive importance. Mistakes were made, and
these have been rectified. The Board of Directors has drawn the
necessary conclusions, as evidenced by the changes in top
management, and the separation of duties of the Chief Financial
Officer and the Chief Investment Officer. There is no longer an
investment company at Swiss Life/Rentenanstalt for its
management.
Swiss Life
The Swiss Life Group is one of Europe's leading providers of
long-term savings and protection and life insurance. The Swiss
Life Group offers individuals and companies comprehensive advice
and a broad range of products via agents, brokers and banks in
its domestic market, Switzerland, where it is market leader, and
selected European markets. Multinational companies are serviced
with tailor-made solutions by a network of partners in over fifty
countries.
The Swiss Life Group, registered in Zurich, was founded in 1857
as the Swiss Life Insurance and Pension Company. Shares of Swiss
Life Holding are listed on the SWX Swiss Exchange (SLHN). The
company employs around 12 000 persons.
CONTACT: SWISSLIFE
General-Guisan-Quai 40
P.O. Box, 8022 Zurich
Home Page: http://www.swisslife.com
===========================
U N I T E D K I N G D O M
===========================
CABLE & WIRELESS: Former Executive Holds to GBP1.5 MM Claim
-----------------------------------------------------------
Cable & Wireless is continuing its discussions with former chief
executive Graham Wallace, an indication that the ousted head is
still pressing on with this demands for a GBP1.5 million payoff.
Mr. Wallace, whose departure was announced in January, left the
Board Friday last week after the succession of Italian telecoms
expert Francesco Caio.
He is claiming full payoff under the terms of his unusual two-
year contract, which were agreed before it was published.
The move prompted criticisms from institutional shareholders who
believe he should not bother with the payoff after presiding over
a collapse in the company's share price.
Shareholder groups have issued new guidelines to block the multi-
million-pound payment even if the contract is already in place.
Chairman Richard Lapthorne is believed bent on reducing the size
of the payment, according to The Guardian.
But there are fears that the company might honor the contract to
cut the legal battle short if Mr. Wallace does not drop his bid.
GLOYSTARNE: Sell-off to New Wave Logistics Protects Jobs
--------------------------------------------------------
New Wave Logistics bought Rotherham-based haulage and
distribution group Gloystarne, protecting some 300 jobs in South
Yorkshire in the process.
Gloystarne succumbed into administration two months ago after
struggling against intense competition, customer price pressure
and rising labor costs.
The group provides manufacturers and importers with a
distribution and storage service. It also delivers goods to
major supermarkets and wholesalers, with its distribution centers
in Bristol, Milton Keynes and Glasgow.
New Wave Logistics, meanwhile, is the U.K. subsidiary of global
logistics conglomerate NYK Group. Established in 1991, it has a
network of distribution centres, with customers including
Blockbuster, Casio, EPSON, GlaxoSmithKline, Jenks, Olivetti-
Lexikon, Philips, Pioneer, Sanyo and Yamaha-Kemble.
The company, which acquired the business for an undisclosed
amount, plans to make a "significant investment" in new vehicles,
handling equipment and IT systems.
According to managing director of New Wave, Malcolm Wilson, the
acquisition underlines the company's commitment to the U.K. food
and grocery sector.
He added that in the long term, New Wave plans to boost the
business, starting with providing a better service to existing
customers.
"We are also pleased that key members of Gloystarne's management
will continue to work within the business as we move forward to
identify new opportunities," he said.
Administrator Morgan Morris, of Ernst & Young's corporate
restructuring team in Leeds, also told Yorkshire Today that they
"are obviously delighted to have secured the future of the
business and are sure Gloystarne's reputation for quality service
and its strong customer base will make a valuable addition to the
New Wave Logistics brand."
He said: "We have been particularly grateful for the continued
loyalty of Gloystarne's customers and suppliers throughout the
administration."
Gloystarne is a major force in shared-use distribution, with a
current annual turnover of GBP23 million. It was founded in 1972
as a general hauler, and diversified into warehousing in the
early 1980s and now has 658,000 sq ft of storage.
British Tissues, one of its biggest customers, acquired the
company in 1986 but was bought back by the original management
team in 1994.
SHELLYS SHOES: Stylo Acquires Chain for Only GBP1.5 Million
-----------------------------------------------------------
Shoe retailer and designer Shellys Shoes has been sold to Stylo
plc for a knockdown price of GBP1.5 million.
The loss-making group, whose creations have been worn by some of
Europe's big stars, last year recorded a loss of GBP2.4 million
on sales of GBP21.5 million.
According to Stylo, the loss was partly due to a decision to cut
stock of top brands such as Doctor Martens and Kickers in favor
of its own designs. It is also thought that the group's
overheads were too high for the size of the business.
Shellys was founded in the 1940s by the Robbins family, which
still controls it. It has been at the front line of footwear
fashion ever since, claiming to have been the first to introduce
crepe soles in the 1950s, winklepickers in the 1960s, Doctor
Martens and platform soles in the 1970s and Chelsea boots in the
1980s.
Stylo in contrast is a company not normally associated with
catwalk fashion.
Michael Ziff, Stylo's chairman said: "Shellys is a brand leader
in the fashion arena. We have been looking for some time to set
up our own design center but these guys are already there. We can
be earlier into fashion than we previously have been."
Shellys's portfolio of stores, include five in London with
flagship store on Oxford Circus and a long-standing site in
Convent Garden.
Mr. Ziff plans to implement cost-savings in back office areas of
the business.
Shelly Robbins, Shellys' managing director, who will stay on as a
consultant, said: "I look forward to working with Stylo to build
on the undoubted strength of the Shellys brand and complement the
existing chains managed by Stylo."
Reports say Stylo is paying GBP750,000 in cash with the remainder
due in cash in a year's time. It will continue to run Shellys as
a separate business and hopes to grow its overseas wholesale
business.
SSL INTERNATIONAL: Slater Ends Long-time Career With Group
----------------------------------------------------------
The Board of SSL International plc announces that Andrew Slater
(55), Board Director responsible for the Group's operations in
Europe, has decided to step down at the end of April 2003 after
nearly 21 years with the Group. Garry Watts (46) will assume
responsibility for Europe, as Group Finance Director and
Director Europe.
Ian Martin, Chairman, said:
'Following the Board's strategic decision to dispose of the
Medical division and focus on the Consumer division we are
adjusting the management structure to bring it into line with the
size of the group after any disposal.
'The Board is immensely grateful to Andrew for his contribution
to the Group over the years and we wish him well for the future.
We are pleased that in addition to his duties as finance director
Garry has agreed to take on responsibility for Europe.
Garry possesses significant operational management experience and
is well equipped for this major role.'
*****
Garry Watts
Garry Watts was appointed Finance Director of SSL International
plc in February 2001. Prior to that he was a board director, with
responsibility for manufacturing, sales and marketing, of
Celltech Group plc. He was Finance Director of Medeva plc, a
pharmaceutical group with operations in the USA, UK, France,
Spain, Belgium and Ireland, from 1996 to 2000.
He is a member of the UK's Medicines Control Agency Supervisory
Board. He qualified as a chartered accountant in 1981, became a
partner of KPMG in 1990 and is a Fellow of the Chartered
Institute of Accountants in England and Wales.
SSL International recently announced that following a strategic
review of the business, it is in shareholder's interests to focus
on the Consumer division, and to realize the value of the Medical
division by selling the unit.
Proceeds of the sale will be used to reduce debt and develop the
consumer business.
CONTACT: SSL INTERNATIONAL PLC
Phone: (020 7367 5760)
Brian Buchan, Chief Executive
Garry Watts, Group Finanace Director
Home Page: http://www.ssl-international.com
THE MAITLAND CONSULTANCY
Phone: (020 7379 5151)
Brian Hudspith
Simone Cheetham
Toft Hall
Toft
Knutsford
Cheshire
TKA TALLENT: Announce Plans to Further Trim Down Workforce
----------------------------------------------------------
TKA Tallent Chassis announced plans to axe 94 more jobs from its
1,060-strong workforce to counter the global downturn in
manufacturing.
Union officials from Amicus met with the company's management to
try to minimize the effects of the job cuts in the manufacturing
sector of Newton Aycliffe.
Gerry Hunter, regional officer for the Amicus union, said "If a
change in shift programs may save some jobs, we will look at
that." He noted that 10% of the workforce had been affected by
the job cuts this year.
The company, which has plants in Belgium, India and the US,
recently lost the contract to supply the Micra chassis for Nissan
to Nissan's partner Renault in France.
It cut the jobs of 65 temporary workers in January. But Simon
Flunder assured there are no more jobs under threat this year.
"The future is very good but occasionally you have to take
actions such as this to strengthen your position," he added.
Mr Hunter said: "Part of the problem is that because of the 'just
in time' policy operated by a lot of companies, we are not
building stocks.
"Once an order is completed, there is almost an immediate turn-
off," he assured.
TXU EUROPE: Schedules Earnings Release, Conference Call
-------------------------------------------------------
TXU will release its first quarter earnings and host a conference
call to discuss the results on Thursday, May 1, 2003. TXU will
also hold its regular quarterly meeting with analysts on
Thursday, May 8, 2003, in New York, NY, followed by similar
meetings on Friday, May 9, 2003, in San Francisco and Los
Angeles, CA.
At 9:00 a.m. Central Time (10:00 a.m. Eastern) on Thursday, May
1, 2003, TXU will host a conference call with analysts in which
senior management will discuss first quarter results. TXU will
webcast the event live at www.txucorp.com. We recommend a pre-
event system check to ensure a successful connection. Please
select the "Investor Resources" tab, then click on the live
webcast information link. If you are unable to attend the live
webcast, a playback will be available on our website later that
day.
The following information is provided for analysts who would like
to participate in the conference call:
United States & Canada: 800/309-0343
International: 706/634-7057
Conference ID: 9614791
Moderator: David Anderson
In addition, TXU will webcast live at http://www.txucorp.comits
regular quarterly meeting with analysts on Thursday, May 8, 2003,
at 7:30 a.m. Central Time (8:30 a.m. Eastern) and will have a
replay available on the website later that day.
For analysts who wish to attend the quarterly meeting in New
York, NY, it will begin promptly at 8:30 a.m. Eastern on
Thursday, May 8, 2003, in the St. Regis Roof Room on the 20th
floor of the St. Regis Hotel (located at 2 East 55th at 5th Ave.)
TXU will also host meetings for analysts on Friday May 9, 2003,
in San Francisco, CA, at 7:30 a.m. Pacific Time at the Mandarin
Oriental Hotel (located at 222 Sansome Street); and in Los
Angeles, CA, at 1:00 p.m. Pacific Time at the California Club
(located at 538 South Flower Street).
If you plan to attend one of these analyst meetings, please RSVP
to Sherri Cox at scox2@txu.com, 214/812-4901, or via fax at
214/812-3366. Please indicate your meeting preference.
TXU is a major energy company with operations in North America
and Australia. TXU's energy business is the largest power
generator and electricity retailer in Texas with 19,000 megawatts
of competitive generation and 2.7 million electric customers. TXU
also has the largest electricity and natural gas utilities in
Texas, delivering over 100 million megawatt hours of electricity
and over 140 billion cubic feet of natural gas annually. TXU's
business in Australia includes both electricity and natural gas
delivery and energy operations with 1,280 megawatts of generation
and over 1 million electricity and natural gas customers. TXU
serves over five million electricity and natural gas customers in
North America and Australia. Visit http://www.txucorp.comfor
more information about TXU.
CONTACT: TXU EUROPE
Investor Relations
David Anderson
Phone: 214.812.4641
E-mail: danderson@txu.com
Tim Hogan
Phone: 214.812.2756
E-mail: thogan@txu.com
WORLD SPORTS: Requests Voluntary Liquidation for Subsidiary
-----------------------------------------------------------
World Sports Solutions, a company that markets sports stars, said
it is putting its subsidiary World Sports Solutions International
Limited into voluntary liquidation.
The company headed by Tony peer Lord Taylor was under pressure
over loans issued when it was still a private company.
It previously requested the London Stock Exchange to suspend the
trading of its shares until it clarifies its financial position.
The share was suspended at 12 p, although the stocks had been
valued at 165 p after its flotation 15 months ago.
Observers expect the company to be sold to a trade buyer. A
management buyout is likely to follow, according to ic
Liverpool.co.uk.
The company, whose shareholders include Arsenal's Patrick Vieira,
said it lost GBP1.7 million in the 18 months to April 2002.
WWS is known to have marketed famous England footballer Rio
Ferdinand, and brokered an advertising deal between Ferdinand of
Manchester United and Ben Sherman.
The company also represents jockey Richard Johnson and acts for
Leeds United and the Williams F1 team.
************
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter -- Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Trenton, NJ
USA, and Beard Group, Inc., Washington, DC USA. Kimberly
MacAdam, Larri-Nil Veloso, Ma. Cristina Canson, and Laedevee
Gonzales, Editors.
Copyright 2003. All rights reserved. ISSN 1529-2754.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.
Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.
The TCR Europe subscription rate is US$575 per half-year,
delivered via e-mail. Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each. For subscription information,
contact Christopher Beard at 240/629-3300.
* * * End of Transmission * * *