/raid1/www/Hosts/bankrupt/TCREUR_Public/030507.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, May 7, 2003, Vol. 4, No. 89
Headlines
* A U S T R I A *
GRUNDIG AUSTRIA: Files for Insolvency, Vienna Factory for Sale
* B E L G I U M *
LERNOUT & HAUSPIE: Dictaphone Shareholders to Meet May 16
* C Z E C H R E P U B L I C *
UNION BANKA: CNB Drafts Proposal for Dissolution of Business
* F R A N C E *
FRANCE TELECOM: May Sell 51% Stake in CTE Telecom, Source Says
SCOR: Announces Successful Asian Renewals Campaign at April 1
SELECTIBAIL: On CreditWatch Developing on Planned Merger
SUEZ SA: Equity Firm's Plan for a GBP2.4-Billion Offer Revealed
SUEZ SA: Posts +5.3% 1st Quarter 2003 Revenues Growth
VIVENDI UNIVERSAL: In Talks With U.S. Firm Regarding Theme Parks
* G E R M A N Y *
COMMERZBANK AG: Losses to Continue in First Quarter, Say Analysts
HVB GROUP: May Want Higher Price for Consumer Credit Unit
KIRCHMEDIA GMBH: Saban Seeks to Avoid German Takeover Obligation
MOBILCOM AG: Indian Business Group Interested in 3G Business
* I T A L Y *
TELECOM ITALIA: TIM Directors Approve Q1 Results of 2003
TELECOM ITALIA: Board Adopts First-Quarter 2003 Accounts
* L U X E M B O U R G *
MILLICOM INTERNATIONAL: 85% of Notes Tendered in Exchange Offer
* N E T H E R L A N D S *
JOMED N.V.: Amsterdam District Court Declares Bankruptcy
KLM ROYAL: Presents Recent Traffic and Capacity Statistics
ROYAL KPN: Acquires HubHop, Widens Scope of WLAN Activities
ROYAL PHILIPS: Chief Executive Officer David Hamill to Step Down
* R O M A N I A *
RBG PHOENIX: Assets Sold to Expert Servicii for USD3.5 Million
* S W E D E N *
ABB LTD.: Delay in Asbestos Court Hearings No Cause for Alarm
* S W I T Z E R L A N D *
CREDIT SUISSE: CSFB Reports Profit for the First Quarter of 2003
* U N I T E D K I N G D O M *
ABBEY NATIONAL: Tells Employees to Reapply Under Current Shakeup
ASHTEAD GROUP: U.S. subsidiary Wins $15 Million Damages Award
BOOTS: Chairman Reassures Commitment to Investment Policy
DESIGNER ROOM: Businessman Buys Store Out of Administration
GALLAHER GROUP: Shareholders Criticize Salary Offer for Director
GALLIFORD TRY: Unveils Reorganization of Construction Division
GLAXOSMITHKLINE PLC: Completes Requirement for Approval of Drugs
INFINEON TECHNOLOGIES: Considers Relocation to Avoid High Taxes
MUTUAL RISK: Fitch Downgrades Long-Term Issuer Rating to 'D'
PNC TELECOM: Sells Two Principal Business to Harthall Limited
=============
A U S T R I A
=============
GRUNDIG AUSTRIA: Files for Insolvency, Vienna Factory for Sale
--------------------------------------------------------------
Grundig Austria has filed for insolvency today, Friday May 2,
2003.
This step ensures that the salaries of the 800 employees of the
Vienna factory will be paid out of an adequate fund until the end
of May. Further, this decision has been taken in order to access
required financial resources for operations.
Production in Vienna shall resume as soon as possible. At the
same time, intensive talks will be held to find an investor for
the Vienna factory.
Considering those developments, the national sales organizations
of Grundig have built up stock to bridge potential merchandise
shortage. Therefore, the European sales organizations will manage
to ensure running business and deliveries to be carried out in
the best possible way.
=============
B E L G I U M
=============
LERNOUT & HAUSPIE: Dictaphone Shareholders to Meet May 16
---------------------------------------------------------
The Annual Meeting of Stockholders of Dictaphone Corporation
will be held at the Trumbull Marriott, 180 Hawley Lane,
Trumbull, CT 06611, Montpelier Room, on Friday, May 16, 2003, at
8:30 a.m., Eastern Time, for these purposes:
-- To elect three (3) directors.
-- To approve the director indemnification agreements.
-- To transact such other business as may properly come
before the meeting.
According to Dictaphone Chief Financial Officer Tim S. Ledwick,
"stockholders of record, as of the close of business on April 1,
2003, are entitled to vote at the Annual Meeting of
Stockholders. Proxies properly executed by such stockholders
will be voted as specified on the proxy and as designated in the
proxy on all business voted upon at such Annual Meeting of
Stockholders and any adjournment thereof." (L&H/Dictaphone
Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service,
Inc., 609/392-0900).
===========================
C Z E C H R E P U B L I C
============================
UNION BANKA: CNB Drafts Proposal for Dissolution of Business
------------------------------------------------------------
The Czech National Bank has announced in its website that it is
currently drafting a proposal for the dissolution of Union Banka
and the appointment of its liquidator.
Banking operations at the Ostrava-based bank ended last week, as
CNB permanently revoked its banking license due to its failure to
meet financial obligations.
Future developments for the bank could take the course of a
dissolution, settlement, or bankruptcy. It is noted that besides
CNB's proposal for dissolution, courts received proposals for
bankruptcy and settlement.
In terms of settlement, which is backed by the current management
of the bank and major shareholder Invesmart, the bank would be
transformed in an asset management company.
Presently, clients are entitled to 90% of their deposits or a
maximum of close to CZK800,000. They are reportedly opposed to
it and want to be paid 100% of their deposits, like clients of
some previous banks that went bankrupt. However, the Chamber of
Deputies is very unlikely to approve a higher compensation,
according to news agency Czech Happenings.
Meanwhile, CNB clarified that it decided to strip UB of its
license to operate as a bank, not its banking license. This is
only a formal detail since under the valid Banks Act, UB's
current permission to operate as a bank has not been changed into
a banking license.
The report said the termination of banking operations of UB will
not affect the payments to the clients of the bank. Depositors
are due to receive this week a letter specifying the date and
branch of GE Capital Bank where they will get the insured parts
of their deposits.
Union Banka closed down on February 21 due to insufficient
liquidity. Its trouble stemmed from an unmanageable expansion
when it took over struggling financial houses in mid-1990. A
restructuring plan was submitted on March 3, but was later
rejected by the Finance Ministry.
CONTACT: UNION BANKA
ul. 30 dubna c. 35
70200 Ostrava
Phone: 596108111
Fax: 596120134
Home Page: http://www.union.cz
E-mail: union@union.cz
===========
F R A N C E
===========
FRANCE TELECOM: May Sell 51% Stake in CTE Telecom, Source Says
--------------------------------------------------------------
Debt-laden company France Telecom is reportedly planning to
divest its dominant fixed line operator CTE Telecom subsidiary in
El Salvador.
Daily El Diario de Hoy says potential buyers are advanced and
France Telecom will most likely be ready to sell its 51% CTE
stake in September, upon expiry of clauses in the 1998
privatization agreement that prevent France Telecom from selling
the stake for five years.
Mexico's Telmex, a European firm, and a US-based firm are
reportedly interested in the assets.
France Telecom, which ended 2002 with a US$23 billion loss and
debt approaching US$78 billion, are offloading poorly performing
overseas assets.
The operator is profitable, and the sale seemed to have diverted
from the strategy, but the source said the sale would conform to
an overall market strategy rather than being driven by political
or financial reasons.
CTE ended 2002 with US$31 million profit. The Central American
division of international credit rating agency Fitch has
maintained its AA rating on the company.
France Telecom executives in El Salvador and North America were
unavailable for comment when contacted by the region's press.
CONTACT: FRANCE TELECOM
6, Place d'Alleray
75505 Paris Cedex 15, France
Phone: +33-1-44-44-22-22
Fax: +33-1-44-44-95-95
Homepage: http://www.francetelecom.fr
Contacts: Thierry Breton, Chairman
Michel Combes, Executive Committee, Finance
SCOR: Announces Successful Asian Renewals Campaign at April 1
-------------------------------------------------------------
SCOR Group renewed 60% of its 2002 portfolio in Asia at April 1,
2003. Japanese treaties represent 68% of business renewed and
South Korean treaties 32%.
The April 1, 2003 Asian region renewals registered a rise of 2%
(stability in Japan; up 5% in Korea).
This trend reflects the combined effect of new writings (+2%),
higher premium rates (+5%), and treaty cancellations (-9%).
The treaties renewed provide for better control of exposures per
risk, while limiting accumulations, and in particular catastrophe
exposures in Japan with a 6% reduction in earthquake
accumulations and no change in typhoon accumulations.
The bulk of the portfolio concerns short-tail risks. Property
damage accounts for 97% of the Japanese portfolio and 99% of the
Korean portfolio. Non-proportional treaties account for 46% of
the total in Japan, in 2003, and for 12% in Korea.
The Asian renewals are compliant with the profitability criteria
laid down in the "Back on Track" plan.
SELECTIBAIL: On CreditWatch Developing on Planned Merger
--------------------------------------------------------
Standard & Poor's Ratings Services said that it placed its 'BB+'
long-term and 'B' short-term counterparty credit ratings on
France-based S,lectibail on CreditWatch with developing
implications following the announcement of a planned merger of
Selectibail and its sister property company Bail Investissement
(not rated).
"The CreditWatch placement reflects the need to assess the effect
that the merger will have on the ratings on S,lectibail," said
Standard & Poor's credit analyst Florence Garcin. "To resolve the
CreditWatch placement, Standard & Poor's will meet with the two
companies' management to assess the creditworthiness of the post-
merger entity."
Selectibail's financial profile has been eroded by the after-
effects of an aggressive external growth strategy carried out in
the mid-1990s. The company's current strategy is one of
liquidating assets, as reflected by the winding down of its
former core real estate leasing business. In December 2000, the
decision to merge Selectibail's former main subsidiary,
Immobiliere Complexes Commerciaux, with Bail Investissement had
the effect of further reducing S,lectibail's balance sheet. In
exchange, Selectibail received 17.92% of Bail Investissement's
shares.
Selectibail is a small real estate leasing company, with total
assets of EUR423 million at year-end 2002. Bail Investissement is
a listed property company with a portfolio market value of about
EUR1.35 billion at year-end 2002.
SUEZ SA: Equity Firm's Plan for a GBP2.4-Billion Offer Revealed
---------------------------------------------------------------
Private equity firm CVC is offering French utility Suez GBP2.4
billion (US$3.85 billion) for its water unit Northumbrian Water,
according to the Sunday Times.
Confidential documents left in the back of a taxi last week and
seen by the newspaper revealed that the firm plans to fund the
acquisition using GBP43 million of equity and GBP2.35 billion of
debt and loans.
CVC, however, dismissed the information saying the confidential
papers were out of date. It declined to comment further on the
bid.
CVC is vying for the asset against a consortium of Deutsche Bank,
Ecofin, the investment management and corporate advisory group,
and stockbrokers Collins Stewart. The private equity arm of
Morgan Stanley, which is handling the sale in behalf of Suez, is
believed one of the bidders.
Suez is due to reveal the official buyer this month.
The French company is selling assets as part of a debt- and cost-
reduction plan started last September. The aim is to cut costs
by EUR500 million this year, with a view to further reducing its
EUR28.2 billion debt to EUR100 million in 2004.
CONTACT: SUEZ SA
Home Page: http://www.suez.com
Financial analysts,
Frederic Michelland
Phone: +331-40-06-66-35
in Belgium:
Guy Dellicour
Phone: +322-507-02-77
SUEZ SA: Posts +5.3% 1st Quarter 2003 Revenues Growth
-----------------------------------------------------
-- Group revenues: +5.3% (EUR 10.8 billion)
-- Group organic growth: +6.8% (Energy: +6.1%
Environment: +7.5%)
-- Revenues in Europe and North America: EUR 9.7 billion, i.e.
90% of total revenues (+12.6%)
Total Group revenues at March 31, 2003 were EUR 10.8 billion, an
increase of 5.3% compared with the figure for the same period in
2002. Most revenues are generated in Europe and North America.
Europe and North America represent 90% of total and grew by 12.6%
in relation to the 1st quarter 2002.
These revenues growth figures include the negative impact of
exchange rate fluctuations and the favorable impacts of changes
in Group structure and natural gas price increases in relation to
1st quarter 2002.
Exchange rate fluctuations (negative impact EUR 611.9 million),
the main factors being depreciations of the U.S. dollar (-EUR
206.1 million) and of South American currencies (including Brazil
for -EUR 235.5 million and Argentina for -EUR 65.5 million).
Changes in Group structure (positive impact EUR 291.2 million).
The main factors were the acquisition of Interpower,
consolidation of ACEA Electrabel SPA and subsidiaries, and 2002
ownership increases in Teris and Teris LLC.
Natural gas prices (positive impact EUR 202 million). Natural gas
prices were higher during 1st quarter 2003 in relation to the
same period in 2002. On a comparable basis, Group organic
revenues were up 6.8%, as a result both of Energy (+6.1%) and
Environment (+7.5%) activities, reflecting SUEZ businesses'
commercial dynamism and their growth potential, despite a
continuing difficult economic environment.
This favorable top line trend, in line with Group expectations,
was due to sustained growth in its domestic European markets in
both the environment (France, Spain, and others) and the energy
sectors, the latter due to the cold winter. Outside Europe, the
notable organic growth in North America resulted from the startup
of the Puerto Rico contract and the energy sales growth following
the bringing into service of new power plants, good performance
of the LNG business and the cold winter there as well.
REVENUES CONTRIBUTION BY BUSINESS ACTIVITY
(in EUR millions) March 31, March 31, Gross Organic
2003 2002 (1) change growth (2)
Energy 6,794.1 6,415.8 +5.9% +6.1%
Environment 3,772.2 3,656.3 +3.2% +7.5%
Subtotal 10,566.3 10,072.1 +4.9% +6.6%
Other businesses 190.2 142.8 +33.2% +21.6%
TOTAL GROUP 10,756.5 10,214.9 +5.3% +6.8%
(1) Reported in 2002, after netting energy trading purchases and
sales.
(2) On a 2002/2003 comparable basis, i.e. constant exchange rates
and accounting methods, after netting energy trading purchases
and sales, and excluding natural gas price variations and changes
in Group structure.
GROUP BUSINESS REVENUES TREND
ENERGY
Energy revenues grew by 5.9%, of which 6.1% came from organic
growth. The unfavorable impact of foreign exchange fluctuations
was nearly offset by changes in Group structure and natural gas
price increases.
(in EUR millions) March 31, March 31, Gross Organic
2003 2002 (1) change growth
Electricity &
Gas Europe 3,389.5 2,910.6 +16.5% +8.4%
Electricity &
Gas International 1,088.1 1,223.1 -11.0% +7.3%
Energy and
Industrial Services 2,316.5 2,282.1 +1.5% +2.4%
-------- ------- ------ -----
6,794.1 6,415.8 +5.9% +6.1%
(1) Trigen contribution (EUR 124 million) transferred from SEI to
EGI and netting energy trading purchases and sales.
1. Revenues of Electricity & Gas in Europe (EGE) increased by
16.5% during 1st quarter 2003. On a comparable basis, revenues
increased EUR 249.9 million reflecting 8.4% organic growth,
thanks to strong growth in natural gas sales:
Electricity (+EUR 38 million)
-- Sales to direct customers increased by EUR 89 million. This
growth is accounted for by expanded sales outside the Benelux,
particularly in Italy, and by a transfer of customers from mixed
inter-communal companies toward the deregulated market segment
which is provided directly by Electrabel and Electrabel Customer
Solutions. In Belgium, electricity volumes sold to direct
customers increased by 18.5%.
-- Sales to distributors and other wholesalers, mainly in
Belgium, declined EUR 75 million as a result of the transfer
mentioned above of customers to the deregulated market segment.
Outside the Benelux sales are progressing, particularly in Poland
and Hungary.
Natural gas (+EUR 212 million)
-- sales to distributors in Belgium increased in volume terms
over the same period in 2002 due to 2003's harsher winter.
-- export volumes grew substantially with punctual sales in Spain
and the signing of a new contract in France.
2. The revenues trend for Electricity & Gas International (-
11.0%), was accounted for by unfavorable exchange rate
fluctuations. On a comparable basis, EGI's contribution rose by
EUR 73.7 million, for an organic growth rate of 7.3%, and this
despite of the strong 1st quarter 2002 performance due to the
positive impact of rationing in Brazil.
First quarter 2003 growth was generated mainly in North America
(+EUR 136.5 million), with several factors contributing to the
positive trend: a progression in LNG activity (+EUR 87 million);
Trigen's good performance (+EUR 18.1 million); and the startup of
two new power plants, one at Red Hills, Mississippi on April 1,
2002 and the other at Ennis, Texas on May 2, 2002 (+EUR 52
million). In Latin America, excluding the impact of rationing,
sales increased slightly following the replacement in Brazil of
the initial contractual volumes sold to distributors with new
bilateral contracts (+EUR 46 million). In Asia, the Bowin power
plant (Thailand) entered service at the end of January 2003 (+EUR
32 million) and Hanjin City Gas (South Korea) has turned in a
good performance (+EUR 21 million).
3. Revenues from Energy and Industrial Services increased by
1.5%. On a comparable basis, this rate was higher, bringing
organic growth to 2.4% (+EUR 54.7 million). Most of this growth
resulted from Elyo's expansion in operation and maintenance,
outsourcing, as well as from the increased output of
cogeneration.
ENVIRONMENT
Environment businesses' organic growth was 7.5%. Exchange rate
fluctuations had an unfavorable impact (-EUR 271.1 million).
Changes in Group structure relate mainly to the increase in
ownership of Teris and Teris LLC following the acquisition of
Rhodia's shares.
(in EUR millions) March 31, March 31, Gross Organic
2003 2002 (1) change growth
Local Services
(SELS) (1) 3,128.0 2,917.7 +7.2% +8.9%
SELS Water Europe 1047.7 977.5 +7.2% +5.0%
SELS Waste Services 1261.8 1182.7 +6.7% +3.2%
Degr,mont 191.1 173.5 +10.2% +16.9%
Others / International 627.4 584.0 +7.4% +27.9%
Industrial Services
(SEIS) 644.2 738.6 -12.8% +1.8%
------- ------ ------ ------
3,772.2 3,656.3 +3.2% +7.5%
(1) The presentation of Local Services activities reflects the
organization established since May 2002.
SUEZ Environment Local Services (SELS) generated EUR 3.1 billion
in revenues, a net increase, excluding exchange rate fluctuations
and changes in Group structure, of 8.9% or +EUR 240.4 million
(+4.7% excluding Puerto Rico). This progression stemmed mainly
from SELS activities in Europe and North America, which account
for 87% of this business line's activity. Water and Waste
Services in Europe grew by 5% and 3.2% respectively, thanks to
sustained activity levels in France and Spain. In France, the
continued development of sanitation activities in the municipal
and industrial markets and increased hazardous waste landfill
volumes are the main drivers of growth. Degr,mont continued its
expansion in Europe (+EUR 15 million with numerous contracts
signed in France, Spain, and Italy) and in North America (+EUR 9
million). International activities benefit from strong organic
growth in water in North America, with the July 1, 2002 startup
of the new Puerto Rico contract, which generated EUR 113.9
million during the 1st quarter of 2003, and the development of
unregulated activities in the U.S.
Revenues from Environment Industrial Services (Ondeo Nalco and
OIS) recorded net growth of 1.8% (+EUR 11.1 million). Nalco
revenues increased by 1.2% largely to the oil and paper
manufacturing sectors. Ondeo Industrial Solutions revenues
expanded with significant contracts signed during the 1st quarter
2003 which represent activities of over EUR 50 million.
OTHERS
Revenues from the Communications sector grew by 33.2%, an
increase of EUR 47.5 million over 1st quarter 2002; this growth
was attributed to a good performance by M6 and to increased sales
by Noos. This sector's organic growth was 21.6%.
REVENUES BREAKDOWN BY GEOGRAPHIC ZONE
The geographic revenues breakdown was as follows:
(in EUR millions) March 31, March 31, Gross
2003 2002 (1) change
France 2 454.1 2 275.7 +7.8%
Belgium 2 991.1 2 700.6 +10.8%
Subtotal,
France-Belgium 5 445.2 4 976.3 +9.4%
Other European Union 2 593.4 2 428.4 +6.8%
Other European
countries 343.3 201.0 +70.8%
North America (2) 1 272.0 967.3 +31.5%
Subtotal Europe
and North America 9,653.9 8,573.0 +12.6%
South America 405.0 922.9 -56.1%
Asia and Oceania 565.0 562.3 +0.5%
Africa 132.6 156.7 -15.4%
TOTAL 10,756.5 10,214.9 +5.3%
(1) Reported in 2002, after netting energy trading purchases and
sales.
(2) including Mexico.
Growth in France and Belgium was sustained. Great growth in North
America results for 1/3 from the new Puerto Rico contract.
Decline in revenues from South America is related to the
depreciation of the currencies of Argentina and Brazil.
ORGANIC REVENUES GROWTH ON A COMPARABLE BASIS
Organic growth in revenues on a comparable basis is as follows:
March 31, March 31, Organic
2003 2002 growth
Reported revenues 10,756.5 11,564.9
Energy trading(1) 1,350.0
Reported revenues,
excluding trading 10,756.5 10,214.9
Changes in Group
structure(2) 398.8 - 107.6
Exchange rate
fluctuations - 611.9
Natural gas prices 202.0
Comparable 10,357.7 9,697.4 +6.8%
(1) The contribution of trading, EUR 1,350 million for 1st
quarter 2002, is now presented after netting of energy trading
purchases and sales in revenues at March 31, 2003.
The contribution of trading "around the assets" activities, whose
purpose is to optimize the Group's energy production assets and
fuel purchase and energy sales portfolio, is fully accounted for
within group revenues. For 1st quarter 2003, the figure was EUR
390.6 million (versus 194.8 million for 1 st quarter 2002).
(2) Respectively 2003 revenues of subsidiaries added to the
consolidation scope and 2002 revenues of subsidiaries withdrawn
from the consolidation scope since April 1 2002.
SUEZ, a worldwide industrial and services Group, provides
innovative solutions in Energy - electricity and gas - and the
Environment - water and waste services. It generated 2002
revenues of EUR 40.218 billion (excluding energy trading). The
Group is listed on the Euronext Paris, Euronext Brussels,
Luxemburg, Zurich and New York Stock Exchanges.
CONTACT: Arnaud Erbin, Financial Analyst
Phone: (331) 40 06 6489
Eleonore de Larboust
Phone: (331) 40 06 17 53
For Belgium:
Guy Dellicour
Phone: 00 322 507 02 77
Homepage: http://www.suez.com
VIVENDI UNIVERSAL: In Talks With U.S. Firm Regarding Theme Parks
----------------------------------------------------------------
French media group Vivendi Universal and U.S. investment firm
Blackstone Group are in negotiations regarding the sale of
Vivendi's theme parks.
The report of the US$1.5-billion transaction came as Vivendi
unveiled plans to sell its U.S. unit Vivendi Universal
Entertainment and other assets to focus on its telecoms
activities and its French cable television business.
In the company's annual general meeting, Chief executive Jean-
Rene Fourtou told shareholders the sale of Vivendi Universal
Entertainment was a major goal for 2003.
The sell-off of the flagship theme parks to the New-York based
firm is the first step towards dismantling the company's
entertainment empire, according to the LA Times.
The assets being negotiated include Universal Studios Hollywood,
Universal Orlando in Florida and Universal's ownership interests
in parks in Spain and Japan, a source close to the negotiations
told the paper.
Blackstone already holds a 50% stake in the two parks that make
up Universal Orlando, making it the best candidate to buy the
remainder of the theme parks.
Vivendi Universal targets to dispose a large chunk of its assets
to raise EUR7 billion (US$7.8 billion) by the end of the year.
Proceeds of the sales will go down to paring the group's EUR11
billion debt.
CONTACT: VIVENDI UNIVERSAL
Investor Relations
Paris
Daniel Scolan
Phone: +33 (1).71.71.3291
Laurence Daniel
Phone: +33 (1).71.71.1233
or
New York
Eileen McLaughlin
Phone: +(1) 212.572.8961
=============
G E R M A N Y
=============
COMMERZBANK AG: Losses to Continue in First Quarter, Say Analysts
-----------------------------------------------------------------
Analysts are expecting Commerzbank to post its third straight
quarterly loss in the first three months of 2003, according to
Bloomberg.
An average forecast of 12 analysts surveyed by the news agency
says the German bank is likely to have a net loss of EUR38
million (US$43 million) in the first quarter. The figure
contrasts results for the same a period a year ago, which showed
net income of EUR72 million.
Of the 12 analysts surveyed, only five expect the bank to post a
first-quarter profit.
The losses could come with a decline in revenue and a rack up of
reorganization costs, including a EUR150 million charge for job
cuts, which Alexander Plenk, an analyst at Bankgesellschaft
Berlin AG, says could be booked entirely in the first quarter.
Germany's third-largest bank posted its first annual loss in its
133-year history as a result of rising risk provisions and
falling stock markets. It had a EUR298 million loss in 2002
after setting aside EUR1.32 billion for bad loans.
For the first three months of 2003, analysts expect loan losses
to total EUR295 million, compared with EUR254 million a year ago.
HVB GROUP: May Want Higher Price for Consumer Credit Unit
---------------------------------------------------------
German bank HVB Group is seeking way ahead more than EUR300
million from the sale of its highly profitable consumer credit
specialist Norisbank.
Germany's second largest bank is sticking its eye on the EUR400-
million (US$449 million) mark, according to a banker familiar
with the deal.
"You can forget about a sale at 300 million or a little higher,
that much is for sure," the banker told Reuters referring to the
lower-level transaction reported by Financial Times Deutschland.
Interested buyers include BNP Paribas and Societe Generale in
France and Postbank and Citibank in Germany. Banco Santander
Central Hispano and Diba, the ING subsidiary, are also said to be
potential bidders.
HVB is selling the consumer credit business to refurnish its
capital base, which has been eroded by heavy losses. It incurred
losses due to more than EUR2 billion bad loan charges.
HVB chief executive, Dieter Rampl said in February the bank
needed to raise EUR1.7 billion to repair its balance sheet and
inject capital into the real estate operations.
But even if the sale goes ahead at a purchase price of EUR300
million, HVB was poised to book a decent profit from the
Norisbank sale, according to analysts at private bank Sal.
Oppenheim.
Mr. Rampl is disposing non-core assets, and is further planning
to launch a partial initial public offering of a 25% stake in
Bank Austria, and sell HVB's international property business.
The planned asset sales could also see the disposal of HVB's
Hamburg-based Vereins-und Westbank.
KIRCHMEDIA GMBH: Saban Seeks to Avoid German Takeover Obligation
----------------------------------------------------------------
U.S. investor Haim Saban has requested a takeover exemption that
could trim down a EUR1.3 billion bill related to its purchase of
a controlling stake in ProSiebenSAT.1.
The American entrepreneur in March bested publisher Bauer in the
race to acquire the media broadcaster being auctioned by bankrupt
KirchMedia.
The transaction triggers mandatory takeover offer to all other
shareholders under German takeover law. The ruling mandates that
any investor whose holding rises above 30% of a listed company's
equity has had to tender for the outstanding shares, at least
matching the original offer price.
Mr. Saban is buying a 36% stake in ProSiebenSAT.1 for EUR525
million (US$590 million), which, by virtue of the broadcaster's
dual share structure, grants it 72% of the votes, and effectively
puts it beyond the level that triggers a mandatory offer.
But it emerged that Hogan & Hartson, one of the law firms
advising Mr. Saban, is seeking to avoid having to buy out
minority shareholders by filing for an exemption with BaFin, the
chief German financial services and takeover regulator.
The exemption could save Mr. Saban and his bidding partners
between EUR400 million and EUR500 million.
The lawyers cited ProSiebenSAT.1's financial troubles as the
reason for the exemption granted under "Section 9" of the law.
The German broadcaster is a restructuring case, the lawyers
asserted in its filing. It is due to report a first-quarter loss
and a 15% drop in sales next week, the report noted.
The move is expected to anger minority shareholders who have
already warned Mr. Saban against excluding them from the
transaction.
BaFin, meanwhile, declined to confirm whether it received the
request. It reportedly asked for additional information abut
ProSiebenSAT.1.
CONTACT: KIRCHMEDIA GMBH & CO KGAA
Rudolf Wallraf
RW-Konzept GmbH
Phone: +49 (0)9 99562324
Mobile: +49 (0)3 2678888
Hartmut Schultz
Hartmut Schultz Kommunikation GmbH
Phone: +49 (0)89 99806220
Mobile: +49 (0)170 4332832
SABAN GROUP
in Germany:
Bernhard Meising
Phone: +49 (0)211 5775902
Elisabeth Ramelsberger
Phone: +49 (0)211 5775913
Citigate Dewe Rogerson GmbH
in USA:
Stephanie Pillersdorf
Phone: +1 212 687 8080
Citigate Sard Verbinnen
MOBILCOM AG: Indian Business Group Interested in 3G Business
------------------------------------------------------------
Indian conglomerate Hinduja is interested in buying the third-
generation mobile-phone business that German telecommunications
group MobilCom is selling at a bargain price.
A MobilCom spokesman clarified there is yet no binding offer
between the party, or any other company. Two other UMTS license-
holders--02, the German arm of Britain's MM02, and E-Plus, a unit
of KPN of the Netherlands--were previously named potential
buyers.
Despite the discounted price, and reports that MobilCom would
even give it away to anyone committed to reviving it, other phone
companies were reluctant to take over the business on account of
a bleak outlook for the service.
The operation consists of a license that originally cost over
EUR8 billion and a half-built nationwide network of transmitters
that cost more than EUR1 billion.
Quam, another company involved in the German UMTS (universal
mobile telecommunications system) network was stuck without
refunds for its EUR8.5 billion-license fee after its operations
failed.
Hinduja is a major Indian business group with interests ranging
from manufacturing to aviation.
=========
I T A L Y
=========
TELECOM ITALIA: TIM Directors Approve Q1 Results of 2003
--------------------------------------------------------
TIM forecasts that its revenues growth and profitability for the
present year will be in line with the 3 year Industrial Plan
objectives already communicated to the financial community.
The organizational model provided for by the legislative decree
231/01 has been formalized
TIM GROUP
-- Consolidated revenues: EUR 2,616 million, + 4.7% with respect
to the 1Q02 (+15.4% excluding foreign exchange rate effects);
-- Consolidated gross operating profit: EUR 1,262 million, +3.4%
(+8.1%, excluding foreign exchange rate effects);
-- Operating income : EUR 897 million, + 7.9%
-- Operating income to revenues ratio: 34.3% (33.3% in the 1Q02)
-- Income before extraordinary items and taxes: EUR 874 million,
+ 11.6%
-- Consolidated net income attributable to the TIM parent
company: EUR 480 million
-- Free operating cash flow: EUR 1,163 million, +69%
-- Free operating cash flow to revenues ratio: 44.5% (27.5% in
the 1Q02)
-- Net borrowings: EUR 774 million less EUR 1,148 million with
respect to December, 2002
-- Mobile lines: 40.2 million (+2,7% with respect to December
2002); 493 thousand GSM customers in Brazil (293 thousand as of
December 2002)
TIM S.p.A.
-- Revenues: EUR 2,149 million, + 9.0% with respect to the 1Q02
-- Revenues from VAS: EUR 233 million, +38.7%
-- Gross operating profit : EUR 1,136 million, + 7.6%
-- Operating income: EUR 880 million, + 10.8%
-- Operating income to revenues ratio: 40.9% (40.3% in the 1Q02)
-- Net income : EUR 531 million
-- TIM domestic market mobile lines: 25.7 million (+1.4% with
respect to December 2002)
The Board of Directors of TIM (TELECOM ITALIA Group) chaired by
Carlo Buora, has approved the review of business operations for
the first quarter of 2003 proposed by the Chief Executive Officer
Marco De Benedetti.
TIM GROUP
During the first quarter the consolidated revenues of the TIM
Group amounted to EUR 2,616 million representing a 4.7% growth
with respect to the first quarter 2002 (EUR 2,498 million) mainly
on account of both the positive performance of the domestic
business and of the Greek subsidiary Stet Hellas. Net of the
devaluation of the Brazilian and Venezuelan exchange rates the
revenues growth in the first quarter reached 15.4% with respect
to the same period in 2002.
Gross operating profit amounted to EUR 1,262 million and recorded
a 3.4% increase with respect to the same period in 2002 (EUR
1,221 million); net of the foregoing exchange rate devaluation,
the increase in the gross operating profit stands at 8.1%. The
gross operating profit to revenues ratio was 48.2% in the first
quarter of 2003 and reflects, with respect to the first quarter
2002 (48.9%) the GSM start-up costs in Brazil.
Operating income amounted to EUR 897 million representing a 7.9%
growth with respect to the first quarter 2002 (EUR 831 million).
The impact of the devaluation of the exchange rates is
practically non-existent at the level of operating income.
Profitability has increased: the gross operating profit to
revenues ratio was 34.3% against 33.3% recorded for the first
quarter 2002.
Income before extraordinary items and taxes for the first three
months of 2003 amounted to EUR 874 million, a growth of 11.6%
with respect to the same period in 2002 and with a ratio to
revenues that has grown from 31.3% in the first quarter 2002 to
33.4% in the first three months of 2003.
Consolidated net income attributable to the Parent company
amounted to EUR 480 million. In the first quarter 2002 net income
stood at EUR 918 million reflecting capital gains for EUR 484
million from the disposal of Bouygues. Net of said capital gain
in 2002 consolidated net income for the first quarter of 2003
increased by 10.6% with respect to the same period last year.
Overall investments in the first quarter 2003 amounted to EUR 220
million. The industrial investments, for EUR 171 million,
principally referred to the development of the network while
financial investments amounted to EUR 49 million.
The free operating cash flow for the first quarter (operating
income+ amortisation/depreciation - industrial investments, net
of variations in working capital), amounted to EUR 1,163 million,
a significant improvement (EUR 687 million) with respect to the
same period in 2002 with a 69% increase. In the first quarter
2003 free operating cash flow to revenues ratio was 44.5%
compared to 27.5% recorded in the same period of 2002.
Net borrowings amounted to EUR 774 million, a strong reduction (-
60%) with respect to December 31, 2002 (EUR 1,922 million) mainly
as a result of the high level of cash flow generated in the first
quarter of the year.
As of March 31, 2003 the number of mobile lines of the TIM Group
reached approximately 40.2 million, an increase of 2.7% with
respect to the same figure at December 31, 2002 (39.1 million).
In particular the GSM lines in Brazil amounted to 493 thousand at
the end of March, compared to 293 thousand at the end of December
2002.
The personnel of the TIM Group as of March 31, 2003 was 18,913
units; an increase of 211 employees with respect to December 31,
2002.
In 2003 TIM will be committed on two fronts: firstly in Italy, to
maintain its technological and market leadership by focusing on
high-value customers as well as the development of a new VAS
business cycle; secondly, abroad, pursuing a strategy aimed at
developing GSM in Latin America, especially in Brazil as well as
defending the levels of profitability of its other companies.
TIM S.p.A.
In the first quarter domestic business revenues amounted to EUR
2,149 million representing a 9.0% increase with respect to the
same period in 2002 (EUR 1,972 million).
The growth of revenues was the result of the positive trend both
in the evolution of voice traffic (+5.3% with respect to the
same period in the preceding year) and of value-added services
(VAS), that in the first quarter amounted to EUR 233 million
(+38.7% with respect to the same period in 2002).
In the first quarter the ratio of revenues from VAS to total
service revenues was 11.1% with respect to 8.7% for the first
quarter 2002.
Gross operating profit amounted to EUR 1,136 million, and
recorded a 7.6% increase with respect to the first quarter 2002
(EUR 1,056 million). Gross operating margin to revenues ratio was
52.9% in the first quarter 2003 (53.5% in the first quarter 2002)
and had an impact on the growth in revenues from handsets sales.
Gross operating profit to service revenues ratio was 54.3% (54.6%
in the first quarter 2002).
Operating income amounted to EUR 880 million representing an
increase of 10.8% with respect to the same period in 2002 (EUR
794 million). Profitability also increased: gross operating
profit to revenues ratio was 40.9% compared to 40.3% recorded for
the first quarter 2002.
The net income posted in the statutory accounts for the first
three months of 2003 amounted to EUR 531 million, a growth of
7.5% with respect to the same period in 2002 (as regards the
statutory accounts posted in 2002 net income was not impacted by
the capital gains from the disposal of Bouygues).
As of March 31, 2003 the number of mobile lines stood at 25.7
million (a 1.4% increase compared to December 31, 2002).
TIM S.p.A. personnel as of March 31, 2003 stood at 10,122 units;
(139 employees less with respect to December 31, 2002).
The first quarter 2003 results of the TIM Group leading foreign
subsidiaries
LATIN AMERICA
BRAZIL (average exchange rate real/euro 0.266929325)
TIM Brazil Group
In the first quarter 2003 TIM Brasil posted consolidated revenues
for 869 million reais, representing a growth of 36.4% with
respect to the first quarter 2002. These results include the
revenues from the GSM technology start-up (the service was
launched in October 2002) which in the quarter amounted to 123
million reais.
The consolidated gross operating profit, amounting to 201 million
reais, exhibited a decrease of 15.2% with respect to the same
period in the preceding year as a result of the charges sustained
for the start-up phase of the company operating with GSM
technology.
Consolidated operating income returned a loss of 39 million
reais. The operating income of the companies operating TDMA
technology, which exhibited an improvement of 52% with respect to
the first quarter of the 2002, was off-set by the GSM start-up
charges that included, at the level of operating income, the
depreciation charges for network development investments.
The number of lines reached 5,637 thousand (+5.7% with respect to
December 31, 2002) of which 493 thousand in GSM technology
compared to 293 thousand as of December 31, 2002.
PERU (Average exchange rate nuevo sol/ euro 0.267368956)
In the first quarter of 2003 TIM PerU posted 103 million nuevo
soles in revenue compared to 50 million nuevo soles for the same
period of 2002; a growth of 106.0%.
The gross operating profit returned a loss of 14 million nuevo
soles compared to the loss of 33 million nuevo soles in the same
period of 2002 representing an improvement of 57.6%.
The gross operating income posted a loss of 47 million nuevo
soles against a loss of 56 million nuevo soles in the same period
of 2002 representing an improvement of 16.1%.
The number of lines reached 436 thousand (+10.4% with respect to
December 31, 2002) with a market share of 17.5%. It is noteworthy
that service was launched in the first quarter of 2001.
VENEZUELA (spot exchange rate bolivar/euro 0.000573658, note that
the company follows accounting principles for high-inflation
countries)
In the first quarter Corporacion Digitel posted revenues for
57,794 million bolivares representing an 11.4% increase with
respect to the first quarter 2002.
The gross operating profit was 23,404 million bolivares against
8,773 bolivares in the same period of 2002 representing a 166.8%
improvement. The gross operating profit to revenues ratio was
40.5% (16.9% in the first quarter 2002).
In terms of operating income the company reached break-even in
the first quarter of 2003 by posting 2,270 million bolivares
against the loss of 925 million bolivares in the first quarter
2002.
The number of lines reached 918 thousand (+2.7% with respect to
December 31, 2002) with a market share of 15.5%.
These results have been achieved in a negative business
environment conditioned by the recent political-economic events
which have characterized the country. They are the consequence of
the cautious management of resources aimed at minimizing the
financial exposure of the Group towards the country while at the
same time guaranteeing the development of the operations.
EUROPE
GREECE
In the first quarter 2003 Stet Hellas posted revenues for EUR 183
million representing an increase of 26.2% with respect to the
first quarter 2002 (EUR 145 million).
Gross operating profit amounted to EUR 64 million, a 25.5% with
respect to the same period 2002 (EUR 51 million). The gross
operating profit to revenues ratio stood at 35.0%, in line with
the percentage recorded in the first quarter 2002.
Operating income amounted to EUR 36 million and represents a
56.5% growth with respect to the same period in 2002 (EUR 23
million).
The number of lines reached 2,581 thousand (+2.7% with respect
to December 31, 2002) with a market share of 27%.
* * *
Other resolutions passed by the Board of Directors
A new organizational model has been completed to comply with
Decree Law 231/01. This new model consists of ad hoc internal
auditing forms that embody the Code of Ethics, general principles
of internal auditing and specific principles according to which
relations are undertaken with public sector bodies.
Over 1,300 people contributed more than 20 thousand man-hours to
this project, which included accurately mapping risks and
auditing the regulatory status of the strict organizational
systems that were already in place.
The Board of Directors has taken note of the resignation of
Riccardo Perissich to whom the Board extends sincere its thanks
for the work undertaken as a member of the Board and of the
Committee for internal control, and, in his place, has appointed
Paolo Ligresti who will remain in office up until the next
Shareholders' Meeting.
In compliance with the Preda Code of Conduct that recommends, in
the case of listed companies controlled by another listed
company, that the Committee for internal control is exclusively
made up of independent directors, the Board has appointed Lorenzo
Caprio as a member of the foregoing committee.
The Committee for internal control, therefore, is composed of
independent administrators: Paolo Savona (Chairman), Attilio
Leonardo Lentati and Lorenzo Caprio.
N.B. The tables on the balance sheet, income statement and cash
flow statement are attached herewith
To see Economic-financial data:
http://bankrupt.com/misc/TIM_GROUP.pdf
TELECOM ITALIA: Board Adopts First-Quarter 2003 Accounts
--------------------------------------------------------
-- Operating profits improved
-- Debt reduced by 2 billion euros compared with end 2002
-- Debt due beyond one year rises from 75% of total at end 2002
to 81% in the first quarter of 2003
-- Post-merger Group financial objectives confirmed
-- 2003 Net operating accounts of the company resulting from the
merger will permit the dividend policy to remain unchanged
-- The Organizational Model provided for by the legislative
decree 231/01 has been formalized
TELECOM ITALIA GROUP
Revenues: 7,125 million euros (-1.9% compared with the first
quarter of 2002), +6.4% excluding exchange rate fluctuations and
changes to the area of consolidation
Gross operating result: 3,303 million euros (+0.9% compared with
the first quarter of 2002), +3.9% excluding exchange rate
fluctuations and changes to the area of consolidation
Gross operating results/revenues ratio: 46.4%
(45.1% in the first quarter of 2002)
Operating income: 1,866 million euros (+7.8% compared with the
first quarter of 2002), +6.4% excluding exchange rate
fluctuations and changes to the area of consolidation
Operating income/revenues ratio: 26.2%
(23.8% in the first quarter of 2002)
Result before extraordinary items and tax: 1,450 million euros
(+19% compared with the first quarter of 2002)
Net consolidated result: 503 million euros (+32% compared with
the first quarter of 2002, excluding net capital gains from
disposals)
Free cash flow from operations: 2,413 million euros
(+50% compared with the first quarter of 2002)
Debt down to 16,079 million euros
(-2,039 million euros compared with 31 december 2002)
Telecom italia spa
Revenues: 3,959 million euros (-5.5% compared with the first
quarter of 2002), +0.2% on equivalent terms
Gross operating results/revenues ratio: 45.4%
(44.7% in the first quarter of 2002)
Operating income/revenues ratio: 26.6%
(26.2% in the first quarter of 2002)
Result before extraordinary items and tax: 670 million euros (+92
million euros compared with the first quarter of 2002)
Net income: 356 million euros
(+27% compared with the first quarter of 2002)
Debt: 14,887 million euros
(-241 million euros compared with 31 December 2002)
At today's Telecom Italia Board of Directors meeting, chaired by
Marco Tronchetti Provera, the Board adopted the first quarter
2003 accounts.
TELECOM ITALIA GROUP
During 2002 and in the first quarter of this year the 9Telecom
Group, Telespazio Group and the Sogei S.p.A., Consiel S.p.A.,
Datahouse S.p.A., Emsa S.p.A. Immsi S.p.A. and Telimm S.p.A.
companies left the area of consolidation, while Blu S.p.A. the
Webegg Group were added. The repercussions of these changes are
highlighted in the headline consolidated economic data to enable
comparisons on equivalent terms.
Revenues in the first quarter of 2003 amounted to 7,125 million
euros, a 1.9% drop compared with the same period in 2002 (7,265
million euros). Changes to the area of consolidation affected
this figure as the 9Telecom Group, Sogei (consolidated for the
first six months of 2002) and the Telespazio Group (consolidated
until 30 September 2002) left the area, and the Webegg Group was
added. Revenues were maintained with significant contributions
posted by the Mobile Business Unit, Domestic Wireline Business
Unit and the Internet and Media Business Unit. Excluding the
negative effects of exchange rate fluctuations (348 million
euros) and changes to the consolidation area (218 million euros),
organic growth reached 6.4% (+426 million euros).
The gross operating result, corresponding to 3,303 million euros,
registered growth of 0.9% compared with the first quarter of 2002
(3,274 million euros). Organic growth of 3.9% was recorded (+125
million euros), excluding the negative effects of exchange rate
fluctuations and changes to the area of consolidation. The gross
operating result was equal to 46.4% of revenues, compared with
45.1% during the same period in 2002.
Operating income amounted to 1,866 million euros, a 135 million
euro improvement compared with the first quarter of 2002 (+7.8%,
+6.4% in terms of organic growth). Operating income accounted for
a larger proportion of revenues, up from 23.8% for the same
period in 2002 to 26.2% in the first quarter of 2003. The higher
absolute figure benefited from gross operating result growth and
lower depreciation.
The result before extraordinary items and tax corresponded to
1,450 million euros, up 229 million euros compared with the first
quarter of 2002 (approx. +19%).
The Group's net consolidated result for the first quarter of 2003
increased by 121 million euros (approx. +32%) to 503 million
euros compared with the same period in 2002, excluding net
capital gains equal to 339 million euros generated by the
disposal of equity stakes in Bouygues Decaux Telecom and
Lottomatica. Taking these into account, the Group's net
consolidated result for the first quarter of 2002 corresponded to
721 million euros.
Investments totalled an aggregate of 860 million euros (1,227
million euros in the first quarter of 2002): 697 million euros in
capital expenditure, 142 million euros in long-term financial
investments, and 21 million euros in goodwill.
Free cash flow, corresponding to 2,413 million euros, posted a
805 million euro increase (approx. +50%) compared with the first
quarter of 2002, and corresponded to 33.9% of revenues (22.1% in
the first quarter of 2002).
Net financial borrowings, corresponding to 16,079 million euros,
was reduced by 2,039 million euros compared with 31 December 2002
(18,118 million euros). This improvement was generated by free
cash flow from operations over the period and the proceeds from
the first two installments for the disposal of Telekom Srbija (60
million euros). Securitization operations were also undertaken to
improve net financial borrowings at 31 March 2003 by 839 million
euros, a figure that is in line with the corresponding figure for
31 December 2002.
The proportion of debt falling due beyond one year grew from 75%
at 31 December 2002 to 81% at 31 March 2002. Taking into account
debt that falls due during the next financial year (2,273 million
euros), the medium/long-term percentage rises to 93% (88% at 31
December 2002).
At 31 March 2002 the Group employed 100,765 people, a reduction
of 948 (101,713 at 31 December 2002). The fall may principally be
ascribed to changes to the area of consolidation.
The outlook for the 2003 financial year is for the Telecom Italia
Group to maintain its operating profitability and further reduce
net financial borrowings.
On the assumption that the merger of Telecom Italia into Olivetti
goes ahead (described below, in the section on events occurring
after 31 March), it is expected that:
-- Consolidated net financial borrowings may rise temporarily as
a result of operations associated with the merger (withdrawal by
Olivetti shareholders, and a partial voluntary Olivetti public
purchase offer for Telecom Italia ordinary and savings shares),
which will see partial cover in 2003, in cash flows generated by
both the management and disposals of non strategic assets. As
previously announced, this increase will be reabsorbed by year-
end 2004;
-- For the 2003 financial year the Group will maintain its
operating profitability prior to consolidation difference write-
downs.
It is forecast that the 2003 net operating accounts of the
company resulting from the merger will allow for a dividend
policy whereby current Telecom Italia shareholders receive
overall dividend payments that are at least equal to those
received at present.
Lastly, a new organizational model has been completed to comply
with Decree Law 231/01. This new model consists of ad hoc
internal auditing forms that embody the Code of Ethics, general
principles of internal auditing, and the specific principles
according to which relations are undertaken with public sector
bodies.
Over 1,300 people contributed more than 20,000 man-hours to this
project, which included accurately mapping risks and auditing the
regulatory status of the strict organizational systems that were
already in place.
TELECOM ITALIA SpA
In late 2002 Telecom Italia Sparkle took over the "Wholesale
International Services" company unit; in March 2003 subsidiary
company Telecom Italia Lab was merged through incorporation, with
bookkeeping and fiscal effect from 1 January 2003.
Telecom Italia SpA revenues at 31 March 2002 amounted to 3,959
million euros, down slightly compared with the first quarter of
2002 (4,190 million euros). This was wholly the result of
bookkeeping effects arising from the transfer to Telecom Italia
Sparkle of the "Wholesale International Services" unit and the
resulting allocation of international call traffic revenues to
this unit. On equivalent terms, revenues posted a 9 million euro
rise.
The gross operating result, corresponding to 1,798 million euros,
registered a 77 million euro reduction compared with the first
quarter of 2002 (1,875 million euros in the first quarter of
2002), and accounted for 45.4% of revenues (44.7% during the same
period in 2002). The 33 million euro fall on equivalent terms may
essentially be ascribed to higher corporate structure costs. The
slowdown was generated by the previously mentioned drop in
revenues, though this was partly offset by lower consumption of
materials and external services, and diminished labour costs.
Operating income, corresponding to 1,052 million euros, posted a
45 million euro reduction compared with the first quarter of 2002
(1,097 million euros), and amounted to 26.6% of revenues (26.2%
during the same period in 2002). The reduction on equivalent
terms was equal to 16 million euros.
The result before extraordinary items and tax corresponded to 670
million euros, against 578 million euros for the first quarter of
2002.
The Parent company net result was a 356 million euro profit, up
76 million euros (approx. +27%) compared with the first quarter
of 2002. As is customary, first quarter 2003 results do not
include dividends from subsidiary companies generated through
profits from the current financial year, which are reported at
year-end in compliance with the principle of maturity. This
result was achieved following improvements over the first quarter
of 2002 of the balance of investment management (+41 million
euros), the balance between equity interest income and charges
(+96 million euros) and the balance of extraordinary income and
charges (+57 million euros).
Net financial debt corresponded to 14,887 million euros,
following a reduction of 241 million euros compared with 31
December 2002 (15,128 million euros). The improvement was the
result of cash flow from operations (768 million euros), which
more than compensated for investment and extraordinary management
spending (358 million euros), in addition to the acquisition of
the initial net financial borrowings of incorporated company
Telecom Italia Lab (169 million euros). Further, the positive
repercussions of securitization operations corresponded to 839
million euros. The proportion of medium/long-term debt rose to
74% at 31 March 2003, up from 68% at 31 December 2002 on a
proforma basis.
EVENTS OCCURRING AFTER MARCH 31, 2003
THE MERGER OF TELECOM ITALIA INTO OLIVETTI
At its 15 April 2003 meeting, the Board of Directors adopted the
plan to merge Telecom Italia into Olivetti, including provisions
for the following share exchange ratio:
-- 7 Olivetti ordinary shares, par value one euro each, for every
Telecom Italia ordinary share of par value EUR0.55 each;
-- 7 Olivetti savings shares, par value one euro each, for every
Telecom Italia savings share of par value EUR0.55 each.
As a result of the merger, the controlling stake in Telecom
Italia held by Olivetti will be cancelled, and Olimpia's stake in
Olivetti will be significantly diluted. The exchange ratio
requirement shall predominantly be covered by a redistribution of
Olivetti capital as it stands at the time the merger is
completed. It has consequently been deemed appropriate to adjust
the post-merger par value of Olivetti ordinary and savings shares
to EUR0.55 (equal to the par value of Telecom Italia shares) in
place of the present par value of EUR1.
The company resulting from the merger will take on the Telecom
Italia name and company purpose. Company headquarters shall be
located in Milan, at the current Telecom Italia offices.
More generally, Olivetti shall also adopt new bylaws that
essentially match Telecom Italia's current bylaws. Pursuant to
the change in company purpose, Olivetti shareholders will be
entitled to exercise withdrawal rights. Olivetti has entered into
a 9 billion euro facility agreement to meet any requirements
arising from the exercise of withdrawal rights. Any portion of
this facility not used for withdrawals will be set aside for a
partial voluntary tender offer on Telecom Italia ordinary and
savings shares.
The public purchase offer acquisition price will be equal to the
average share price over the period between 12 March and the date
of the Olivetti Shareholders' Meeting called to approve the
merger, plus a 20% premium, with a minimum and maximum
respectively corresponding to EUR7.0 and EUR8.4 for ordinary
shares and EUR4.7 and EUR5.65 for saving shares. Both the
withdrawal rights and public purchase offer are conditional upon
the merger going through. The merger will become effective upon
the final registration of the official merger document at the
registry offices of the companies involved, or, alternatively, at
a later date as established in the official merger deed, which is
scheduled to be ready by early August 2003. For bookkeeping
purposes, it is planned that transactions undertaken by Telecom
Italia shall be entered onto the Olivetti accounts starting from
1 January 2003; the fiscal effects of the merger shall also
commence from that same date. The ordinary and savings shares
issued by Olivetti in exchange for Telecom Italia shares, which
will be cancelled as a result of the merger, will be cum-coupon.
The merger shall only come into effect if the savings shares
allocated by Olivetti under the exchange are admitted for listing
on the automated market run by Borsa Italiana S.p.A.. A request
will be made for the new ordinary and savings shares of the
company resulting from the merger to be admitted to a New York
Stock Exchange listing.
SEAT PAGINE GIALLE SPIN-OFF
On 1 April 2003 the Seat Pagine Gialle Board of Directors adopted
a plan for the proportional and partial spin-off of Seat Pagine
Gialle S.p.A. (the "spin-off" company) to a newly founded company
(the "beneficiary" company), on the basis of the spin-off
company's balance sheet situation at 31 December 2002. On
approval of the project by Seat PG's shareholders, the
beneficiary company will take on the going concern composed
principally of the following business areas: Directories
(consisting of Italian telephone publishing operations and equity
interests in TDL Infomedia and Thomson), Directory Assistance
(89.24.24 Pronto Pagine Gialle and Telegate) and Business
Information (Consodata Group). The spin-off company will take on
the new name of Telecom Italia Media; the beneficiary company
will be known as Seat Pagine Gialle. On the basis of the spin-off
plan, at the moment the operation becomes effective, current Seat
PG shareholders will be allocated the following shares in
exchange for every 40 ordinary (savings) shares held:
-- 29 new ordinary (savings) shares in the Seat Pagine Gialle
beneficiary company
-- 11 new ordinary (savings) shares in the Telecom Italia Media
spin-off company.
Furthermore, it should be noted that Telecom Italia has begun
procedures for the divestment, by competitive process, of
disposal of the controlling equity interest in the above-
mentioned beneficiary company. This will be implemented
subsequent to conclusion of the spin-off process.
DISPOSAL OF STREAM EQUITY INTEREST
On 30 April 2003, upon receipt of approval from the relevant
authorities, the agreement with News Corporation announced on 1
October 2002 for the creation of a single Italian pay-TV company
was completed. The new company emerging from the integration of
Stream and Tele+ will be called Sky Italia. Telecom Italia will
hold a 19.9% stake in the company, and News Corporation 80.1%.
STRATEGIC OUTSOURCING DEAL BETWEEN TELECOM ITALIA AND HEWLETT-
PACKARD
The Management Services & Outsourcing agreement between Telecom
Italia and Hewlett-Packard announced on 21 February has become
operational, following completion of procedures pursuant to
legislation in force. The agreement implements operations
outsourcing contracts as follows: HP is to provide asset
management, help desk, maintenance and workstation management
services, while IT Telecom is to administer Hewlett-Packard
Italiana's SAP environment operational activities and host HP's
systems at its Data Centers. Contracts have also been completed
for the disposal of 100%-owned Telecom Italia company IT
Telecom's Desktop Management services company unit to a new
Hewlett-Packard entity known as HP DCS (Hewlett-Packard
Distributed Computing Services).
BUSINESS UNIT RESULTS BREAKDOWN
First-quarter 2003 data for the Mobile Services and Internet &
Media Business Units are available in press releases issued
following the TIM and Seat Pagine Gialle Board Meetings called to
adopt the first-quarter accounts.
DOMESTIC WIRELINE
Since January 1, 2003, the area of consolidation of Telecom
Italia's fixed-line network services business unit Domestic
Wireline has changed following the transfer of the Loquendo SpA
company (previously part of IT Group operations). In the first
quarter of 2003 Domestic Wireline significantly boosted its
operational and earnings performance compared with the same
period in the preceding year.
Revenues, corresponding to 4,235 million euros, posted +1.4%
growth compared with the first quarter of 2002. This is of
enormous significance, given that in recent years revenues have
fallen consistently. This increase has been achieved through the
implementation of an effective presence on the core telephony
market, and major ongoing development of broadband markets,
innovative data services and value added services. In particular,
flat voice offerings now apply to almost 5.4 million lines. Core
traffic market share has stabilized, while broadband offering
accesses now correspond to 1,100,000.
Business customer data service growth continues to be driven by
innovative data services development (+48% compared with the
first quarter of 2002), which more than compensated for the
slowdown in traditional data services and leased lines, areas in
which pricing is regulated and there has been a migration towards
innovative solutions. Significant growth was also recorded in
value added services (VAS revenues approx. +52% compared with the
first quarter of 2002).
The gross operating result, corresponding to 1,973 million euros,
registered 1.6% growth compared with the first quarter of 2002,
and amounted to 46.6% of revenues.
Operating income corresponded to 1,233 million euros, after
posting 2.9% growth compared with the first quarter of last year.
As a proportion of revenues, operating income is now 29.1%,
compared with 28.7% in the first quarter of last year.
During the first quarter of the year Domestic Wireline confirmed
its commitment to investment by investing 433 million euros, a
figure that matches the same period in the preceding year.
SOUTH AMERICA
Revenues amounted to 292 million euros, a 78 million euro fall
compared with the same period in 2002. This was the result of
exchange rate fluctuations, which had a negative impact of around
101 million euros (-88 million euros for the Chilean Peso and -13
million euros for the Boliviano). Stripping out these effects,
EUR23 million of growth was recorded, associated with improved
revenues from the Entel Chile Group (+8.1% in local currency
terms).
The gross operating result posted a 25 million euro drop on the
first quarter of 2002, though excluding exchange rate
fluctuations growth corresponded to 9 million euros. The gross
operating results/revenues ratio was up from 34.3% in the first
quarter of 2002 to 34.9% in the first quarter of 2003.
Operating income was impacted by the elements described above,
and was down by 9 million euros (with exchange rate fluctuations
amounting to -12 million euros). The operating income/revenues
ratio (12.7%) grew compared with the first quarter of 2002
(12.4%).
INFORMATION TECHNOLOGY MARKET
Continuing on from the 2002 financial year, in the first quarter
of 2003 the Information Technology Market Business Unit
implemented overall efficiency enhancement actions and vigorous
cost reduction, particularly at Finsiel SpA and its main
subsidiaries.
From January 1, 2003, the Netikos Group, Webegg Group and Eustema
SpA, which had previously been consolidated among Group IT
operations, were transferred to the ITM BU. Sogei S.p.A.
(consolidated for the first six months of 2002) and Consiel
S.p.A. (consolidated for the first eight months of 2002) left the
consolidation area following disposal.
Revenues posted a 32 million euro fall compared with the same
period in the preceding year, reclassified under equivalent
conditions. This may principally be ascribed to Finsiel's lower
turnover, which was generated by reduced volumes and a general
reduction in prices to main clients, alongside lower turnover
from the Webegg Group and, to a lesser extent, from Banksiel.
These reductions were offset by improved performances from
Eustema and Eis, and a greater contribution by Agrisian.
The gross operating result and operating income increased as a
result of the aforementioned price cuts to main customers, which
principally affected Finsiel.
INFORMATION TECHNOLOGY GROUP
The new IT Telecom SpA company commenced operations on 1 January
2003, offering technology innovation services and supplying
information operations oriented towards Telecom Italia Group
companies. IT Telecom SpA was formed through the merger of
Netsiel S.p.A., Saritel S.p.A., Sodalia S.p.A. e Telesoft S.p.A.
Consolidated revenues posted 61 million euro growth compared with
the first quarter of 2002, driven by improved Business System,
Operating Systems and Institutional Projects operations, in
addition to the completion of a number of projects underway with
Telecom Italia in the areas of Broadband, UNICA TD and Order
Management.
The gross operating result figure was unchanged, while operating
income was impacted by the lower pricing that was introduced in
the second half of 2002, and by higher depreciation associated
with greater investments undertaken for infrastructure,
predominantly relating to the second half of 2002.
Milan, May 5, 2003
TELECOM ITALIA: Seat PG Directors Approve Results for Q1 2003
---------------------------------------------------------------
The organizational model provided for by the legislative decree
231/01 has been formalized
SEAT PG GROUP:
-- Revenues: EURO 345 Million
(+3.6% Compared to 03/31/2002)
-- GOP: EURO 47,2 Million (+74,2% Compared to March 31, 2002)
-- Operating Income: EURO -35,3 Million
(EURO -68,9 Million at March 31, 2002)
-- Indebtedness Decreased to EURO 664 Million
(EURO 680 Million at December 31, 2002)
SEAT PG S.p.A
-- Revenues: EURO 175,1 Million (+24,3% Compared to March 31,
2002)
-- GOP: EURO 49.6 Million (+27.7% Compared to March 31, 2002)
-- Operating Income: EURO 3.7 Million
(EURO -17.4 Million at March 31, 2002)
Upon proposal of Managing Director Paolo Dal Pino, the Board of
Directors of Seat Pagine Gialle (Telecom Italia Group), chaired
by Riccardo Perissich, approved the Group's results for Q1 2003.
The first quarter closed with a significant increase in revenues
and gross operating profit (GOP) compared to the same period of
2002.
The first quarter has always been affected by the strong seasonal
effect of the lower number of directories published both in Italy
and abroad. Consolidated GOP for the first quarter 2002 accounted
only for 8% of consolidated GOP for the year.
In a particularly difficult market situation, the directories
area gave a positive contribution to the Group's performance:
revenues increased by 2.8% in Italy and by 4% in the UK, although
the Euro/Pound Sterling exchange reduced the overall improvement
of revenues from this area to Euro 1.6%.
It is noted that, due to the unfavorable situation, revenues from
Italian Directories were affected by the important Turin
directories performance whose contraction reduced the increase in
revenues for Q1 by about 1.5 percentage points.
The directory assistance area confirmed the important
profitability progress made, showing a GOP of Euro 3.2 million
compared to a loss of Euro 2.3 million in Q1 2002.
The Internet Area greatly contributed to improving results as it
achieved a significant increase in revenues (+76.9% compared to
Q1 2002, +20% in comparable terms), and continued to increase its
profitability as a consequence of diversification of revenue
sources and broadband development.
The positive results achieved by the Seat PG Group in Q1 2003 are
due to a constant recovery of efficiency and a significant
decrease in operating costs implemented by the management.
Main economic and financial results of the Seat PG Group
Revenues for the quarter reached Euro 345 million, with an
increase of 3.6%. Gross operating profit recorded a further
significant increase and reached Euro 47.2 million compared to
Euro 27.1 million in Q1 2002, up 74.2% with a ratio to revenues
of 13.7%, compared to 8.1% in 2002.
Operating income for the period showed an expense balance of Euro
35.3 million compared to Euro 68.9 million in Q1 2002. In
absolute terms, loss decreased by Euro 33.6 million.
The Group's consolidated net result for the period was negative
for Euro 35.9 million, significantly improved compared to the
loss of Euro 46.9 million in Q1 2002.
During the first quarter, net financial indebtedness further
decreased to Euro 664 million compared to Euro 680 million at
December 31, 2002.
Lastly, a new organizational model has been completed to comply
with Decree Law 231/01. This new model consists of ad hoc
internal auditing forms that embody the Code of Ethics, general
principles of internal auditing, and the specific principles
according to which relations are undertaken with public sector
bodies.
Seat PG S.p.A.
At the end of the first quarter, revenues of the Parent Company
Seat PG S.p.A. amounted to Euro 175.1 million (+24.3%) and
operating result amounted to Euro 3.7 million. This compares to a
loss of Euro 17.4 million for Q1 2002.
The net result at 03/31/2003 was negative for Euro 20.5 million
but showed a clear improvement compared to the loss of Euro 54.3
million in the same period of 2002.
Performance of the Business Areas
In the first three months of 2003, the performance of the main
business areas was as follows:
-- In Q1 2003, revenues of the Directories Area amounted to Euro
137 million, with an increase by 1.6% compared to the first
quarter of 2002. GOP increased by 6,3% reaching Euro 47,5 million
compared to Euro 44.7 million in the same period of 2002, in a
period marked by strong seasonality and with the advertising
market that showed recession trends also in the first months of
2003. Operating income for the first quarter amounted to Euro 4
million, compared to a loss of Euro 7 million for Q1 2002.
-- Revenues of the Internet Area amounted to Euro 56.8 million,
compared to Euro 32.1 million in Q1 2002. Revenues include the
full value of calls to Internet access numbers beginning by 7. In
FY 2002, and in previous years, revenues from dial-up telephone
traffic included only the rebate recognized by Telecom Italia
equivalent to part of the cost of the telephone call. The
positive impact on ISP revenues deriving from the application of
the full fee amounted to about Euro 18 million in the first
quarter. GOP amounted to Euro 9.5 million thus showing a
significant increase compared to Euro 600,000 in Q1 2002. At the
end of March 2003, active users at 45 days reached 2,380,000,
(1,930,000 in Q1 2002) of which 584,000 subscribers to ADSL
services. Revenues of the portal business area exceeded Euro 6
million, with an increase of 40% compared to the first quarter of
2002.
-- Revenues of the Television Area increased by 27.5%, from Euro
16.7 million in the first quarter 2002 to Euro 21.3 million in Q1
2003 also due to the new agreement on the advertising collection
on La7 through an external advertising representative. In the
first quarter, La7 continued to pursue its cost-cutting
objectives, strengthened its publishing image and brand awareness
and increased the recognition of its programs.
Milan, 5 May 2003
===================
L U X E M B O U R G
===================
MILLICOM INTERNATIONAL: 85% of Notes Tendered in Exchange Offer
---------------------------------------------------------------
Millicom International Cellular S.A., the global
telecommunications investor, announces that as of 5 p.m. EST time
on May 2, 2003, approximately $781 million or 85% of the
outstanding amount of Millicom's 13-1/2% Senior Subordinated
Discount Notes due 2006, or the "Old Notes", had been tendered in
Millicom's private exchange offer and are thereby deemed to have
consented to certain amendments to the existing indenture
covering the Old Notes. The private exchange offer and consent
solicitation has now expired and is expected to close on May 7,
2003.
Upon closing of the exchange offer, Millicom will issue
approximately $562 million of Millicom's 11% Senior Notes due
2006 and approximately $64 million of Millicom's 2% Senior
Convertible PIK (payment in kind) Notes due 2006 in exchange for
the $781 million of Old Notes tendered, whereupon the Old Notes
shall be cancelled. In addition, Millicom will also pay to
holders of Old Notes who consented to the amendments of the Old
Note indenture $50 per $1,000 of Old Notes so consenting
(excluding affiliates of Millicom), or approximately $38 million
in the aggregate. Millicom's 2% Senior Convertible PIK Notes due
2006 are convertible into Millicom common stock at a conversion
price of $10.75 per share. If the original principal amount of
approximately $64 million of the new 2% Senior Convertible Notes
were converted into Millicom's common stock, the 2% Notes would
convert into approximately 5.93 million shares of Millicom's
common stock (which, when issued, would constitute approximately
26.7% of the then issued and outstanding common stock).
This press release is neither an offer to purchase nor a
solicitation of an offer to sell Millicom's securities and is not
being made to, nor will tenders be accepted from, or on behalf
of, holders of Old Notes in any jurisdiction in which the making
of the exchange offers and consent solicitations or the
acceptance thereof would not be in compliance with the laws of
such jurisdiction.
Millicom's securities referred to herein have not been registered
under the Securities Act of 1933, as amended, and such securities
may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements.
Millicom International Cellular S.A. is a global
telecommunications investor with cellular operations in Asia,
Latin America and Africa. It currently has a total of 16 cellular
operations and licenses in 15 countries. The Group's cellular
operations have a combined population under license (excluding
Tele2) of approximately 382 million people. In addition, MIC
provides high-speed wireless data services in six countries. MIC
also has a 6.4% interest in Tele2 AB, the leading alternative
pan-European telecommunications company offering fixed and mobile
telephony, data network and Internet services to 16.8 million
customers in 22 countries. The Company's shares are traded on the
Luxembourg Bourse and the Nasdaq Stock Market under the symbol
MICC.
Lazard is acting for Millicom International Cellular S.A. in
connection with the exchange offer and consent solicitation and
no-one else and will not be responsible to anyone other than
Millicom International Cellular S.A. for providing the
protections offered to clients of Lazard nor for providing advice
in relation to the exchange offer or consent solicitation.
CONTACT: MILLICOM INTERNATIONAL
Marc Beuls, President and Chief Executive Officer
Phone: +352 27 759 101
Home Page: http://www.millicom.com
Shared Value Ltd, London
Andrew Best
Phone: +44 20 7321 5022
LAZARD, NEW YORK
Jim Millstein
Phone: +1 212 632 6000
LAZARD, LONDON
Peter Warner
Daniel Bordessa
Cyrus Kapadia
Phone: +44 20 7187 2000
=====================
N E T H E R L A N D S
=====================
JOMED N.V.: Amsterdam District Court Declares Bankruptcy
--------------------------------------------------------
On May 2, 2003, following a vote of the creditors meeting, the
Amsterdam District Court declared JOMED N.V. bankrupt. The Court
appointed Messrs. Rutger J. Schimmelpenninck and Matthieu Ph. Van
Sint Truiden as receivers in bankruptcy.
The Management Board and the Supervisory Board of JOMED N.V.
regret that they were not able to conclude an acceptable solution
for all involved parties that would prevent the bankruptcy of
JOMED N.V. The bankruptcy declared does not include the
subsidiaries of JOMED N.V.
The receivers in bankruptcy together with the management of JOMED
N.V. are currently investigating the possibilities for a so-
called "plan of composition" which, upon acceptance by the
creditors and approval by the Court in accordance with the
applicable statutory provisions, would permit JOMED N.V. to exit
the bankruptcy.
CONTACT: JOMED N.V.
Jorgen Peterson, Acting CEO
Phone: +46 42 490 6014
Christiaan Zijderveld, Assistant to the Administrators
Phone: +31 20 577 2906
Lars-Johan Cederbrant, Acting CFO
Phone: +46 42 490 6048
KLM ROYAL: Presents Recent Traffic and Capacity Statistics
----------------------------------------------------------
Passenger load factor at 74.0 percent
-- Passenger load factor on North Atlantic almost stable at 85.2
percent
-- Passenger load factor on Asia/Pacific falls by 26.9 percentage
points to 60.3 percent
-- Cargo traffic increased by 2 percent year-on-year
Passenger Traffic
Passenger load factor decreased by 6.8 percentage points year-on-
year to 74 percent. Passenger traffic was down 7 percent, while
passenger capacity increased by 1 percent year-on-year. This
increase in capacity is mainly the result of cabin
reconfigurations of the 747-400 fleet. The number of flights was,
however, 8 percent lower than last year due to frequency
reductions in Europe and cancellations in the route area Middle
East /South Asia.
The impact on capacity from the reconfiguration was most
pronounced on the Asia/Pacific route area. This is the main
reason for the capacity increase of 10 percent in this route
area. Furthermore, KLM increased frequencies to Seoul and
Shanghai as part of its summer schedule. However, due to the
outbreak of the SARS-virus, traffic was severely affected, down
24 percent on last year.
As of April 14, scheduled services to the Middle East were re-
instated (except for Kuwait), albeit with lower frequencies than
the original flight schedule. Traffic on the route area Middle
East/South Asia was down 34 percent, with a capacity decrease of
34 percent. This resulted in a load factor decrease of 0.3
percentage points to 74.4 percent.
Cargo Traffic
Cargo load factor decreased by 1.1 percentage point to 70.9
percent. Cargo traffic was 2 percent higher than last year, on a
3 percent capacity increase.
Traffic on the Asia Pacific routes increased by 6 percent, on a 8
percent capacity increase.
On the North Atlantic routes traffic was 7 percent higher, on a 6
percent capacity increase.
Traffic inbound Europe is doing relatively well compared to last
year, while European outbound traffic remains under pressure.
ROYAL KPN: Acquires HubHop, Widens Scope of WLAN Activities
-----------------------------------------------------------
Acquisition in the Netherlands and cooperation agreement in
Germany set to strengthen KPN's broadband connectivity portfolio
KPN N.V. acquired a controlling interest in wireless local area
network 'hotspot' provider HubHop B.V. in the Netherlands. KPN's
German subsidiary E-Plus also announced a far-reaching wireless
LAN (WLAN) cooperation agreement with NetCheckIn GmbH in Germany.
These initiatives will help KPN strengthen its position in the
emerging WLAN market, providing the basis for the further
development and deployment of wireless broadband access services.
KPN has invested 1.5 million euro in acquiring the controlling
shareholding in HubHop B.V. HubHop B.V is the largest provider of
public WLAN hotspots in the Netherlands. The company currently
owns and operates 35 hotspots throughout the country (a.o.
Nederlands Congres Centrum in the Hague and Beurs van Berlage in
Amsterdam). As one of the first movers on the Dutch WLAN market,
HubHop B.V. has been instrumental in promoting the benefits
public WLANs potentially offer for wireless broadband
connectivity next to wider GPRS and UMTS mobile networks.
In Germany, E-Plus and NetCheckIn GmbH (NCI) have signed a letter
of intent with a view to joint acquisition and exploitation of
public WLAN hotspots. The agreement will allow E-Plus to provide
attractive and secure wireless broadband access and billing
services to customers at suitable locations around Germany. Under
the agreement, NCI will build and maintain the necessary
infrastructure. E-Plus will manage the customer relationship
including billing.
KPN sees WLAN as an important component of its broadband strategy
next to its current DSL, GPRS and future UMTS networks. Through
WLAN, customers will be able to enjoy easy access to broadband
services at home, at the office as well as in public locations
such as airport departure lounges and caf,s without the
inconvenience of wires or cables. With these initiatives, KPN
continues to ensure that its customers can benefit from broadband
data communication, wherever they are and whenever they want to.
ROYAL PHILIPS: Chief Executive Officer David Hamill to Step Down
----------------------------------------------------------------
David Hamill to step down as CEO Of Philips Lighting - Theo Van
Deursen appointed as successor
Royal Philips Electronics announced that Mr. David Hamill (45),
President and CEO of Philips Lighting and member of the Group
Management Committee will leave the Company as of December 31,
2003.
Mr. Hamill joined Philips in 1986 and has been in charge of
Philips Lighting since 2001. Since then, he has overseen three
years of market share gains, industry leading EBIT performance,
and best-in-class delivery time and inventory management.
Mr. Hamill accepted the above role on the basis of a limited
period with a view to subsequently returning to the United
Kingdom to rejoin his family. He has agreed to remain with
Philips for a further six months after he steps down as CEO of
Philips Lighting, working closely with the Board of Management to
advance the company's performance improvement program.
Mr. Hamill will be succeeded by Theo van Deursen (56), currently
ad-interim CEO of the Lighting Electronics business group and
until recently responsible for the transition program of the
Philips Components businesses. Mr. Van Deursen has enjoyed a 30-
year career with Philips including roles across the Components
and Lighting divisions. Previous to his special assignment with
Philips Components, Mr. Van Deursen was CEO of the Automotive &
Special Lighting business unit of Philips Lighting. He will take
up his new position as of July, 1 2003, and has been appointed a
member of the Group Management Committee as of April 1.
"David Hamill has taken Philips Lighting from strength to
strength and whilst we respect his decision to return to the U.K.
to be with his family, we are sorry to see him leave," commented
Gerard Kleisterlee, Philips' CEO. "Theo van Deursen is an
excellent successor with a strong track-record in Philips, and
the Lighting division in particular - the business will continue
to move forward under his leadership."
*****
About Royal Philips Electronics
Royal Philips Electronics of the Netherlands is one of the
world's biggest electronics companies and Europe's largest, with
sales of EUR 31.8 billion in 2002. It is a global leader in color
television sets, lighting, electric shavers, medical diagnostic
imaging and patient monitoring, and one-chip TV products. Its
166,000 employees in more than 60 countries are active in the
areas of lighting, consumer electronics, domestic appliances,
components, semiconductors, and medical systems. Philips is
quoted on the NYSE (symbol: PHG), London, Frankfurt, Amsterdam
and other stock exchanges. News from Philips is located at
http://www.philips.com/newscenter
THEO VAN DEURSEN (56)
Theo van Deursen was born on May 22, 1946 in Eindhoven, The
Netherlands and studied Electronics and Business Administration
at the Technische Universiteit Eindhoven.
Mr. Van Deursen joined Philips in 1973 as a Management Trainee in
Purchasing. In 1976 he joined Philips Elcoma (Philips' then
combined Components and Semiconductor activities) where he held
various management positions in the Components businesses,
including five years as an industrial director in South Korea.
In 1987 he became CEO of the Magnetic Products business group
within the Components division. He held this position until 1994
when he joined the Lighting division, becoming CEO of the
Automotive business group, which was extended to include the
Special Lighting business group in 2000.
In 2002 he headed a special assignment for the strategic
evaluation of the Components division, eventually overseeing the
integration of the different businesses into other parts of the
Company. He is currently acting as the ad interim CEO of the
Lighting Electronics business group.
Theo is married and has two sons.
CONTACT: ROYAL PHILIPS
Jeremy Cohen, Philips Corporate Communications
Phone: +31 20 59 77 213
E-mail: jeremy.cohen@philips.com
=============
R O M A N I A
=============
RBG PHOENIX: Assets Sold to Expert Servicii for USD3.5 Million
--------------------------------------------------------------
Assets of the troubled copper smelter RBG Phoenix has been sold
to Expert Servicii SRL, a local company based in Bucharest,
according to Reuters.
A senior officer of Romania's asset recovery agency (AVAB) said
assets of the country's biggest copper smelter were sold for
USD3.5 million. The sale was completed after an international
tender on April 26.
RBG Phoenix amassed overall debts of USD3.0 million and Avab had
pledged to sell its assets to the highest bidder to pay them off.
The online news center quoted AVAB director Nicolae Campeanu as
saying: "Bucharest-based Expert Servicii SRL is the winner...
they were the only bidders".
CONTACT: RBG PHOENIX
Baia Mare
Contact: Gabriela Dobrota, General Manager
Phone: +40 (262) 217 823
===========
S W E D E N
===========
ABB LTD.: Delay in Asbestos Court Hearings No Cause for Alarm
-------------------------------------------------------------
The resumption of the court hearings related to ABB Ltd's
proposed asbestos package on May 12-13 does not arise from new
complications, according to a company spokesman.
The Delaware court was not able to complete all the hearings
on May 1-2 and, accordingly, the session next week will resume
where those hearings left off.
But he cleared: "For ABB this does not mean complications. We are
confident we can reach an agreement settlement," he said.
In January, ABB Ltd. and its U.S. subsidiary Combustion
Engineering agreed to a pre-packaged bankruptcy plan for CE. It
set aside US$1.2 billion to settle pending asbestos claims.
The U.S. subsidiary filed for bankruptcy in February.
The judge hearing the case will write her ruling a couple of days
after the hearings have been completed. The concerned company
has 30 days to appeal the ruling in the wake of its publication.
The spokesman cleared that the delay in the hearings has nothing
to do with the sale of its oil, gas and petrochemicals division,
according to AFX.
=====================
S W I T Z E R L A N D
=====================
CREDIT SUISSE: CSFB Reports Profit for the First Quarter of 2003
----------------------------------------------------------------
Credit Suisse First Boston returns to profitability, Credit
Suisse Financial Services reports improved results across all
segments
Credit Suisse Group announced a net profit of CHF 652 million for
the first quarter of 2003, in line with the Group's preliminary
outlook announced on April 25, 2003. Credit Suisse First Boston
returned to profitability in the first quarter, due in large part
to the significantly improved performance of its Institutional
Securities segment. Winterthur's results recovered further in the
first quarter, with both Life & Pensions and Insurance improving
their profitability versus the fourth quarter due primarily to
increased investment income, tariff increases and lower
administration costs. Private Banking recorded a higher segment
profit than in the fourth quarter of 2002, as well as net new
assets of CHF 1.5 billion. At the same time, Corporate & Retail
Banking reported a significant increase in profitability compared
to the weak fourth quarter of 2002.
Oswald J. Grbel, Co-CEO of Credit Suisse Group and Chief
Executive Officer of Credit Suisse Financial Services, stated,
"Credit Suisse Group's first quarter results demonstrate real
progress on our goal to return the Group to profitability in
2003. In addition, we are pleased that all of Credit Suisse
Financial Services' segments improved their results in the first
quarter, reflecting our targeted measures to reduce costs and
adapt the business to prevailing market conditions."
John J. Mack, Co-CEO of Credit Suisse Group and Chief Executive
Officer of Credit Suisse First Boston, said, "Credit Suisse First
Boston's return to profitability in the first quarter confirms
that the measures we have taken to restore our earnings strength
are paying off. Last week, we announced the successful conclusion
of the sale of Pershing to The Bank of New York. We also
finalized the agreement with US regulators last week, which is an
important step forward for the Firm and the entire industry in
restoring investor confidence."
Group Results
In the first quarter of 2003, Credit Suisse Group reported a net
profit of CHF 652 million, including writedowns on the Group's
investments in Swiss Life and Swiss International Airlines of CHF
73 million and CHF 77 million, respectively, and CHF 204 million
of amortization of acquired intangible assets and goodwill, after
tax. This compared with a net loss of CHF 950 million in the
fourth quarter of 2002, in which results were impacted by after-
tax exceptional items of CHF 1.3 billion and the one-time
positive cumulative effect of a change in accounting principle
for periods prior to 2002 of CHF 520 million. Compared to the
first quarter of 2002, net profit increased by CHF 284 million or
77%. The Group's operating income was CHF 7.0 billion in the
first quarter of 2003, up 10% versus the previous quarter but
down 16% versus the first quarter of 2002. The Group's operating
expenses decreased 2% versus the fourth quarter to CHF 5.0
billion and were down 23% compared to the first quarter of 2002.
Earnings per share for the first quarter of 2003 were CHF 0.53,
versus a loss of CHF 0.80 for the fourth quarter and a profit of
CHF 0.31 for the first quarter of 2002. The Group's return on
equity was 9.2% in the first quarter of 2003, versus -13.0% in
the fourth quarter and 4.1% in the first quarter of 2002. The
Group's consolidated BIS tier 1 ratio was 10.0% as of March 31,
2003, up from 9.7% as of December 31, 2002. This increase is
attributable to earnings generated in the first quarter, offset
by moderate growth in risk-weighted assets in the banking
segments and slightly lower equity in the insurance business, and
to the positive impact of the Pershing sale transaction that
closed on May 1, 2003.
Business Unit Results
The segment results described below represent net operating
profit before minority interests, excluding exceptional items (at
Private Banking, Institutional Securities and CSFB Financial
Services segments) and the one-time positive cumulative effect of
a change in accounting principle for periods prior to 2002 in the
fourth quarter of 2002. For further information on Credit Suisse
Group's first quarter 2003 and fourth quarter 2002 results,
please refer to the respective Quarterly Reports, including the
reconciliation of operating results to consolidated results
contained therein.
All of Credit Suisse Financial Services' segments improved their
performance in the first quarter of 2003 versus the previous
quarter. However, as the business unit's fourth quarter 2002
result benefited from the one-time positive cumulative effect of
a change in accounting principle for periods prior to 2002 of CHF
266 million, its first quarter 2003 net profit of CHF 666 million
represents a decline of 6% quarter-on-quarter. Compared to the
first quarter of 2002, net profit was up 13%. Before the
amortization of acquired intangible assets and goodwill,
excluding exceptional items in the fourth quarter of 2002 of CHF
73 million and the cumulative effect of a change in accounting
principle for periods prior to 2002, first quarter 2003 net
operating profit was CHF 690 million, up 29% versus the fourth
quarter and up 11% versus the first quarter of 2002.
Private Banking reported a segment profit of CHF 371 million in
the first quarter 2003, up 10% versus the previous quarter but
down 39% compared to the first quarter of 2002. Operating income
declined 2% versus the previous quarter to CHF 1.3 billion and
was down 21% versus the first quarter of 2002, primarily as a
result of reduced transaction volumes in the securities business
due to investor passivity and the market-driven lower asset base.
First quarter operating expenses decreased 7% versus the fourth
quarter and 8% versus the first quarter of 2002.
Corporate & Retail Banking posted a segment profit of CHF 124
million in the first quarter of 2003, up 158% versus the weak
fourth quarter but down 15% compared to the first quarter of
2002. Operating income rose 3% quarter-on-quarter to CHF 734
million but was down 7% versus the first quarter of 2002. First
quarter operating expenses were down 14% and 3% versus the fourth
and first quarters of 2002, respectively. The cost/income ratio
was 67.4% for the first quarter of 2003, compared to 80.8% in the
fourth quarter of 2002.
Life & Pensions recorded a segment profit of CHF 111 million in
the first quarter of 2003, an increase of CHF 96 million versus
the first quarter of 2002 and of CHF 18 million compared to the
fourth quarter of 2002. Investment income was CHF 1.2 billion for
the first quarter of 2003, up CHF 429 million versus the first
quarter of 2002. Life & Pensions reported a decrease in gross
premiums written of 4%, or CHF 263 million, to CHF 6.5 billion
compared to the first quarter of 2002. Adjusted for acquisitions,
divestitures and exchange rate impacts, premiums fell 2% versus
the first quarter of 2002. The expense ratio for the first
quarter of 2003 was 6.8%, compared to 6.4% in the first quarter
of 2002.
Insurance reported a segment profit of CHF 92 million in the
first quarter of 2003, an increase of CHF 239 million compared to
the first quarter of 2002 and of CHF 86 million compared to the
fourth quarter of 2002. First quarter 2003 investment income was
CHF 289 million, up CHF 202 million versus the first quarter of
2002. Net premiums earned rose CHF 227 million, or 6%, to CHF 4.0
billion versus the first quarter of 2002. Adjusted for
acquisitions, divestitures and exchange rate impacts, the premium
volume increased 13%. The combined ratio improved 3.2 percentage
points in the first quarter to 100.7%, compared to 103.9% in the
first quarter of 2002.
The Credit Suisse First Boston business unit reported a net
profit of USD 161 million (CHF 221 million) in the first quarter
of 2003, compared to a net loss of USD 811 million (CHF 1.3
billion) in the fourth quarter and a net loss of USD 19 million
(CHF 32 million) in the first quarter of 2002. Before the
amortization of acquired intangible assets and goodwill,
excluding exceptional items in the fourth quarter of 2002 of CHF
1.4 billion before tax, or CHF 1.3 billion after tax, and the
one-time positive cumulative effect of a change in accounting
principle for periods prior to 2002, first quarter net operating
profit was USD 292 million (CHF 400 million), compared to a net
operating profit of USD 11 million (CHF 15 million) in the fourth
quarter and up 88% from a net operating profit of USD 155 million
(CHF 259 million) in the first quarter of 2002. Trends in
operating income and expenses were affected by a change in
reporting for Pershing; effective January 1, 2003, Pershing's
operating income was reported net of expenses. First quarter
operating income increased 24% on a US dollar basis versus the
previous quarter, reflecting significantly increased revenues in
the Institutional Securities segment. With cost control remaining
one of its top priorities, Credit Suisse First Boston
significantly improved its pre-tax margin in the first quarter
versus both the fourth and first quarters of 2002. Total
operating expenses were 16% higher than in the fourth quarter and
16% lower than in the first quarter of 2002. Excluding Pershing,
total operating expenses were 27% higher quarter-on-quarter
because of increased incentive compensation tied to performance.
However, compared to the first quarter of 2002 - again excluding
Pershing - operating expenses were down 10% on a 12% reduction in
headcount and various cost containment measures.
Institutional Securities reported a segment profit of USD 348
million (CHF 476 million) in the first quarter of 2003, up 452%
versus the fourth quarter and 60% versus the first quarter of
2002. First quarter 2003 operating income was up 39% versus the
prior quarter, to USD 2.6 billion (CHF 3.6 billion), reflecting
stronger results in Fixed Income. Compared to the first quarter
of 2002, operating income declined 5% as improved Fixed Income
results were insufficient to offset industry-wide declines in
equities and M&A volumes. Segment operating expenses were
consistent with overall Firm trends cited above. In the first
quarter of 2003, despite the continuing challenging market
environment, the Equity division's rankings in research, sales
and trading generally remained consistent or improved, and Credit
Suisse First Boston retained its number one ranking in global
high yield new issuances.
CSFB Financial Services reported a segment profit of USD 37
million (CHF 51 million) for the first quarter of 2003, a decline
of 23% versus the fourth quarter and 47% versus the first quarter
of 2002. This performance reflects lower results from Private
Client Services and Pershing, which were impacted by low customer
activity and unfavorable market conditions, as well as from
Credit Suisse Asset Management, which experienced a decline in
assets under management. Operating income for the segment was
down 37% compared to the fourth quarter and 43% compared to the
first quarter of 2002, and operating expenses were below both
periods by 41% and 44%, respectively. Excluding Pershing,
operating income was flat compared to the fourth quarter and was
down 5% compared to the first quarter of 2002, while operating
expenses were below both periods by 3% and 5%, respectively.
Net New Assets
Credit Suisse Financial Services reported net new assets of CHF
0.3 billion in the first quarter of 2003, with net inflows of CHF
1.5 billion at Private Banking and of CHF 2.2 billion at Life &
Pensions partially offset by a net outflow of CHF 3.4 billion
from Corporate & Retail Banking due to a shift from time deposit
accounts of corporate clients to transaction accounts, which do
not qualify as assets under management. Credit Suisse First
Boston reported a net asset outflow of CHF 3.8 billion in the
first quarter, as a CHF 1.5 billion net inflow at Private Client
Services was offset by net outflows of CHF 5.2 billion from
Credit Suisse Asset Management and CHF 0.1 billion from
Institutional Securities. For Credit Suisse Group, an overall net
asset outflow of CHF 3.5 billion was recorded in the first
quarter of 2003, compared with a net asset outflow of CHF 6.6
billion in the fourth quarter of 2002. The Group's total assets
under management were CHF 1,160.5 billion as of March 31, 2003, a
decline of 2.9% versus December 31, 2002.
Valuation Adjustments, Provisions and Losses
Total valuation adjustments, provisions and losses of CHF 233
million were recorded in the first quarter of 2003, a decrease of
90% compared with CHF 2.4 billion in the fourth quarter of 2002.
Compared to the first quarter of 2002, valuation adjustments,
provisions and losses decreased 51%.
Outlook
Given the continued challenging market environment and global
uncertainty, Credit Suisse Group remains cautious in its outlook
for 2003. The Group made progress towards its goal to return to
solid profitability in 2003 but remains exposed to continued
volatility in the financial markets, especially as regards the
Life & Pensions business.
CONTACT: CREDIT SUISSE GROUP
Investor Relations
Phone: +41 1 333 4570
===========================
U N I T E D K I N G D O M
===========================
ABBEY NATIONAL: Tells Employees to Reapply Under Current Shakeup
----------------------------------------------------------------
Two thousand employees of U.K.-based bank Abbey National were
advised to reapply for their jobs as the group restructures roles
of managerial staff across the U.K.
The shakeup, which is part of the company's effort to redirect
the company towards profitability, is expected to result to an
unspecified number of redundancies.
A company spokeswoman said: "Obviously the restructure will lead
to some uncertainty among staff, but it will not be a drawn out
process. Redundancy levels will be kept to a minimum."
The review, which the spokeswoman said would be completed by the
middle of June, will shelve positions for local sales managers
and client managers, according to the Scotsman.
But branch managerial positions, which were taken out in 1999,
will be reinstalled.
The spokeswoman assured: "The restructure is such that there will
be up to four new jobs for each member of staff to apply for.
It's a good opportunity to take on a new role, possibly in a new
location."
She even added that the shakeup could eventually lead to an
increase in the company's 7,000-strong workforce. The bank is to
recruit 450 staff to help customers with everyday personal
finance issues.
But she conceded: "The new jobs will be at floor level - too
junior for the managerial staff currently under review to apply
for."
UK's sixth largest bank, which posted losses amounting GBP1
billion last year, expects to improve customer service and boost
its ailing finances from the restructuring.
ASHTEAD GROUP: U.S. subsidiary Wins $15 Million Damages Award
-------------------------------------------------------------
Ashtead Group PLC announces that the North Carolina Business
Court has issued a ruling awarding its U.S. subsidiary, Sunbelt
Rentals, compensatory damages of US$5m against Head & Engquist
Equipment LLC (H&E), a competitor in the rental of aerial work
platforms and certain members of its staff.
This amount was trebled to US$15m pursuant to the provisions of
the North Carolina Unfair Trade Practices Act. Sunbelt was also
invited to petition the Court for recovery of its attorneys'
fees.
The events subject to litigation date back to shortly prior to
Sunbelt's June 2000 acquisition of BET USA when H&E and the
individual defendants executed a plan to develop its aerial work
platform rental business by raiding over 100 staff from the BPS
division of BET USA, including two of its regional managers, six
branch managers, and a significant number of branch staff and
using them to open competing aerial work platform rental stores
in seven major markets served by BPS. The defendants have the
right to appeal the Court's decision.
*****
The plant hire group announced in March plans to withdraw the
interim dividend of 0.62 p it declared in January for the six
months ended October 31, 2002, and defer a separate interest
payment on a GBP130 million convertible bond due at the start of
next month to Rentokil Initial.
CONTACT: George Burnett
Ian Robson
Phone: 01372 362300
BOOTS: Chairman Reassures Commitment to Investment Policy
---------------------------------------------------------
The chairman of the trustees of Boots pension scheme, John
Watson, denied that the company is reversing its investment
policy and is again buying equities.
Mr. Watson said the move back into equities was "not currently on
the agenda," Financial Times reports.
Speculations about the company's shift of strategy emerged
following the departure late last year of John Ralfe, head of
corporate finance at chemists' chain and mover behind the
company's switch into bonds.
Mr. Ralfe was earlier engaged in a row over issues including
pensions with Howard Dodd, new finance director who is opposed to
the early adoption of the controversial accounting standard FRS
17.
Boots employees are likely to be relieved by Mr. Watson's
assurance, especially at a time when other pension funds are
running up large deficits because of exposure to sagging equity
markets.
Boots was spared from the trend with a surplus of GBP170 million
in March 2002 for its GBP2.4 billion pension fund.
DESIGNER ROOM: Businessman Buys Store Out of Administration
-----------------------------------------------------------
Italian businessman Marino Roberto bought The Designer Room at
Hartlepool's Marina that went into administration last June.
According to the Evening Gazette, jobs under threat at a
Hartlepool store were saved by the sale to Mr. Roberto, who plans
to change the image of the store.
Mr. Roberto said the store would move away from selling
discounted labeled clothing and sell full price designer clothes
for men and women.
The coffee shop will also be revamped, and new features will be
added such as wine bar, bookshop and a card shop.
The paper noted that the Italian already owns shops on New Bond
Street in London, and in Manchester, Italy and Germany.
"Hartlepool doesn't have a full price designer retailer. I want
to give it a different feel and atmosphere," Mr Roberto said.
He added: "Now it is known as a 'cheapy' shop and I really think
it is lacking in quality, now it is going to be a more classy
shop. I am retaining all the staff and I will also recruit
specialists in ladies' and men's wear. We will also have staff
for the coffee shop and wine bar."
Mr Roberto is reportedly planning a big launch for the new look
store and hopes it will be up and running in August or September.
GALLAHER GROUP: Shareholders Criticize Salary Offer for Director
----------------------------------------------------------------
Shareholders of cigarette-maker Gallaher are criticizing the
company's two-year salary offer for its director Nigel Dunlop,
according to Yorkshire Today.
The owner of Benson & Hedges and Silk Cut brands has offered Mr.
Dunlop a security of receiving a two years' salary if he loses
his job as a result of the company being taken over even though
he is only on a one-year contract.
In opposition, The National Association of Pension Funds advised
its members to vote against the election of Mr. Dunlop to
operations director. The association is at the same time
campaigning for the same reason against the re-election of
executive director Nigel Simon at the group's annual general
meeting on May 14.
According to an NAPF spokesman, "This could potentially lead to
directors manipulating a situation to bring about a takeover."
The NAPF spokesman also said: "Additional payments to directors
should be performance related.
"It is wrong to dish out shareholders' money to executives simply
for getting out of bed in the morning."
Gallaher, which has an asset of US$3.4 billion, is included in
Bloomberg's list of European companies with insolvent balance
sheets.
GALLIFORD TRY: Unveils Reorganization of Construction Division
--------------------------------------------------------------
Galliford Try plc on Thursday unveiled the reorganization of the
company's construction division. The new structure will see the
division, which has annual revenues in excess of GBP500m,
organized into six business units, operating under a new
Galliford Try Construction brand. Each operation will focus
exclusively on the market segments that match its core strengths
with a particular emphasis on partnering and the public and
regulated sectors.
The primary objective of the reorganization is to deliver
sustainable profitability by leveraging upon the primary
expertise residing within each business unit, effectively
creating national 'centers of excellence' in market segments such
as water, rail, PFI, Procure 21, affordable housing and
commercial property. The process will involve the transfer of
projects and people between some units and, in the case of
Middlesex-based Try Construction and Kent-based Try Accord, the
merger of two businesses into a new entity.
As a result of the reorganization, Galliford Try will benefit
from an overall reduction in its cost base going forward in
excess of o4m and a rationalization of the division's management
structure. Following the appropriate consultations, 170 employees
have been made redundant. Additionally, the reorganization will
see the closure of the Try Accord office at East Peckham in Kent.
The review and implementation of the restructuring has been led
by Andy Sturgess, who joined Galliford Try as the managing
director of the construction division in January 2003. "The
review process has highlighted the need for every business unit
to play to its strengths," comments Andy.
"Steps have been taken to ensure this and to make available the
resources to leverage the maximum potential from each focused
operation. We see significant growth opportunities in these
markets and, over time, our intention is expand the new 'centers
of excellence' within the business units from regionally-focused
to national operations. This process is already well advanced in
market segments such as the water, rail and PFI."
The six business units within the restructured division consist
of three operations covering Galliford Try's main construction
work together with three specialist units. The three main
construction businesses, re-branded as Galliford Try
Construction, will be responsible for specific market sectors
across the country. These units are Central, based in
Leicestershire, North, based in Cheshire and South, based in
Middlesex.
The three specialist operations include Partnerships, based in
Essex, which will concentrate on affordable housing and community
health. Communications, based in Leicestershire, will focus on
telecommunications, while Rock & Alluvium, based in Surrey, will
serve the specialist ground engineering market.
The entire restructuring process will be completed within the
previously announced cost estimate of o4m. Future workload for
the division remains healthy with 76 per cent of the o633m total
revenue reported in the company's interim statement having been
secured on a value basis, rather than in pure price competition.
Some 70 per cent of this revenue has been secured in the public
and regulated sectors, providing greater security of income in
the current economic environment. The public and regulated sector
focus also provides for a wide range of opportunities to secure
business from clients operating framework agreements and
preferred supplier policies to deliver best value.
Overview Of The Reorganization
The reorganization will see the creation of six, rebranded
business units (units), each focused on specific market segments:
Galliford Try Construction North (formerly Galliford Northern)
based in Warrington, Cheshire and headed by unit managing
director Brian Branson. North will focus on all water and rail
projects conducted by the company throughout the UK. This
reflects the unit's success in becoming a major framework
contractor in these expanding markets.
Galliford Try Construction Central (formerly Galliford Midlands)
based in Wolvey, Leicestershire and headed by unit managing
director Chris Bond. Central will be responsible for all national
building framework agreements and PFI projects. Central will be
the 'centre of excellence' for Procure 21 and LIFT, amongst
others. This focus will capitalise on opportunities built upon
the company's track record in PFI and partnerships. The unit will
also carry out building, infrastructure and interiors contracts
outside of the South of England.
Galliford Try Construction South (a combination of the former Try
Construction and Try Accord) based in Uxbridge, Middlesex and
headed by unit managing director John Fidler. South will be
responsible for private commercial and interiors work to build
upon the company's long-term relationships with blue chip
clients, together with public sector building and other
infrastructure projects. This business unit will include the
retained expertise from Try Accord.
Galliford Try Partnerships (formerly Galliford Hodgson) based in
Chelmsford, Essex and headed by unit managing director John Owen.
Partnerships will focus on the company's growing affordable
housing work, which last year encompassed 2,200 units, together
with community healthcare. This expertise will be expanded from
its current East London focus to include other major cities
around the UK over time.
Galliford Try Communications (formerly part of Galliford
Midlands) based in Wolvey, Leicestershire and headed by unit
managing director Dean Ashton. Communications is the market
leading business in the provision of nationwide services to the
telecommunications industry. In 2002, Communications completed
1,000 cell site installations for UK mobile phone operators.
Rock & Alluvium based in Wallington, Surrey and headed by unit
managing director Ken Cromwell. The company's specialist ground
engineering contractor will retain its original focus and brand
identity.
To See Business Unit/Segment Focus at a Glance:
http://bankrupt.com/misc/Focus.pdf
CONTACT: Jonathan Sinnatt, Kinross + Render
Phone: 020 7592 3100
Vicky Ray, Kinross + Render
Phone: 020 7592 1975
GLAXOSMITHKLINE PLC: Completes Requirement for Approval of Drugs
----------------------------------------------------------------
Corixa Corporation and GlaxoSmithKline announced that many of the
steps required for approval of Bexxarr therapy (tositumomab and
iodine I 131 tositumomab) are complete. However, the U.S. Food
and Drug Administration (FDA) has extended its review of the
Bexxar therapy application for up to an additional three months.
The three-month extension provides additional time to further
refine post marketing commitments and package insert language and
to ensure that they are consistent with an updated safety
database requested by the FDA and submitted by Corixa in early
April 2003.
Bexxar therapy safety data presented at the Oncologic Drugs
Advisory Committee in December 2002 included safety data on a
population of 620 patients. The updated safety database contains
safety information on 995 treated patients with up to 9.5 years
of follow up. The overall safety profile of Bexxar therapy was
not altered by the inclusion of the additional data.
As a result of this action, the FDA now has up to three months to
complete its review of Bexxar therapy but can take action at any
time. The new Prescription Drug User Fee Act (PDUFA) goal date
for the FDA to complete its review of Bexxar therapy is August 1,
2003.
A majority of the steps required for approval already have been
completed, including:
Satisfactory completion of all required manufacturing site
inspections;
Agreement on several elements of post approval studies;
Submission of first and second drafts of the package insert; and
Completion and submission of information and procedures for drug
ordering, dose preparation, dosimetry methods, and dose
administration.
"Corixa and GlaxoSmithKline are continuing to work closely with
the agency to finalize remaining documentation required for
approval, and to make Bexxar therapy available to the many
patients with follicular non-Hodgkin's lymphoma (NHL) who could
benefit from this therapy," said Steven Gillis, Ph.D., chairman
and chief executive officer of Corixa Corporation. "In addition
to our progress with the FDA, we continue to work closely with
GlaxoSmithKline to ensure that marketing, reimbursement and sales
resources, as well as other procedures are ready for rollout upon
approval."
"We believe that we and Corixa, working together with the FDA,
will be able to quickly finalize remaining documentation," said
Kevin Lokay, vice president of Oncology at GlaxoSmithKline. "We
look forward to a final decision regarding Bexxar approval and
continue to believe that Bexxar therapy will give the oncology
community a therapeutic option that has longer follow-up data
than other newly approved cancer therapies and will provide
additional therapeutic options for patients in need. We've
recently expanded our oncology resources, thoroughly trained our
sales force and are prepared for a successful launch of Bexxar
therapy."
Bexxar Therapy
Corixa and GlaxoSmithKline are seeking approval of Bexxar therapy
for the treatment of patients with B-cell, follicular, non-
Hodgkin's lymphoma (NHL), with and without transformation, whose
disease has relapsed following or is refractory to chemotherapy
and is refractory to rituximab.
Bexxar is a dual-action therapy that pairs the tumor-targeting
ability of a cytotoxic (cancer killing) monoclonal antibody
(tositumomab) and the therapeutic potential of radiation (iodine
131) administered as a patient-specific dose. Iodine 131 has a
well-established safety profile in the treatment of thyroid
disease and tositumomab has anti-tumor activity of its own.
Combined, these agents form a radiolabeled monoclonal antibody
(iodine I 131 tositumomab) that binds to the target antigen CD20
found on NHL cells, thereby initiating an immune response against
the cancer and delivering a dose of radiation directly to tumor
cells. Bexxar therapy is the only NHL therapy that is
specifically dosed based on an individual's drug clearance rate,
allowing the delivery of a pre-determined amount of radiation to
each individual patient.
Conference Call
Corixa and GSK will discuss the FDA's PDUFA response in a
conference call and webcast on Monday, May 5, 2003 at 8:00 a.m.
ET/5:00 a.m. PT. To access the live conference call, dial
800.289.0496 (domestic) or 913.981.5519 (international). Webcast
participants can sign up at the Investors page of Corixa's web
site (http://www.corixa.com/default.asp?pid=invest).A recorded
replay of the conference call can be accessed through the
website, or by dialing 888.203.1112 (domestic) or 719.457.0820
(international), and entering passcode 301473. The call will be
rebroadcast until midnight ET, May 12th.
About Corixa
Corixa is a developer of immunotherapeutics with a commitment to
treating and preventing autoimmune diseases, cancer and
infectious diseases by understanding and directing the immune
system. Corixa is focused on immunotherapeutic products and has a
broad technology platform enabling both fully integrated vaccine
design and the use of its separate, proprietary product
components on a standalone basis. Corixa currently has multiple
programs in clinical development, including several product
candidates that have advanced to and through late stage clinical
trials.
The company partners with numerous developers and marketers of
pharmaceuticals, targeting products that are Powered by CorixaTM
technology with the goal of making its potential products
available to patients around the world. Corixa was founded in
1994 and is headquartered in Seattle, with additional operations
in Hamilton, Mont., and South San Francisco. For more
information, visit Corixa's Web site at www.corixa.com.
About GlaxoSmithKline
GlaxoSmithKline (NYSE: GSK) is one of the world's leading
research-based pharmaceutical and healthcare companies.
GlaxoSmithKline is committed to improving the quality of human
life by enabling cancer patients to do more, feel better and live
longer. For more information, visit http://www.gsk.com
INFINEON TECHNOLOGIES: Considers Relocation to Avoid High Taxes
---------------------------------------------------------------
Infineon's chairman Ulrich Schumacher confirmed he is considering
moving the company's headquarters abroad, just like his peers, to
avoid high tax burdens in Germany.
Airing his complaint, Infineon board member Peter Bauer said:
"Many foreign competitors pay only half the taxes we pay. That's
not acceptable."
But the plan puzzled observers, according to Frankfurter
Allgemeine Zeitung, since the company currently pays no
corporation tax.
Years of losses exempt it at present from the obligation. Under
German tax law, corporations can stock-pile unused losses during
bad years and deploy them in profitable years. Infineon paid no
taxes last year, and is not expecting to do so for years to come
due to extent of its accrued losses. It even received a tax
refund of EUR139 million, according to the report.
Transferring the facility outside Germany means the loss of
Infineon's seat in Frankfurt's Dax blue-chip index. But the
chipmaker does not appear worried, according to the report, which
is not surprising considering the fall of Infineon's share value
since its listing in March of 2000: the share went down under
EUR7 from EUR70.
The report cited the chairman saying Europe's second-largest
chipmaker might transfer location to Switzerland. For years, the
country has worked to lure German companies with their low
taxation, low indirect labor costs, geographic proximity and
German-speaking population.
MUTUAL RISK: Fitch Downgrades Long-Term Issuer Rating to 'D'
-----------------------------------------------------------
Fitch Ratings has downgraded Mutual Risk Management Ltd.'s (MRM)
long-term issuer rating, which provides an indication of MRM's
credit quality at a senior unsecured level, to 'D' from 'C'.
Fitch also downgraded the rating of MRM's convertible
exchangeable subordinated debt to 'D' from 'C'.
The rating actions follow creditor and judicial approval of MRM's
plan to restructure its senior debt. Fitch Ratings considers the
restructuring to be a distressed debt exchange since the
alternative to the restructuring would have been liquidation.
Fitch expects to withdraw the ratings on May 31, 2003 and no
longer follow the company.
The following ratings are affected:
Entity/Issue/Type Action Rating/Watch
Mutual Risk Management Ltd. --Long-term issuer Downgrade 'D';
--Conv. Exch. Sub. Debt Downgrade 'D'.
NOTE: The noted ratings were initiated by Fitch as a service to
users of Fitch ratings. The ratings are based primarily on public
information.
CONTACT: FITCH RATINGS
Donald F. Thorpe CPA, CFA
Phone: +1-312-606-2353
or
James B. Auden CFA,
Phone: +1-312-368-3146, Chicago
PNC TELECOM: Sells Two Principal Business to Harthall Limited
-------------------------------------------------------------
PNC Telecom announces that it sold its two principal businesses,
KJC Mobile Phones (KJC), a mobile phone retail and distribution
business, and PNC Telecom Services (Services), a fixed line
telecom business, to Harthall Limited.
The consideration for the disposal comprises GBP2m cash and the
assumption of a number of liabilities and contracts of the
company, including bank debt, leasing finance, compromise
agreement payments and all employment contracts. Payment of
GBP0.25m of the consideration is deferred until a date no later
than May 7, 2003.
Following the disposal, the Company has no ongoing business and
its principal asset is the cash consideration, net of the
expenses of the disposal and other company's liabilities, which
will be placed on deposit.
In the year ended March 31, 2002, KJC made an operating loss of
GBP2.1m and Services made an operating loss of GBP2.9m. As at 31
March 2002, KJC had net operating assets (excluding goodwill) of
GBP0.8m and Services had net operating liabilities (excluding
goodwill) of GBP2.5m.
CONTACT: PNC TELECOM PLC
Ian Gray
Phone: 08700 775776
SEYMOUR PIERCE LIMITED
Johnatan Wright
Phone: 020 7648 8700
************
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.
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