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/raid1/www/Hosts/bankrupt/TCREUR_Public/030512.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Monday, May 12, 2003, Vol. 4, No. 92 Headlines B E L G I U M SOBELAIR: Shareholders Support Plan to Refinance Ailing Carrier F R A N C E SUEZ SA: Water Unit Needs New Listing in Bourse by End of 2005 G E R M A N Y KIRCHMEDIA GMBH: Saban Denies His Offer Lacks Financial Backing TRANSTEC AG: Operating Result of EUR-0.12MM Within Budget I R E L A N D ELAN CORP.: FTC Halts Portion of Probe Relating to Skelaxin I T A L Y TELECOM ITALIA: Calls Special Meeting of Shareholders L U X E M B O U R G MILLICOM INTERNATIONAL: Announces Closing of Exchange Offer N E T H E R L A N D S KLM ROYAL: Spends EUR500,000 to Protect Passenger Privacy KLM ROYAL: Increases Operating Loss to EUR252 Million for Q4 KONINKLIJKE AHOLD: Overstatements Ballooned to USD 880 Million KONINKLIJKE AHOLD: Ratings Cut Due to Larger-than-Expected Gap KONINKLIJKE AHOLD: Lease 2001-A Ratings Lowered, on Watch Neg P O L A N D ELEKTRIM SA: Announces Changes in Agreement, Supervisory Board LOT AIRLINES: Invests in New Aircraft Despite Financial Problems S P A I N CABLEUROPA S.A.: Moody's Confirms Senior Ratings of ONO Group S W E D E N TELIASONERA: Approves Financials, Decides to Issue Dividends U K R A I N E AES: To Decide on Fate of Ukrainian Power Distributors Soon U N I T E D K I N G D O M ABBEY NATIONAL: First National to Close to New Business AMP LIMITED: To Withdraw Resolutions From Annual General Meeting ANTISOMA PLC: Reports Results for the Three Months Ended March ARC INTERNATIOANAL: Invites Offers for Repurchase of Shares AUSTIN REED: Board Concludes Review of Options Regarding Offers BAE SYSTEMS: Completes Sale of Interest in Space Systems Venture ENODIS PLC: Issues Interim Results for the 26 Weeks Ended March ENODIS PLC: Announces Non-Executive Directorship Changes GLAXOSMITHKLINE PLC: Anti-Vomiting Drug Faces Generic Challenge H&A WINES: Joint Administrators Offer Business for Sale IZODIA: Evaluates Stand About Possible Suit Against RBSI LAURA ASHLEY: Ng to Remain in Board Despite Resignation as CEO MARCONI PLC: Holds Separate Meetings of the Scheme Creditors SODEXHO ALLIANCE: First-Half Net Profit Dropped 33 Percent SPICES FINANCE: Fitch Downgrades Series 1 (PEAS) Class II Notes SWANSEA RUGBY: Calls Meeting of Creditors in Face of Bankruptcy THISTLE HOTELS: Notification of Major Interest in Shares ============= B E L G I U M ============= SOBELAIR: Shareholders Support Plan to Refinance Ailing Carrier --------------------------------------------------------------- Aldo Vastapane, one of the top shareholders of Belgian chartered carrier Sobelair, said there are plans to refinance the troubled airline. The company's general shareholders meeting on Wednesday agreed to the request of the management for a EUR4 million funding. The airline's creditors have not yet decided on its stand. Sobelair incurred losses of more than EUR9 million just within a year after it was bought from bankrupt Belgian national airline Sabena. Its troubles stem from an expensive leasing agreement with German company DSF, with which it pays US$650,000 per month for two 767s. The recent drop in air travel as a result of the conflict in Iraq is further aggravating its troubles. The airline plans to cut down costs by slashing crew salaries and canceling Wednesday flight to South Africa in May and June. It is also proposing to lower its lease contract with DSF to US$495,000. The plan that would determine the viability of Sobelair is expected to be drawn within the next six weeks, Expatica.com reported in its web site. =========== F R A N C E =========== SUEZ SA: Water Unit Needs New Listing in Bourse by End of 2005 -------------------------------------------------------------- Northumbrian Water must get a new listing on the London Stock Exchange by the end of 2005 under an agreement entered by its parent, Suez, when it acquired the unit in 1996. The water utility was removed from the stock market during the acquisition. "Our understanding is that this condition is still in force," a spokeswoman for the Office of Water Services told Dow Jones Newswires. Suez recently said it will be offering Northumbrian Water for sale via a private auction valued at GBP2 billion. The discovery of the original takeover agreement means the bidder's operating proposals for the company, and not just price alone, could decide the transaction. Ofwat would play an important role in determining the eventual terms of ownership of the unit. Philip Fletcher, director general of water services, could allow a later date for the listing with Northumbrian's buyers, the spokeswoman said. The agreement would depend on "prevailing conditions in the market," says Suez in its announcement of the takeover in 1995. But one person familiar with the situation also said the new owner could avoid a listing by agreeing to publish regular, detailed financial information about the company. This would also allow the regulator and market observers an opportunity to compare Northumbrian's performance against the records of its U.K. peers. Bidders for the unit includes a consortium consisting of Deutsche Bank AG and U.K. brokerage Collins Stewart Holdings PLC; private- equity company CVC Capital Partners Ltd.; and the private-equity arm of investment bank Morgan Stanley. Deutsche Bank, Ecofin, and stockbrokers Collins Stewart, all earlier indicated they wanted to re-enlist the water company in the stock exchange. Northumbrian serves about 4.3 million customers in England. ============= G E R M A N Y ============= KIRCHMEDIA GMBH: Saban Denies His Offer Lacks Financial Backing --------------------------------------------------------------- U.S. billionaire Haim Saban dismissed reports suggesting his offer to purchase German broadcaster ProSiebenSat.1 Media AG from Kirchmedia has no firm financial footing. Mr. Saban's spokeswoman the report has "no substance," according to Dow Jones Newswires. The statement is in response to what manager magazin said on its website that potential investors had refused offers to buy up to five stakes worth EUR350 million each because they didn't see a worthwhile "exit" opportunity after four to seven years. Mr. Saban is offering institutional investors including, Apax Partners & Co. Ltd. and Blackstone Group, stakes in ProSiebenSAT.1 worth a total of up to EUR1.75 billion. The report also said Mr. Saban himself didn't intend to invest more than EUR250 million in the deal. The transaction is estimated worth EUR2 billion. The American entrepreneur in March bested publisher Bauer in the race to acquire the media broadcaster and film rights library 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. The acquisition has been approved by the German Cartel Office, but it has yet to be formally completed. But reports earlier indicated that Mr. Saban may be trying to avoid having to buy out minority shareholders by filing for an exemption with BaFin, the chief German financial services and takeover regulator. His lawyers reportedly cited ProSiebenSAT.1's financial troubles as the reason for the filing of the exemption granted under "Section 9" of the German takeover law. A spokeswoman for Bafin denied having received all the information needed to rule on a request by Saban. She said there were no deadlines for a BaFin ruling, and declined to comment further on the request. TRANSTEC AG: Operating Result of EUR-0.12MM Within Budget --------------------------------------------------------- transtec AG has partially improved its operating result to EUR - 0.12 million in the 1st quarter of 2003, a customary weak time throughout the industry. In the corresponding quarter of the previous year, the operating result amounted to EUR -0.28 million. The net loss for the period was EUR -0.28 million in comparison with EUR -0.38 million in Q1 2002. Sales in the reporting period amounted to EUR 21.42 million in comparison with EUR 28.86 million in the previous year. The decline in sales is the result of focusing on complex system solutions in previous years. As of March 31, 2003, transtec AG had liquid funds in the amount of EUR 5.66 million. The equity ratio increased to 57.8 percent in comparison with 51.3 percent on the balance sheet date of 31 December 2002. The expected improvement in the readiness of customers to invest following the end of the Iraq conflict has not been noted. ============= I R E L A N D ============= ELAN CORP.: FTC Halts Portion of Probe Relating to Skelaxin ----------------------------------------------------------- Elan Corporation, plc announced that it has received a letter from the U.S. Federal Trade Commission (FTC) informing Elan that the FTC has discontinued that portion of its investigation concerning whether Elan wrongfully listed its patent for SkelaxinT (metaxalone) in the Food and Drug Administration's Orange Book (Approved Drug Products with Therapeutic Equivalence Evaluations). The letter further states that the FTC is "no longer investigating any Elan activities relating to Skelaxin that would lead us to recommend that the [FTC] commence a law enforcement action for the removal of the [Skelaxin] patent from the Orange Book." Elan continues to work closely with the FTC regarding matters unrelated to the Orange Book listing of the Skelaxin patent. G. Kelly Martin, Elan's President and Chief Executive Officer, stated, "We believe that the FTC's letter further confirms and validates our previously stated position that all conditions to King Pharmaceuticals' agreement to close its purchase of Elan's primary care franchise have at all times been, and continue to be, satisfied." On March 14, 2003, Elan announced that the FTC had commenced a non-public investigation to determine whether Elan or any other person had engaged in unfair methods of competition with respect to Skelaxin. On March 17, 2003, Elan commenced an action against King Pharmaceuticals, Inc. alleging that King breached its agreement to purchase Elan's primary care franchise (principally consisting of Elan's U.S. and Puerto Rican rights to SonataT (zaleplon) and Skelaxin). A trial date has been set for May 15, 2003. Elan is focused on the discovery, development, manufacturing, selling and marketing of novel therapeutic products in neurology, pain management and autoimmune diseases. Elan shares trade on the New York, London and Dublin Stock Exchanges. ========= I T A L Y ========= TELECOM ITALIA: Calls Special Meeting of Shareholders ----------------------------------------------------- Registered Office in Milan, Piazza degli Affari, 2 Corporate Headquarters in Rome, Corso d'Italia, 41 Fully paid-up share capital EURO 4,023,816,860.80 Tac/VAT and Milan Company Register number: 00471850016 Call to Special Meeting of Holders of Telecom Italia Savings Shares (in accordance with the second paragraph of Art. 146, of Law Decree 58/98) Shareholders possessing savings shares are called to a Meeting to be held in Milan, at the Registered Office, Piaza degli Affari, 2, on June 9, 2003 at 11:00 a.m. on first call, and - if necessary - on second and third call on June 10 and 11 respectively, 2003, at the same time and place, to discuss and vote on the following AGENDA (1) Examination of the resolutions of Telecom Italia's Extraordinary Meeting called on first call on May 24, 2003, and possible approval of the resolutions that could prejudice the category rights, in accordance with the first paragraph, letters e) and b) of article 146, of Law Decree 58/1998. (2) Common representative report regarding the reserve previously constituted for the expenses necessary to safeguard the common interests and resolutions regarding the creation of a new reserve, or the integration with the existing one, in accordance with the first paragraph, letter c) of article 146, of Law Decree 58/1988. (3) Possible resolutions in accordance with the first paragraph, letter a) of article 146, of Law Decree 58/1998. Shareholders possessing savings shares who have represented the required certification issues by an authorized intermediary in accordance with current legislation are eligible to attend the Meeting. As usual, the owners of ADRs listed on the New York Stock Exchange and representing savings shares of Telecom Italia, must contact JP Morgan Chase Bank (previously Morgan Guaranty Trust Company), 1 Chase Manhattan Plaza N.Y. 10081, issuer of said ADRs. It is specified that the Meeting is called on UBS AG request, that declares to hold more than 1% of savings shares of the same class of share capital. On behalf of the Common Representative Prof. Carlo Pasteris Shareholders are invited to arrive before the scheduled start of the Meeting in order to facilitate registration formalities. Registration of participants will begin at 10.00 a.m. The present notice, published in the Official Gazette of the Italian Republic, dated May 7, 2003, n. 104, will also be made available on the Internet site, at the following address http://www.telecomitalia.it CONTACT: TELECOM ITALIA Registered Office in Milan, Piazza degli Affari, 2 Corporate Headquarters in Rome, Corso d'Italia, 41 =================== L U X E M B O U R G =================== MILLICOM INTERNATIONAL: Announces Closing of Exchange Offer ----------------------------------------------------------- Millicom International Cellular S.A., the global telecommunications investor, today announces that on May 8, 2003, its private exchange offer in connection with its 13-1/2% Senior Subordinated Discount Notes due 2006, or the "Old Notes", has closed. On May 2, 2003, approximately $781 million (equaling approximately 85%) of the outstanding amount of 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. In the exchange offer and consent solicitation, Millicom issued 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 were cancelled. In addition, Millicom also paid 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 of Millicom). 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 five 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 17.7 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. CONTACTS: 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 ===================== KLM ROYAL: Spends EUR500,000 to Protect Passenger Privacy --------------------------------------------------------- Dutch flag carrier KLM paid EUR500,000 for its insistence not to reveal passenger details available in its reservation system to the scrutiny of U.S. authorities. The American government had demanded access to airline reservation systems to screen people traveling to the U.S. as part of the U.S. government's heightened security policy following the September 11 attacks. Airlines were naturally opposed to the idea since it would involve sensitive details such as credit card numbers, addresses, food preferences and medical details. To force aviation companies to comply with the request, huge fines and possible withdrawal of landing rights were put in place as sanction for those who are unwilling to cooperate. But the Dutch airline, in a rare effort to preserve privacy of passengers not traveling to the U.S., adjusted its reservation system, costing it some EUR500,000. A KLM spokesman said it is believed that the Dutch carrier was the only European airline to have restricted access to its reservation system in this manner, according to Expatica.com. "It comes down to improper use of details that we need to have in order to operate," the KLM spokesman said. The U.S. authorities sent KLM a letter saying it will start examining reservation lists within the next 30 days. Other airlines had received the letter earlier, the KLM spokesman told newspaper De Telegraaf. The source also said KLM plans to advise passengers on US-bound flights that third parties could examine their personal details. The European Commission's move to enter an agreement in principle with the U.S. regarding the policy also sparked criticisms in its home front. The European Parliament, which has since opposed the guidelines, had demanded that the European court issue a ruling over the matter. KLM ROYAL: Increases Operating Loss to EUR252 Million for Q4 ------------------------------------------------------------ KLM Group on Thursday reported an operating loss of EUR 252 million for the fourth quarter, ended March 31, 2003. This compares to an operating loss of EUR 124 million last year. Included within the operating loss for the quarter was an additional charge of EUR 69 million, following the decision to accelerate the retirement of KLM's Boeing 747-300 fleet earlier than previously anticipated. Fourth quarter after tax income before extraordinary items amounted to a net loss of EUR 217 million, compared to a net loss of EUR 108 million, or EUR 2.31 per common share last year. This quarter's net income included an extraordinary loss after tax of EUR 181 million relating to the Alitalia arbitration award, as well as a one-off restructuring provision of EUR 49 million after tax (EUR 75 million pretax). Including extraordinary items, fourth quarter net loss was EUR 447 million, or EUR 9.96 per common share. Operating loss for fiscal year 2002/03 was EUR 133 million, compared to an operating loss of EUR 94 million last year. Net loss, excluding extraordinary items, for the year amounted to EUR 186 million. Including these items, net loss amounted to EUR 416 million, or EUR 9.26 per common share. Last year, KLM Group reported a net loss of EUR 156 million, or EUR 3.37 per common share. STRUCTURAL CHANGES GOING FORWARD Despite positive signs in the first half year, KLM Group reported a disappointing result for the fiscal year. This was mainly caused by the impact of the weak global economy and the continued instability in the Middle East and subsequent war in Iraq, which had an impact of approximately EUR 40 million on operating income. Travel demand was impacted further by the outbreak of the SARS virus in March of this year. While the inherent cyclical nature and geopolitical developments affected our industry severely, KLM Group recognizes that the airline's operating model needs structural improvement going forward. As such, KLM Group announced on April 1, 2003 the implementation of far-reaching measures to achieve the necessary changes in its cost structure. The overall objective is to achieve a return on capital employed of nine percent and a ten percent operating margin. This will be supported by a 10 percent reduction of unit costs, or an annualized cost saving of EUR 650 million to be achieved by March 2005, with a substantial part of this secured by March 2004. The number of job losses currently identified is 3,000 FTEs. Additionally, short-term measures have been taken to mitigate the effects of SARS on the Company's results for this fiscal year. Leo van Wijk, President and CEO of KLM, said: 'The current industry environment is unprecedented and we believe that the revenue environment has permanently changed. Our yields are decreasing and our cost base does not currently compensate for this development. We must therefore work hard with our employees, suppliers, the Dutch Government and other partners to reduce our cost base to match the new revenue environment. In doing so, we remain committed to our loyal customers and will keep responding to their changing demands by adapting accordingly our product and service model. Our new European product positioning and pricing structure demonstrates this approach. We are determined that we will manage today's challenges and emerge from these difficult times as a financially robust company, ready to meet the challenges of the future.' FINANCIAL PERFORMANCE REVENUES Passenger Business Fourth quarter passenger traffic demand was significantly affected first by tensions in the Middle East and the following war in Iraq, as well as the outbreak of the SARS virus. Passenger traffic revenues of EUR 904 million were EUR 69 million, or 7 percent, lower than last year, as a result of lower than expected traffic volumes and lower yields. Passenger traffic (in RPKs) in the fourth quarter increased by 4 percent. Passenger capacity (in ASKs) rose 8 percent on last year, which partially is the result of changes in the configuration of aircraft. The number of flights, however, declined by 2 percent. Passenger load factor declined by 3.3 percentage points to 76.8 percent. Passenger yields in the three months to March 2003 declined 10 percent compared to last year. Excluding currency effects, yields were 5 percent below last year. Cargo Business KLM Cargo's traffic revenues of EUR 249 million in the fourth quarter were 2 percent lower than last year. This is the combined result of higher traffic volumes and lower yields. Cargo traffic (in RFTKs) increased by 2 percent, whilst cargo capacity (in ATFKs) increased 5 percent. As a consequence, cargo load factor dropped by 2.3 percentage points to 70.9 percent. In the quarter, outbound European traffic remained under pressure, while traffic from Asia performed better than expected. Cargo yields were 4 percent below last year. Excluding currency effects, cargo yields increased by 4 percent year-on-year. Engineering & Maintenance Business In the fourth quarter, KLM Engineering & Maintenance successfully managed increased pressure on its revenues as a result of deteriorating market conditions in the MRO (Maintenance, Repair and Overhaul) market. Revenues increased by 5 percent to EUR 218 million. Charter and Low Cost Businesses Despite the negative effects of the current operating environment, Transavia / BASIQ AIR managed to increase traffic volumes in line with capacity levels in the fourth quarter, albeit with increased pressure on yields. Revenues nevertheless were at the same level as last year. At the end of January, KLM announced the sale of buzz to Ryanair. Following this, Ryanair announced its intention to temporarily cancel all routes. This announcement had a further negative effect on the revenues of buzz in the fourth quarter. On April 11, 2003, the sale of buzz was finalized. In anticipation of this transaction KLM recorded a loss of EUR 9 million in fiscal 2002/03 for the impairment of certain assets. Group Revenues for Fiscal Year 2002/03 Group operating revenues for fiscal 2002/03 (EUR 6,485 million) were 1 percent lower than last year. Traffic of KLM Company (includes KLM Passenger Business and Cargo Business) was up 2 percent on last year, while capacity was up 1 percent. As a consequence, overall load factor increased by 1.3 percentage points to 78.2 percent. KLM Company yield was down 4 percent compared to last year. Manageable yield (excluding currency effects), however, was at the same level as last year. OPERATING EXPENSES Fourth quarter's Group operating expenses increased by EUR 14 million (1 percent) to EUR 1,629 million. KLM airline manageable unit costs (excluding currency and fuel price effects) increased by 2 percent compared to the corresponding period. Including these effects, unit costs were down 2 percent on last year. For the fiscal year 2002/03, Group operating expenses decreased by EUR 8 million to EUR 6,618 million. Manageable unit costs (excluding currency effects, fuel price effects and the effects of the accelerated retirement of the 747-300 fleet) increased by 1 percent compared to last year. Including these effects, unit costs were at the same level as last year. RESULTS ON SALE OF ASSETS Fourth quarter Results on Sale of Assets, EUR 39 million negative, mainly relates to sale-andlease-back transactions of fleet and to the sale of KLM uk's low cost activity (buzz) to Ryanair. These sale-and-lease-back transactions are aimed at reducing residual value risks on certain aircraft types. CASH FLOW AND FINANCING Cash Flow and Liquidity Position Fourth quarter's cash flow from operating activities (including a cash out of EUR 171 million relating to the Alitalia settlement) amounted to EUR 274 million negative. Cash flow from investing activities amounted to EUR 75 million, being the positive balance of prepayments on new aircraft and the proceeds of sale-and- lease-back transactions of fleet. Free cash flow in the fourth quarter was EUR 199 million negative. Continued focus on capital employed once again resulted in a significant reduction of working capital. Supply chain initiatives by Engineering & Maintenance, aimed at a reduction of inventory levels, were implemented during the fiscal year. Debtor management enabled KLM Cargo to reduce its account receivable substantially. As of March 31, 2003, KLM Group had cash and cash equivalents totaling EUR 919 million, of which EUR 608 million is in cash and EUR 311 million is in Triple A bonds and long term deposits. Financial Position During the fiscal year 2002/03, KLM's net-debt position increased by EUR 279 million to EUR 2,887 million on March 31, 2003. Stockholders' equity decreased by EUR 516 million to EUR 1,476 million. KLM's gearing (net debt as a percentage of stockholders' equity) deteriorated from 131 percent last year to 195 percent at March 31, 2003. For its new fleet deliveries, KLM has secured financing. KLM Group's three Dutch pension funds remained in a significant surplus position, despite the adverse conditions in the financial markets. DISTRIBUTION TO SHAREHOLDERS KLM's dividend policy, which was revised with effect from fiscal year 2002/03, is geared to paying a sustainable dividend, linked to cash earnings. Despite the current global political and economic environment, the Board of Managing Directors has in line with this policy decided to make a distribution in cash to shareholders of EUR 0.10 per common share for the fiscal year 2002/03. The distribution will be paid out of reserves (fiscal year 2001/02: a distribution was made of EUR 0.20 per common share). RECONCILIATION UNDER US GAAP On the basis of United States Generally Accepted Accounting Principles (US GAAP), KLM's net loss for the fiscal year 2002/03 amounts to EUR 267 million. Under US GAAP, KLM Stockholders' equity on March 31, 2003 was EUR 2,827 million. The positive differences are primarily the result of pension accounting and the accounting treatment of the restructuring provision. OUTLOOK On the basis of current economic conditions and uncertainties surrounding the SARS virus, KLM Group does not anticipate a short-term improvement in the operating environment. As such, the Group is firmly set on implementing the necessary measures aimed at a structural reduction of its cost levels, as well as short term measures, that contribute immediately to an improvement in results. Amstelveen, May 8, 2003 The Board of Managing Directors To see financials: http://bankrupt.com/misc/KLM_ROYAL.pdf UPCOMING EVENTS Press Conference on Annual Results for fiscal year 2002/03 A press conference for financial media will be held on Thursday, May 8, 2003 at 9.30 hours am CET. Leo van Wijk, President and Chief Executive Officer, and Rob Ruijter, Managing Director and Chief Financial Officer will host the press conference. The press conference is also accessible via live audio webcast on the KLM Investor Relations website at http://investorrelations.klm.com, under 'Events and Presentations'. Analyst Meeting on Annual Results for fiscal year 2002/03 An analyst meeting will be held on Thursday, May 8, 2003 at 3:30 hours pm CET. Leo van Wijk, President and Chief Executive Officer, and Rob Ruijter, Managing Director and Chief Financial Officer will host the analyst meeting. The meeting will be accessible via live audio webcast on the KLM Investor Relations web site at http://investorrelations.klm.com,under 'Events and Presentations'. Annual General Meeting of Shareholders The Annual General Meeting of Shareholders will be held on June 25, 2003 in the Schouwburg, Amstelveen, The Netherlands, commencing at 2.00 hours pm CET. KLM's Annual Report, together with the agenda for the meeting, will be published on May 30, 2003. CONTACT: KLM ROYAL Investor Relations Phone: 31 20 649 3099 KONINKLIJKE AHOLD: Overstatements Ballooned to USD 880 Million --------------------------------------------------------------- Ahold, the international food retailer and foodservice operator, announced Thursday that the forensic accounting work being performed by PricewaterhouseCoopers (PwC) as part of Ahold's internal investigation of its subsidiary U.S. Foodservice is now substantially complete. The results were reported to Ahold's Audit Committee on May 7, 2003. Completion of the U.S. Foodservice forensic accounting work is a required step to recommence audit work at U.S. Foodservice to enable the completion of the Ahold 2002 audit by June 30, 2003. For the period April 1, 2000 (the effective date of Ahold's acquisition of U.S. Foodservice) to December 28, 2002 (the end of Ahold's 2002 fiscal year), PwC has identified total overstatements of pre-tax earnings of approximately USD 880 million. Of this amount, approximately USD 110 million relates to fiscal year 2000, approximately USD 260 million relates to fiscal year 2001 and approximately USD 510 million relates to fiscal year 2002. In addition, PwC identified approximately USD 90 million of adjustments required to be made to the opening balances for U.S. Foodservice at the date of its acquisition. This consists of a reclassification of such amount from current assets to goodwill primarily as a result of required write-offs of vendor receivables. In connection with the earnings and opening balances adjustments discussed above, corresponding adjustments to the balance sheet of U.S. Foodservice at December 28, 2002 also will be required. These adjustments will consist of approximately USD 700 million of write-offs of accrued vendor receivables, an approximately USD 210 million increase in deferred contract revenue liabilities and an approximately USD 80 million increase in trade payables, as well as a USD 25 million increase in inventory. Any other adjustments required with respect to U.S. Foodservice, including possible impairment of goodwill or other long-lived assets, will be det ermined by the company. Although the forensic accounting work at U.S. Foodservice is substantially complete, an internal legal investigation at U.S. Foodservice is ongoing. The Supervisory Board of Ahold will be meeting shortly to determine which actions should be taken with respect to U.S. Foodservice. In addition to the investigation at U.S. Foodservice, Ahold had commenced internal investigations at various Ahold operating companies. Although these investigations are ongoing, the forensic accounting work at Albert Heijn, Stop & Shop, Santa Isabel in Chile, Ahold's operations in Poland and the Czech Republic, and the ICA Ahold Scandinavian joint venture is substantially complete and no evidence of financial fraud has been found at any of those operations. The accounting adjustments that will be required as a result of this forensic accounting work and that at Ahold's other operating companies have not yet been determined. Ahold further announced that Deloitte & Touche has resumed its audit work at ICA Ahold and Santa Isabel. Ahold previously had announced the resumption of audit work at Stop & Shop and Albert Heijn. Ahold management is confident that the company will be able to achieve completion of the remaining audits by June 30, 2003. CONTACT: KONINKLIJKE AHOLD P.O. Box 3050 1500 HB Zaandam Netherlands Corporate Communications Phone: +31.75.659.5720 Fax: +31 (0)75 659 83 02 Home Page: http://www.ahold.com KONINKLIJKE AHOLD: Ratings Cut Due to Larger-than-Expected Gap -------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Netherlands-based food retailer and food service distributor Ahold Koninklijke N.V. to 'BB-' from 'BB+', following today's announcement by the group that accounting irregularities at its U.S. Foodservice arm were materially larger than expected. In addition, the senior unsecured debt ratings on Ahold were lowered to 'B+' from 'BB+', reflecting structural subordination. At the same time, Standard & Poor's affirmed its 'B' short-term rating on the group. The long-term ratings remain on CreditWatch with negative implications, where they were placed on Feb. 24, 2003, following the disclosure of substantial accounting irregularities. These irregularities have been quantified today as a larger-than- expected overstatement of pretax earnings of $880 million over three years and adjustments of $90 million for the opening balances of the group's U.S. Foodservice subsidiary at the date of its acquisition. "The rating actions reflect Ahold's tight liquidity, which will remain so barring major divestments, and as such, the group's liquidity position is no longer reflective of a 'BB+' long-term rating," said Standard & Poor's credit analyst Christian Wenk. The group's tight liquidity is a function of its limited leeway under the currently available secured facilities of $1.3 billion and EUR600 million ($680 million); the uncertainties about its ability to access a $915 million unsecured tranche; and the group's debt repayments in the second half of the year, in particular the repayment in September 2003 of a EUR678 million subordinated convertible bond, which will constrain liquidity even if Ahold gets access to the unsecured tranche. To access the unsecured tranche of the bank facility, Ahold must provide: -- The audited 2002 accounts of main subsidiaries Albert Heijn B.V. and Stop & Shop by the end of May 2003; and -- The group's consolidated 2002 audited accounts by the end of June 2003. Ahold's auditor, Deloitte & Touche, has resumed work at Albert Heijn and Stop & Shop. Deloitte & Touche, however, will only resume work on the group's consolidated accounts once Ahold has completed ongoing internal investigations into its main operating subsidiaries. As a result, it remains currently uncertain whether Ahold will be able to provide all audited accounts within the required timeframe. "Failure to get access to the unsecured tranche would put the ratings in jeopardy given Ahold's debt repayments in the second half of the year," added Mr. Wenk. Although Ahold retains an investment-grade business profile in light of its leading positions in food retail on the East Coast of the U.S., as well as in the Netherlands and Scandinavia, liquidity will remain the key driving factor of ratings in the foreseeable future. The next review is expected when audited accounts are provided. KONINKLIJKE AHOLD: Lease 2001-A Ratings Lowered, on Watch Neg ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on the A-1 and A-2 pass through certificates issued by Ahold Lease 2001-A Pass Through Trusts (Ahold Lease 2001-A) to 'BB-' from 'BB+'. At the same time, the ratings remain on CreditWatch with negative implications, where they were placed Feb. 24, 2003 (see list). The lowered ratings reflect the corporate credit rating on Ahold Koninklijke N.V. (Ahold), which was lowered to 'BB-' from 'BB+' May 8, 2003. The rating on Ahold also remains on CreditWatch negative, where it was placed Feb. 24, 2003. The ratings on Ahold Lease 2001-A are dependent on Ahold's corporate credit rating, as Ahold guarantees leases that serve as the source of payment on the rated securities. The leases, which are "bondable" triple- net, are on 46 properties, which include supermarkets and other retail stores, office buildings, warehouses, and distribution centers in 13 states. RATINGS LOWERED; REMAIN ON CREDITWATCH Ahold Lease 2001-A Pass Through Trusts Pass-through trust certificates Rating Class To From A-1 BB-/Watch Neg BB+/Watch Neg A-2 BB-/Watch Neg BB+/Watch Neg =========== P O L A N D =========== ELEKTRIM SA: Announces Changes in Agreement, Supervisory Board -------------------------------------------------------------- No 32/03 - Change in Significant Agreement by Subsidiary of Elektrim S.A. Temporary Suspension of Patnow II Project The Management Board of Elektrim S.A. announces that on May 6, 2003 an agreement was signed between Elektrim-Megadex S.A. (Elektrim's subsidiary) and Elektrownia Patnow II Sp. z o.o. providing for a suspension (until new financing is organized) of the contract in progress for the construction of 460 MW unit for supercritical parameters in Elektrownia Patnow II. The agreement is aimed at agreeing on the terms and conditions of continuing the investment in a limited scope and adjusting the rate of carrying out the project to current financial potential of the investor and expected dates of activating further tranches of the credit facility. No 33/03 Supervisory Board Resolution Regarding Appointment of Person Supervising The Issuer The Management Board of Elektrim S.A. announces that on May 7, 2003, the Supervisory Board of Elektrim S.A., acting pursuant to art. 390 1 of Commercial Companies Code in connection with 15 section 1 of the Company Statutes adopted a resolution regarding the delegation of Supervisory Board member, Mr Leszek Maciusowicz to independently perform supervising activities regarding the Power Group of Elektrim S.A. The resolution enters into force on approval. LOT AIRLINES: Invests in New Aircraft Despite Financial Problems ---------------------------------------------------------------- Financial problems in LOT Polish Airlines failed to deter the carrier from investing about EUR200 million in new aircraft. The carrier bought 10 new Embraer 170 aircraft with an option to acquire 11 more. It plans to finance the acquisition from operational and finance leasing, said LOT spokesman Leszek Chorzewski. The deal, which brings LOT's total number of aircraft in service to 61, is seen as the start of Polish carrier's concentration on short and medium-distance routes. "The acquisition of the Embraers proves LOT is aiming at becoming a regional airline, focusing on short distance flights," said Elzbieta Marciszewska from the Warsaw School of Economics. The move, however, is deemed disadvantageous in the light of its full-membership in the Star Alliance in October. According to Warsaw Business Journal, Ms. Marciszewska said within the Star Alliance LOT would serve mostly as a feeder for other airlines that would fly passengers to more distant and more profitable destinations. "This is a pity, (since) connections once abandoned are difficult to reestablish," Marciszewska said. LOT reported net profit of EUR25.6 million (PLN109.3 million) on revenue of EUR632 million (PLN2.7 billion) in 2002. But despite this, the carrier still needs to undergo deep restructuring, the report says. The article also cited Zbigniew Rydzkowski, a transportation professor at Gdansk University, saying LOT has not seen any profit on its operations since 1997, and that its net profit in 2002 resulted from the fact that some of its aircraft were resold to their leasing companies. ========= S P A I N ========= CABLEUROPA S.A.: Moody's Confirms Senior Ratings of ONO Group ------------------------------------------------------------- Moody's said it confirmed the senior implied, senior unsecured issuer, and senior unsecured bond ratings of ONO group, which comprises ONO, Cableuropa S.A., and its subsidiaries. The ratings have a negative outlook. The ratings confirmed are ONO Finance plc's senior implied rating at Caa1, senior unsecured issuer rating at Ca, and senior unsecured bond ratings at Caa3. Moody's also assigned a Caa1 rating to the amended EUR 750 million bank facility of Cableuropa S.A. and withdrew the Caa1 rating of Cableuropa's prior EUR 800 million facility. While affirming the group's continued financial progress, strengthened balance sheet, and improved liquidity, Moody's continued to say that the ratings and negative outlook suggest that the company "likely remains over-leveraged and will be challenged to grow into even its improved capital structure." The rating agency says it does not expect the company to continue to demonstrate solid growth and maintain tight cost controls. But it warns that "the magnitude of requisite growth in the context of the company's high debt levels, the relatively limited scale afforded by ONO's franchise areas, and the difficult economic and competitive environment which characterises ONO's franchise areas (particularly for business services and Pay-TV), remains of significant concern." It mentioned that while ONO's debt was reduced following a "Dutch offer" that allows buy back of approximately EUR533 million in bonds, and subsequent recapitalization, a considerable amount of the group's debt remains outstanding. Pro forma for the recapitalisation, debt at YE 2002 amounted to approximately EUR 934 million. The group further has a EUR 293 million in current liabilities, excluding short-term debt. Cableuropa, the holding company for the ONO Group, offers broadband telecom services such as cable TV, Internet access, and local exchange access. =========== S W E D E N =========== TELIASONERA: Approves Financials, Decides to Issue Dividends ------------------------------------------------------------ Today's Annual General Meeting of TeliaSonera AB approved the income statement and balance sheet for 2002. The Annual General Meeting decided upon a dividend to shareholders of SEK 0.40 per share, and Tuesday 13 May 2003 was appointed as the record date for the dividend. With this record date, it is estimated that the dividend will be sent out from VPC on Friday 16 May 2003. The shareholders' meeting discharged the Board and Managing Directors from liability for the financial year 2002. Ordinary members Tapio Hintikka, Carl Bennet, Ingvar Carlsson, Eva Liljeblom, Caroline Sundewall, Roger Talermo, and Tom von Weymarn were re-elected. Lars-Eric Petersson had declined to offer himself for re- election, and was thanked by the Chairman. Sven-Christer Nilsson and Paul Smits were newly elected to the Board. Sven-Christer Nilsson was born in 1944, and was formerly CEO and President of LM Ericsson AB. Paul Smits was born in 1946, and was formerly CEO and President of KPN in the Netherlands. The following directors' fees were approved for the Board: to the Chairman, SEK 750,000; to the Deputy Chairman, SEK 550,000; and to the other directors, elected by the Annual General Meeting, SEK 400,000 each. The registered auditors Ernst & Young AB, with Chief Auditors Torsten Lyth and Lars Traff, and KPMG Bohlins AB, with Chief Auditors Solveig Tornroos-Huhtamaki and Thomas Thiel, were appointed as auditors for the period until the end of the Annual General Meeting in 2007. It was stipulated that compensation to the auditors shall be paid on the basis of invoice. ============== U K R A I N E ============== AES: To Decide on Fate of Ukrainian Power Distributors Soon ----------------------------------------------------------- The fate of Ukrainian power distributors, KyivOblEnergo and RivneOblEnergo will be decided by the end of the month, according to a company official. Mykhaylo Malyovaniy, board of directors for the utilities, said the unit's owner, power company AES Corp., will decide whether to sell the power generators by the end of May. US-based AES, which revealed earlier this year plans to dispose some assets in the former Soviet Union, Africa and China, is in talks with Luxembourg-based company Vacuna International, industry sources told Dow Jones Newswires. The power giant will use the proceeds of the sales to trim down debts and strengthen balance sheets AES received a blow earlier this year when the Ukrainian government decided to cut power tariffs that AES-owned distributors are allowed to charge consumers by 14%. The move is expected to reduce the company's revenue in Ukraine. The government cited AES' failure to deliver promised upgrades to the power distribution networks and other facilities as part of the reason for the cut. AES bought KyivOblEnergo and RivneOblEnergo from the Ukrainian government for US$70 million in April 2001. The plants supply power to consumers in Kiev and Rivne regions. KyivOblEnergo reported after tax profits of 59.7 million hryvnias ($1=UAH5.489) on sales of UAH636 million in 2002. KyivOblEnergo has debts of UAH69.4 million. RivneOblEnergo's 2002 after-tax profits were UAH21.1 million on sales of UAH325.3 million. RivneOblEnergo has debts of UAH46.7 million. =========================== U N I T E D K I N G D O M =========================== ABBEY NATIONAL: First National to Close to New Business ------------------------------------------------------- Abbey National has taken the decision to stop writing new business in First National Motor Finance as soon as contracts allow. The majority of the existing book will mature over the next two to three years. Approximately two-thirds of FNMF employees will be made redundant by the end of 2003. Abbey National announced in November 2002 its intention to solely focus on personal financial services (PFS) in the U.K., offering the full range of services through direct and intermediary channels. The bank decided to withdraw from all businesses and activities that do not fit with the new PFS strategy, separating them from the rest of the company by placing them in a 'Portfolio Business Unit', and considering a range of exit options to ensure maximum value for shareholders. The businesses and assets identified for disposal, including FNMF, were announced in Abbey National's annual results statement on 26 February 2003. The majority of First National's businesses were sold to GE Consumer Finance. The deal completed on 10 April. Stephen Hester, Chief Operating Officer, Abbey National, said: "The decision to close FNMF to new business will enable the existing assets of o2.9bn to substantially run off within the three year target for the Portfolio Business Unit, releasing more capital than a sale of the business at a discount. We would clearly have preferred to find a future for the business that would have offered security for our staff, but sadly that has not proved possible." CONTACT: ABBEY NATIONAL Jon Burgess, Investor Relations Phone: 020 7756 4182 E-mail: jonathan.burgess@abbeynational.co.uk AMP LIMITED: To Withdraw Resolutions From Annual General Meeting ---------------------------------------------------------------- AMP has announced that it will withdraw the resolutions relating to the equity-based components of the remuneration packages of its two Executive Directors at its Annual General Meeting (AGM) next week. AMP was seeking approval in relation to the equity-based components of the remuneration of Chief Executive Officer Andrew Mohl and Managing Director of Henderson Global Investors, Roger Yates, at its AGM on May 15, 2003. AMP Chairman Peter Willcox said that in light of the demerger proposal announced last week, it was no longer appropriate to seek approval for the resolutions. The resolutions related to incentives based on AMP's performance for periods up to 2005-06. The proposed resolutions were set out in item 3 of the AGM Notice of Meeting. The resolutions relate only to the share-based components of Mr. Mohl's and Mr. Yates' packages. "The company has been reviewing these resolutions this week, in consultation with some of out investors, and has taken the decision to withdraw them," Mr Willcox said. "There were a number of complex legal and contractual issues to consider. In particular, Mr. Mohl and Mr. Yates have contractual entitlements and the company will now need to consider alternative short and long-term incentives." Mr. Willcox said that a number of investors had indicated their support for long-term incentives that aligned the interests of management and shareholders. He said that remuneration packages for executives in a demerged entity would be considered by the Board of Directors as part of the overall proposal. Any equity-based components of remuneration in the new demerged entities will be subject to necessary shareholder approval at the appropriate time. CONTACT: AMP LIMITED Level 24, 33 Alfred Street Sydney NSW 2000 Australia ABN 49 079 354 519 Contact: Mark O'Brien, Investors Relations Phone: 9257 7053 ANTISOMA PLC: Reports Results for the Three Months Ended March -------------------------------------------------------------- Antisoma plc, the U.K.-based biotechnology company developing novel anti-cancer drugs, announces its results for the three months ended March 31, 2003. Announced today [Thursday] --New forecast from safety committee points to completion of R1549 (formerly Pemtumomab) pivotal ovarian cancer study between February and August 2004 --Third phase I study on AS1404 (DMXAA) starts in New Zealand --Patents granted for R1550 (previously Therex) and caspase enzymes --Patent rights to RGD peptides out-licensed to Amersham Highlights --Completion of agreements on strategic alliance with Roche --Cash and cash equivalents as at March 31,2003 of GBP34.9 million (December 31, 2002: GBP37.6 million) --Revenues increased to GBP4.2 million for the quarter from GBP0.41 million in the same period last year --Operating loss reduced to GBP0.09 million for the quarter from GBP3.6 million in the same period last year --Positive data presented for AS1406 in breast cancer and lymphoma --Nigel Courtenay-Luck promoted to Chief Scientific Officer Commenting on the results, Dr Barry Price, Chairman of Antisoma, said: "Today's results demonstrate the clear financial benefits from the Company's agreement with Roche. Antisoma remains fully focused on driving its pipeline forward. The latest prediction for completion of the phase III trial of R1549 in ovarian cancer is encouraging since it suggests that we may be only around 12 months away from having the results of that very important study." To see financials: http://bankrupt.com/misc/ANTISOMA_PLC.pdf CONTACT: ANTISOMA PLC Phone: +44 (0)20 8799 8200 Raymond Spencer, Chief Financial Officer Glyn Edwards, Chief Executive Officer FINANCIAL DYNAMICS Jonathan Birt/Ben Atwell Phone: +44 (0)7884 238 952 ARC INTERNATIOANAL: Invites Offers for Repurchase of Shares ----------------------------------------------------------- Tender Offer The Board of ARC International announces that it is posting a circular to Shareholders (other than certain Overseas Shareholders) setting out the terms of and condition to the Tender Offer to be made by WestLB Panmure Limited (Panmure), as principal, to purchase up to 181,153,846 Ordinary Shares at a price of between 26 pence and 34 pence per Ordinary Share. Words and expressions defined in the Circular shall have the same respective meanings in this announcement. The Board is proposing to return GBP48.5 million of surplus capital through the purchase by the Company for cancellation of existing issued Ordinary Shares. This return of capital is to be effected by Panmure purchasing, as principal, existing Ordinary Shares for up to a total purchase price of GBP48.5 million (less the costs of the Tender Offer) from Shareholders and then selling such Ordinary Shares through the facilities of the London Stock Exchange to the Company for cancellation. In addition, the Company will lend a further GBP1.5 million to the EBT Trustee to fund proposed market purchases of Ordinary Shares by the EBT Trustee. Full details of the Tender Offer, including the terms on which it is made and condition to which it is subject, are set out in the Circular, which will be posted to Shareholders today. The principal terms of the Tender Offer are as follows: - Panmure is inviting Shareholders to tender Ordinary Shares (subject to the maximum number indicated below) at any price, in increments of 1 pence, within the Price Range of 26 pence to 34 pence; - Panmure will purchase, as principal, existing issued Ordinary Shares for up to a total purchase price of GBP48.5 million (less the costs of the Tender Offer) and then sell such Ordinary Shares through the facilities of the London Stock Exchange to the Company for cancellation; - all Shareholders (other than certain Overseas Shareholders) on the Register on the Record Date are being given the opportunity to participate in the Tender Offer. The Tender Offer is, however, being made to Shareholders resident in the United States and Canada pursuant to applicable exemptions and exemptive reliefs; - all Ordinary Shares which are successfully tendered will be purchased at the same price (the Strike Price), which will be determined at the conclusion of the Tender Offer on the basis of the prices at which Ordinary Shares have been tendered. The Strike Price will be the lowest price per Ordinary Share (within the Price Range) which will allow Panmure to purchase Ordinary Shares with an aggregate purchase value not exceeding o48.5 million (less the costs of the Tender Offer) in accordance with the order of priority detailed below; - Shareholders are entitled to tender Ordinary Shares for sale at different prices within the Price Range but all Ordinary Shares purchased by Panmure will be purchased at the Strike Price and Ordinary Shares tendered at a price or prices above the Strike Price will not be purchased under the Tender Offer; - all or part of a registered holding of Ordinary Shares may be tendered, but only one tender may be made in respect of any single share; - Shareholders may tender any number of Ordinary Shares that are registered in their names on the Record Date in two ways: (i) tenders may be made at fixed prices, in which case they will only be accepted if the price at which the tender is made is at or below the Strike Price; or (ii) tenders may be expressed to be made at the Strike Price, in which case the Shareholder will be treated as having tendered at the price at which the Strike Price is ultimately set; - subject to the Tender Offer becoming unconditional and not lapsing, tenders from Shareholders will be accepted in the following order of priority: (i) first, tenders by Shareholders holding 1,000 Ordinary Shares or fewer at or below the Strike Price will be accepted in full; (ii) second, tenders of over 1,000 Ordinary Shares below the Strike Price will be accepted, and may be scaled back pro rata to ensure that the consideration paid to Shareholders does not exceed o48.5 million (less the costs of the Tender Offer); and (iii) thirdly, tenders of over 1,000 Ordinary Shares at the Strike Price or at a fixed price equal to the Strike Price will be accepted, and may be scaled-back pro rata to ensure that the consideration paid to Shareholders does not exceed o48.5 million (less the costs of the Tender Offer). If the Strike Price were to be 26 pence, being the bottom end of the Price Range, the Company would repurchase up to 181,153,846 Ordinary Shares, equating to approximately 59.6 per cent of the existing issued share capital of ARC International. If the Strike Price were to be 34 pence, being the top end of the Price Range, the Company would repurchase up to 138,529,411 Ordinary Shares, equating to approximately 45.6 per cent of the existing issued share capital of ARC International. Expected Timetable 2003 Tender Offer commences: 8.00 a.m. on Friday, 9 May Latest time and date for receipt of Tender Forms: 3.00 p.m. on Friday, 23 May Record Date for Tender Offer: 5.00 p.m. on Friday, 23 May Tender Offer trade date: Tuesday, 27 May Announcement of take-up level under the Tender Offer: By 8.00 a.m. on Tuesday, 27 May CREST accounts credited with Tender Offer proceeds and revised holdings of Ordinary Shares: Thursday, 29 May Despatch cheques for Tender Offer proceeds in respect of certificated Ordinary Shares: Thursday, 29 May Despatch of balance share certificates in respect of any unsold Ordinary Shares and share certificates in respect of unsuccessful tenders: Thursday, 29 May CONTACT: ARC INTERNATIONAL PLC Phone: 001 408 437 3400 Mike Gulett, Chief Executive Officer Monica Johnson, Chief Financial Officer PANMURE Phone: +44 (0) 20 7020 4000 Andrew Godber/Mark Lander TULCHAN COMMUNICATIONS Phone: +44 (0) 20 7353 4200 Julie Foster/Tim Lynch AUSTIN REED: Board Concludes Review of Options Regarding Offers --------------------------------------------------------------- On March 27, 2003 Austin Reed Group PLC announced that the Board had received an approach that might lead to an offer for the Group. On March 31, 2003 Slater Menswear confirmed that it had made the approach. Following these announcements, the Board was contacted by other parties who expressed an interest in exploring the possibility of making an offer for the Group. As announced in the Group's preliminary results on April 9, 2003, the Board, with its financial advisers, commenced a review of all options which could optimize shareholder value. As part of its review, the Board has explored the possibility of the sale of the Group to all parties who approached it. This process included Slater Menswear, who subsequently informed the Board's advisers on April 24, 2003 that it had encountered difficulties funding an offer at the level indicated in the approach that led to the Group's announcement on March 27, 2003. In the view of the Board and its advisers none of the approaches, given their low indicative values or their failure to specify a value, were likely to lead to an offer which would be recommended by the Board. The Board confirms therefore that it is currently not in discussions with any party that may lead to an offer being made for the Group. The Board notes the announcement made by Nigel Robertson on April 30, 2003 confirming his potential interest in making an offer for the Group. However, to date the Board has not received any proposal from him. The Board will review any proposal by Mr Robertson when one is received. During its review, the Board also assessed a number of other options to optimize shareholder value, including the sale of individual businesses, brands and property assets. The Board has concluded that the interests of all shareholders are best served by the continuing independence of the Group. The focus on the continued growth of the business, in particular the opening of the newly redeveloped Regent Street flagship store in Autumn this year and the re-launch of the Austin Reed brand, is expected to deliver substantial performance improvement. In addition, the Board is pursuing new licensing opportunities and brand extensions for both Austin Reed and Country Casuals, whilst maintaining an emphasis on delivering operating efficiencies and cost reduction programs. The Group will also continue to assess opportunities to maximize shareholder value, including exploiting its strong asset base which at January 2003 represented 175 pence per share. CONTACT: CLOSE BROTHERS CORPORATE FINANCE Alka Bali (Managing Director) Phone: 020 7655 3100 CAZENOVE & CO. Richard Wintour (Managing Director) Phone: 020 7588 2828 AUSTIN REED Roger Jennings (Chief Executive) Geoff Gibson (Financial Director) Phone: 020 7534 7703 Richard Constant/Charlotte Stone Gavin Anderson Phone: 020 7554 1400 BAE SYSTEMS: Completes Sale of Interest in Space Systems Venture ---------------------------------------------------------------- BAE Systems said in a statement Thursday it has completed the sale of its interest in Astrium space systems joint venture to the other shareholder, EADS. In February, EADS confirmed it got 25% of Astrium, Europe's leading space company, and took full control of Paradigm Secure Communications Ltd., formerly held by BAE SYSTEMS and EADS. For BAE the deal marks its exit from non-core space sector At that time the global aerospace and defense company said the transaction, which was signed January 30, will be implemented when all regulatory clearances have been obtained. EADS, which already owns 75% of Astrium, had said that "prior to completion of the transaction, EADS and BAE SYSTEMS will each make a capital contribution into Astrium of EUR 84 million (total EUR 168 million)." The transaction involves EADS acquiring Astrium shares for EUR84 million at completion. Taking into account the cash contribution, BAE SYSTEMS interest will effectively be transferred to EADS for no net cash consideration. ENODIS PLC: Issues Interim Results for the 26 Weeks Ended March ---------------------------------------------------------------- Group Financial Highlights GBP m (except EPS) Q203 Q202 H103 H102 Food Equipment adjusted operating profit(a) 13.4 16.2 23.6 30.4 Effect of disposals and foreign exchange - (3.3) - (5.9) Like-for-like(b) Food Equipment operating profits 13.4 12.9 23.6 24.5 Adjusted Group profit/(loss) before tax(c) 5.8 6.2 8.3 11.3 Group profit/(loss) before tax (1.8) (4.5) (2.0) (8.2) Adjusted, diluted EPS 1.2p 1.7p 1.7p 3.2p Basic, diluted (loss) per share (0.9p) (1.8p) (0.9p) (3.2p) Net debt 181.0 380.5 Key Points -- Overall results before exceptional items in line with Board's expectations -- Q203 like-for-like(b) Food Equipment operating profits up 4% -- Food Service Equipment - North America: data indicates improved market share in H1 -- Food Service Equipment - North America: like-for-like H103 operating profits down 4% due to lower sales to certain Quick Serve Restaurant chains and margin decline at our North American refrigeration business. Like-for-like operating profits at most other North American businesses increased -- Food Service Equipment - Europe/Asia: H103 operating profits down GBP 0.7m to GBP 3.6m, but Q203 GBP 0.4m ahead of prior year at GBP 2.0m Continued significant progress in Food Retail Equipment turnaround, with Q203 operating profits of GBP 0.7m compared with Q103 loss of GBP 0.8m -- Net debt continues to reduce - GBP 181.0m at H103 (FY02: GBP 186.1m) Andrew Allner, Chief Executive Officer said: "Overall, first half results before exceptional items were in line with the Board's expectations at the start of the financial year, with like-for-like Q203 operating profits in Food Equipment up 4%. As already announced, new cost reduction measures, expected to save up to GBP 9m of costs planned for the second half, have been implemented to mitigate the likely impact of slower markets. We anticipate continued progress at Kysor Warren as management actions take effect. Net debt should continue to decline over the second half, although it will rise slightly during the third quarter due to seasonal factors. Moving the office of the CEO to Florida will improve the effectiveness of the executive team as my successor, Dave McCulloch, and his team continue to implement the Group's strategy". A meeting for equity investors and analysts will be held today at 9:00am at the office of Financial Dynamics. A conference call will be held for bondholders at 11:00am today. For details, please contact Sorrel Beynon at Financial Dynamics on 020 7269 7291 or Kaylie Thomson at Enodis on 020 7304 6024. (a) Before operating exceptional items and goodwill amortization (see note 3 to the attached results for details). (b) Like-for-like adjusted for disposals and foreign exchange (see Other Financial Information in the attached results for details). (c) Before all exceptional items and goodwill amortization (see Other Financial Information in the attached results for details). The above adjusted information is presented to indicate the underlying operational performance of the Group. Chief Executive Officer's Review Overview Whilst markets have remained difficult, our overall results, before exceptional items, are in line with the Board's expectations at the time of the announcement of our FY02 preliminary results in November 2002. Our Q2 FY03 Food Equipment operating profits(a) were up 4% on a like-for-like basis, although reported profits declined GBP 2.8m after including the effects of disposals and foreign exchange. In our largest market, North America, we believe we have again increased market share and most of our businesses in Food Service Equipment - North America improved like-for-like operating profits in H103. However, the impact of lower sales to certain Quick Serve Restaurant chains together with pricing and margin issues at our refrigeration business led to Food Service Equipment - North American like-for-like operating profits being 4% lower. We have made further significant progress in improving the performance of Kysor Warren under its new management team. As a result, Food Retail Equipment made operating profits in Q203 of GBP 0.7m compared with a loss of GBP 0.8m in Q103. H103 operating profits in Food Service Equipment - Europe/Asia were down GBP 0.7m to GBP 3.6m, but were GBP 0.4m ahead in Q2 at GBP 2.0m. Debt reduced further in H103 reflecting strong operating cash flow. Net debt at 29 March 2003 was GBP 181.0m compared to GBP 186.1m at 29 September 2002 and GBP 380.5m at 30 March 2002. Results H103 profit before tax, goodwill amortization and exceptional items was GBP 8.3m (H1 2002: GBP 11.3m). The decrease from the prior year was primarily caused by: GBP m -- Loss of H102 operating profits from businesses sold during FY02 (4.2) -- Impact of adverse foreign exchange rates on operating profit (1.7) -- Lower interest charge 3.7 Like-for-like H103 Food Equipment operating profits were down 4%, with a 5% reduction in Global Food Service Equipment offset by improved results in Food Retail Equipment. Like-for-like Q203 operating profits were up 4% compared to last year with Food Retail Equipment making GBP 0.7m of operating profits, almost recouping Q103 losses. (a) Throughout this discussion, operating profit is before operating exceptional items and goodwill amortisation. (see note 3 to the attached results for details) Exceptional Items In our Q103 results we recognized exceptional items related to the favorable settlement of warranty claims arising from disposed businesses (GBP 2.5m), offset in part by increased legal fee accruals in respect of the Consolidated Industries litigation (GBP 1.7m), giving rise to a net credit to the profit and loss account of GBP 0.8m. On 8 April 2003 we announced that new cost reduction and restructuring measures were being implemented to mitigate the likely impact of slower markets in the second half. The Group is taking an exceptional charge for the cost of these programs, together with the costs of relocating the office of the CEO to Tampa. This charge is expected to be approximately GBP 4.5m in total, of which GBP 1.8m has been recognized in the first half. In addition, as a result of the slowdown in the property market, approximately GBP 2.5m of exceptional provision has been recorded for liabilities for vacant leasehold properties. The total net exceptional costs recognized in H103 are GBP 3.5m. Cashflow and Financing Net debt at 29 March 2003 was GBP 181.0m, down from GBP 186.1m at 29 September 2002. The reduction is the result of strong operating cash inflow, after capital expenditure but before exceptional items, of GBP 21.0m, offset by interest payments of GBP 9.7m and tax of GBP 3.1m. Net debt is expected to fall further over the second half of the year although it will rise slightly during the third quarter due to seasonal factors. Earnings Per Share Adjusted diluted earnings per share are 1.7p (3.2p). H103 diluted EPS is calculated on the average number of shares in issue of 399.2m (H102: 307.5m). Basic loss per share was 0.9p (3.2p). REVIEW OF OPERATIONS Global Food Service Equipment Global Food Service Equipment comprises our operations in North America, approximately three quarters of Food Service Equipment sales, and those in Europe/Asia. At the time of our preliminary announcement in November we stated that we did not anticipate any improvement in the North American food service equipment markets for the year as a whole. We believe the market in H103 was flat to slightly down, with major Quick Serve Restaurant chains scaling back expansion, offset in part by continuing investment in the full service and limited menu restaurant sectors. Based on available information we believe we continue to gain market share. Generally the markets in Europe as expected continued to be down overall versus prior year. Results Like-for-like H103 sales for our North American operations, including exports, were up 3% on the prior year with strong performance at a number of businesses offset by weaker sales to certain Quick Serve Restaurant chains. In absolute terms, sales at GBP 196.3m were down GBP 34.1m on the prior year, with a decline of GBP 40.3m due to disposals and adverse foreign exchange movements partially offset by like-for-like improvements of GBP 6.2m. Operating profits for Food Service Equipment - North America businesses declined by GBP 4.5m to GBP 20.1m, of which GBP 3.6m was due to the effect of disposals and foreign exchange. The majority of our North America operations improved like-for- like operating profits. However, the effect of lower sales to certain Quick Serve Restaurant chains and continued pricing issues and down trading by customers to lower margin products in our refrigeration business, considerably reduced profits. Like-for-like H103 third party sales in Food Service Equipment - Europe/Asia declined by 3%. Like-for-like profits fell by 8% principally due to the continued effect of low volumes in the U.K. The performance of the two U.K. businesses affected by factory relocations in FY02 has continued to improve. Food Retail Equipment Significant progress has been made in turning around Kysor Warren. There has been a further marked reduction in the level of losses such that Food Retail Equipment made profits of GBP 0.7m in Q203 compared with losses of GBP 0.8m in Q103. The benefits of the focus on quality and productivity implemented by the new Kysor Warren management team are clear. H103 turnover in Food Retail Equipment reduced to GBP 48.7m from GBP 92.0m, of which GBP 31.0m was due to the effects of disposals and foreign exchange. Like-for-like sales declined by 20% due to reduced sales in Mexico, market share losses at Kysor Warren and the return to more normal seasonality trends at Kysor Panel Systems However, the impact of this shortfall was offset by aggressive cost reductions, reducing H103 losses to GBP 0.1m compared to losses of GBP 0.4m in the prior year on a like-for- like basis. Property We have made continued progress in respect of development of our Felsted property and expect full year property operating profits of around GBP 4m in H203. Office of the CEO to Transfer to Florida As announced on 8th April 2003 the Board of Enodis has concluded that there are significant benefits to be gained from the consolidation of its executive team at its Global Operations Centre in New Port Richey (Tampa) Florida. This facility already houses the heads of finance, human resources, marketing, purchasing, U.S. sales, operations, legal, and information technology, as well as the Enodis Technology Centre, which is used extensively for innovative equipment solutions and customer and industry events. Relocating the office of the CEO to this facility will result in significantly improved accessibility to the operations and customers in North America, where approximately three quarters of the Group's sales are generated. It is the Group's intention to maintain its primary listing on the London Stock Exchange and to retain the office of the Chairman and its head office functions in London. For family reasons I have decided not to relocate to Florida, but will stay with the Group until June to assist an orderly transition. I will be succeeded by Dave McCulloch, 56, who joined the Group in 1986, was appointed to the Board of Enodis in November 2001 and was appointed Chief Operating Officer in May 2002. Current Trading and Outlook As already announced, new cost reduction measures, expected to save up to GBP 9m of costs planned for the second half and GBP 13m in a full year, have been implemented to mitigate the likely impact of slower markets in the second half. These savings will arise from salaried headcount reductions, purchasing and material efficiency initiatives and reductions in discretionary spending. The Food Service sector is large with growth driven by disposable income and lifestyle changes. Although the short term outlook for our business continues to be uncertain we remain confident of Enodis' ability to capitalize on the opportunities which will arise. We continue to focus on growing market share by targeting new markets and accounts, together with innovative new product development as well as cost reduction measures. We expect further progress at Kysor Warren as the new management team continues to make progress towards the elimination of losses. Andrew Allner CEO May 8, 2003 Management's Discussion and Analysis (MD&A) Under the terms of our 10-3/8% senior subordinated notes we are required to prepare and furnish an MD&A to the Securities and Exchange Commission (SEC) in the US on Form 6-K. The MD&A is a US style explanation of our H103 results and contains more detail of certain matters, for example liquidity and capital resources, historical cashflows and legal proceedings including more detail on the status of the Consolidated Industries case. You will be able to obtain a copy of the Form 6-K filing on the SEC website at http://www.sec.gov To see financials: http://bankrupt.com/misc/Enodis.pdf ENODIS PLC: Announces Non-Executive Directorship Changes -------------------------------------------------------- Enodis plc, the global food service and food retail equipment company, is pleased to announce the appointment of Mike Cronk as a non-executive director with immediate effect. From 2000 to January 2003, Mr. Cronk served as Executive Vice President of Aramark Corporation, Philadelphia, USA, a world leader in providing managed services, including food, facility and other support services, in 18 countries with approximately 200,000 employees. During his 22-year period of employment at Aramark he held several other senior positions, including President of the International Food and Support Services Group. He is a non-executive director of United Financial Holding Inc., Lisle, Illinois, USA; AIM Services, Tokyo, Japan; ARAKOR, Seoul, Korea; and is Principal of the Natoma Group and Chairman of GeoStrategy Consulting. Mr. Cronk will replace Robert Briggs as a non-executive director. Mr. Briggs has decided to step down from the Board with immediate effect so that he can devote more of his time to his duties at Kaiser Foundation Health Plan, where he is Senior Vice-President and Chief Financial Officer. Peter Brooks, Chairman of Enodis, commenting on the board changes, said: "We are delighted that a businessman with Mike Cronk's range of experience has agreed to join our Board. He brings with him international business expertise and a depth of knowledge of the food service sector which will greatly benefit Enodis. Equally, we are sorry to lose Robert Briggs as a non- executive director. We valued and thank him for his significant input and contribution to the Board's deliberations." CONTACT: ENODIS PLC Peter Brooks Phone: 020 7304 6000 or FINANCIAL DYNAMICS Richard Mountain Phone: 020 7269 7291 GLAXOSMITHKLINE PLC: Anti-Vomiting Drug Faces Generic Challenge --------------------------------------------------------------- GlaxoSmithKline stands to face another challenge for the patent of its anti-vomiting drug Zofran. In addition to the attack for the table form of Zofran, there is yet another attack for its injectable form, according to reports. GSK has already faced generic challenges on many of its best selling drugs including Paxil/Seroxat, Augmentin and Wellbutrin. Generic producers have filed Abbreviated New Drug Applications under Paragraph IV, which specifically cover patent challenges, an information from the FDA's Office of Generic Drugs reveals. The FDA, however does not disclose the identity of the company or companies making the filings, or the date of the filings. Analysts had already predicted the battle for the rights for Zofran whose patents expires July 2005. Zofran, whose chemical name is ondansetron, is usually prescribed as an anti-emetic for cancer patients whose treatment causes nausea. First-quarter sales of Zofran rose 24 pct to GBP182 million, according to GlaxoSmithKline. H&A WINES: Joint Administrators Offer Business for Sale ------------------------------------------------------- The Joint Administrators, Andrew Stoneman and Jason Godefroy, offer for sale as a going concern the business and assets of H&A Wines & Spirits Group Limited. Bottling and Packaging Wholesale Company -- Turnover circa GBP13 million per annum -- Four markets - Contract bottling for large drinks companies - Sale of small size wines to hotels, brewers and restaurants - Supply of wines to major airlines and caterers - Production of alcohol themed gift packs -- Production of over 60 million units per annum -- Freehold premises in Chorley circa 130,000 sq. ft. -- Stock at cost circa GBP1.8 million -- Order book and quality customer base -- Plant and machinery at net book value circa GBP3 million -- Experienced management team -- Early offers invited CONTACT: MENZIES Desrie Khan of Menzies Corporate Phone: 020 7291 9750 Fax: 020 7291 9777 E-mail: dkhan@menzies.co.uk Homepage: http://www.habottlers.co.uk IZODIA: Evaluates Stand About Possible Suit Against RBSI -------------------------------------------------------- Izodia is considering filing legal action against Royal Bank of Scotland International in relation to the transfer of its now- missing funds by the Jersey bank last year. Izodia's retained law firm in Jersey, has been contacting RBSI's lawyers. It is understood to be seeking to evaluate whether it has grounds to lodge the suit. The former e-commerce software company said in January it lost control of most of its funds when RBSI transferred GBP27 million of its cash to a company associated with Orb, the Jersey-based investment group that is Izodia's largest shareholder. The funds are believed to have gone to Lynch Talbot, an investment company that has common shareholders with Orb. RSBI said it had no intention of "acting as a guarantor of Lynch Talbot's liabilities." The Serious Fraud office in December investigated into the alleged unlawful appropriation of funds belonging to Izodia by Orb. The latter denied any wrongdoing. Rory Macnamara, Izodia's chairman, said: "Our lawyers are looking at every possible avenue for returning the funds." RBSI said: "Given Izodia's threat of litigation, it would be inappropriate to comment on the specific allegations they have made," although it indicated it would defend any proceedings that might arise. It also said it would "co-operate fully with all relevant authorities". Izodia is filing a suit against Orb in Jersey to try to discover how the funds disappeared. Its shareholders are also trying to recover the cash since last year. The shareholders, which include Prudential, Morley Fund Management and JO Hambro Capital Management and Laxey Partners, are also hoping Orb will be able to unload a portfolio of assets it bought from Thistle so that they could extract the amount from Orb. But the latter is yet without a deal for the 37 hotels it is selling two months after it offered the assets. LAURA ASHLEY: Ng to Remain in Board Despite Resignation as CEO -------------------------------------------------------------- Laura Ashley announces that KC Ng has resigned as Chief Executive Officer of the Company with effect from June 1, 2003. He will, however, remain on the Board as a Non-Executive Director. The Board has appointed Ms Ainum Mohd-Saaid as a director with immediate effect. Ms Ainum Mohd-Saaid and Ms Rebecca Annapillai Navarednam have been appointed joint Chief Executive Officers (CEOs) with effect from June 1, 2003. The new joint CEOs bring considerable experience to the Company. Ainum Mohd-Saaid (aged 57) is a senior lawyer who has held the position of Attorney General in Malaysia and has also held the position of Executive Director/Chief Operating Officer of a successful retail fashion group in that country. Rebecca Navarednam (aged 56) is a Fellow Member of the Institute of Chartered Accountants in England and Wales. She was General Manager of a leading bank in Malaysia and has held the position of Chief Financial Officer at Corus and Regal Hotel Group plc. Commenting on these changes, Dr Khoo, Chairman of Laura Ashley said: 'I would like to take this opportunity to thank KC Ng for his contribution to Laura Ashley during a difficult time in its evolution.' 'We have chosen to split the CEO's role because of the unique skills that the new joint holders of this position bring to the Company. Their roles will be distinct, with clear lines of reporting within the business, and I am confident that this structure will allow us to accelerate our strategy as a successful retailer in the U.K. and a franchisor and licensor of the Laura Ashley brand in the rest of the world' CONTACT: BRUNSWICK Tom Buchanan Katya Reynier Phone: 020 7404 5959 MARCONI PLC: Holds Separate Meetings of the Scheme Creditors ------------------------------------------------------------ In the High Court of Justice, Chancery Division, Companies Court Nos. 1782 and 178 of 2003 In the matter of Marconi Corporation PLC and in the matter of Marconi PLC and in the matter of the Companies Act 1985 Notice is hereby given that at separate meetings of the Scheme Creditors (as defined in the schemes of arrangement hereinafter identified) of, respectively, Marconi Corporation plc and of Marconi plc, which meetings were held, pursuant to an order of the High Court of Justice of England & Wales, on 25th April, 2003 at the Institute of Civil Engineers, One Great George Street, London SW1, the Scheme Creditors voted by a majority in number representing no less than three fourths in value of those present and voting either in person or by proxy to approve (without modification)schemes of arrangement pursuant to section 425 of the Companies Act 1985 between Corp and plc and their respective Scheme Creditors. The Scheme Creditors include the holders of the 7 3/4% and 8 3/8% bonds denominated in U.S. dollars, issued by Corp and guaranteed by plc due in 2010 and 2030 respectively and the 5.625% and 6.375% bonds denominated in euros, issued by Corp and guaranteed by plc and due in 2005 and 2010 respectively. Now, therefore, notice is given that Corp and plc have petitioned the High Court to sanction each of the schemes of arrangement referred to above and that such petitions will be heard in the Royal Courts of Justice, the Strand, London, WC2A 2LL, on Monday 12th May, 2003 at 10.30a.m. All Scheme Creditors are entitled to attend the Sanction Hearing in person or through counsel to support or oppose the sanctioning of the Schemes. In the event that the High Court sanctions either: (1) both of the schemes of arrangement; or (2) the scheme of arrangement in respect of Corp but not that in respect of plc, a petition for relief under section 304 of the United States Bankruptcy Code will be heard before the United States Bankruptcy Court of the Southern District of New York. It is anticipated that the U.S. Hearing will take place on Tuesday 13th or Wednesday 14th May, 2003. CONTACT: ALLEN & OVERY One New Change, London EC4M 9QQ Solicitors for Corp and plc SODEXHO ALLIANCE: First-Half Net Profit Dropped 33 Percent ---------------------------------------------------------- Fiscal 2002-2003 Half-Year Results The Board of Directors of Sodexho Alliance met on May 5, 2003 under the chairmanship of Pierre Bellon to examine the interim financial statements for the six months that ended February 28, 2003. 1. Financial Performance for the first half 2002-2003 Results (in EUR millions) Six months Six months % Currency % Ended ended change effect change Feb. 28 Feb. 28 excl. 2002 2003 currency effect Revenues 6,572 6,198 +3% -9% -6% EBITA 314 294 +5% -11% -6% Group net income 128 86 -17% -16% -33% Excluding the currency effect: Consolidated revenues totaled EUR6.2 billion, with organic growth of 3%. EBITA amounted to EUR294 million, a 5% increase over the prior comparable period. EBITA margin stood at 4.8%, essentially from a significant improvement in operating results in Continental Europe. Net financial expense increased by EUR27 million, mainly due to foreign exchange gains realized in the first-half of 2001-2002, when cash held by the Service Vouchers and Cards business in Latin America was transferred into hard currencies. The effective tax rate increased from 33% to 41%, as first-half 2001-2002 results included certain exceptional items which where not subject to income tax. Group net income after goodwill amortization amounted to EUR86 million, a 17% decrease. The euro's sharp appreciation against other currencies, notably the US dollar, led to a negative translation effect in the consolidated accounts which reduced reported revenues by 9%, EBITA by 11%, and Group net income by 16%. However, unlike exporting companies, our subsidiaries' revenues and operating expenses are denominated in the same currency. Consequently, currency fluctuations do not create operating risks for Sodexho. 2. Sodexho in North America Currently, 49% of Sodexho's revenues are generated in North America, where organic growth in revenues amounted to 3% in the first-half of 2002-2003. Since October 1, 2002, Sodexho Inc. has provided food services on 55 U.S. Marine Corps sites in the United States. We have established a strong relationship of mutual respect and true partnership with the U.S. Marine Corps, and they have recently assured us that they are satisfied with our performance and have no basis to cancel our contract. With operations in all 50 states, Sodexho Inc. is solidly anchored in the United States, where it employs more than 110,000 Americans. Sodexho is proud to be a leader in the world's largest market, notably in the two client segments with the greatest growth potential: education and healthcare. 3. New Contracts Food and Management Services Business and Industry: Hewlett Packard - United States, 200 sites - 90,000 people - food services Rich Products - United States, New York - 35,000 people - multi- services HJ Heinz - United Kingdom, Wigan - 2,000 people - multi-services JP Morgan - United Kingdom, (2 sites), London - 2,216 people - multi-services Alcatel - France, Vlizy-Villacoublay - 1,700 people - food services TotalFinaElf - France, La Mede - 200 people - multi-services Nuon - Netherlands (16 sites) - 7,000 people - food services Dutch Congress Center - Netherlands, The Hague - 2,000 people - food services IBM - Italy, Milan/Rome - 3,000 people - food services Johnson Controls - Sweden, Goteborg - 900 people - food services Grupo Santander - Spain, Madrid - 11,000 people - multi-services Sony Corporation - Brazil, Sao Paulo - 565 people - food services Almacenes Exito - Colombia, Bogota - multi-services Nestle - Peru, Lima - 200 people - multi-services Banco Santander - Chile (115 sites), Santiago - multi-services Borders Group - Australia (3 sites) Knox, Brisbane and Carlton - multi-services Healthcare: Ben Taub General Hospital - United States, Texas - 879 beds - food services Fairview Health Services - United States, Minneapolis - 2,613 beds - food services Medical Center Of Louisiana - United States, Louisiana - 680 beds - food services Fundacion - Socio Sanitaria de Barcelona - Spain - 9 sites - multi-services Centre Hospitalier Prive de L'Ouest Parisien - France - 470 beds - food services Wesley Garden Aged Care Facilities - 6 sites - Australia, Sydney - 700 beds - multi-services Education: Penn Harris Madison School Corp - United States, Indiana -10,000 children - multi-services College Mount St. Vincent - United States, New York - 1,600 students - food services Concordia University - United States, Oregon - 1,100 students - food services Hayward School District - United States, California - 25,000 students - food services Clamart Municipal Schools - France, Clamart - 1,620 children - food services Remote Sites BP - (4 sites) United States and United Kingdom - 880 people - multi-services Service Vouchers and Cards Qualix SA Servicios Ambientais - Brazil - 8,000 beneficiaries - multi-services Pepsi - Hungary - 1,000 beneficiaries - multi-services 4. Fiscal 2002-2003 Outlook As Pierre Bellon said during the Annual Meeting of Sodexho Alliance shareholders last February, "the economic environment will not improve in 2003, which makes our clients hesitant about investing and hiring." We have therefore set the following intermediary objectives for fiscal 2002-2003: Organic growth in revenues of 4% or less, greater than the 1.9% in organic growth achieved in fiscal 2001-2002. EBITA margin of 4.7%, as compared to 4.2% in fiscal 2001-2002. Group net income of EUR210 million, at constant exchange rates and excluding exceptional items. In his remarks at the Annual Meeting, Pierre Bellon indicated that this would be difficult. We are continuing to use our best efforts to meet this net income objective, but according to our estimates, we are currently closer to a figure of EUR200 million at constant exchange rates and excluding exceptional items. At current exchange rates, the negative currency effect for fiscal 2002-2003 will be approximately EUR20 million. We are confident in the future of our Group, which enjoys enormous growth potential both in Food and Management Services and in Service Vouchers and Cards. We also benefit from many advantages over our global competitors. Our values: service spirit, team spirit, the spirit of progress and conviviality. Our mission: improving the quality of daily life, which gives meaning to everything our employees do. A global network and operations in 74 countries. Low capital-intensive businesses that generate cash flow. An excellent business model where cash flow finances organic growth, reimburses borrowings and pays dividends. About Sodexho Alliance Founded in Marseille in 1966 by Chairman and Chief Executive Officer Pierre Bellon, Sodexho Alliance is the world's leading provider of food and management services. With more than 315,000 employees on 24,700 sites in 74 countries, Sodexho Alliance reported consolidated sales of 12.6 billion euros for the fiscal year that ended on August 31, 2002. The Sodexho Alliance share has been listed since 1983 on the Euronext Paris Bourse, where its market value totals 3.2 billion euros. The Sodexho Alliance share has been listed since April 3, 2002, on the New York Stock Exchange. CONTACT: SODEXHO ALLIANCE Investors Relations: Jean-Jacques Vironda Phone: + 33 (1) 30 85 29 39 Fax: +33 (1) 30 85 50 05 E-mail: Jean-Jacques.Vironda@sodexhoalliance.com SPICES FINANCE: Fitch Downgrades Series 1 (PEAS) Class II Notes --------------------------------------------------------------- Fitch Ratings, the international rating agency, has downgraded Spices Finance Limited Series 1 (PEAS) Class II notes to 'CCC' from 'BBB-' (BBB minus) and removed them from Rating Watch Negative. At the same time Fitch has affirmed the rating of Class I at 'AAA'. Spices Finance Limited, a special purpose vehicle incorporated with limited liability in Jersey, currently provides protection to Morgan Stanley on a USD920 million reference portfolio of 92 reference entities through a credit default swap. The reference portfolio has a weighted-average credit quality equivalent to a 'BBB-' (BBB minus) rating, down from 'BBB/BBB+' when the deal was rated in August 2001. The portfolio amount has decreased from the initial USD950 million following credit events on Enron, Teleglobe and Marconi. Fitch's rating action reflects the lower than expected recovery rates on Enron's and Teleglobe's debt and expected recoveries on Marconi. Another factor in the rating action is the significant deterioration in the credit quality of the portfolio. Initially all investment grade, the portfolio now contains 24 sub- investment grade names, as compared to 12 in June 2002. The weighted-average Fitch Factor for the portfolio has increased to 22.02 as of May 2003 from 17.40 in June 2002. In the light of the size of the Class II tranche (comprising 7.23% of the current reference portfolio) and despite the decrease in the initial credit enhancement and deterioration in credit quality of the portfolio, the Class I notes are still able to sustain a 'AAA' rating. The agency will closely monitor any changes to the existing portfolio and will take further action as required. SWANSEA RUGBY: Calls Meeting of Creditors in Face of Bankruptcy --------------------------------------------------------------- Notice is hereby given that a meeting of creditors in the above matter is to be held at The Clubhouse, Swansea RFC, Bryn Road, St Helens, Swansea, SA2 0AR on May 13, 2003 at 11.00 am: (1) To consider and if thought fit, to approve our Statement of Proposal as Joint Administrators, under Section 23(1) of the Insolvency Act 1986. (2) To consider whether or not to establish a creditors' committee. (3) To authorize the Joint Administrators' remuneration. (4) Any other business. The Joint Administrators propose to implement a Company Voluntary Arrangement for the Company because a more advantageous realization of the assets of the Company Voluntary Arrangement for the Company would be affected than on a winding up. The proxy should be completed and returned to us by 12 noon on May 12, 2003, if you cannot attend the meetings and wish to be represented. In order to be entitled to vote at the meeting, you must give to us details in writing of your claim not later than 12 noon on May 12, 2003. CONTACT: JOINT ADMINISTRATORS Geoffrey Paul Rowley John Neville Whitfield THISTLE HOTELS: Notification of Major Interest in Shares -------------------------------------------------------- On May 1, 2003, BIL International Limited announced that the offer made by HSBC Bank plc on behalf of BIL (UK) Limited for the entire issued share capital of the Company not already owned by the BIL group had been declared unconditional in all respects. The Offer has been recommended by the Company's board. Further to that announcement, the Company received notifications from BIL on May 2, and 7, 2003 such that, as a result of valid acceptances having been received in respect of a total of 58,934,437 ordinary shares in the Company as at 3.00pm on May 6, 2003, BIL is interested in a total of 280,029,077 ordinary shares in the Company. Class of security: Ordinary shares of 25 13/20 pence Name of person having a major interest: BIL International Limited through its wholly-owned subsidiaries BIL (UK) and Ableton Holdings Limited Date of notice to company: 07/05/03 Date of change in interest: from 01/05/03 up to and including 06/05/03 as a result of acceptances of the Offer Names of registered holders and number of shares held by each: Ableton Holdings Limited 221,094,639 ordinary shares BIL (UK) Limited 1 (one) ordinary share Acceptances received from shareholders 58,934,437 ordinary shares Change in the number of shares in which the 58,934,437 substantial shareholder is interested: Relevant percentage of the issued class 12.19% of security: Total holding of the substantial shareholder 280,029,077 following this notification: Total percentage holding of the substantial 57.93% shareholder following this notification: Name of contact and telephone number for Ian Cattermole queries: 020 7895 2000 In its notifications to the Company, BIL indicated that the terms of engagement between BIL (U.K.) and Capita IRG Plc, in its capacity as receiving and escrow agent for the purposes of the Offer, may constitute an agreement for the purposes of section 204 of the Companies Act 1985 in relation to shares which are the subject of acceptances of the Offer. Submitted by Ian Cattermole, Company Secretary on behalf of Thistle Hotels Plc Issued by: Nick Denton, Hogarth Partnership Limited Tel: 020 7357 9477 ************ 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. 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