/raid1/www/Hosts/bankrupt/TCREUR_Public/030523.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
Friday, May 23, 2003, Vol. 4, No. 101
Headlines
* C Z E C H R E P U B L I C *
UNION BANKA: Liquidators Begin Bankruptcy Proceedings
* F I N L A N D *
BENEFON OYJ: Discloses Resolutions Made at General Meeting
* F R A N C E *
RHODIA S.A.: Announced Pricing for Privately Placed Notes
VIVENDI UNIVERSAL: Suspends Bronfmans' Participation in Board
VIVENDI UNIVERSAL: Cablevision Eyes U.S. Entertainment Assets
* G E R M A N Y *
BAYER AG: Lawsuit Over Cholesterol Drug Takes New Direction
HVB GROUP: Bank Austria's IPO Seen in Vienna, Hazy in Warsaw
SOFTM AG: Revenues and Result for Q1/03 Within Expectations
* I T A L Y *
TELECOM ITALIA: Shareholders Issue Open Letter to Investors
* L U X E M B O U R G *
THIEL LOGISTIK: Reports EBIT of Minus EUR8.6 Million in Q1
* N E T H E R L A N D S *
KLM ROYAL: To Trim Down Jobs at Cargo Division to Lower Costs
LAURUS N.V.: Scraps Konmar; Ends Bid to Rival Ahold's Heijn
ROYAL PHILIPS: CEO Says Company to Focus on Controllable Factors
* N O R W A Y *
AKER KVAERNER: Secures Funding for Masa Yards, Cancels Debt
* P O L A N D *
NETIA HOLDINGS: To Convene Ordinary Shareholders' Meeting June
NETIA HOLDINGS: Transfers Warrants to Entitled Shareholders
* S W E D E N *
NCC AB: To Trim Down Workforce at Property Development Business
* S W I T Z E R L A N D *
ZURICH FINANCIAL: Group Sells Part of Dutch Operations to SNS
* U N I T E D K I N G D O M *
ABBEY COMPUTER: Joint Administrators Call Meeting of Creditors
AMP LTD.: Banking Sells Rural Lending Portfolio to Rabobank
AMP LTD.: Commences Share Purchase Program on Wednesday
AQUILA INC.: SSE Agrees to Terms of Purchase for U.K. Facility
CABLE & WIRELESS: Chief Considers Divesting Assets Abroad
CARLTON COMMUNICATIONS: Swings Back to Profit for Six Months
CHRISTIAN SALVESEN: Says Sale Of German Business Complete
CHRISTIAN SALVESEN: Talks Regarding Expression of Interest Ended
CORUS GROUP: Spokesman Clears Option Regarding Teesside Facility
DAISYTEK-ISA: U.K. and Irish Operations Sold; 700 Jobs Saved
EDINBURGH FUND: May Face GBP2 MM Bill Over NZ Share Suspension
EQUITABLE LIFE: Revives Negligence Suit Against Former Auditor
HOLMES PLACE: To Disclose Recommended Bid of GBP25 Million
MARCONI CORP.: Finmeccanica Could Buy Mobile Access Operation
MARCONI PLC: Higher Stake of Americans Could Force Sale, Merger
REPS INC.: Notice Regarding Creditors Meeting Scheduled May 28
===========================
C Z E C H R E P U B L I C
============================
UNION BANKA: Liquidators Begin Bankruptcy Proceedings
-----------------------------------------------------
Prague-based liquidator Value Added (VA) took over assets of
Union Banka in accordance with a May 9 court decision, while the
bank's management carries bankruptcy proceedings and settlement
at the Ostrava Court.
According to deputy chairman of the Regional Court in Ostrava
Rostislav Krhut, the bank was liquidated on May 19 after none of
the concerned parties, namely UB, CNB and Value Added, objected
to the court's verdict to liquidate the bank.
The first step is to take control of UB's assets, estimated at
CZK8 billion, to prevent their mishandling, VA managers say.
The liquidator will also try to reduce the bank's costs, through
measures including dismissals, and the sale of some assets.
Co-owner of VA Karel Kriz said it will take weeks to establish
the volume of assets at UB and if the assets do not suffice for
the payment of depositors and other creditors, we shall have to
file for bankruptcy and settlement.
The liquidation process is expected complete in 2 years.
On the issue of proceedings concerning the petitions for
bankruptcy and settlement filed by the bank's management on at
the Ostrava court, Kriz said he would be glad if the court waited
for information from the liquidator about the assets.
UB has some 130,000 clients. Its liquidation value is put at
CZK8 billion to 11 billion, as audited by HZ Praha. Former CEO
Petr Votoupal has also revealed that liabilities total CZK19.17
billion.
GE Capital Bank launched the payments of deposits in crowns on
Saturday and in the first two days of the payments nearly 14,000
clients collected their money. GECB paid out a total of Kc1.5bn
to them.
Union Banka closed down on February 21 due to insufficient
liquidity. Its trouble stemmed from an unmanageable expansion
when it took over struggling financial houses in mid-1990. A
restructuring plan was submitted on March 3, but was later
rejected by the Finance Ministry.
CONTACT: UNION BANKA
ul. 30 dubna c. 35
70200 Ostrava
Phone: 596108111
Fax: 596120134
Home Page: http://www.union.cz
E-mail: union@union.cz
=============
F I N L A N D
=============
BENEFON OYJ: Discloses Resolutions Made at General Meeting
----------------------------------------------------------
The following resolutions were made in the Annual General Meeting
of Benefon Oyj May 21, 2003:
The Annual General Meeting of Benefon Oyj postponed the
confirmation of the income statement and the balance sheet of the
Company from the financial period 2002 to be decided in a
separate Extraordinary Shareholders' meeting, which meeting will
be summoned and held later.
The Annual General Meeting of Benefon Oyj discharged the
accountables from liability. In addition the Annual General
Meeting resolved to change the Articles of Association, continue
the application for corporate reorganization filed in, to
authorize the Board of Directors to increase the share capital
and to change the terms and conditions of option rights. All
resolutions were made unanimously except the decision about dis-
charging the accountables from liability which was made with a
clear majority after a vote in which the accountables did not
participate. Also the request by one shareholder for a special
audit in the company was left without needed support.
Change of the Articles of Association
The General Meeting resolved to change the articles 8, 12 and 14
of the Articles of Association according to the proposal of the
Board of Directors.
The Board of Directors and the auditors
The number of members of the Board of Directors was decided to be
three. Jorma U. Nieminen, Jukka Nieminen and Pascal Lorne were
elected to be the members of the Board of Directors.
Ernst & Young Oy, with Tapio Ali-Tolppa, CPA, as responsible
auditor was elected to be the auditor of the Company and Veikko
Soinio, CPA, was elected to be the deputy auditor of the Company.
Continuing the application for corporate reorganization
The General Meeting resolved to continue the application for
corporate reorganization filed in by the Board on April 24, 2003.
In addition, it was acknowledged that, in parallel, the company
will continue the clarification and negotiations about a
voluntary debt settlement possibility as reported earlier.
The authorization of the Board of Directors to decide on the
increase of the share capital by rights issue, issue of options
or convertible bonds
The General Meeting resolved to authorize the Board of Directors,
within the time limit of one year from the General Meeting, to
decide on the increase of share capital by rights issue, issue of
options or convertible bonds in one or more installments such
that in the issue of convertible bonds or options or in the
rights issue, in total a maximum of 2.010.760 new investment
shares with a book parity value of EUR 0,34 (not the exact value)
per share, shall be entitled to be subscribed for. The share
capital may, based on the authorization, therefore be increased
by a maximum of EUR 676.371,12.
The authorization includes the right to deviate from the pre-
emptive right of the shareholders, referred to in Chapter 4,
Section 2 of the Companies Act, to subscribe for new shares,
convertible bonds or options and the right to decide on prices of
the subscriptions, those entitled to subscription, the terms and
conditions of the subscription and the terms and conditions of
the convertible bonds and options. The authorizations may be used
in deviation from the shareholders' pre-emptive right provided
that there is a weighty financial reason from the company's point
of view, such as financing of corporate acquisition or other
arrangement relating to the development of the company's business
operations or strengthening the company's balance sheet, to do
so. When the share capital is increased by a rights issue on
other basis than convertible bonds or options, the Board of
Directors is authorized to decide that the shares can be
subscribed for in kind, using the right of set-off or on other
specific terms.
The change of the terms and conditions of the option rights
The General Meeting resolved to change the terms and conditions
of the option rights issued by the annual general meeting
27.4.2001 and amended by the General Meeting 17.5.2002 such that
the share subscription price is with all the option rights EUR
0,34, as proposed by the Board of Directors.
CONTACT: BENEFON OYJ
The Board of Directors
Jukka Nieminen, President
===========
F R A N C E
===========
RHODIA S.A.: Announced Pricing for Privately Placed Notes
---------------------------------------------------------
Rhodia Tuesday announced the pricing of a EUR1 billion equivalent
privately placed notes.
This issue comprises the following four tranches:
-- EUR 200 million of senior notes at 8 % due 2010
-- $ 200 million of senior notes at 7.625 % due 2010
-- EUR 300 million of senior subordinated notes at 9.25 % due
2011
-- $ 385 million of senior subordinated notes at 8.875% due 2011.
This announcement does not constitute an offer to sell, or a
solicitation of offers to purchase, securities in the United
States. The securities referred to herein have not been, and will
not be, registered under the Securities Act of 1933, as amended,
and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements. This notice is issued pursuant to Rule 135(c) of
the Securities Act of 1933.
Standard & Poor's Ratings Services recently assigned a 'BB' long-
term rating to France-based specialty-chemicals group Rhodia
S.A.'s proposed senior notes of approximately EUR400 million due
2010. The amount of the proposed senior subordinated notes issue
has been revised to approximately EUR600 million and the long-
term rating on these notes was affirmed at 'BB-'. Proceeds from
the combined EUR1 billion issue are expected to be used to
refinance bank debt due in 2003 and 2004.
CONTACT: RHODIA S.A.
Investor Relations
Marie-Christine Aulagnon
Phone: +33 1 55 38 43 01
Fabrizio Olivares
Phone: +33 1 55 38 41 26
VIVENDI UNIVERSAL: Suspends Bronfmans' Participation in Board
-------------------------------------------------------------
Suspension of Edgar M. Bronfman and Edgar Bronfman, Jr.'s
participation in Vivendi Universal's Boards and Committees
Pursuant to the announcement made by Jean-Rene Fourtou during the
Annual Shareholders' meeting, Vivendi Universal is in open
discussions for the disposal of parts of its American assets.
Mr. Edgar Bronfman Junior, Vice Chairman of the Board of Vivendi
Universal having informed Jean-Rene Fourtou of his intention to
lead a consortium of potential purchasers, Jean-Rene Fourtou
gathered on May 19th the members of the Corporate Governance
Committee in order to address this matter.
After consultations with the Company's counsels, it was mutually
agreed to suspend the participation of both Messrs Edgar M.
Bronfman and Edgar Bronfman Junior to any Vivendi Universal
Committees and Board meeting and all information exchange within
this framework and to suspend certain provisions of the
agreements between the Bronfman family and the Company as well as
the employment agreement between Edgar Bronfman Junior and a
subsidiary of the Company in the United States.
It was verified that Mr. Edgar Bronfman Junior does not possess
any recent and substantial information concerning this
contemplated transaction. The first point on the status of the
discussions on this project took place on May 19th without his
presence.
The Corporate Governance Committee of the Board, with the
assistance of the Company's counsels, will ensure the correct
application of this decision.
VIVENDI UNIVERSAL: Cablevision Eyes U.S. Entertainment Assets
-------------------------------------------------------------
Cablevision Systems Corp is interested in teaming up with Edgar
Bronfman in the purchase of the U.S. entertainment assets of
Vivendi Universal.
According to the Wall Street Journal, Cablevision wants to
contribute some of its Rainbow Media assets, including AMC,
Women's Entertainment and IFC, in return for a 25% to 33% stake
in the venture.
Investors were previously expecting Cablevision to use the assets
to trim down its US$8 billion debt load.
Cablevision did not fully confirm it was in talks with Bronfman,
but said Tuesday it was interested in the Vivendi assets.
In a statement, the company said: "We believe that these assets
could potentially fit well with certain Rainbow properties."
Vivendi Chief Executive Jean Rene Fourtou plans to sell Vivendi
Universal Entertainment--which includes Universal Music, studios
and theme parks--to trim down EUR11 billion in debts. Analysts
value the music division at US$7.3 billion; studios, US$5
billion; and theme parks, US$1 billion.
Vivendi Universal targets to raise EUR7 billion (US$7.8 billion)
from the sale by the end of the year.
A US consortium led by Marvin Davis, the oil tycoon, has already
made a putative US$20 billion offer for all of Vivendi's
entertainment assets including Universal Music, the world's
largest music recording business. Other potential bidders
include General Electric Co's GE.N NBC network, Metro-Goldwyn-
Mayer Inc. MGM.N and the former head of Vivendi's U.S. business,
Barry Diller.
CONTACT: VIVENDI UNIVERSAL
Investor Relations
Paris
Daniel Scolan
Phone: +33 (1).71.71.3291
Laurence Daniel
Phone: +33 (1).71.71.1233
or
New York
Eileen McLaughlin
Phone: +(1) 212.572.8961
=============
G E R M A N Y
=============
BAYER AG: Lawsuit Over Cholesterol Drug Takes New Direction
-----------------------------------------------------------
Bayer AG confirmed a new suit over its withdrawn cholesterol drug
Baycol had been filed against it on behalf of 82-year-old Hollis
Haltrom.
Mr. Haltrom's case was overturned in a Texas state court ruling
earlier this year. In a new twist, the case is now filed against
the parent company in Germany, Bayer AG, and GlaxoSmithKline Plc,
which marketed the drug in the US, instead of Bayer's U.S. unit
Bayer Corp., as in the previous instance.
A Bayer spokeswoman said the case has been filed again in Texas,
but it hasn't been accepted yet by the court.
Chris Pinedo of the Texas-based Watts Law Firm is acting as
lawyer to Mr. Haltrom, the plaintiff in the first case to go to
trial in Texas over Baycol.
Bayer, which withdrew Baycol in 2001 after it was linked to 100
deaths globally, also won a second case against the drug in
Mississippi in early April. It said earlier this month it was
able to settle a total of 785 cases out of court. Around 8,00
cases are currently pending.
The next trial over Baycol in the U.S. is scheduled to begin in
Fort Worth, Texas, on June 16, unless an out-of court settlement
is reached.
In Minneapolis, Judge Michael Davis has yet to decide whether the
Baycol case will proceed as a class action in the federal court
system. Bayer is known not to favor class certification due to
the differing circumstances in each case.
Bayer is also facing separate suits from shareholders in the U.S.
due to damages from the recent declines in the company's share
price caused by Baycol.
HVB GROUP: Bank Austria's IPO Seen in Vienna, Hazy in Warsaw
------------------------------------------------------------
The planned IPO of HVB Group AG's Austrian unit Bank Austria-
Creditanstalt (BA-CA) will initially be launched on the Vienna
stock exchange, while listing in Warsaw and Frankfurt are still
being considered.
Citing HVB board member Gerhard Randa, the Financial Times
Deutschland reported that a listing in Warsaw will not be
possible before 2004 and that the bank has yet to decide whether
to seek a Frankfurt listing.
"(A listing at) the stock exchange of Warsaw is a good idea, but
legally so complicated that it is hardly feasible before 2004,"
Randa said.
Earlier, TCR-Europe reported that Bank Austria is planning to
list shares in Vienna Frankfurt and Warsaw, with an investor
roadshow and bookbuilding scheduled from May 23 to July 8.
The report said a maximum of 24.9% stake in BA-CA will be sold,
which could generate EUR1.1 billion. Proceeds of the sale are to
help the German group refurbish capital eroded by heavy losess
and 80-90% of the shares will go to institutional investors.
HVB incurred losses due to more than EUR2 billion bad loan
charges. It is also selling its profitable consumer credit arm
Norisbank AG to help the company recover.
SOFTM AG: Revenues and Result for Q1/03 Within Expectations
-----------------------------------------------------------
SoftM Software und Beratung AG (ISIN: DE0007249104), Munich, has
begun the year 2003 in a very difficult market as expected. In
spite of the difficult under-lying market situation, i.e.
especially the continued high level of uncertainty pertaining to
customers in the small and medium sized industry concerning the
economic development, SoftM was able to stabilize total revenues
in the first quarter of 2003 at the previous year's level of 14.9
million Euro (previous year 15.1) and thereby reaching the plan
goal of 14,1 million Euro.
The standard software business unit had revenues of 3.5 million
Euro (previous year 3.7) and in consulting 5.8 million Euro
(previous year 6.3). The SoftM business unit hardware achieved
revenues of 5.6 million Euro (previous year 5.1).
The EBITDA was 0.6 million Euro (previous year 1.5) in the first
quarter. The net profit/loss after the first three months came to
-0.6 million Euro (previous year -0.3) and the result of normal
business activities EBT was -0.8 million Euro (previous year -
0.1), the plan goal is -0,7 million Euro. The operating cash flow
for the first quarter of 2003 was 12,8 million Euro (previous
year 5.8).
Due to the fact that in spite of the continuing difficult
conditions the projections for the first quarter were almost met,
the Board considers that the goals on revenues and result for the
whole year 2003 can be met.
The complete first quarter report is made available by SoftM
under http://www.softm.com
SoftM Software und Beratung AG (ISIN: DE0007249104), Munich, is a
leading supplier of business-critical applications for small- and
medium-sized businesses. In addition to SoftM Suite, an
integrated ERP solution for Financials, Human Resources, e-
Business, Supply Chain Management, Customer Relationship
Management and Business Intelligence, SoftM offers its customers
comprehensive consultancy services. The range of services is
completed by the hardware unit. With 3,400 customers SoftM is the
market leader for business applications on the IBM iSeries
computing platform (previously AS/400) in German speaking
countries. Sixteen locations in Germany, Austria, Switzerland,
France and the Czech Republic provide the customers with easy
access to services.
CONTACT: SOFTM AG
Dr. Johannes Weidelener,Investor Relations,
Messerschmittstr
4, D-80992 Munich
Phone: +49 (0) 89 14329-169
Fax: +49 (0) 89 14329-114
E-mail: johannes.weidelener@softm-ag.de
=========
I T A L Y
=========
TELECOM ITALIA: Shareholders Issue Open Letter to Investors
-----------------------------------------------------------
Open Letter to Telecom Italia Investors
On March 12, 2003, Telecom Italia and Olivetti announced their
intention to merge. The merger terms were approved by the Boards
of Directors of the merging companies on April 15, 2003.
We strongly believe along with many other investors, independent
research analysts and commentators that the proposed merger terms
do not offer adequate consideration to Telecom Italia's minority
shareholders. We hereby wish to reiterate our dissatisfaction
with the proposed merger and urge all competent authorities and
decision makers to take into account our concerns. We strongly
propose that Telecom Italia shareholders actively defend their
shareholder rights.
The transaction constitutes a merger between an operating
company, Telecom Italia, and a highly leveraged acquisition
vehicle, Olivetti. It is mainly driven by Olivetti's need to
reduce its debt and to get direct access to Telecom Italia's cash
flows and underlying assets.
The proposed merger exchange ratio does not reflect the rationale
and background of the transaction. The ratio does not constitute
adequate consideration for Telecom Italia minority shareholders,
especially in light of the burden and risks that would be imposed
by Olivetti on Telecom Italia. Now does the recent performance
of the Telecom Italia share price redress the unfairness of the
proposed merger terms.
It has been argued that the transaction may be of advantage to
Telecom Italia to the degree that it would reduce the principal
shareholder's influence over the company. However, this alleged
benefit could be achieved through other means without the
negative impact on the financial position of minority
shareholders that the proposed merger would entail. There is
therefore no objective justification for Telecom Italia to enter
into the transaction on the proposed terms.
Were the proposed transaction to take place, it would constitute
a serious failure of Telecom Italia's corporate governance as
well as a notable setback for corporate governance in Italy as a
whole, and the protection of minority shareholders in general.
The proposed transaction would also have a negative impact on
investor confidence and thus on the company's cost of capital.
Stichting Pensioenfonds ABP
Fidelity Investments
Deutsche Asset Management
Varma-Sampo
Newton
PGGM
TIAA CREF
Morley Fund Management
DWS Investments
M&G Investment Management
Schroder Investment Management
Robus Kapitalforvaltning
Spoor Pensioenfonds (SPF Beheer BV)
Deminor Italia SpA has submitted a detailed analysis of the terms
and conditions of the proposed transaction to the Telecom Italia
Board of Directors and its advisors prior to the Board's approval
of the transaction. Deminor Italia SpA is a fully owned
subsidiary of Deminor International scrl, a company under Belgian
law. Deminor advises institutions holding close to 5% of
ordinary shares and 25% of saving shares of Telecom Italia.
These institutions have communicated to Deminor dissatisfaction
with the terms being offered in the proposed partial tender offer
and in the proposed merger. Deminor continues to analyze the
terms proposed for these transactions set forth in the documents
provided by Telecom Italia, Olivetti and their respective
advisors and will continue to communicate to any interested
Telecom Italia shareholders its views based on this analysis.
The analysis can be found on Deminor's web site at the following
address: http://www.deminor.com
The present open letter does not constitute and should not be
interpreted as a proxy solicitation, nor as a solicitation to buy
or to sell securities of Telecom Italia or of Olivetti. The
purpose of this letter is to merely communicate to the investor
community the signatories' dissatisfaction with the proposed
merger of Telecom Italia and Olivetti. The signatories of the
present letter have not agreed to act by common consent nor to
coordinate any of their actions with regard to the proposed
merger or with regard to the companies involved in the merger.
By signing this letter, the signatories are not requesting any
institution to vote or to act in any particular way with regard
to the proposed merger.
CONTACT: DEMINOR INTERNATIONAL srl
Chaussee de la Julpe 181 b. 24
B-1170 BRUSSELS
Phone: +32-2-674 71 10
Fax: +32-2-674 71 20
Homepage: http://www.deminor.com
===================
L U X E M B O U R G
===================
THIEL LOGISTIK: Reports EBIT of Minus EUR8.6 Million in Q1
----------------------------------------------------------
Thiel Logistik AG, Grevenmacher (Luxembourg), posted an EBIT of
minus 8.6 million euros in the first quarter of 2003 against a
positive EBIT of 17.7 million euros in the same period of the
previous year. The main reason for this loss was the negative
earnings performance in the Western Europe and Switzerland
reporting segments especially. As a result of the disappointing
first quarter and following an initial analysis, the new
management considers the forecasts for 2003 made by the previous
management as far too optimistic. Based on current information
specific forecasts for sales and earnings cannot be made. The new
management team is nonetheless convinced that it will end 2003
with a positive operating position.
"First-quarter sales in 2003 grew by 17.5% to 413.8 million euros
compared to the prior year's period, despite the continuing slump
in the economy", the new CEO, Dr. Klaus Eierhoff, explained in a
telephone conference on May 21. "However, the growth dynamic has
weakened considerably compared to the 78.2% rise in the previous
year's quarter."
The new head of Thiel Logistik was disappointed with the earnings
performance, which, he noted, was primarily the result of
internal factors. Switzerland, for example, again recorded a
heavy loss. "The reason for this was an unsatisfactory sales
performance coupled with the heavy impact of fixed costs", Dr.
Eierhoff went on to say. In the Western Europe segment the
Luxembourg region in particular posted a substantial loss. In
this region consulting services at Thiel Logistik AG for
subsidiaries that were faced with high infrastructure costs were
significantly down on the year before, placing a heavy burden on
income. There was also a negative business performance at freight
forwarding companies. In addition, one-off expenses for
consulting services also put earnings at Thiel Logistik under
pressure.
"2003 is a year of consolidation, requiring radical changes," Dr.
Eierhoff emphasized. "We have carried out a strategic review and
will be initiating radical steps as a result of its findings."
The new management team will therefore focus on core business
areas and strategically selected sector solutions, and adjust the
portfolio by selling peripheral businesses. The Group will become
more efficient as we put new structures in place, which will also
mean re-allocating the management's duties and areas of
responsibility. "Lastly, we will be extending our cost-cutting
program further, and continuing to implement a uniform
controlling system consistently throughout the Group," Dr.
Eierhoff stressed. "Decentrally managed logistics companies and
focused sector solutions will form the core of our business in
future."
By setting this course Thiel Logistik will create the framework
for assuming a leading market position at the international level
in selected segments.
The potential to do this is already available within the company.
The new Executive Board is therefore positive in its assessment
of the medium to long-term future of Thiel Logistik AG. A primary
goal is to make the company appeal to the capital market again.
"That will mean that we are again posting continual growth in
sales and especially earnings, and achieving sustained dividend
capability once more for Thiel Logistik," Dr. Eierhoff concluded
by saying.
=====================
N E T H E R L A N D S
=====================
KLM ROYAL: To Trim Down Jobs at Cargo Division to Lower Costs
-------------------------------------------------------------
Some 325 jobs at the cargo division of Dutch airline KLM Royal is
under threat under the carrier's cost cutting plans announced
earlier this year.
According to a spokesman, KLM Royal Dutch Airlines NV plans to
cut the jobs to save EUR40 million over the coming two years.
The airline is targeting to cut a total of at least 3,000 jobs
across the group, mainly at the Amsterdam airport. It is also
aiming at lowering annual costs by EUR650 million.
Temporary employees and those under one-year contracts will be
the first to bear the brunt of the layoffs.
KLM recently reported operating loss of EUR252 million for the
fourth quarter ended March 31, 2003. This is an increase from an
operating loss of EUR124 million last year.
Leo van Wijk, President and CEO of KLM, said in the firm's
financial results: "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."
CONTACT: KLM ROYAL
Investor Relations
Phone: 31 20 649 3099
LAURUS N.V.: Scraps Konmar; Ends Bid to Rival Ahold's Heijn
-----------------------------------------------------------
Netherland's second-largest supermarket operator Laurus N.V. has
revealed plans of abandoning its Konmar brand, effectively
leaving rival Ahold's Albert Heijn stores alone in the premium
sector.
The Dutch retailer said its remaining 79 Konmar stores will be
remodelled under the Super Boer or Edah brands. The conversion
will start in September and will end by July 4.
The 50 bigger Konmar Super stores will be spared, according to
Laurus.
The focus of the retailer's finance and administration department
will also be narrowed down to two locations instead of the
current four. The move will cost 80 jobs.
Laurus is the Netherlands' second-largest supermarket operator,
behind Dutch retail giant Royal Ahold, and operates more than
2,400 supermarkets at home and abroad under the names Edah,
Konmar, and Super De Boer.
CONTACT: LAURUS N.V.
Parallelweg 64, P.O. Box 175
5201 AD Hertogenbosch, The Netherlands
Phone: +31-73-622-3622
Fax: +31-73622-3636
Homepage: http://www.laurus.nl/bis/page-1-2.html
ROYAL PHILIPS: CEO Says Company to Focus on Controllable Factors
---------------------------------------------------------------
Gerard Kleisterlee, Chief Executive Officer of Royal Philips
Electronics addressed the annual Credit Suisse First Boston
European Technology Conference in Barcelona, Spain, Tuesday and
update the meeting on the course of business at Philips.
Mr. Kleisterlee will give an overview of the roadmap towards "One
Philips" where synergies between the business groups can be fully
exploited. The result will be a more exciting company to work for
and to do business with, a company more focused on its customers
and the end consumer, and a company that can be better understood
and appreciated by its investors.
The Philips CEO will reiterate that the Company remains fully
focused on the things management can control: cost and asset
management, process improvement and customer driven innovation.
The continuing difficult economic environment and declining US
dollar are putting pressure on revenues, in particular in the
consumer electronics and semiconductor businesses, whilst the
impact of the SARS virus in Asia remains too early to gauge. At
the same time, Mr. Kleisterlee will confirm that these challenges
have invigorated efforts to deliver on the company's 2003
objectives, to return the Semiconductors division and the
Consumer Electronics activities in the US to profitability by Q4
2003, to bring in cost savings of EUR 1 billion by year-end, and
to continue to move Medical Systems towards the objective of 14%
EBITA in 2004.
"Our company continues to become stronger as One Philips and I am
proud of the progress we have made in this respect," said
Kleisterlee.
Gerard Kleisterlee's presentation will be webcast and available
for download as from 10:30 CET, May 21, 2003, at
http://www.philips.com/broker_conferences
About Royal Philips Electronics
Royal Philips Electronics of the Netherlands is one of the
world's biggest electronics companies and Europe's largest, with
sales of EUR 31.8 billion in 2002. It is a global leader in color
television sets, lighting, electric shavers, medical diagnostic
imaging and patient monitoring, and one-chip TV products. Its
166,000 employees in more than 60 countries are active in the
areas of lighting, consumer electronics, domestic appliances,
components, semiconductors, and medical systems. Philips is
quoted on the NYSE (symbol: PHG), London, Frankfurt, Amsterdam
and other stock exchanges. News from Philips is located at
http://ww.philips.com/newscenter
===========
N O R W A Y
===========
AKER KVAERNER: Secures Funding for Masa Yards, Cancels Debt
-----------------------------------------------------------
Aker Kvaerner has entered into an agreement with the financing
company Finnvera, that will allow the Group to secure stand-alone
export financing for its Finnish shipbuilding company Kvaerner
Masa-Yards. With this financing solution for the Finnish yards,
the Aker Kvaerner group will be able to redirect a substantial
part of its financial resources to develop the other parts of the
Group.
According to the agreement Kvaerner Masa-Yards and its future
shipbuilding projects will be granted guarantees and bonding
lines by Finnvera at commercial terms sufficient to meet the
needs of foreseeable business volume of Kvaerner Masa-Yards
during the coming years. Kvaerner Masa-Yards will of course
continue to seek financing from other sources. The agreement
expires at the end of 2010.
"Historically the Shipbuilding activities of Aker Kvaerner have
required a disproportionate share of the group's financial
capacity. The agreement with Finnvera will allow Aker Kvaerner to
redirect a substantial part of its financial resources to further
strengthen our other core businesses.
Within 12 to 18 months we expect to be able to reallocate in the
range of EUR 250-300 million, half of which is already in the
group cash pool," said Helge Lund, Group President and CEO of
Aker Kvaerner. EUR 300 million represents in excess of NOK 50 per
Aker Kvaerner share.
"The additional financial flexibility puts us in a position where
we can cancel out the three-year debt that expires at the end of
2004," he said. Aker Kvaerner will retain its ownership in
Kvaerner Masa-Yards. The group will continue to have above EUR
200 million in equity in the Finnish shipbuilders, an investment
that is expected to generate reasonable rate of return going
forward.
Kvaerner Masa-Yards ranks as a leading cruise ship builder of the
world, with a remarkable track record and recognition both with
regard to the quality of the design and concepts, project
execution capabilities and safety. The agreement with Finnvera
will provide a fully competitive financial framework for Kvaerner
Masa-Yards going forward.
"Employees and management of Kvaerner Masa-Yards have achieved
significant operational improvements at the yards in Helsinki and
Turku. The yards are cost effective and quality driven, and have
produced very positive results in the past few years," said Mr
Lund.
Jorma Eloranta, President and CEO of Kvaerner Masa-Yards added:
"The overall market situation is difficult, but we are working
hard to win new work. I am confident that we will continue to be
an even stronger core player in the Finnish shipbuilding cluster
going forward."
Aker Kvaerner is a leading global provider of engineering and
construction services, technology products and integrated
solutions. Group activities span a number of industries,
including Oil and Gas upstream and downstream, Process,
Pharmaceuticals, Metals, Power, Chemical Pulping, Environmental
and Shipbuilding. Aker Kvaerner is a multi-local group of
businesses with nearly USD 6 billion of annual revenues and
around 33 000 employees in more than 30 countries.
CONTACT: AKER KVAERNER
Tore Langballe, Vice President, Investor Relations
Phone: +47 90 77 78 41
===========
P O L A N D
===========
NETIA HOLDINGS: To Convene Ordinary Shareholders' Meeting June
--------------------------------------------------------------
Netia Holdings S.A. (WSE: NET, NET2), Poland's largest
alternative provider of fixed-line telecommunications services,
today announced that it will hold an ordinary shareholders'
meeting in Warsaw on June 12, 2003, to approve (i) the management
board's report and financial statements for the 2002 financial
year, (ii) changes in remuneration of members of the supervisory
board and (iii) the amendments to Netia's statute.
Netia is proposing to amend its statue to change its name from
"Netia Holdings S.A." to "Netia S.A." and to reflect in the
statute its current registered share capital which includes
series H shares registered by the Polish court in connection with
Netia's financial restructuring.
Participating in the Ordinary Shareholders' Meeting on June 12,
2003:
Shareholders holding publicly traded bearer shares and registered
shares shall have the right to participate in the Meeting on
condition that at least 7 days prior to the date of the Meeting
(i.e. by June 5, 2003 at 17.00 hours Warsaw time) they deliver to
the Company depository certificates issued by the brokerage house
keeping such Shareholder's securities account, or by Centralny
Dom Maklerski PEKAO SA.
Shareholders who own non-publicly traded bearer shares shall have
the right to participate in the Meeting provided that their
shares are deposited with the Company at least 7 days prior to
the date of the Meeting, i.e. by June 5, 2003 at 17.00 hours
Warsaw time.
Proxies of Shareholders who are legal persons must present an up-
to-date copy of an extract from an appropriate register stating
who is authorized to represent such entities, and respective
powers of attorney. The power of attorney authorizing a proxy to
participate in the Meeting must be in writing.
The list of Shareholders authorized to participate in the Meeting
shall be available for inspection at the Company's offices 3 days
prior to the Meeting.
NETIA HOLDINGS: Transfers Warrants to Entitled Shareholders
-----------------------------------------------------------
Netia Holdings S.A. (WSE: NET, NET2), Poland's largest
alternative provider of fixed-line telecommunications services on
Tuesday announced that on May 15, 2003, Netia Holdings incentive
Share Company Limited transferred 64,847,952 subscription
warrants to the entitled entities, as required pursuant to the
provisions of the prospectus for the issuance of Netia's shares
and notes, dated April 17, 2002, prepared under Polish law and
made publicly available on December 2, 2002, as subsequently
amended on April 14, 2003. The transaction was settled on May 16,
2003.
As a result of the transaction, 31,419,172 subscription warrants
separated from the series I notes issued by Netia on April 29,
2003, each entitling its holder to subscribe for one series J
share of Netia by April 29, 2005 (the Two-Year Warrants) and the
31,419,172 subscription warrants, each entitling its holder to
subscribe for one series J share of Netia by April 29, 2006 (the
Three-Year Warrants), have been transferred to the persons who
were Netia's shareholders of record as at December 22, 2002 (the
Entitled Shareholders). As part of the same transaction,
1,004,806 Two-Year Warrants and 1,004,806 Three-Year Warrants
separated from the series II notes issued by Netia on April 29,
2003, have been transferred to 232 Entitled Shareholders who
submitted their applications between May 5 and May 13, 2003.
On May 19, 2003, one of the participants of Polish National
Depository for Securities informed Centralny Dom Maklerski Pekao
S.A. that one confirmation of rights to subscribe for the
subscription warrants attached to the series II notes was issued
in error. 245 Two-Year Warrants and 245 Three-Year Warrants were
allocated based on such erroneous confirmation. However, the
warrants were not recorded in the securities account of the
person who placed such order and were subsequently returned to
Netia Holdings Incentive Share Company Limited on May 19, 2003.
Consequently, Netia's press release, dated May 15, 2003,
contained some incorrect data. Valid subscription orders were
submitted by 232 Entitled Shareholders, rather than by 233, as
reported, who as at December 22, 2002 held a total of 19,999,897
of Netia shares, rather than 20,004,789, as reported.
Out of the 245 Two-Year Warrants and 245 Three-Year Warrants, 243
Two-Year Warrants and 243 Three-Year Warrants shall be
transferred to the Entitled Shareholders who filed their valid
orders, whereas and 2 Two-Year Warrants and 2 Three-Year Warrants
shall be cancelled. As a result of the foregoing, the total
number of cancelled warrants shall be 105 Two-Year Warrants and
105 Three-Year Warrants, not 103 Two-Year Warrants and 103 Three-
Year Warrants as stated in the earlier release. The correctional
transaction involving the transfer of additional 243 Two-Year
Warrants and 243 Three-Year Warrants shall be effected on May 21,
2003.
Following consultations with the Warsaw Stock Exchange, Netia
plans to introduce the subscription warrants to trading on the
Warsaw Stock Exchange on May 27, 2003.
The series I and II notes do not give rise to substantial long-
or medium-term indebtedness of Netia and have been issued solely
in order to provide a means of distributing the subscription
warrants.
===========
S W E D E N
===========
NCC AB: To Trim Down Workforce at Property Development Business
---------------------------------------------------------------
Jobs at the property development business of Swedish construction
firm NCC AB are under threat as continued market decline
necessitates further restructuring measures in the division.
NCC plans to cut 100 jobs within the operation's 200 workforce,
mainly in Sweden where nearly 50 employees will be laid off.
The job cuts are on top of the 2,500 slashes done out of its
25,000 workforce under NCC's restructuring program launched last
year.
While the program called Turnaround was executed as planned, the
company said the downturn in the office market has intensified
and additional measures are required within the property
development business.
Employees in Sweden, Norway, Denmark and Finland will be
affected. But operations in Poland, Germany, Hungary and Belgium
will bear the brunt of it all because they will be phased out
completely.
NCC assured that negotiations with trade unions regarding the
organizational changes are essentially completed.
The restructuring costs will affect the NCC's earnings during the
second quarter of 2003, NCC said in a statement.
=====================
S W I T Z E R L A N D
=====================
ZURICH FINANCIAL: Group Sells Part of Dutch Operations to SNS
-------------------------------------------------------------
Zurich Financial Services Group (Zurich) and SNS Reaal Groep N.V.
(SNS Reaal) have signed an agreement under which SNS Reaal will
acquire all of Zurich's Life operations as well as Zurich's Non-
Life operations in the consumer and small business segments in
the Netherlands. SNS Reaal is a Dutch bancassurance group with
total assets of just over EUR 46 billion. Zurich will continue to
serve the Non-Life corporate business customers in the
Netherlands through its business unit Continental Europe
Corporate (CEC). The transaction is subject to regulatory
approvals.
Axel P. Lehmann, Chief Executive Officer of the Business Division
Continental Europe, said, "This sale marks our progress in the
implementation of our strategy to focus on core markets and core
activities that maximize the value of our businesses."
In 2002, the insurance portfolios of Zurich Netherlands' Life
operations, plus the Non-Life operations in the consumer and
small business segments recorded gross written premiums and
policy fees of about EUR 211.5 million. The parties agreed to
keep the price confidential.
Zurich Financial Services is an insurance-based financial
services provider with an international network that focuses its
activities on its key markets of North America, the United
Kingdom and Continental Europe. Founded in 1872, Zurich is
headquartered in Zurich, Switzerland. It has offices in
approximately 60 countries and employs about 68,000 people.
CONTACT: ZURICH FINANCIAL
Media and Public Relations
8022 Zurich, Switzerland
Phone: +41 (0)1 625 21 00
Fax: +41 (0)1 625 26 41
Home Page: http://www.zurich.com
===========================
U N I T E D K I N G D O M
===========================
ABBEY COMPUTER: Joint Administrators Call Meeting of Creditors
--------------------------------------------------------------
ABBEY COMPUTER FORMS LIMITED (In Administration)
Notice is hereby given that a meeting of creditors in the above
matter is to be held at The Hilton Darrtford Bridge, Masthead
Close, Crossways Business Park, Dartford, Kent DA2 6QF on June 3,
2003 at 10.00am:
(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 business.
The Joint Administrators propose a more advantageous realization
of the assets of the Companies than would be effected on a
winding up and to implement a CVA for Abbey Computer Forms
Limited.
Form of proxy should be completed and returned to use by 12 noon
on June 2, 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 us details in writing of your claim not later than 12
noon on June 2, 2003.
CONTACT: Geoffrey Paul Rowley
Simon Peter Bower
Joint Administrators
AMP LTD.: Banking Sells Rural Lending Portfolio to Rabobank
-------------------------------------------------------------
AMP has entered into an agreement to sell its A$222 million
(NZ$249 million) rural lending portfolio in New Zealand to
Rabobank, in line with the restructuring strategy announced for
AMP Banking on November 14, 2002.
The sale is expected to complete by July 1, 2003, subject to
regulatory approval and contractual obligations. The final
purchase price will be dependent on a number of factors,
including account balances at the date of completion, and is
expected to be in line with book value.
This divestment is the latest step to significantly restructure
the operations of AMP Banking, which is now focusing retail
deposits and mortgage products in Australia.
This sale follows the sales of:
-- the Australian and New Zealand credit card portfolio to
American Express announced on December 23, 2002;
-- AMP's UK banking portfolio to Newcastle Building Society
announced on March 28, 2003; and
-- the New Zealand residential mortgage and retail deposut
portfolios to HSBC and the property finance portfolio to GE
Commercial Finance, both announced on April 14, 2003.
Together with the rural sale announced Wednesday, these
divestments will have been made at a small premium to book value.
Dicussions continue in relation to the proposed divestment of
construction and other property finance loans retained by AMP
Bank and AMP Finance.
AMP is also reviewing the potential outsourcing or restructuring
of various functions within its core Australian retail banking
business. Decisions on AMP Banking's future outsourcing needs
are expected in the fourth quarter of this year.
AMP Share Purchase Plan set to open
AMP's Share Purchase Plan (SPP) will open tomorrow, providing
eligible retail shareholders with the opportunity to subscribe
for up to A$5,000 worth of shares.
The SPP is part of the capital raising announced by AMP on 1 May
2003 to facilitate its proposed demerger. The offer is open only
to resident Australian and New Zealand shareholders, opening 22
May 2003 and closing 13 June 2003 (unless extended).
Almost 900,000 shareholders are currently being mailed an
application form and letter from the AMP Chairman, Peter Willcox,
inviting them to participate in the SPP offer.
In the letter, Mr Willcox explains to shareholders a number of
issues including the reasons behind the raising and its timing.
"We wanted certainty. We knew the current market conditions and
the likely price we could achieve. We don't know what market
conditions will be like later in the year, so we chose to
immediately proceed with the capital raising and not let the
markets control the process," Mr Willcox says in the letter.
"We have set what we believe is a very tight deadline to complete
the separation of AMP's businesses. To start cleanly separating
the businesses, we had to immediately begin raising additional
capital. By doing this now, we believe we will be better able to
meet all our deadlines so we can separate the businesses by
December 2003."
Mr Willcox also confirms in the letter that AMP's policy is to
pay dividends in line with the Group's sustainable earnings. As
AMP has already announced, volatile global investment markets,
along with weak investor sentiment, impacted full year 2002
financial results.
"These two factors continue to impact our 2003 earnings and on 1
May 2003 we announced lower first quarter results for the Group,"
Mr Willcox tells shareholders in the letter.
"AMP's Board will consider the payment of dividends in light of
the Group's sustainable earnings following the release of the
2003 half-year results in August."
The SPP has been underwritten by UBS Warburg up to A$500 million.
The maximum amount that can be raised through the offer is A$750
million.
Ordinary shares under the SPP will be offered at the lower price
of:
-- A$5.50 (the price at which institutional investors subscribed
for shares under the placement); or
-- a 5 per cent discount to the average market price of AMP
shares calculated over a 15 day trading period after the close of
the offer.
A copy of the Chairman's letter and application form, including
the terms and conditions, is attached.
CONTACT: AMP LIMITED
Level 24, 33 Alfred Street
Sydney NSW 2000
Australia
ABN 49 079 354 519
Contact: Mark O'Brien
Phone: 9257 7053
AMP LTD.: Commences Share Purchase Program on Wednesday
-------------------------------------------------------
AMP's Share Purchase Plan (SPP) opened Wednesday, providing
eligible retail shareholders with the opportunity to subscribe
for up to A$5,000 worth of shares.
The SPP is part of the capital raising announced by AMP on 1 May
2003 to facilitate its proposed demerger. The offer is open only
to resident Australian and New Zealand shareholders, opening 22
May 2003 and closing 13 June 2003 (unless extended).
Almost 900,000 shareholders are currently being mailed an
application form and letter from the AMP Chairman, Peter Willcox,
inviting them to participate in the SPP offer.
In the letter, Mr Willcox explains to shareholders a number of
issues including the reasons behind the raising and its timing.
"We wanted certainty. We knew the current market conditions and
the likely price we could achieve. We don't know what market
conditions will be like later in the year, so we chose to
immediately proceed with the capital raising and not let the
markets control the process," Mr Willcox says in the letter.
"We have set what we believe is a very tight deadline to complete
the separation of AMP's businesses. To start cleanly separating
the businesses, we had to immediately begin raising additional
capital. By doing this now, we believe we will be better able to
meet all our deadlines so we can separate the businesses by
December 2003."
Mr Willcox also confirms in the letter that AMP's policy is to
pay dividends in line with the Group's sustainable earnings. As
AMP has already announced, volatile global investment markets,
along with weak investor sentiment, impacted full year 2002
financial results.
"These two factors continue to impact our 2003 earnings and on 1
May 2003 we announced lower first quarter results for the Group,"
Mr Willcox tells shareholders in the letter.
"AMP's Board will consider the payment of dividends in light of
the Group's sustainable earnings following the release of the
2003 half-year results in August."
The SPP has been underwritten by UBS Warburg up to A$500 million.
The maximum amount that can be raised through the offer is A$750
million.
Ordinary shares under the SPP will be offered at the lower price
of:
-- A$5.50 (the price at which institutional investors subscribed
for shares under the placement); or
-- a 5 per cent discount to the average market price of AMP
shares calculated over a 15 day trading period after the close of
the offer.
A copy of the Chairman's letter and application form, including
the terms and conditions, is attached.
CONTACT: AMP LIMITED
Level 24, 33 Alfred Street
Sydney NSW 2000
Australia
ABN 49 079 354 519
AQUILA INC.: SSE Agrees to Terms of Purchase for U.K. Facility
-------------------------------------------------------------
Scottish & Southern Energy Plc has agreed to terms on the
purchase of Midlands Electricity, majority-owned by U.S. firm
Aquila Inc., sources familiar with the process told Reuters.
But the GBP1.2-billion transaction could still fall through,
sources said, since the key to the final agreement is still with
bondholders from Midland's holding company, Avon Energy.
The transaction could be announced within the next 24 hours if
the sale goes through.
Aquila Inc., owns 79.9% of the UK utility, while FirstEnergy
Corp., owns the remaining 20.1%.
The U.S. company bought UK's fourth-largest regional electric
company for US$264 million in cash in May 2000. But it announced
three months after that it was seeking a buyer for the facility
as part of an effort to sell US$1 billion in assets to boost its
liquidity and please rating agencies.
CABLE & WIRELESS: Chief Considers Divesting Assets Abroad
---------------------------------------------------------
Cable & Wireless new chief executive Francesco Caio, who is
currently preparing to unveil a wide-ranging restructuring plan
for the company, is considering disposing assets in Japan and the
US, according to The Times.
Mr. Caio is mulling over selling the Japanese operation, which it
acquired for GBP350 million in 1999, for up to GBP100 million,
the report says. But he might find it difficult to sell the US
arm because despite a recent restructuring, the operation is
still being smothered by competition from rivals such as AT&T,
McI, regional operators and a string of new entrants. McI is the
former WorldCom.
Cable & Wireless is likely to shut down the U.S. arm if a buyer
could not be found--a scenario that could cost the international
telecoms carrier a significant restructuring cost. Citigroup
estimates the expenses to be around GBP600 million in cash,
inclusive of foreclosures of property leases and payments for
staff.
The closure of the U.S. arm--considered as the root of all of the
company's troubles--would leave its chief executive Simon
Cunningham without a job. Mr. Cunningham, and chief legal
counsel Dan Fitz were expected to leave their posts after the
arrival of Mr. Caio in April.
The recent report appears now that Goldman Sachs prediction last
week was incorrect.
Goldman Sachs concluded the U.S. operation would be retained
after it got access to a company note for the company's US
customers saying that the existing restructuring was going "ahead
of plan."
The sale of the Japanese operation, on the other hand, would
leave the company with only its U.K. and Carribean holdings--
operations generating a profit of GBP300 million a year.
Although profitable, the Cable & Wireless Japan lags behind
rivals, occupying the fourth slot as the biggest long-distance
operator in the country.
A Cable & Wireless spokeswoman said: "The review of the business
is ongoing, and we will update the market next month once it is
complete."
Mr. Caio will advise investors of his plans when the company
reports its full-year results on June 4.
He is being advised by Bill Trent, the finance director of the
collapsed company Energis. The two are thought to be close,
being former partners at McKinsey, the management consultancy.
CARLTON COMMUNICATIONS: Swings Back to Profit for Six Months
------------------------------------------------------------
Headlines
-- EBITA up 50% to GBP42 million (2002: GBP28 million)
-- ITV1 peak-time audience 5% ahead of BBC1
-- ITV2 a growing success story
-- Carlton's share of total ITV advertising revenue up 1.2%
-- Cinema revenue up 15% to GBP37 million
-- Cost saving initiatives - GBP17 million in a full year
-- Net interest charges down to GBP6 million
-- Profit from continuing operations GBP26 million (2002: GBP3
million)
-- Cash and financial assets of GBP638 million
-- Reported earnings per share 3.0p (2002: loss of 27.3p)
-- Dividend per Ordinary share 2.0p (2002: 3.275p)
Michael Green, Chairman, said: 'Our profits are significantly
ahead of last year. We've improved the performance of ITV. We've
reduced costs throughout the business. Our merger with Granada is
on schedule.'
CHAIRMAN'S STATEMENT
'Carlton increased earnings before interest, tax, amortisation
and exceptional items by 50% to GBP42 million in the first half
of this year. This was despite a 3% decrease in total turnover to
GBP509 million. Carlton has focused on careful cost control
across the group.
'Carlton's share of total advertising revenue across ITV's family
of channels was up 1.2% in a period when we managed customer
uncertainty caused by the Iraq War and continued softness in
advertising demand. A combination of investment in programs, a
revitalized commissioning process and competitive scheduling
helped ITV1 deliver a 32.4% average audience in peak-time in the
first quarter of 2003, 5% ahead of BBC1.
'The schedule has delivered better commercial impacts at a lower
cost than we forecast. Carlton is currently expecting its
contribution to the cost of network programs to reduce by at
least GBP10 million to around GBP320 million in our full
financial year.
'ITV2 continues to be a growing success story. The channel
enjoyed the highest year-on-year growth in audience share of any
UK channel in 2002. During our first half, ITV2 was the second
most popular non-terrestrial channel across peak-time in multi-
channel homes. In the fast-growing number of Freeview homes, ITV2
has been the top-rating non-terrestrial channel since October.
Two weeks ago, ITV2, boosted by I'm a Celebrity Get Me Out Of
Here, achieved more than 3% all-time viewing share, beating Sky
One and all other non-terrestrial channels with its highest
ratings since launch. ITV2 is becoming increasingly attractive to
advertisers in terms of audience delivery and scale.
'Carlton Screen Advertising (CSA) - our market leading cinema
advertising business - increased its turnover by 15% to GBP37
million (2002: GBP32 million). Blockbuster films such as Harry
Potter and the Chamber of Secrets, Lord of the Rings: The Two
Towers and the latest Bond film Die Another Day helped CSA sell
out its complete inventory for the first time ever in December.
'Carlton International performed strongly in a generally subdued
market using the largest English language film library outside
Hollywood to good effect and adding to its top-rating television
movies from Carlton America.'
'Carlton has achieved GBP6 million of savings in the first six
months compared to last year. Staff totals have reduced by 84,
and 129 redundancies from our studio, on-line and interactive
operations have been announced and will occur in our second half.
Further savings of around GBP6 million are anticipated in the
second half, giving run-rate savings of GBP17 million a year.
'The proposed merger with Granada is currently with the
Competition Commission which has outlined to us the issues raised
by further consolidation of ITV and will present its report to
the Government on 25 June. We believe the merger has clear
benefits for shareholders, advertisers and viewers.
'The company is in a healthy financial position with cash and
financial assets of GBP638 million and has declared an interim
dividend of 2.0p (2002: 3.275p). Consistent with the proposed
merger terms, this aligns Carlton's dividend cost with Granada's
and provides a basis for progressive dividend growth. Reported
earnings per share were 3.0p (2002: a loss of 27.3p).
'Carlton's share of total ITV advertising revenue for the first
nine months of our financial year is currently anticipated to be
down around 1%, reflecting the World Cup revenue benefit last
year in May and June. Management continues to achieve higher
efficiency and reduce the cost base, concentrate on delivering
value to advertisers in the form of commercial impacts and is
working to strengthen ITV1, ITV2 and the ITV News Channel.
'I am delighted to announce that John McGrath, chairman of The
Boots Company plc and former group chief executive of Diageo plc,
has joined the Board as a non-executive director.'
Michael Green
Chairman
OPERATING REVIEW
OVERVIEW
Total turnover from continuing operations was GBP508.5 million
(2002: GBP524.8 million) and total EBITA from continuing
businesses before exceptional items was GBP42.1 million (2002:
GBP28.1 million). Net interest charges were down to GBP5.6
million (2002: GBP8.5 million) due to lower effective interest
rates. Profit from continuing operations before taxation was
GBP26.4 million (2002: GBP2.8 million).
BROADCASTING
Turnover was GBP370.0 million (2002: GBP376.2 million) and
Carlton's ITV1 Net Advertising Revenue (NAR) was GBP334.0 million
(2002: GBP333.8 million). The effect of the Iraq War on our
business was less than many forecast with only a few customers
deferring campaigns. Major sector advertisers included financial
services, cosmetics and pharmaceuticals and supermarkets.
Last year we strengthened and streamlined the ITV management
structure as well as increased investment in the programme
schedule. We have produced a more competitive schedule at a lower
cost than we had forecast and replaced some high-cost programming
with additional news output around the war.
ITV2, 44% owned by Carlton, enjoyed the highest year-on-year
growth in audience share of any UK channel in 2002. American Idol
2, Popstars: The Rivals Extra and Champions League have helped to
deliver good demographics as well as a growing audience.
Carlton and Granada are consolidating ownership of the ITV News
Channel which has seen its ratings more than double since it was
re-launched in October last year and it played an important role
in ITV's highly regarded war coverage.
ITV's family of three channels delivered an overall peak-time
share of commercial audiences of 53% during our first six months.
CINEMA ADVERTISING
Carlton Screen Advertising's revenue in the UK and the Republic
of Ireland in the first six months increased by 15% helped by
strong feature film releases in the Autumn including the latest
Harry Potter, Lord of the Rings and Bond movies. Turnover was
GBP37.3 million (2002: GBP32.4 million).
CSA won the National Amusements Cinemas contract from October
2002, pushing its share of cinema admissions in the UK to 63%. UK
cinema admissions in 2002 were the highest for 30 years.
The second half of our financial year looks strong with Matrix
Reloaded, Terminator 3, X2 and Charlie's Angels 2 released this
summer. Sponsorship and product promotions are growth areas for
CSA.
We are also continuing to build our cinema advertising businesses
in North America and Europe, using the commercial expertise which
CSA has developed in the more mature UK market. The combined
revenues of these 50% joint venture businesses is running at
around GBP100 million per annum.
CONTENT
Carlton Content substantially improved its margins while turnover
of GBP66.6 million was down (2002: GBP94.5 million).
Carlton International
Turnover for the first six months was GBP37.8 million (2002:
GBP43.1 million). This fall was due to a high-volume, low-margin,
third party distribution deal coming to an end.
Carlton International otherwise performed strongly with its
substantial library showing the commercial longevity of its film
and drama catalogue. Peak Practice is still a popular series
internationally and is now playing on one of China's major
terrestrial stations, whilst Inspector Morse has been on US TV
consistently for the last 10 years. Carlton has licensed four of
the UK's top five exported shows over the last five years.
Carlton America is one of the largest producers and distributors
of TV movies in Hollywood. It continued to add to its portfolio
of 180 TV movie titles and scored a major hit this year with its
Rudy Giuliani film starring James Woods, which has also been
acquired by ITV. The Thunderbirds film - licensed by Carlton - is
in production for a 2004 theatrical release with major licensing
and publishing initiatives.
Videos and DVDs of favourite films and dramas performed well for
Carlton Visual Entertainment. The most recent releases of
Inspector Morse and Sharpe box sets have produced retail sales of
GBP2.5 million in just three months. DVD sales now accounts for
more than 70% of Carlton Visual turnover.
Carlton Productions
Carlton Productions' revenue was GBP28.8 million (2002: GBP51.4
million). Delays last year in ITV commissioning, particularly in
drama, and the ending of The Big Breakfast contract were the
major contributing factors to this reduction in turnover.
However, full year revenue is currently expected to be at a
similar level to last year.
Carlton has a strong slate of drama commissions, with GBP19
million being delivered in our second half including three major
new series, comedy drama Fortysomething, a new medical series
Sweet Medicine and a naval drama series Making Waves. Police
drama The Vice returns in the summer and new one-off dramas
include Margery and Gladys and Too Good To Be True.
By the end of 2003, Carlton Productions will also have delivered
270 hours of its RTS Award-winning daytime show Today with Des
and Mel to ITV, a new situation comedy for BBC1 and a raft of
programming for BSkyB, Channel 4, Five and PBS Network in
America.
Financial Review
In the six months to 31 March 2003 total EBITA (profits before
interest, tax, amortisation and exceptional items) rose by 50% to
GBP42.1m (2002: GBP28.1m). Profit before tax from continuing
operations rose to GBP26.4m from GBP2.8m in 2002.
Six months ended 31 March 2003 2002
GBPm GBPm
------------------------------------ ---------- --------
Continuing operations EBITDA
(before exceptional operating 47.2 43.7
items)
Depreciation (10.1) (11.0)
------------------------------------ ---------- --------
Group EBITA before exceptional operating items37.1 32.7
Share of operating results
of joint ventures and 2.7 (4.6)
associates
Investment income 2.3 -
------------------------------------ ---------- --------
Total EBITA before exceptional operating items42.1 28.1
Amortization (7.7) (11.7)
Joint venture goodwill amortization (1.6) (0.9)
------------------------------------ ---------- --------
32.8 15.5
Exceptional operating items (0.8) (4.2)
------------------------------------ ---------- --------
Reported profit before interest
and tax (EBIT) on 32.0 11.3
continuing businesses
Net interest charges (5.6) (8.5)
------------------------------------ ---------- --------
Continuing operations profit before taxation 26.4 2.8
------------------------------------ ---------- --------
Discontinued operations
- operating loss - (101.7)
- exceptional profit/(loss) on
sale/closure of 10.6 (80.5)
businesses ---------- --------
------------------------------------
Discontinued operations profit/(loss)
before taxation 10.6 (182.2)
----------------------------------- ---------- --------
----------------------------------- ---------- --------
Total Group profit/(loss) before taxation 37.0 (179.4)
----------------------------------- ---------- --------
Profit analysis
Group EBITA before exceptional operating items was GBP37.1m, up
13% against 2002 (GBP32.7m). The changes in Group EBITA before
exceptional operating items from 2002 to 2003 are reconciled in
the table below:
Group EBITA GBPm
---------------------------------------------- ------
Six months ended 31 March 2002 32.7
Year-on-year changes
Advertising revenue 0.2
Sponsorship income (1.4)
PQR & license fees 6.1
Network program budget (6.4)
Digital satellite transmission costs (1.3)
Cost saving initiatives 5.8
Other net movements 1.4
---------------------------------------------- -------
Six months ended 31 March 2003 37.1
---------------------------------------------- -------
Share of operating results of joint
ventures and associates 2.7
Investment income 2.3
---------------------------------------------- -------
Total EBITA before exceptional operating items 42.1
---------------------------------------------- -------
Carlton share of ITV1 NAR was GBP334.0m (2002: GBP333.8m). Total
turnover (including share of joint ventures' turnover) fell by
GBP16.3m due to the scaling down and closure of non-core
businesses and reduced Content turnover.
Carlton's share of network schedule costs has increased by
GBP6.4m since last year. In the second half these costs are
expected to be lower than last year, with our share of total
network budget being around GBP320m in the full financial year.
Payments to the Government for the Group's wholly owned
broadcasting licences continue to be a significant element of
costs. In the six month period these payments totalled GBP47.6m
before digital satellite transmission costs (2002:GBP53.7m) and
were made up of cash bids of GBP14.2m (2002: GBP12.0m) and
Percentage of Qualifying Revenue ('PQR') payments of GBP33.4m
(2002: GBP41.7m). PQR has been calculated after the effects of
digital penetration, which has been calculated at an average of
40% (2002: 26%) in the period, reducing licence costs by GBP22.2m
(2002: GBP14.4m).
Cost savings of GBP5.8m have been achieved in the period. Most of
these savings relate to regional programming, transmission and
network centre costs. There have also been significant savings in
staff costs following the restructuring of various parts of the
business.
Amortisation
Amortisation in 2002 included accelerated amortisation of GBP4.0m
which was re-allocated to exceptional operating items in the full
year results. Like-for-like amortisation charges are unchanged.
Exceptional items
Exceptional items relating to the period can be analysed as
follows:
Continuing Discontinued - sale of Total exceptional
businesses items
GBPm GBPm GBPm
-------------------- ----------- ----------- ---------
Exceptional operating
charges
Restructuring costs (0.8) - (0.8)
--------------------- ----------- ------------ ---------
(0.8) - (0.8)
--------------------- ----------- ------------ ---------
Exceptional income
Technicolor sale - 10.6 10.6
adjustments ----------- ------------ ---------
---------------------
- 10.6 10.6
--------------------- ----------- ------------ ---------
The majority of the Technicolor sale adjustments relate to the
release of litigation provisions.
Joint ventures and associates
Joint ventures and associates generated profits before interest
and amortisation of GBP2.7m (2002: GBP4.6m loss). Goodwill
amortisation charge was GBP1.6m (2002:GBP0.9m).
The improved performance reflects the growth of ITV2 with
Carlton's share of losses reduced to GBP1.3m, down from GBP5.1m
in 2002. The improved performance has been driven by increased
advertising revenues. The two Screenvision joint ventures
generated profits of GBP1.8m (2002: GBP0.7m loss) from a share of
turnover of GBP25.2m (2002: GBP7.9m).
Investment income
Investment income includes a declared GBP2.0m maiden dividend
from the 15.5 million Thomson shares held.
Interest
Net interest charges were GBP5.6m (2002: GBP8.5m). The tables
below show the constituent elements of the net interest charge
and a reconciliation from the 2002 figure.
GBPm
--------------------------------------------- -------
Interest payable (23.7)
Benefits from swaps 12.7
Interest receivable 8.8
Amortisation of fees and fx option costs (3.4)
-------------------------------------------- --------
Net interest charge 2003 (5.6)
-------------------------------------------- --------
Net interest charge 2002 (8.5)
Lower effective interest rates 6.5
Higher interest bearing balances (2.4)
Other (1.2)
-------------------------------------------- --------
Net interest charge 2003 (5.6)
-------------------------------------------- --------
Earnings per share
Six months to 31 Six months to 31
March 2003 March 2002
Basic earnings per share pence pence
--------------------------- ----------- --------
Continuing operations - 1.6 (0.6)
pre-exceptionals
Exceptional operating items after (0.1) (0.5)
tax ----------- --------
---------------------------------
Continuing operations - 1.5 (1.1)
post-exceptionals
Discontinued operations 1.5 (26.2)
-------------------------- ----------- --------
Reported earnings per share 3.0 (27.3)
----------------------------- ----------- --------
Continuing operations - 1.6 (0.6)
pre-exceptionals (as above)
Amortisation 1.4 1.9
------------------------- ----------- --------
Continuing operations pre-exceptionals 3.0 1.3
and amortisation ----------- --------
---------------------------------
Details of the earnings upon which the above calculations are
based are in Note 3. Diluted reported earnings per share figures
are the same as those above.
Cash flow
Cash inflow from operating activities was GBP46.0m (2002:
GBP174.8m). This includes the proceeds from the redemption of
Thomson loan notes (GBP32.6m). There was a GBP33.0m increase in
working capital due to payment of year end accruals, including
those of closed businesses, and increased work in progress in
Carlton Productions.
Payments of GBP21.0m relating to the closure of ITV Digital and
ITV Sport Channel were made in the period, bringing Carlton's
share of total closure costs to date to GBP38.4m.
Balance sheet
Net assets at 31 March 2003 were GBP441.7m, an increase of
GBP8.2m since 1 October 2002. Fixed asset investments include
Thomson shares at a carrying value of GBP440.7m. All Thomson loan
notes have now been sold or have matured. Loan notes with a book
value of GBP35.0m matured in the period. Net debt is analysed in
the table below:
Carrying Market Market
value value value
31 March 31 March 31 March 16 May
2003 2003 2003 2003
GBPm Thomson GBPm GBPm GBPm
Analysis of net debt assets
-------- -------- -------- --------
Net cash 476.4 15.5 million 440.7 110.0 149.2
shares
Credit linked notes 45.0
Loans - long term (986.1)
Finance leases (32.4)
-------- -------- -------- -----
Statutory net debt (497.1) 440.7 110.0 149.2
-------- -------- -----
Hedged exchange 26.2 Thomson share Euro Euro Euro
Movements -------- price 41.2 10.3 13.6
Adjusted net debt (470.9)
--------
Market value of 110.0
Thomson shares --------
Effective net debt (360.9)
--------
Since 1 October 2002, the strengthening of the euro against
sterling has increased the book value of both the exchangeable
liability and the Thomson shares held as fixed asset investments
by GBP39.3m. The increased liability has a direct effect on the
calculation of statutory net debt. The adjustment in the table
above shows the corresponding value of the currency option
(GBP26.2m) purchased to hedge differences that may arise on the
maturity of the euro-denominated exchangeable bond, giving a more
meaningful measure of net debt for comparative purposes.
Adjusted net debt has increased by GBP11.0m since 1 October 2002.
The increase is reconciled below:
GBPm
--------
Reported net debt at 30 September 2002 (459.9)
Net cash flow (76.5)
Credit linked notes 45.0
Long-term loans (excluding exchange differences) 35.0
Finance leases (0.7)
--------
(457.1)
Exchange differences on long-term loans (40.0)
Hedged exchange movements 26.2
--------
Adjusted net debt at 31 March 2003 (470.9)
--------
Effective net debt adjusted to reflect the market value of
Thomson shares at 16 May, the latest practical date before
publication of these results (GBP149.2m) was GBP321.7m.
To see financials:
http://bankrupt.com/misc/CARLTON_COMMUNICATIONS.htm
CHRISTIAN SALVESEN: Says Sale Of German Business Complete
---------------------------------------------------------
Following statements issued on 16 April and 6 May 2003, Christian
Salvesen announces that it has completed the sale of its German
industrial logistics business to its Managing Director for
Germany, Mr Torben Sigenstrom.
*****
Stock in the Northampton-based firm, which has slumped in the
past year after a string of profit warnings, gradually showed
signs of recovery after the company sold its loss-making German
industrial logistics division.
The company, which transports good for clients such as Ford,
Safeway and Tesco, showed pre-tax profits of GBP8.8 million last
year. The figure compares with GBP22 million in 2002.
CONTACT: CHRISTIAN SALVESEN
Phone: 01604 662600
Frances Gibson-Smith
HOGARTH PARTNERSHIP LIMITED
Phone: 020 7357 9477
John Olsen
Tom Leatherbarrow
CHRISTIAN SALVESEN: Talks Regarding Expression of Interest Ended
----------------------------------------------------------------
Further to the announcement on 15 May 2003 by the board of
Christian Salvesen PLC regarding an expression of interest in a
possible offer for the Company, the board can now confirm that it
is no longer in such discussions with any parties.
*****
Earlier this week, the board of European logistics company
Christian Salvesen Plc confirmed it received an unsolicited
preliminary expression of interest from a financial buyer
regarding a possible offer for the company.
The board in a statement said it will keep the market informed of
any further developments.
A spokeswoman for Christian Salvesen declined to pinpoint who
might be the interested buyer, but she suggested the likelihood
of a private equity house, according to The Scotsman.
The troubled logistics business had shunned a near 200-p-per
share offer from Swedish investment firm Custos in mid-2000.
CONTACT: HOGARTH PARTNERSHIP LIMITED
Phone: 020 7357 9477
John Olsen
Tom Leatherbarrow
CORUS GROUP: Spokesman Clears Option Regarding Teesside Facility
----------------------------------------------------------------
A Corus spokesman cleared that the Anglo-Dutch steelmaker would
only consider divesting its steel-making operations in Teesside
if attempts to turn the U.K. plant into a cash-generative steel
slab producer fail, according to Dow Jones.
A U.K. newspaper earlier said new chief executive of Corus,
Philippe Varin, is considering the idea to unload the operation
to pave the way for the placement of new loans for the firm.
According to the report, a sale of the plant could lighten
financing needs, and lower interest payments, potentially easing
out talks with banks regarding nearly GBP700 million of new
loans.
"Not that I'm aware of [any discussions with potential buyers]...
because we still intend to refocus it and run it," the spokesman
said.
The company was known to have said it intends to operate the
facility independently inside the group despite it being surplus
to requirement. It ruled out a sale or a shut down of the plant
except as a last resort.
The previous report said sale of the plant is believed likely to
raise up to GBP200 million, but analyst with a major European
bank doubted whether the Teesside facility would raise such
amount.
The analyst noted the high cost of producing slab in the U.K. as
compared with the likes of Brazil and Ukraine.
DAISYTEK-ISA: U.K. and Irish Operations Sold; 700 Jobs Saved
------------------------------------------------------------
Administrators of office equipment supplier Daisytek-ISA was able
to sell the group's U.K. and Irish operations to a newly-formed
acquisition vehicle backed by Brett Palos and the Gold family.
Administrators PricewaterhouseCoopers, who were appointed last
week, also previously secured a sale for Daisytek-ISA in Sweden
and Norway.
The credit terms for European subsidiary of U.S. Daisytek
International were cut after the parent filed for Chapter 11
bankruptcy protection in May.
The action was prompted by the fact that the global company,
which distributes electronic office products such as computer and
printer supplies, is supplied by the same firms.
The sale of the group's UK and Irish operations successfully save
700 jobs in the process.
The company employs 1,200 people, including those at France.
About 700 staff are based in the UK at offices including Belfast,
Hemel Hempstead, Wakefield and Grangemouth in Scotland.
Daisytek-ISA will continue to trade as ISA Trading.
EDINBURGH FUND: May Face GBP2 MM Bill Over NZ Share Suspension
--------------------------------------------------------------
Edinburgh Unit Trust Managers Suspend Marketing In New Zealand
A press report in New Zealand on 16 May 2003 noted that marketing
of the shares in Edinburgh Investment Company ICVC (EIC) had
ceased in New Zealand as from 17 April 2003. EIC is an open-ended
investment company which is managed by Edinburgh Unit Trust
Managers Limited (EUTM), a wholly owned subsidiary of Edinburgh
Fund Managers Group plc (EFM).
EUTM has ascertained that technical aspects of New Zealand
securities laws which require the filing of updated documents of
EIC with the New Zealand Registrar of Companies may not have been
complied with. Such filings have now been brought up to date. The
consequence of the delay in filing is that under New Zealand law
some allotments of shares in EIC made to New Zealand investors
from June 2001 to April 2003 may be void and the subscriptions
repayable by EIC.
EUTM is currently working through the complex factual and legal
issues involved, and is considering the appropriate action to
take, including the option of applying to the New Zealand courts
to have any void allotments validated. It is too early to
indicate with any certainty the amount, if any, of the ultimate
liability of EUTM. However, on the basis of the limited
information available at present, and with EIC, if necessary,
returning the current value of the void shares to New Zealand
investors, EFM believes that the amount of any contribution that
EUTM may make could be in the region of GBP2,000,000. Further,
EFM is exploring a number of routes to mitigate this potential
exposure, in whole or in part. In particular, the exposure will
only exist if the validation process in New Zealand fails. As
indicated above, the issues are complex, and are subject to
ongoing investigations by the Company's advisors both in the UK
and in New Zealand. These investigations may take several months
to complete.
EUTM understands that the non-compliance issue affects other
overseas fund managers in New Zealand, and one issuer has already
sought validation of void allotments in the New Zealand courts.
Industry bodies in New Zealand and Australia are also seeking a
general legislative remedy, to protect otherwise valid
investments from being void as a result of minor technical
breaches.
CONTACT: POLHILL COMMUNICATIONS
Julian Polhill
Phone: 0207 655 0500
EQUITABLE LIFE: Revives Negligence Suit Against Former Auditor
--------------------------------------------------------------
Mutual insurer Equitable Life is reviving a professional
negligence claim against former auditor, Ernst & Young, according
to the Times.
Equitable Life lunges in February a second attempt to claim
GBP2.6 billion in compensation for alleged negligence from Ernst
& Young. But the accountancy firm succeeded in having most of
the claims thrown out.
Equitable Life previously claimed that the auditor's failure to
include a provision of GBP1.6 billion to cover the cost of
guarantees had prevented the directors from selling the business
ahead of its near-collapse in the summer of 2000.
The insurer argued it could have taken drastic action to prevent
the near disaster.
Equitable nearly collapsed after the holders of guaranteed
annuity rate policies won a test case against the society in the
House of Lords in summer 2000. It admitted that its liabilities
were in excess of GBP1.5 billion.
Iain Milligan, QC, for Equitable, told Lords Justices Brooke, Rix
and Dyson: "The essential problem is that the mutual society
operated very close to the margin by virtue of its policy of full
distribution of profits. If the directors had known that their
margin was more than GBP1 billion less than supposed, they would
have had little choice but to take drastic action."
Ernst & Young had since then denied liability.
Mr. Justice Langley in February gave the insurer leave for the
pursuit of a smaller claim for "hundreds of millions of pounds".
He also gave a leave to appeal his decision to strike out the
bulk of the claim against Ernst & Young.
In a recent development, Equitable's lawyers returned to the High
Court to appeal the ruling. It urged the Court of Appeal to
reinstate its "sale at value" argument and restoring the bonus
claim at the full original amount.
Ernst & Young also appealed to strike the bonus claim entirely.
The appeal hearing is expected to last all week, according to the
report.
HOLMES PLACE: To Disclose Recommended Bid of GBP25 Million
----------------------------------------------------------
Troubled health club operator Holmes Place could settle for a bid
lower than the 200p offered by rival chain Cannons in September
last year.
The company might disclose a recommended bid from Bridgepoint
Capital and Permira, the venture capitalists, worth about 25p a
share soon, according to The Times. The offer values Holmes
Place at just GBP25 million, or about GBP193 million including
debt.
Bridgepoint initially offered 175p a share last summer, but
Cannons outbid it with its 200p offer. The proposal, however,
was called off later because of a profit warning from Holmes.
But despite the offer, observers fear the club operator might
finally collapse to the crisis which led it to issue five profit
warnings in less than a year and breach financial covenants.
Parties involved in the negotiations refused to comment on the
transaction, but it is believed the debt funding for the deal
will largely be provided by Holmes Place's current bankers,
including Lloyds TSB and Royal Bank of Scotland.
Holmes Place's incumbent chief executive Allan Fisher is expected
to "have some sort of continuing role," in the firm after the
purchase, according to the report. But the new owners are also
expected to fortify the firm's board with an executive from
outside.
MARCONI CORP.: Finmeccanica Could Buy Mobile Access Operation
-------------------------------------------------------------
Marconi's Mobile Access operation, based near Genoa and active in
mobile wideband equipment, could be sold off to Finmeccanica SpA.
Newspaper Il Sole 24 Ore said Finmeccanica SpA is interested in
acquiring the unit. It also mentioned Marconi's Italian unit
Marconi Communications chairman Giorgio Berlolina saying the sale
to a buyer he did not specify would be finalized by the end of
the month.
A Finmeccanica spokeswoman said wideband is not currently part of
the group's core business. She declined to comment further.
The possible disposal follows other sell-offs by Marconi,
including the military unit, Marconi Mobile.
Mr. Bertolina said the market situation remains "critical. We are
still waiting for a significant recovery of investments and there
will be no growth for the next 18 months."
Marconi recently emerged from a nine-month financial
restructuring process, and began trading on the London Stock
Exchange Monday. It initiated the reorganization last August to
trim down debt incurred due to a slump in the telecommunications
industry.
CONTACT: MARCONI
Joe Kelly
Phone: 0207 306 1771
E-mail: joe.kelly@marconi.com
David Beck
Phone: 0207 306 1490
E-email: david.beck@marconi.com
Investor enquiries:
Heather Green
Phone: 0207 306 1735
E-mail: heather.green@marconi.com
MARCONI PLC: Higher Stake of Americans Could Force Sale, Merger
---------------------------------------------------------------
The ownership of one-third of telecom equipment maker Marconi by
American shareholders after the relisting of the firm's shares
could increase pressure for a sale or a merger with one of the
company's North American rivals, according to The Times.
Marconi completed the relisting of its shares Monday and
confirmed that the 8% ownership of shareholders from North
America increased to one third.
The telecom company could be pressured to sell or merge with
North American rivals, such as Lucent or Nortel, if it does not
recover, according to the report.
Its strong presence in Europe among fixed-line carriers would
make it an attractive target to a North American supplier, the
report says. The British company is second to France's Alcatel
in the expensive core transmission kit market, with a customer
share of 20%.
But Marconi executives maintained the company is strong enough to
remain independent.
Chief Executive Mike Parton said he was confident the group was
"viable", although he added that "if there is consolidation in
the industry, then I am sure that we will play a part in it".
The restructuring, which attracted many hedge funds into the
stock, lowered Marconi's debts to GBP3.1 billion.
Investors who participated in the company's restructuring
includes AIG, the insurer, Appaloosa Management, the hedge fund,
and the Teachers Insurance and Annuity Association of America as
main investors. They all took unspecified positions in the
company's bonds, which have converted into new shares as part of
the rescue.
The company's major shareholders are not yet fully disclosed, but
they are expected to be identified soon as Stock Exchange
regulations requires holding disclosures from investors owning
over 3% of a company.
Marconi's stock closed at 591/2p at Tuesday's reporting. It was
higher than the 30p to 50p range that executives had been
privately expecting only a few weeks ago. But City analysts said
it was too early for them to take a firm view on whether the
current level is sustainable, according to the report.
REPS INC.: Notice Regarding Creditors Meeting Scheduled May 28
--------------------------------------------------------------
The Insolvency Act 1986
REPS INC. LIMITED
Notice is hereby given pursuant to Section 98 of the Insolvency
Act 1986 that a Meeting of Creditors will be held at RSM Robson
Rhodes, 186 City Road, London EC1V 2NU on May 28, 2003 at 10.30am
for the purposes mentioned in Sections 99, 100 and 101 of the
said Act. Creditors wishing to vote at the meeting must lodge a
proxy, together with a statement of their debt, at the offices of
RSM Robson Rhodes, 186 City Road, London EC1V 2NU not later than
1200 hours noon on the business day prior to the meeting.
A list of the names and addresses of the company's creditors will
be available for inspection, free of charge, at the offices of
RSA Robson Rhodes, 186 City Road, London EC1V 2NU on 23 and 27
May 2003 between the hours of 1000 and 1600 hours.
CONTACT: NICHOLAS SOLARI, Director
*************
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
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Information contained herein is obtained from sources believed to
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The TCR Europe subscription rate is US$575 per half-year,
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or balance thereof are US$25 each. For subscription information,
contact Christopher Beard at 240/629-3300.
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