/raid1/www/Hosts/bankrupt/TCREUR_Public/030602.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, June 2, 2003, Vol. 4, No. 107


                              Headlines

* C Z E C H   R E P U B L I C *

UNION BANKA: Declared Bankrupt by Ostrava Regional Court

* F R A N C E *

ALCATEL SA: Auctions Battery Unit Saft for the Second Time
ARIANESPACE SA: Rocket Program Gets EUR400 Million ESA Boost

* G E R M A N Y *

ALLIANZ AG: Life Policy Sales Will Improve, Says Chairman
KIRCHMEDIA GMBH: Banks Not Afraid to Drop Saban, Says Report
MUNICH RE: Urged to Expedite Sale of Cross-shareholdings
THYSSENKRUPP AG: Steel Unit on Solid Growth Track for 2002/2003

* I R E L A N D *

AER LINGUS: Reaches Agreement on Workers' Pay With SIPTU
ROYAL TARA: Shutters Business Due to Global Economic Slump

* I T A L Y *

FIAT SPA: New Plan to Be Revealed by End of June, Says Chairman

* M O N A C O *

MONACO: Indebtedness Leads to Second Division Downgrade

* N E T H E R L A N D S *

KLM ROYAL: Intended Appointments to the Supervisory Board

* N O R W A Y *

WIDEROE FLYVESELSKAP: To Cut 130 Jobs Due to Financial Crisis

* S P A I N *

TERRA LYCOS: Telefonica Confirms EUR1.7 Billion Bid for Control

* S W I T Z E R L A N D *

ZURICH FINANCIAL: Bank One to Purchase Zurich Life for US$500MM

* U N I T E D   K I N G D O M *

ABERDEEN ASSET: Appoints Head of Emerging Markets Debt
AES DRAX: Extension of Six-month Standstill Agreement Likely
AMEY PLC: Ferrovial Makes Its Tender Offer Unconditional
AMP LIMITED: Outlines Impact of Changes on Property Trust
BIG FOOD: Preliminary Statement Fifty Two Weeks to 28 March 2003
BRITISH AIRWAYS: CEO Denies Entertaining Merger Offers
CABLE & WIRELESS: Latest Restructuring to Cut HQ Staff by Half
CBR GROUP: Engineering Unit's Lease on Life Extended Via Buyout
CORDIANT COMMUNICATIONS: Disposes 70% in Australian Businesses
EQUITABLE LIFE: Results of Equitable Life Annual General Meeting
ETHICON LIMITED: To Close Edinburgh Plant; Cut Livingston Jobs
INVENSYS PLC: Presents Preliminary Results for 2003
MARCONI CORP: Presents Preliminary Statement for 2002/2003
MELVILLE DUNDAS: Threatens to Bring Down Subcontractors
NETWORK RAIL: Presnets Preliminary Results for Year 2002/2003
NETWORK RAIL: Results Reflect Ownership of Infrastructure
ROYAL MAIL: Faces Fine for Missing Delivery Targets
TELEWEST COMMUNICATIONS: Doubts Rebel Bondholders Has Numbers
SECURICOR PLC: Sued in U.S. for Security Breach on Sept. 11


===========================
C Z E C H   R E P U B L I C
============================


UNION BANKA: Declared Bankrupt by Ostrava Regional Court
--------------------------------------------------------
The future of Union Banka has taken on a definitive course as the
Regional Court in Ostrava sent the unfortunate bank into
bankruptcy after a proposal for settlement initiated by the
bank's board of directors was turned down on Tuesday.

Deputy chairman ofthe court Rostislav Krhut told the Czech
Happenings that a settlement is not viable if an entity is in
liquidation, since it contradicts the aim of settlement, which is
to clear a company of debts and return it to operation.

UB's obligations amount to Kc19 billion, while the worth of its
assets is estimated at only Kc8-11 billion.  The court's decision
was based on the insolvency and excessive debts of the bank,
Khrut revealed.

According to CTK, 33 creditors filed the petition for bankruptcy.
The Deposit Insurance Fund (FPV) is the largest of them, claiming
worth some Kc12.3 billion.

UB bankruptcy clients are entitled to the payment of 90% of their
deposits, but a maximum of less than Kc800,000.  GE Capital Bank,
which launched the payments of the insured parts of deposits on
May 17, is to pay some Kc12.5bn to 109,000 individuals and
several thousand companies.

Meanwhile, the appointment of Michaela Huserova as the receiver
will markedly restrict the function of the liquidator, Krhut
said.

Prague-based liquidator Value Added took over assets of
UB on May 19 after none of the concerned parties, namely UB, CNB
and Value Added, objected to the court's verdict (May 9) to
liquidate the bank.

Chief liquidator Petr Cermak said the drafting of a financial
statement was ordered as of May 18 and steps to cut the bank's
costs have been launched.  Some 640 UB employees have also been
given notice, following a decision that the bank would employ
only about 70 people by the end of the year.

However, Cermak said VA is ready to participate in the sale of
UB's branches as well as in the exacting of claims if the
receiver shows interest.

CTK has not yet reached Huserova for comment.

Union Banka closed down on February 21 due to insufficient
liquidity.  Its trouble stemmed from an unmanageable expansion
when it took over struggling financial houses in mid-1990.  A
restructuring plan was submitted on March 3, but was later
rejected by the Finance Ministry.

CONTACT:  UNION BANKA
          ul. 30 dubna c. 35
          70200 Ostrava
          Phone: 596108111
          Fax: 596120134
          Home Page: http://www.union.cz
          E-mail: union@union.cz


===========
F R A N C E
===========


ALCATEL SA: Auctions Battery Unit Saft for the Second Time
----------------------------------------------------------
Three years after French telecommunications equipment maker
Alcatel SA first auctioned its battery unit Saft, it is again
looking for buyers through Credit Suisse First Boston and Societe
Generale.

The Deal, citing a banker familiar with the company, said Alcatel
has mandated the two banks to find buyers for the unit whose
profile has been changed since the failed auction.

The company underwent restructuring and streamlining through
disposals and closures of overseas production plants, notably in
Brazil, Mexico and South Korea.  It has also repositioned itself
on higher-margin products, such as lithium batteries, which are
widely used in mobile phones.  In April Saft acquired, for an
undisclosed amount, several activities from Exide Technologies
Inc. of Princeton, N.J.

These included the German subsidiary Friemann & Wolf
Batterietechnik GmbH, assets from Polish company Centra SA and
certain assets of Electro Mercantil Industrial SL in Spain.

Reports say the first sale was canceled after Alcatel decided
that the offers were too low.  The highest offers were reported
at EUR350 million to EUR400 million (US$410 million to US$470
million), well below the asking price of EUR800 million.

However, the banker believes conditions were more favorable this
time around, as Alcatel was willing to consider a partial sale.
He said some bidders might make an offer for only the profitable
parts ofSaft, in which case Alcatel would retain loss-making
units.

He added that several private equity firms are interested in the
unit, including CVC Capital Partners, BC Partners and Apax
Partners, as well as PAI Management, in which French bank BNP
Paribas is the dominant shareholder.

Saft had Ebitda of EUR70 million on sales of EUR550 million in
2002. The banker said a "realistic" price tag would be 8 to 10
times Ebitda, or EUR560 million to EUR700 million.

Alcatel, Soci,t, G,n,rale and CSFB declined to comment.


ARIANESPACE SA: Rocket Program Gets EUR400 Million ESA Boost
------------------------------------------------------------
Ministers representing the 15 nations that constitute the
European Space Agency (ESA) approved last week a scheme to help
save the rocket program of Arianespace SA, the troubled European
satellite launcher.

In a report last week, AFX News said the Agency earmarked around
EUR400 million to revive the project, which desperately needs a
EUR1 billion cash injection.  The failed maiden launch of the
Ariane-5 rocket in December 2002 has put the company on the
brink.

Of the EUR400 million, EUR72.5 million will be used to order new
versions of the rocket from 2005; EUR42.5 million to redesign the
Vulcain-2 engine, which was blamed for the launch failure and
EUR60 million on testing.  The other EUR228 million will be spent
on two test launches, one in March 2004, carrying a dummy
payload, and another in September 2004, carrying a new ESA supply
pod for the International Space Station.

To help the company save on cost, the ESA ministers were also
asked to take responsibility for manufacturing the rockets away
from Arianespace and assign it solely to European Aeronautic
Defense & Space Co., AFX News said.


=============
G E R M A N Y
=============


ALLIANZ AG: Life Policy Sales Will Improve, Says Chairman
---------------------------------------------------------
Allianz AG, the German bank that offers a range of insurance
products and services through subsidiaries and affiliates, sees
potential for more life insurance policy sales via branches of
its Dresdner Bank unit.

Gerhard Rupprecht, chairman of Allianz's life insurance business,
told news agency Handelsblatt that "productivity of the branches
will improve" from the current 12% policies sold. He also noted
that "certain standoffishness between the banking and the
insurance people has, to a large extent, been removed."

Allianz recorded a loss amounting to nearly EUR1.2 billion in
March, mainly due to operating losses at Dresdner Bank of EUR2.0
billion.

The loss-making affiliate has cut non-personnel costs by 10% and
reduced non-guaranteed bonus and performance related pay to
restore profitability.

CONTACT:  ALLIANZ AG
          Koniginstrasse 28
          D-80802 Munich, Germany
          Phone: +49-89-38-00-00
          Fax: +49-89-34-99-41
          Home Page: http://www.allianz.com
          Contact:
          Paul Achleitner
          Member of the Management Board (Finance)

          DRESDNER BANK AG
          Jurgen-Ponto-Platz 1
          D-60301 Frankfurt/Main, Germany
          Phone: +49-(0) 69/2 63-0
          Fax numbers: General enquiries
                       +49-(0) 69/2 63-48 31
                       +49-(0) 69/2 63-40 04


KIRCHMEDIA GMBH: Banks Not Afraid to Drop Saban, Says Report
------------------------------------------------------------
Creditor banks of KirchMedia GmbH won't hesitate to resort to a
"Plan B" if billionaire Haim Saban fails to meet a EUR525 million
up front payment due Saturday, AFX News said last week.

Accordingly, the banks have reportedly instructed KirchMedia's
insolvency administrators to withdraw from the Saban deal "if
they deem it necessary."  The Financial Times reported, however,
that Mr. Saban has been granted a grace period, although it did
not say until when.

Failure to continue with the deal would put ProSiebenSAT.1,
Germany's No.1 pay-TV, in jeopardy.  Currently, the sticking
point of the negotiations is the complex process that will give
Mr. Saban 75% of the votes in ProSiebenSAT.1 and control of
KirchMedia's heavily indebted film library.


MUNICH RE: Urged to Expedite Sale of Cross-shareholdings
--------------------------------------------------------
After raising EUR3.7 billion from a bond sale last month,
investors now want Munich Re CEO Hans-Juergen Schinzler to hasten
the sale of the company's shareholdings in other firms, including
competitors.

Bloomberg says investors have singled out the stakes in Allianz
AG, HVB Group and Commerzbank AG.  Considered the world's largest
re-insurer, Munich Re holds an 18% stake in Allianz, 26% in HVB
and a tenth of Commerzbank.  In sum, the company has interest in
at least 15 German companies, according to the newswire, which
added that write downs on these holdings have already cost Munich
Re more than the claims related to the September 11 terrorist
attacks.  The company is even expected to report its fourth
straight quarterly loss today.

"We've seen how big the damage from the cross-shareholdings can
be," Dieter Ewald, who helps oversee the equivalent of US$15
billion at Frankfurt Trust, including Munich Re shares, told
Bloomberg.  "Munich Re should draw lessons from these
consequences."

"The write downs on Munich Re's investments probably amounted to
800 million euros in the first quarter, leading to a net loss of
233 million euros.  The write downs totaled 5.7 billion euros
last year," Bloomberg said.

The process to the cut the company's cross-shareholding has
actually begun.  Last month, it agreed with Allianz to reduce
states in each other to 15%.  The company said it is open to "a
sensible" solution to cutting the holding in HVB Group as well.

"They've started to disrupt the vicious circle, but they have to
continue," Oliver Flade, an analyst at HVB, told Bloomberg in an
interview.  He rates Munich Re `"neutral."

Meanwhile, according to Mr. Schinzler at the company's annual
earnings press conference on April 30, first-quarter operating
results have "substantially" improved.  Analysts estimate that
net premium income increased 7.1 percent to EUR9.4 billion in the
first three months of the year.

Mr. Schinzler, who will be replaced by Nikolaus von Bomhard at
the end of the year, also said the company raised prices by 11
percent in the latest round of renewals in January, led by
liability and property contracts.  It also terminated 16 percent
of contracts because they didn't meet profitability targets.  The
company forecasts that premium income will rise 5 percent this
year.


THYSSENKRUPP AG: Steel Unit on Solid Growth Track for 2002/2003
---------------------------------------------------------------
ThyssenKrupp Steel AG can look back on a successful 1st half of
fiscal 2002/2003. At Carbon Steel, the strategy of concentrating
steel production at one site started to reap rewards, while
Stainless Steel capitalized on its position as world market
leader. In addition to cost cutting and performance enhancement
measures, the improvement is also the result of a consistent
customer focus, in which high-tech steel products are backed by
systematic technical support. This allows the company to achieve
appropriate prices even in times of economic downturn. The high
level of value added and a high share of long-term supply
agreements help stabilize revenues.

But the Steel segment - the biggest of the ThyssenKrupp Group's
core businesses - is not prepared to settle for its 1st-half
achievements. The aim is to generate sustainable value growth.
The earnings target for the fiscal year 2003/2004 ending
September 30, 2004 is 800 million euros, equating to 12% ROCE.
Dr. Middelmann: "Our strategy of concentrating on the right
product mix and utilizing efficient equipment and processes is
proving successful." ThyssenKrupp Steel is focused on high-value
products with strong growth potential, which account for over 80%
of carbon steel output and more than 90% of stainless production.

In ThyssenKrupp AG's recently published interim report on the 1st
half of fiscal 2002/2003, the Steel segment made the biggest
contribution (229 million euros) to the Group's pre-tax income
and also reported the highest growth rate. "We have turned the
company around, achieved major improvements and are now actually
returning higher-than-budgeted results in our Carbon Steel und
Stainless Steel business units", says Dr. Middelmann. He is
confident that the current earnings trend can be maintained for
the rest of the fiscal year, assuming no further deterioration of
the economy.

The world steel market is currently in good shape. The
International Iron and Steel Institute (IISI) expects record
crude steel output of 950 million metric tons in 2003. Production
in the first four months of the year was up 8.7%, with China
recording easily the highest growth at just under 20%. Western
European output rose 4.8% to the end of April; German and US
production expanded 5.5% and 4.6% respectively from the
comparable prior-year period. The 9% increase in crude steel
output at ThyssenKrupp Steel in the 1st half of fiscal 2003/2004
was higher than the international average. Production facilities
were running at virtually fully capacity.

All forecasts indicate that China will remain the biggest growth
market in the coming years. The Carbon Steel and Stainless Steel
business units both have production facilities there, with the
focus again on high-value products: The Tagal hot-dip coating
line in Dalian - a 50/50 joint venture with Angang New Steel Co.
Ltd. - will start production in September. This 180 million US
dollar investment will have an annual capacity of 400,000 tons.
Another joint venture, ThyssenKrupp Zhong-Ren Tailored Blanks in
Wuhan, commenced operation in October 2002. 5 million US dollar
was invested in this 15,000 tpy capacity plant. Both companies
primarily serve the auto industry. Shanghai Krupp Stainless, a
joint venture with Baosteel, started production in November 2001
and has successfully completed the ramp-up phase. Phase two will
involve an expansion of cold rolling capacity from 72,000 to
290,000 tpy by early 2005, with a further 100,000 tpy to be added
by the end of 2005. This is ThyssenKrupp Steel's biggest foreign
investment, with a total volume of almost 1.4 billion US dollar.
ThyssenKrupp Steel's sales in China have grown almost 60% since
1997 to 337 million euros (2001/2002).

Having achieved major productivity improvements by concentrating
production following the merger of Thyssen and Krupp's steel
activities in 1997, ThyssenKrupp Steel has now turned its
attention to performance enhancement in all three business units.
This involves both portfolio and organizational optimization.
"Within the next two years, the measures we have initiated will
reduce costs by a high nine-figure sum. This will enable us to
offset increases in input material and personnel costs and
further improve our earnings," states Dr. Middelmann.

Some structural measures have already been completed in recent
months. Carbon Steel is looking to further globalize its
downstream coating, processing and service activities. The latest
example is the acquisition of a 100% interest in Spanish hot-dip
galvanizer Galmed S.A. "This will significantly boost our chances
on the high-growth Spanish market," says Dr. Middelmann. The
Stainless Steel business unit has disposed of its quarto plate
activities and is now in the process of reorganizing its European
distribution network. Acquiring the service center activities of
TAD Metals in Italy - Europe's second largest stainless market -
has made an important contribution to this.

On the Group's strategy, Dr. Middelmann says: "Restructuring is
an ongoing, never-ending process." ThyssenKrupp Steel is
concentrating on its core capabilities. Only by focusing on
things it can do better than others will the Group improve its
competitiveness and secure skilled jobs in the long term.
Investment funds are allocated to those Group companies that hold
leading market positions and create sustainable value.

ThyssenKrupp Steel is thus putting itself in a position to play
an active part in the further consolidation of the international
steel industry expected in the course of this decade. Joint
ventures like the ones in China and strategic alliances such as
those agreed with the Japanese JFE Group for automotive research
and development and with Nippon Steel for electrical steel are a
key pillar of this concept. Dr. Middelmann: "We will still be one
of the top 5 players on the global steel market in 2010."

CONTACT:  THYSSENKRUPP STEEL AG
          Erwin Schneider
          Phone: +49 203 / 52 - 2 56 90
          Fax: +49 203 / 52 - 2 57 07
          E-mail: erwin.schneider@tks.thyssenkrupp.com


=============
I R E L A N D
=============


AER LINGUS: Reaches Agreement on Workers' Pay With SIPTU
--------------------------------------------------------
An 18-point deal on the pay and working conditions for around
2,000 workers at Aer Lingus has been contracted between the
airline's management and SIPTU.

The online news agency Business & Finance said the agreement
reached requires Aer Lingus to increase pay by 4pc and to restore
overtime rates to double time.

Both terms are due under the new national wage agreement,
Sustaining Progress, the report said.

However, workers are obliged to accept more flexible working
arrangements including procedures to increase turnaround times.

It is noted that fast turnarounds are central to Aer Lingus' new
strategy of offering high volumes of cheaper flights to
customers.

The national airline has been struggling from the global economic
slowdown, industrial unrest, decline in tourism, stiff
transatlantic competition and rising fuel prices even before the
September 11 attack.  The tragedy only worsened its situation,
leading it to post a EUR52 million loss in 2001.

In an effort to remain sustainable, Aer Lingus slashed its costs
by EUR235 million as part of an emergency rescure package that
also saw it decide to enter the low-cost sector.

Chief executive Willie Walsh recently said cost savings of a
further EUR65 million, however, were required to get the airline
fully fit.


ROYAL TARA: Shutters Business Due to Global Economic Slump
----------------------------------------------------------
The company established by Kerry O'Sullivan in 1953 in Tara Hall,
the former seat of the Joyce family, will shut its doors before
the end of the year due to rising costs and increased competition
from Asia.

Business & Finance news agency said the Galway-based maker of
fine bone china also pointed to the global economic slump and a
sharp decline in demand for luxury goods.

A total of 80 jobs will be lost with Royal Tara's closure, the
report said.

The company specialized in the production of Royal Tara china
tableware until 1977, when a group of Irish businessmen took over
the operation and broadened the range of products to include
individually boxed gift items as well as collector's limited
editions that had an appeal to the discerning buyer, both at home
and abroad.

CONTACT:  Royal Tara
          Tara Hall, Mervue
          Galway, Ireland
          Phone: +353 91 751 301/+353 91 705602
          Fax: +353 91 757 574


=========
I T A L Y
=========


FIAT SPA: New Plan to Be Revealed by End of June, Says Chairman
---------------------------------------------------------------
A new "operating plan" for ailing Italian industrial conglomerate
Fiat SpA will be presented by the end of June, Dow Jones said,
citing Fiat chairman Umberto Agnelli.

Agnelli was overheard telling a shareholder at the annual
assembly of Istituto Finanziario Industriale SpA, his family-run
holding company, that the plan would be "quite complete and
respond to the needs of maintaining maximum employment levels,
while also boosting efficiency to boost Fiat's results.

He reportedly said: "I don't want to give any advance look at the
plan, but please don't call it the Morchio plan as it's the plan
of everyone who works in Fiat".

Giuseppe Morchio is Fiat's new executive chief.  He has been
advising a comprehensive "study" of Fiat's existing industrial
plan with an eye to assessing the company's financial needs.

TCR-EU recently said that Fiat reported a consolidated net loss
of EUR4.2 billion for 2002 as a result of operating losses at its
core auto-making unit and to write-downs on some of its equity
investments.

It was forced to borrow money from Italian banks to keep up with
its chronic cash burn.  It eventually had to unload a large part
of non-core assets to pay the loan.

However, Fiat has declined to comment on persistent reports it
will seek a capital increase.  Morchio was quoted saying, if any
new funds are sought, they will be for development and not to
staunch operating costs.

The Italian firm has since accelerated the sales of its non-core
aerospace and insurance units and announced it will focus on Fiat
Auto, truckmaker Iveco and tractor and construction equipment
maker CNH Global Inc.

CONTACT:  FIAT SPA
          250 Via Nizza
          10126 Turin, Italy
          Phone: +39-011-686-1111
          Fax: +39-011-686-3798
          Toll Free: 800-804027
          Home Page: http://www.fiatgroup.com/e-index.htm


===========
M O N A C O
===========


MONACO: Indebtedness Leads to Second Division Downgrade
-------------------------------------------------------
Football club, Monaco, will appeal the decision that bumped off
the team to the second division due to financial difficulties,
Business & Finance learned late last week.

"We have acknowledged legally the decision of the DNCG [league
financial watchdog] of which we do not share the conclusions," a
statement from Monaco said. "After talks with our legal advisors
we will appeal within the prescribed time limit."

Estimates peg the club's debt at between EUR53 million and EUR87
million, the paper said, adding it needs about EUR25 million to
keep its place in the first division and qualify for next
season's Champions League.

Prince Rainier of Monaco is partly to blame for the club's woes.
According to the report, several proposals to inject cash into
the club, including plans pushed by club President Jean-Louis
Campora and a group of Italian businessmen, were turned down by
the prince.


=====================
N E T H E R L A N D S
=====================


KLM ROYAL: Intended Appointments to the Supervisory Board
---------------------------------------------------------
The KLM Supervisory Board intends to appoint Wim Kok (64) and
Cees J.A. van Lede (60) as supervisory directors of the Company.
Messrs. Kok and Van Lede will take the seats vacated by Arie
Maas, who will resign at the end of his current term, and Max
Albrecht, who will resign after 27 years on the KLM Supervisory
Board.

Neither Mr. Maas nor Mr. Albrecht is available for reappointment.
The Supervisory Board also intends to reappoint Messrs. Floris A.
Maljers (69) and Dudley G. Eustace (66) as supervisory directors.

Wim Kok was Prime Minister of The Netherlands until the summer of
2002. Mr. Kok's knowledge of the national and international
sociopolitical arena and his experience in public office will be
a great asset to the KLM Supervisory Board. Mr. Kok previously
served as Chairman of the Federation of Dutch Trade Unions (FNV),
leader of the parliamentary delegation of the Dutch Labor Party
(Partij van de Arbeid) in the Dutch Lower House, and Minister for
Finance. Earlier this year, Mr. Kok was appointed to the
Supervisory Boards of the ING Group, Shell (Royal Dutch Petroleum
Company) and TPG. The intended appointment of Mr. Kok is based,
among other things, on a recommendation of the KLM Works Council.

Cees J.A. van Lede was Chairman of the Board of Managing
Directors of Akzo Nobel nv until May 1 of this year. Mr. van
Lede's experience in leading internationally oriented
corporations and in the field of national and international
sociopolitical relations will be of great value to the KLM
Supervisory Board. Mr. van Lede was previously a member of the
Board of Managing Directors of HBG and Chairman of the
Confederation of Netherlands Industry and Employers (VNO). He is
currently Chairman of the Supervisory Board of the Dutch Central
Bank and holds seats on the Supervisory Boards of Heineken, Sara
Lee Corporation, Scania, Philips, Reed Elsevier, L'Air Liquide,
and Akzo Nobel.

The KLM Supervisory Board will present the intended appointment
of Messrs. Kok and Van Lede and reappointment of Messrs. Maljers
and Eustace to the KLM Annual General Meeting of Shareholders in
Amstelveen on June 25, 2003.


===========
N O R W A Y
===========


WIDEROE FLYVESELSKAP: To Cut 130 Jobs Due to Financial Crisis
-------------------------------------------------------------
Airline Wideroe, a member of Sweden's SAS Group, will cut 10% of
its entire staff due to the company's appalling economic
situation, says Aftenposten, citing a report from Norwegian news
Bureau NTB.

A total of 130 jobs will be made redundant, as income continues
to evaporate and there is no end in sight.  This is the first
time the airline resorts to terminations, says Aftenposten.

Managing director Per Arne Watle said: "This is a deeply
regrettable situation we are in. Wideroe is struggling with clear
financial problems because revenue is declining and there is no
sign of improvement".

Meanwhile, information chief Siv Sandvik revealed that
considerable cost-cuttings are needed since eight of 10 Wideroe
routes are unprofitable.  No changes in the second quarter can
also be foreseen in terms of profitability.  He added that
earnings in the company are failing, both on "short hop and
regional routes".

It is noted that the last quarterly results of Wideroe showed a
loss of NOK26 million after two years of solid figures.

Negotiations with employee unions on how the cuts will be handled
are apparent in the next weeks.

CONTACT:  WIDEROES FLYVESELSKAP ASA
          Eyvind Lyches vei 10
          PO.Box 312
          N-1301 San dvika
          Phone: 67 11 60 00 (Adm.)
          Fax: 67 11 61 95 (Adm.)
          Fax: 67 11 61 90 (Adm.)


=========
S P A I N
=========


TERRA LYCOS: Telefonica Confirms EUR1.7 Billion Bid for Control
---------------------------------------------------------------
Telefonica finally admitted last week it is buying the remaining
shares of Terra Lycos, its very own subsidiary offering Internet
services, the Financial Times said late last week.

After denying the long-standing rumor, the company admitted it is
offering EUR5.25 for each share or EUR1.7 billion, valuing the
company EUR3.26 billion or less than half the EUR13-price tag at
the initial public offering in November 1999.  Although
relatively low, Telefonica claims the offer values Terra Lycos at
15 percent above its average share price over the past six months
and 51 percent above its business value.  The Internet business
has cash reserves of EUR1.73 billion, equivalent to EUR3.09 a
share, the paper said.  If accepted by shareholders, Telefonica,
which currently hold a 36.5% stake in Terra Lycos, will end up
with a 75% shareholding.

Terra Lycos has yet to report a profit, said the Financial Times,
partly because of a slump in the online advertising market and
competition from Telefonica to deliver high-speed Internet
access, a strategy whose logic analysts have long questioned.
Telefonica, on the other hand, is expecting EBITDA of EUR269
million in the 2003 to 2006 period after absorbing Terra Lycos.


=====================
S W I T Z E R L A N D
=====================


ZURICH FINANCIAL: Bank One to Purchase Zurich Life for US$500MM
---------------------------------------------------------------
Zurich Financial Services Group and Bank One Corporation (NYSE:
ONE) announced definitive agreements for Bank One to acquire
Zurich Life, a large U.S. life insurance group of companies, from
Zurich.

Bank One will pay Zurich approximately USD 500 million in cash.
The total value paid to or retained by Zurich will be in excess
of USD 1 billion, the IAS value of Zurich Life as of December
2002. This value is comprised of the USD 500 million of cash
received from Bank One and the capital in Kemper Investors Life
Insurance Company (KILICO), plus additional assets and businesses
retained by Zurich. Finally, Bank One will provide administration
and assume, through reinsurance, certain lines of business
currently underwritten by KILICO. This transaction is expected to
close in the third quarter of 2003, pending regulatory approvals.

James J. Schiro, Chief Executive Officer of Zurich Financial
Services, said, "This is a positive move for the Zurich Life
companies, their customers, distribution partners and employees
as Bank One's strong distribution channels will leverage Zurich
Life's existing distribution and its capability in manufacturing
high quality life insurance and annuity products. The sale of
Zurich Life is consistent with our decisions to reallocate
capital to non-life businesses that can deliver well in excess of
our earnings hurdle rate. With this transaction, Zurich is on
track towards meeting its goal of generating USD1 billion in
risk-based capital through divestments."

Zurich Life, based in Schaumburg, Ill, is a top-10 writer of term
life insurance in the U.S. serving its customers through
independent general agencies and a direct-to-consumer life
insurance agency, Zurich Direct. It is a significant writer of
fixed and variable annuities, with a recognized expertise in the
teachers' market. Zurich Life also underwrites universal life and
has a substantial share of the business-owned life insurance
market. As of December 31, 2002, Zurich Life had approximately
USD 292 billion of direct life insurance in force.

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.

Zurich Life (http://www.zurichlifeus.com)is comprised of Federal
Kemper Life Assurance Company, Kemper Investors Life Insurance
Company, Zurich Life Insurance Company of America, Zurich Life
Insurance Company of New York and their subsidiaries. In
addition, Federal Kemper Life Assurance Company provides
management services to Fidelity Life Association, a Mutual Legal
Reserve Company.

CONTACT:  Zurich Financial Services
          Investor Relations
          Reinhard Stary
          Phone: +41 (0) 1 625 38 80


===========================
U N I T E D   K I N G D O M
===========================


ABERDEEN ASSET: Appoints Head of Emerging Markets Debt
------------------------------------------------------
Recognizing growing international interest in the Emerging Market
Debt asset class, Aberdeen has appointed Colm McDonagh as Head of
its dedicated Global Emerging Market Debt Team, and is
transferring Marcelo Saez to that Team from Aberdeen's Sydney
office.

Colm has specialized in emerging market debt since 1996 and
joined Aberdeen as a senior bond fund manager, dedicated to that
asset class, in 2000. The Emerging Market Debt Team has
responsibility for the overall investment management of dedicated
total return funds and crossover allocations from other, wider
mandates into emerging market debt. The three-man team is a fully
integrated unit within Aberdeen's extensive Fixed Interest Team
of 24 investment professionals, headed by Global Head of Fixed
Interest, Rod Davidson - but is 100% dedicated to the specialist
asset class of emerging market debt.

The move follows the announcement today of the sale of management
rights to Aberdeen's Guernsey "PCC" range of Emerging Market Debt
funds to Convivo Capital Management Ltd, in a move which furthers
Aberdeen's ongoing program of cost-cutting and disposal of non-
core businesses. Julian Adams, the Fund's current manager, will
become Chief Executive of Convivo.

Martin Gilbert, Chief Executive of Aberdeen Asset Management,
said:

"We are delighted with the transaction as part of our on-going
program of cost-cutting and disposing of non-core businesses.
Although this is a relatively small transaction, involving only
some [GBP37m] of assets under management, it eliminates an entire
specialist fund range from our overheads. We remain committed to
Emerging Market Debt as an asset class but we will focus our
efforts on product development through other fund ranges where we
offer a full suite of funds and asset classes. We wish Convivo
well for the future."

Aberdeen continues to manage a number of Emerging Market Debt
mandates including the top performing Aberdeen Global Sovereign
High Yield Fund domiciled in Luxembourg. The Fund's investment
objective is to maximize long term total return by investing
primarily in international high-yield fixed interest securities
including US, international and emerging market debt instruments,
issued by emerging country governments, supranational
organizations or government related bodies. This is a specialist
fund which is not authorized for retail sale in UK but is held by
institutions and professional investors worldwide. Since launch
in August 2001, the fund has returned over 44.7% (15/8/01-
14/5/03, source: Lipper initial charges applied, gross income re-
invested - US dollars).

Commenting on the appointments, Rod Davidson, Global Head of
Fixed Interest for Aberdeen, said:

"We see excellent investment opportunities in emerging market
debt but it is a specialist asset class and one which requires
dedicated, professional resource. In Colm and his team we have
high quality fund managers and analysts with the experience to
deliver consistent strong performance. The EM Debt Team is fully
integrated within our wider team providing input into Aberdeen's
overall global fixed income investment strategy and allocation."


AES DRAX: Extension of Six-month Standstill Agreement Likely
------------------------------------------------------------
Struggling power generator, AES Drax, is believed to be close to
reaching a deal with creditors that will extend a standstill
agreement inked in November last year, The Times said late last
week.

Last Friday, the British daily said a new standstill agreement
could be signed over the weekend after an intense weeklong
negotiation with banks and bondholders.  Sources privy to the
talks told The Times initial indications are pointing to a
positive development.

Considered UK's biggest power station, AES Drax was forced to
negotiate the six-month standstill deal after losing its most
lucrative sales contract.  The collapse of TXU last year, which
bought 60% of Drax's output at prices significantly above current
market levels, nearly brought down the company as well.

The Times says Drax owes a consortium of 53 banks about GBP800
million and GBP400 million in bonds.  Last year creditors agreed
not to force the company into administration if Drax discussed
restructuring plans.  The standstill expires at the end of this
month.

An option for Drax, according to the paper, is a debt-for-equity
swap.  AES is thought to be keen to retain a small equity stake
in Drax in the swap, which would be worth about GBP1 billion. The
banks are thought to favor holding on to Drax in the hope that
they can sell the plant when the wholesale electricity market
recovers.


AMEY PLC: Ferrovial Makes Its Tender Offer Unconditional
--------------------------------------------------------
Ferrovial this morning declared unconditionalits tender offer for
U.K. service group Amey Plc, which it presented on 25 April.

This declaration entails taking control of Amey as of this date.
Thus far, Ferrovial, through its subsidiary Ferrovial Servicios,
has attained 88.6% of the capital of Amey and could increase this
percentage in the next few days through acceptance of the bid by
a number of institutional investors.

Consequently, the payment to shareholders will be made from 11
June.

Delisting and new Board of Directors

Ferrovial also announced that it has commenced the proceedings to
delist Amey from the London Stock Exchange, which could take
effect on 26 June.

Five new directors have been appointed to Amey's Board to
represent Ferrovial: Jos, Marˇa P,rez Tremps (Director and
Company Secretary of Ferrovial); Nicol s Vill,n (Chief Financial
Officer of Ferrovial); I¤igo Meir s (General Manager of
Ferrovial's services division), as Vice-Chairman of the Board;
Santiago Olivares (Head of Development in Ferrovial's services
division) and Jos, Leo (General Manager of Ferrovial's
telecommunications divisi˘n), who will also be appointed Chief
Financial Officer of Amey. Sir Ian Robinson, Amey's current
Chairman (non-executive), will remain on the Board, as will three
executives of Amey.

Strengthening the services division and expanding internationally
The operation, which has a major strategic component, strengthens
Ferrovial's services area and its international strategy. Amey's
activities involve comprehensive management of infrastructure
(roads and railways and underground rail) and facility management
(maintenance and integrated management of buildings and
facilities).

Amey is one of the leading players in the area of private
financing and management of infrastructure and services for
government under PFI (Private Finance Initiative) and PPP (Public
Private Partnership) formulas.

Amey also has a stake in the maintenance concession for part of
London Underground (Jubilee, Northern and Piccadilly Lines).

Ferrovial is already present in the British Isles through its
ownership of Bristol Airport and Belfast City Airport. It also
owns a toll road concession in the Republic of Ireland (N4/N6).
Ferrovial is currently present in Canada, Poland, Australia, the
United Kingdom, Portugal, Ireland and Latin America.

In 2002, international activities provided 28% of group revenues
and 42% of operating profit.


AMP LIMITED: Outlines Impact of Changes on Property Trust
---------------------------------------------------------
AMP Limited outlined the impact of potential changes to its
listed property trust business, managed by its Australian asset
management company, AMP Henderson Global Investors.

AMP Shopping Centre Trust (ART) and the AMP Diversified Property
Trust (ADP), part of AMP Henderson's Listed Property Trust (LPT)
portfolio, are both subject to takeover offers. If these offers
succeed, the impact on AMP is not material. Changes include:

-- Removal of AMP Henderson as Responsible Entity. This will
result in a reduction in assets under management of approximately
A$1.6 billion.

-- Management rights to around 60 per cent of the current value
of the shopping centres in the ART portfolio will be retained by
AMP Henderson. This reflects an agreement reached today between
Westfield Trust and AMP Life. These centres include Pacific Fair,
Garden City Booragoon, Warringah Mall and Macquarie Centre. This
means AMP Shopping Centres Pty Ltd (a subsidiary of AMP
Henderson) will continue to manage these centres.

-- The annualised net profit after tax impact on AMP Henderson
will be a reduction of around A$7.3 million. This takes into
account the ongoing management of some shopping centres.

-- Removal of AMP Henderson as Responsible Entity. This will
result in a reduction in assets under management of approximately
A$1.8 billion.

-- As part of its offer, Stockland has entered into a number of
arrangements with AMP Henderson and AMP Shopping Centres Pty
Ltd1. These arrangements will result in a one-off payment of
A$39.3 million2 to AMP Henderson, a figure which represents 2.1
per cent of assets under management. The book value of these
rights is around A$67 million.

-- In addition, Stockland and AMP Henderson in New Zealand will
enter into a joint venture under which the groups will joint
asset manage ADP's three New Zealand shopping centres and
potentially pursue other opportunities in New Zealand.

-- The annualised net profit after tax impact on AMP Henderson
will be a reduction of around A$4.2 million.


AMP Chief Executive Officer Andrew Mohl said AMP Henderson was
not immune to the consolidation currently occurring in the LPT
sector.

"Given the shakeup taking place in the property trust sector, the
AMP Group has achieved a number of favourable outcomes for
shareholders. These include a payment from Stockland as well as
the ongoing management of a number of key assets in the ART
portfolio," he said.

"Most importantly for AMP, AMP Henderson remains one of the
largest property asset managers in Australia. AMP continues to
manage around A$10 billion worth of Australian property assets."
AMP Henderson has a diversified suite of property assets across
the listed, unlisted and pooled sectors. Two-thirds of its
business is in the direct unlisted property sector.

CONTACT:  AMP LIMITED
          Level 24, 33 Alfred Street
          Sydney NSW 2000 Australia
          ABN 49 079 354 519
          Contact: Mark O'Brien, Investor Relations
          Phone: 9257 7053


BIG FOOD: Preliminary Statement Fifty Two Weeks to 28 March 2003
----------------------------------------------------------------
Highlights

--  Total net sales GBP5.1 billion (2002: GBP5.2 billion)

--  Operating profit GBP62.4 million (2002: GBP76.1 million)*

--  Second half operating profit GBP44.2 million (2002: GBP42.7
million)*

--  Profit before tax  GBP37.1 million (2002: GBP42.9 million)*

--  Profit before tax GBP14.5milion (2002: GBP12.8 million)

--  Earnings per share 3.5p (2002: 2.8p) and adjusted earnings
per share 9.3p (2002: 11.4p)

--  Final dividend of 1.5p (2002: 1.5p). Total dividend for the
year 2.5p (2002: 2.5p) per share

--  Improved second half performance at Iceland; good overall
progress at Booker; successful trials of key strategic
initiatives prior to rollout in current year.

--  Strong performance of Iceland new format stores with average
uplift in like for like sales of 14.1%

* before goodwill amortisation and exceptional items

Commenting on the statement Chief Executive Bill Grimsey said:

'We made good progress in laying the foundations for the future
growth of the Group. The trials of our strategic initiatives have
proved successful and we are now focussed on implementing our
strategic plans to unlock value from fundamentally attractive
business streams.'

THE BIG FOOD GROUP PLC PRELIMINARY STATEMENT FIFTY TWO WEEKS TO
28 MARCH 2003

Summary

A year of many achievements was masked by the decline in the
Iceland business during the first half.  The Iceland business has
since shown an improving sales trend and recovered its margins
producing a strong second half profit performance.  Booker had a
good year producing profitable like for like sales growth in non-
tobacco and remained a strong cash generator.  Overall, H2 profit
before tax, amortisation of goodwill and exceptional items was
ahead of the same period in the previous year.

A number of the initiatives which are the key components of the
Company's strategy have been successfully trialled and will be
rolled out further during the coming year.

Results

Profit before tax, amortisation of goodwill and exceptional items
was GBP37.1 million compared with GBP42.9 million in the
preceding year.  The split of these profits was as follows:

                H1                    H2                    Year
             GBPmillion              GBPmillion        GBPmillion

2002/03         6.6                  30.5                   37.1
2001/02        16.7                  26.2                    42.9

In addition to the first half issues at Iceland, the net cost to
profits of the refinancing completed on 18 June 2002 was
approximately GBP6.6 million whilst floods at two Booker branches
cost approximately GBP1.6 million

Adjusted earnings per share (as shown in note 5 to the accounts)
were 9.3p (2002: 11.4p)

Cash flow was in line with expectations.

Dividend

A final dividend is proposed of 1.5p (2002: 1.5p) bringing the
total dividend for the year to 2.5p (2002: 2.5p).  The final
dividend is payable on 25 July 2003 to shareholders on the share
register at 27 June 2003.

Sales

Net sales for the 52 weeks were GBP5,061 million (2002: GBP5,220
million) and were derived from the business units as follows:

                                                      GBP million
Booker                                                    3,455
Woodward                                                     96
Iceland                                                   1,510

                                                          5,061

Like for like sales for the same period were as follows:

                                          %
Group                                   (2.0)
Booker                                  (1.3)
- tobacco                               (4.4)
- non tobacco                            1.2
Woodward                                10.6
Iceland Foods                           (4.3)

Analysis of the business units was as follows:

Booker

Booker continued to make progress in a difficult market.  Non
tobacco sales grew 1.2% over the year, continuing the trend seen
over two years and recovering from the decline experienced over
the Christmas period.  Sales to catering customers, which account
for 43% of non-tobacco sales, grew ahead of the retail segment.
Sales of phone cards, which are included with tobacco, suffered
as a result of technology developments and accounted for 1.5% of
the decline in tobacco sales.
Tobacco itself was affected by the changes to import regulations
in the autumn and it is estimated by the tobacco industry that
non UK duty paid product accounts for 28% of total consumption.

During the year, Booker developed its strategic position within
the wholesale market: Premier customers grew from 705 to 1,001; a
drop shipment trial was successfully concluded and this
initiative to gain incremental sales will be rolled out
nationally during 2003/04; and a delivered hub mechanism was
started in Wolverhampton in order to provide the platform for
increased penetration into the growing delivered wholesale
market.  The new branch at Greenford trialled a distinctive
layout to better service the retail and catering customer
segments and this format was further developed at the new Reading
branch opened in March. Booker opened six branches during the
year, including five relocations and one new branch.  It has made
progress in supplier partnerships with category business planning
and co-managed inventory.

Woodward Foodservice

Woodward Foodservice enjoyed good growth during the year.  The
ambient distribution centre was opened in Rhyl to provide an
important product assortment to complement the strengths in
frozen food and fresh fish.  As Woodward adds to its product
portfolio it continues to make inroads into the national account
segment where full range is becoming of increasing importance.

Iceland Foods

Iceland Foods suffered during H1 as it attempted to gain sales
through a too aggressive move towards a value driven proposition.
Both volumes and margins declined.  A return to the more
traditional promotional package was implemented from July and
margins quickly recovered.  Sales during H2, whilst still down
year on year, also responded favourably.  During the year, 33
stores were refurbished as part of the  strategic development to
reposition Iceland in the high street.  Four formats were
trialled, three of which were successful, enjoying an average
increase in like for like sales of 14.1%.  The Company plans to
carry out a further 100 refits during 2003/04. Each of the
refitted stores will offer improved product ranges and a more
customer-friendly shopping environment in tune with the changing
needs of our customers.  Iceland Home Shopping saw sales improve,
benefiting from the new web site and the CD ROM based customer
order service and is now concentrating on the store pick model
following dedicated pick centre trials that proved uneconomical.
As more stores are converted to the new format, Iceland.co.uk
will provide a wider range for customers shopping on the
Internet.

Integrated platforms

A key feature of our strategy to realise the benefits of being an
integrated food group is the development of common infrastructure
and supply chain platforms.  Having realised the immediate
synergy benefits available from the merger of the Iceland and
Booker businesses, we are now focussing on driving efficiencies
and effectiveness through our shared service centre and group
wide departments.

Early returns from these initiatives included Group procurement
e-auctions and collaborative managed inventory programmes with
suppliers. Fifty two e-auctions were completed during the year
representing GBP130 million of turnover with GBP17 million per
annum of savings which have been re-invested in price to maintain
the Group's competitive position. Cost savings and efficiency
gains will continue to build as these programmes are expanded. A
shared Finance Service Centre was established at Deeside to more
efficiently support the finance and planning functions for the
whole business.

Operating Profit

Operating profit, before exceptional items and goodwill
amortisation, by business unit was as follows:


               H1                       H2
     24 weeks                 28 weeks              52 weeks
  GBP million                GBP million             GBP million

Booker   26.1                     30.8                  56.9
Woodward (1.0)                    (1.6)                 (2.6)
Iceland  (6.9)                    15.0                   8.1
         18.2                     44.2                  62.4

Booker operating profit increased by GBP2.3 million, a  4%
increase over the previous year on total sales down 2.5%.  Before
taking account of the additional rents payable of GBP4.8 million
following the sale and leaseback, underlying operating profit was
up over 13%.  The main  contributors to this performance were an
improvement in buying margins and a reduction in stock loss.

Woodward Foodservice has continued to develop its business
strongly and is investing in current costs for future growth.
This rate of investment will increase in 2003/4 as the
infrastructure for real market share growth is put in place ahead
of the revenue flows.

Iceland operating profit recovered from the loss in H1 and the
performance in H2 was similar to that in the previous year,
despite the additional rents payable of GBP2.6 million (GBP3.8
million for the year) under the sale and leaseback.

Exceptional Items

Exceptional items for the year comprised the following elements:

                                                     GBP million
Integration                                             7.1
Business closures                                       2.1
Asset write down                                        1.1
Provision for leases                                    2.2
Other                                                   0.5

Operating exceptional items                            13.0

Profit on fixed assets                                (17.8)


The integration costs relate principally to the creation of a
Finance Shared Service Centre. Business closures include the
Sovereign confectionery business and the Home Shopping pick
centres.

Profit on fixed assets includes the sale and leaseback
transaction.

Cash Flow

Cash flow during the year comprised:
                                    GBP million
Operating profit before goodwill amortisation and exceptional
items                                 62.4
Depreciation and amortisation         77.8
                                     140.2
Interest                             (29.5)
Tax                                    4.8
Dividends                             (8.3)
                                     107.2

Working capital                      (34.4)
Capital expenditure                  (68.7)
Fixed asset disposals                130.0
Provisions                            (4.5)
Operating exceptional items           (5.6)
Other                                 (2.4)

Net cash flow                        121.6

Net debt 29 March 2002              (404.2)

Net debt 28 March 2003              (282.6)

Adjusting for the net proceeds from the sale and leaseback of
GBP123.4 million, net cash outflow for the year was GBP1.8
million.  Average net debt since the refinancing on 18 June was
GBP273.3 million.

Working Capital was affected by the reduction in sales and the
timing of Easter. Underlying efforts to improve stockholding
efficiencies continue.

Capital expenditure for the year was well within the parameters
of the strategic plan although ahead of the previous year as a
number of key initiatives were implemented.   Expenditure on
branches was GBP28.0 million, including the Iceland refit
programme; IT equipment accounted for GBP13.0 million and GBP5.0
million was spent on the home delivery fleet.

Interest

As a result of the re-financing, interest cost for the period 18
June 2002 to 28 March 2003 fell by GBP1.0 million.  The increased
interest cost arising from the high yield bond was offset by the
reduction in debt resulting from the sale and leaseback
transaction.

Interest paid included GBP5.2 million of costs incurred to exit
interest rate swaps.

Outlook

The year 2002/03 saw a decline in market growth for the food
retail sector as well as an increased level of corporate
activity.  Both of these issues point to ever increasing levels
of competition in the supermarket and convenience store segments
served by Booker and Iceland.

Despite this more challenging industry background, we enter the
new financial year confident that a solid base for the longer
term growth of the business has been established.   We are
investing in our brands and products to meet the changing needs
of today's customers.  Reinvigorating what Iceland has to offer
will enable us to maximise the potential of our 754 stores.
Booker is evolving to enable it to capture more of the higher-
growth independent catering market whilst building on its leading
market position within the independent retail sector.  Woodward
is well placed to continue its rapid development, although
revenue investment to achieve this will continue to constrain
performance in the short term.

We have established the platforms that will enable us to unlock
value from fundamentally attractive business streams.

Presentation to Analysts

A presentation to analysts will be made today at 9.15am for
9.30am at The Smeaton Vaults, The Brewery, Chiswell Street,
London, EC1.

To see financials: http://bankrupt.com/misc/BIG_FOOD.htm

CONTACT:  THE BIG FOOD GROUP
          Bill Grimsey, Chief Executive
          Phone: 0207 796 4133 on 29 May 2003
          Bill Hoskins, Finance Director

          Hudson Sandler
          Andrew Hayes
          Noemie de Andia
          Phone: 0207 796 4133


BRITISH AIRWAYS: CEO Denies Entertaining Merger Offers
------------------------------------------------------
British Airways CEO Rod Eddington admitted in a company
newsletter that he is closely monitoring reports that Virgin
Atlantic and bmi british midland are in talks about a possible
tie-up and that indeed he is willing to take part in any
consolidation.

He, however, clarified that the carrier will only entertain the
idea when it has already fully recovered: "We have been
monitoring events closely because any such cooperation (between
bmi and Virgin) in our own backyard could have wide-reaching
implications for our business.  We have to take a long-term view.
We want to participate in the consolidation process as and when
it happens -- but we can only do that if our business is strong,"
he said.

After posting a GBP200 million loss last fiscal year, the company
reported earlier this month positive figures, including a GBP1.4
billion cut on overall debt.  Still, the company has GBP5 billion
in borrowings, which must be reduced further if the carrier
should ever consider buying another airline.

Mr. Eddington added: "We must not allow this issue to deflect or
distract us from our overriding aim -- improving the robustness
of our own airline and returning it to sustained profitability.
As our debt reduces, our balance sheet will strengthen, which
will put us in a good position to exploit any opportunities for
growth as and when they arise."


CABLE & WIRELESS: Latest Restructuring to Cut HQ Staff by Half
--------------------------------------------------------------
Senior executives of Cable & Wireless have reportedly been
ordered to draw up severance terms for several hundred employees
in the U.K., the Financial Times learned last week.

According to the British daily, at least half of the staff in the
London headquarters would be dismissed in the latest phase of the
company's restructuring.  The paper said newly appointed Chairman
Richard Lapthorne will explain this latest redundancies and his
plan for loss-making C&W Global during the announcement of the
results next week.

Together with new CEO Francesco Caio, who was appointed in April,
Mr. Lapthorne has been thoroughly reviewing company operations
since his appointment earlier this year.  The paper says the
telecoms operator is understood to be committed to retaining both
the UK and Japanese arms of Global.  But its previous stance of
holding on to Global's loss-making U.S. arm is believed to have
changed in recent days, with buyers for this division being
sought.

According to the paper, there are very clear indications that the
U.S. arm will be closed or sold, one of which is the revelation
that the firm has been unwinding property lease commitments in
the U.S.  Last year, analysts and investors were shocked at
revelations of property lease commitments in the U.S. totaling
GBP400 million, signaling potentially significant costs if the
company shut down its U.S. arm, the paper said.

"The re-think over strategy is expected to lead to the imminent
departure of Robert Lerwill, deputy chief executive and head of
C&W Regional, the telecoms operator's fixed and mobile businesses
in the Caribbean," the Financial Times said.

Bill Trent, a former finance director at Energis; and LEK
Consultants, a firm of strategy and management consultants; are
advising Cable & Wireless.


CBR GROUP: Engineering Unit's Lease on Life Extended Via Buyout
---------------------------------------------------------------
The only profitable subsidiary of CBR Group, which went into
administration last month, will not be closed along with other
sister companies, Yorkshire Today said late last week.

According to the paper, a management team consisting of Managing
Director Keith Copley, Company Secretary Julian Levick, Technical
Director Ian Allatt and Works Director Steven Vause, bought the
140-year-old CBR Engineers from Ernst & Young, the company's
administrator who had threatened to close the unit on May 9.

Mr. Copley would not reveal how much his group paid, but said it
was "into the hundreds of thousands".

"Things started to go wrong with the group but we weren't told
about it until the administrator was appointed.  We hadn't
considered a management buyout until we were approached by
consultants at Corporate Solutions in Leeds, which pulled the
deal together," Mr. Copley told Yorkshire Today.

"The firm has traded profitably since 1989 but it's frightening
owning your own business, although we're all now feeling a little
more comfortable," he said.

"We are delighted to have achieved this sale and secured the jobs
for all the employees.  This is a profitable business that had
only been brought down by the performance of other parts of the
CBR Group," Hunter Kelly, a partner with Ernst & Young's
corporate restructuring team, told Yorkshire Today.

Of the group's other interests, CBR Commercial Cleaning was
closed down with the loss of 350 part-time jobs; CBR Services,
its asbestos business, which had 120 workers, was sold to Hertel
UK the Middlesbrough-based arm of the Dutch industrial cleaning
group; and Steadfast Scaffolding was sold to Deborah Services of
Cleveland last month, the paper said.

CBR Engineering, which has a turnover of GBP1.5 million, was
founded in 1865 as George Hepworth & Sons and bought by CBR in
1989, the paper added.


CORDIANT COMMUNICATIONS: Disposes 70% in Australian Businesses
--------------------------------------------------------------
Cordiant has entered into an agreement conditional on, amongst
other things, shareholder approval, to dispose of a 70% interest
in its principal Australian businesses, including George
Patterson Bates.  It is proposed that TCG is acquired by The
Communications Group Holdings, a new corporate entity, which on
completion will be owned 55% by funds advised by Pacific Equity
Partners, 15% by TCG management and 30% by Cordiant.  This
transaction represents a first step in Cordiant's stated plan to
reduce debt through a program of non-core asset disposals.

The cash proceeds payable to Cordiant in respect of the disposal
of TCG are A$61.2 million (o24.6 million) which, after deduction
of transaction costs, will be used to repay debt. Prior to
completion, Cordiant will also extract surplus cash of A$41.0
million (o16.5 million) which will be used to reduce net
borrowings.

The retention by Cordiant of an equity interest in TCG through
TCGH is consistent with the practice of other international
agency groups, many of which have established or retained a
presence in the Australian market through minority equity stakes.
The Bates Group will continue to service its existing
international clients in the Australian market through TCGH,
which will, as part of the transaction, enter into network
membership agreements with each of the Bates Group networks, in
order to preserve continuity of service levels.

The Campaign Palace, one of Australia's leading creative
agencies, which has always operated independently of George
Patterson Bates, is not included in the transaction and will
remain part of Cordiant.

In a separate transaction, it is intended that Cordiant will sell
its interest in Western Australia based agency Marketforce to its
management.

The Communications Group

The Communications Group is one of Australia's largest
advertising and marketing communications groups, and provides a
range of services to its clients including advertising, brand
strategy, marketing strategy, media planning and buying, direct
marketing, customer relationship management, public relations,
sales promotion, interactive services, graphic design and retail
store design.  The Communications Group has approximately 900
employees, with its main offices located in Sydney, Melbourne,
Brisbane and Auckland.

George Patterson Bates, the main component of TCG, was founded in
1934 and acquired by Bates Worldwide in 1964. In recent years TCG
has expanded its service offering into branding and design,
public relations, sales promotion, interactive and healthcare
agencies.

In the year ended 31 December 2002, TCG's businesses on a
combined basis generated revenues of A$128.4 million (o51.6
million) and profit before tax of A$5.1 million (o2.1 million).
Net assets attributable to TCG as at 31 December 2002 were A$21.1
million (o8.5 million).

David Hearn, Chief Executive, commented: "This is a good deal for
Cordiant and for the clients and employees of our Australian
businesses.  This transaction will allow the Bates Group to
continue to service its international clients effectively whilst
at the same time executing the first stage of our debt reduction
program."

Separately the Board continues to advance its other discussions
as indicated in Cordiant's announcement of 12 May, and is seeking
to bring them to a conclusion in the near future in the best
interests of the Group and its clients. However, none of the
proposals currently under consideration is likely to result in an
offer at or near the current share price.

A circular will be sent to shareholders in due course seeking
their approval for the disposal of TCG.

Note: The exchange rate used in this announcement is A$2.49 to
GBPo1.00 as at 28 May 2003

CONTACT:  College Hill
          Phone: +44 (0) 20 7457 2020
          Alex Sandberg
          Adrian Duffield


EQUITABLE LIFE: Results of Equitable Life Annual General Meeting
----------------------------------------------------------------
Equitable Life announced Thursday the results of the resolutions
put to members at the annual general meeting held on May 28,
2003.

The following resolutions were passed on a show of hands:

-- To receive the Reports and Accounts
-- To reappoint the Auditors
-- To approve the adoption of the new Articles of Association
-- The votes on a show of hands were consistent with the proxy
votes received, which were as follows:

Resolution                                        For   Against
Resolution 1: To receive the Reports & Accounts 260,595 15,986
Resolution 2: To reappoint the Auditors         260,886 15,791
Resolution 3: To approve the adoption of the
              new Articles of Association       243,709 33,864

A poll was held for the other resolutions. Some members who
returned proxy voting forms left their votes to the discretion of
the chairman of the meeting. As had been explained in the voting
information sent to members, where votes were left to his
discretion, the chairman voted in accordance with the Board's
recommendations. Votes at the discretion of the chairman of the
meeting and how he voted, are included in the results of the
table below, shown in brackets.

Resolution                               For              Against
Resolution 3: To approve the Directors
              remuneration report        211,288 (67,654) 62,726
Resolution 4.1: To re-elect Nigel Brinn  233,093 (62,229) 40,983
Resolution 4.2: To re-elect
                Sir Philip Otton         219,805 (63,674) 54,226
Resolution 4.3: To re-elect
                Charles Thomson          225,924 (61,650) 48,185
Resolution 4.4: To re-elect
                Andrew Threadgold        218,796 (65,565) 55,199
Resolution 4.5: To elect Rodney Allen    124,854 149,037
(100,986)

As there were four vacancies arising to be filled, the following
were re-elected Directors as a result of the poll: Nigel Brinn,
Sir Philip Otton, Charles Thomson, Andrew Threadgold.


ETHICON LIMITED: To Close Edinburgh Plant; Cut Livingston Jobs
--------------------------------------------------------------
Johnson & Johnson subsidiary, Ethicon Limited, has decided to
close its 56-year-old factory in Sighthill, Edinburgh to move
operations elsewhere, The Scotsman reported Thursday.

The paper says more than 850 jobs will be lost at the company
historically known to prefer husbands and wives on its payroll.
Ethicon Vice-President of European operations, Neil Ryding, told
The Scotsman the decision won't likely be reversed even if the
Scottish Executive extends the company more aid.  He, however,
promised to provide employees with severance packages that are
"well ahead" of the legal minimum.

Aside from the Sighthill plant, job cuts are also being lined up
at the Livingston plant, which has previously received grant
funding from the Scottish Executive worth up to GBP700,000,
although manufacturing operations will continue at the site, the
paper said.

"This decision has not been arrived at easily.  We deeply, deeply
regret the impact this will have on our employees and will do
everything we can to help them over the next two years. Our
Scottish operations manufacture a wide range of products at
fairly low volumes.  We can rationalize our whole manufacturing
process much better by moving work to our larger volume plants
overseas," Mr. Ryding told The Scotsman.

With about 1,400+ employees in the U.K., Ethicon produces
syringes and surgical dressings.  The Sighthill and Livingston
plants produce different product lines.  Most of the jobs lost
will move to Puerto Rico, although some of the lines are moving
to Brazil, Germany and the US, the paper said.  About 30
distribution jobs in Livingston will be moved to North Yorkshire.


INVENSYS PLC: Presents Preliminary Results for 2003
---------------------------------------------------
Key features

   -- Sales for continuing(1)operations of GBP4,258m (2002:
GBP4,623m).

   -- Operating profit for continuing(1) operations of GBP250m
(2002: GBP312m), including a GBP25m loss from Baan.

   -- Free cash flow of GBP87m (2002: GBP266m).

   -- Interest cover, based on EBITDA, of 4.3 times.

   -- Disposal programme announced in February 2002 successfully
completed, raising proceeds of GBP1.6bn for the year and GBP1.8bn
in total, ahead of schedule and GBP1.5bn target.

   -- Net debt GBP1,556m (2002: GBP3,016m).

   -- The Board is recommending no final dividend.

Chief Executive of Invensys, Rick Haythornthwaite, said:

'These results are disappointing. We have faced tougher
circumstances than we expected and the headline numbers are not
those we hoped for when we announced our strategy in February
2002.

'Our decision announced on 15 April to narrow the Group's focus
will result in a smaller, but financially stronger Invensys. On
completion of the new disposal programme, Invensys will be based
around Production Management(2), which has shown good underlying
margin recovery this year, and Rail Systems, which has grown both
sales and profits strongly over the last twelve months.'


GBPmillion                                   2003    2002

Sales

-- Continuing operations                  4,258   4,623

-- Total group                            5,018   6,972

Operating profit(3)

-- Continuing operations                    250     312

-- Total group                              330     549

Restructuring and other
costs of reorganisation                   (119)   (471)

Disposals(4)

-- Profit/(loss) on asset value/closure     539    (165)

-- Goodwill on disposals                 (1,321)   (479)

Interest                                   (113)   (170)

EPS

-- Basic                                  (41.2)p (24.8)p

-- Continuing operations before
   exceptional items, goodwill amortisation
   and goodwill impairment                  2.2 p    2.8 p


(1) Continuing operations are the Production Management, Energy
Management and Development divisions.

(2) Production Management, excluding Baan and APV Baker and
including IMServ.

(3) All references to operating profit throughout are stated
before exceptional items, goodwill amortisation and goodwill
impairment

(4) Closures and disposals of businesses and fixed assets.

These results are reported in the structure of the Group
applicable at 31 March 2003. Going forward, reporting of results
will reflect the new structure announced in April.


A presentation and webcast of the Group's preliminary results
will take place at 09.00 am today at Bloomberg, City Gate House,
39-45 Finsbury Square, London EC2A 1PQ. All details of the
announcement, presentation and webcast are available on
http://www.invensys.com.

Strategic update

In April, Invensys announced that it would be disposing of
further businesses and focusing on Production Management and Rail
Systems.

This decision was taken because the Board recognised the need to
secure a greater level of financial stability for the Group and
to enable sufficient investment of resource in the best of its
growth opportunities. On completion of these actions, the Board
believes that Invensys will offer investors higher-quality growth
prospects and leading competitive positions, financed by a
stronger balance sheet.

The Group is divesting its holdings, either partially or wholly,
in the product-based Appliance Controls, Climate Controls,
Metering Systems, APV Baker, Powerware, Lambda, Teccor, Hansen
Transmissions and Baan. These businesses, which had combined 2003
revenues of GBP2.6bn, are now managed in an expanded Development
Division.

Currently in the market there is a range of estimates for
proceeds from the sale of these businesses of up to GBP1.8
billion. Given our track record, we are comfortable that we can
substantially exceed this.

Proceeds raised from asset sales will be used to satisfy the cash
requirements of the Group, including reduction of indebtedness
and funding of pension schemes, as well as the investment
required to grow market share in Production Management and Rail
Systems and return the Group to overall profitability and EPS
growth.

For the year ended 31 March 2003, the retained businesses in
Production Management achieved sales of GBP1,276m, an operating
profit of GBP55m and an operating margin of 4.3% by controlling
costs and improving internal processes, while increasing its
order book. Investment in both engineering and software expertise
and a broad range of technological developments, such as I/A
Foundation Fieldbus, Foxboro A2, ArchestrA and Digital Coriolis,
are helping to regain market share and position the business for
long-term growth.

Rail Systems had sales of GBP404m for the year, operating profit
of GBP51m and an operating margin of 12.6%. Its order book has
also increased by 6% to GBP313m, with a growing pipeline of
tenders driven particularly in Europe and Asia by increases in
road traffic and population growth.

Financial summary

Sales from continuing operations were GBP4,258m (2002: GBP4,623m)
down 8% in absolute terms and reflecting a decline of 4% at
constant exchange rates (CER). Total Group sales for the year
were GBP5,018m (2002: GBP6,972m) reflecting the disposal of
businesses during the year. Operating profit for continuing
operations was GBP250m (2002: GBP312m), in line with our trading
update in April. Total Group operating profit was GBP330m overall
(2002: GBP549m). Total Group operating margin was 6.6% (2002:
7.9%), while operating margin for continuing operations was 5.9%
(2002: 6.7%), primarily due to the underperformance in a minority
of businesses.

These results include a GBP203m negative currency translation
impact on continuing operations' sales and GBP11m on operating
profit due to substantial movement in US dollar to Sterling
exchange rates over the year.

The charge for interest for the year was GBP113m (2002: GBP170m).
The reduction in the interest charge is predominantly due to the
reduction in net debt, following successful completion of the
disposal programme. Interest cover for the year, based on EBITDA
(pre-exceptional items), was 4.3 times. The covenant requirement
in our net debt facilities is 3.5 times on a twelve month rolling
basis.

The tax charge for the year was GBP57m (2002: GBP9m), including a
GBP9m charge on corporate exceptional items, reflecting an
underlying rate of 49%. The rate is impacted by a number of
factors including losses incurred in the year in the US and the
UK for which no tax relief has been recognised. The tax rate for
the prior year benefited from non-exceptional prior year releases
of GBP40m, compared to a GBP1m adjustment to the charge in the
current year.

The Group has recorded a loss of GBP1,442m compared with a loss
of GBP869m last year, primarily reflecting the loss on disposals
(after goodwill) and goodwill impairment in the current year. The
basic loss per share was 41.2p (2002:24.8p). Earnings per share
in respect of continuing operations before exceptional items,
goodwill amortisation and goodwill impairment were 2.2p (2002:
2.8p).

Free cash flow before dividends fell to GBP87m from GBP266m in
the previous year primarily driven by the reduction in operating
profits of GBP219m. The increase in working capital of GBP81m
experienced in the first half of the year was reduced to GBP56m
by the year end. This compares to an GBP8m positive movement in
the prior year. Reductions in expenditure of interest paid, gross
capital expenditure and restructuring costs saved the Group
GBP275m.

Restructuring programme

The restructuring programme charges were GBP119m, representing
2.4% of Group sales.

Goodwill impairment

In accordance with Financial Reporting Standard No 11: Impairment
of Fixed Assets and Goodwill, goodwill capitalised on the balance
sheet has been reviewed for impairment. This review has led to a
GBP585m impairment charge, principally related to Baan, being
recorded in the accounts.

Disposal programme

Closures and the sale of non-core businesses and fixed assets
generated a profit on net assets of GBP539m and a write off of
associated goodwill of GBP1,321m. The write off of goodwill
reduces shareholders' funds by GBP108m, as GBP1,213m has already
been eliminated against reserves on acquisition.

Operational Review

Our operating results include the performance of continuing and
discontinued operations. Continuing operations encompass our
three main divisions in existence during the year ended 31 March
2003: Production Management, Energy Management and Development.
Discontinued operations are those businesses that were sold
during the year including Rexnord, Flow Control, Sensor Systems,
Fasco Motors and Drive Systems.

Production Management Division

Sales GBP1,449m (2002: GBP1,584m), operating profit GBP28m (2002:
GBP33m), operating margin 1.9% (2002: 2.1%)

Sales were 9% lower than the prior year (5% CER). Sales in Europe
were significantly affected by the decline in the software
markets served by Baan. Sales in North America were 5% lower
(CER), reflecting the continued lower spending by organisations
served by the industrial automation businesses, while South
America, Asia Pacific and the Middle East and Africa all grew.
Sales for the year excluding Baan were 6% lower at GBP1,261m
(2002: GBP1,341m).

Excluding Baan, Production Management achieved strong underlying
improvements with a rise in operating profits from GBP28m to
GBP53m and in operating margin from 2.1% to 4.2%. This underlying
performance improvement was the result of aggressive management
actions to control contracts, project management and supply chain
costs.

Although costs were tightly controlled, the Division continued to
invest in new technologies. ArchestrA, the future platform for
all Invensys technology, was launched commercially and customer
feedback has been positive. Foxboro A2, an ArchestrA-based,
smaller scale complement to the I/A series, and Digital Coriolis,
our award-winning flow meter and transmitter, were also
successfully introduced to the market.

Process Systems manufactures process automation systems, advanced
process control solutions, safety and critical control
technologies and software focusing on the management and control
of information flow, in addition to providing project management
and services to the process automation industry.

Process Systems achieved a significant increase in operating
profit from GBP8m to GBP21m, despite a slight decline in sales to
GBP713m (2002: GBP768m). Increases in plant intelligence software
sales, including growth associated with Triconex, were offset by
lower process systems sales in Europe, Middle East and Asia.
Operating margin increased from 1.0% to 3.1%, after including
significant investments in technologies including ArchestrA,
through improved portfolio management and project execution and
the positive impact of performance initiatives.

APV provides process equipment, project management and services
to food, beverage and pharmaceutical producers in North America
and Europe, Middle East and Asia.

APV saw sales reduced to GBP291m (2002: GBP303m). Lower sales in
certain markets were more than offset by operational improvements
and a closer integration between the Products, Solutions &
Services businesses, contributing to an operating profit of
GBP11m compared to a GBP1m loss last year. Operating margin was
3.8%.

Eurotherm manufactures control and measurement instrumentation
for a wide range of industrial and process markets.

Eurotherm successfully maintained operating profits at GBP17m
(2002: GBP20m) as sales dipped from GBP127m to GBP119m in
difficult trading conditions impacted by over-capacity in the
semiconductor, steel and plastic processing industries. Operating
margin fell to 14.3% (2002: 15.7%).

Baan is a provider of enterprise application software and related
services.

Sales for Baan reduced to GBP188m (2002: GBP242m). Significant
cost and headcount reductions were not able to offset a decline
in high margin licence sales, resulting in an operating loss of
GBP25m, compared with an operating profit of GBP5m last year.

Baan's performance had a significant impact on the performance of
Production Management as a whole, reducing operating margin from
4.2% to 1.9%.

APV Baker is a leading manufacturer of process equipment
specifically for the dry food industry.

APV Baker maintained sales at GBP78m (2002: GBP77m) with contract
wins in the US bakery industry. Operating profit remained at
GBP2m and operating margin at 2.6%.

M&I manufactures measurement tools and instrumentation primarily
for the process industries.

M&I experienced a steady decline in markets resulting in a
decline in sales to GBP60m (2002: GBP67m). Despite this, the
positive impact of prior year restructuring and cost containment
programmes resulted in an operating profit of GBP2m compared to
an operating loss of GBP1m the previous year.

Energy Management Division

Sales GBP2,054m (2002: GBP2,341m), operating profit GBP170m
(2002: GBP237m), operating margin 8.3% (2002: 10.1%)

Sales were 12% lower than the prior year (7% CER) as the
continued weaknesses in IT/Telecoms affected Powerware and a
sharp decline in the commercial buildings markets impacted sales
in Climate Controls. Actions have been taken to reduce costs and
stabilise profits, including closing down loss-making operations.
Appliance Controls and Metering Systems, the other key businesses
in the Division, performed well in flat markets.

Operating profit for the year was down from GBP237m in the prior
year to GBP170m, with an operating margin of 8.3%. A decline in
operating profit at Climate Controls was the key factor in the
Division's performance. While businesses targeting the US and
European consumer markets, such as MapleChase, performed
steadily, Building Systems, Ranco Japan and Energy Services
reported significant declines in operating profit driven by
depressed end markets. Appliance Controls and Metering Systems
continued to deliver double-digit operating margins and Powerware
showed overall improvement in both margin and operating profit.

As we announced in April, all the businesses within the Energy
Management Division with the exception of IMServ, now part of
Production Management Division, have been transferred to an
enlarged Development Division and will be divested, either
partially or wholly, in due course.

Development Division

Sales GBP755m (2002: GBP698m), operating profit GBP52m (2002:
GBP42m), operating margin 6.9% (2002: 6.0%)

The Division continued to perform strongly with sales for the
year up 8% on prior year (11% CER), driven by growth in the rail
and wind turbine markets, which more than offset continued
weakness in IT hardware and semiconductor devices. Operating
profit for the Division was GBP52m, with an operating margin of
6.9%.

Sales in Rail Systems were up 15% to GBP404m (2002: GBP350m) for
the year with growth in the U.K., Spain and the U.S. Operating
profit increased 16% to GBP51m (2002: GBP44m), with an operating
margin of 12.6%. Its combination of proven technology and
engineering expertise resulted in the Westinghouse business
winning a contract worth over GBP850m to improve signalling,
safety and train operation on the London Underground. Other
notable current projects are the U.K. West Coast Route
modernisation, the Channel Tunnel Rail Link and a US$50m (GBP32m)
per annum maintenance logistics contract with Burlington Northern
Santa Fe Railroad in North America.

Although demand for its products remained strong, Hansen
Transmissions continued to be impacted by undercapacity. The
construction and commissioning of its new factory in Lommel,
Belgium is progressing on schedule and will alleviate this
situation.

Strong cost management in difficult markets allowed Teccor and
Lambda to control cash flows and minimize losses.

Acquisitions

There were no significant acquisitions made in the year. However,
in accordance with the announced process, GBP49m of outstanding
Baan Company NV (in liquidity) shares were acquired, bringing our
holding to 91.7%.

Disposals

The disposal programme generated GBP1,609m of sale proceeds and a
profit on net assets divested of GBP580m. After the write off of
associated goodwill, the net loss on disposal charged to the
profit and loss account was GBP741m.

Significant disposals and proceeds in the year included Rexnord
(GBP560m), Flow Control (GBP362m), Sensor Systems (GBP267m),
Fasco Motors (GBP236m) and Drive Systems (GBP92m).

Financing

Reduction of the Group's indebtedness is and will remain a major
focus. Debt has reduced to GBP1,556m from GBP2,667m as at 30
September 2002 and GBP3,016m as at 31 March 2002. The Group had
total borrowing facilities of GBP2,599m as at 31 March 2003, none
of which is dependent on credit ratings for availability.

During 2003/04, GBP73m of debt is repayable on privately placed
senior notes and notes issued under the Group's medium-term note
programme. There are no other significant debt maturities in
2003/04. A US$1,500m (GBP949m) syndicated revolving credit
facility matures in June 2004. It is our intention to finance the
repayment of this facility through disposal proceeds.

Pensions

During the year the Group has followed the transitional
disclosure requirements of the FRS 17 accounting standard and at
31 March 2003, the valuation of the Group pension schemes shows a
deficit of GBP931m. Because this is related to market movements,
the figure is sensitive and for example, if U.K. and U.S. equity
markets moved by 10%, our FRS 17 liability will change by
GBP150m.

The Group intends to fully adopt FRS 17 effective from 1 April
2003. Over the next two years Invensys will dispose of businesses
in order to deal with liabilities, a substantial proportion of
which relate to pensions. In these circumstances FRS 17 will
better represent the position of the Group.

The FRS 17 valuation reflects a snapshot of the pension scheme
assets and liabilities at 31 March 2003 and does not impact
employer's contributions. The triennial actuarial review of the
main U.K. pension scheme, with a valuation date of 5 April 2003,
has recently commenced and we expect a report to be available by
September 2003.

With regard to the funding of the U.K. and U.S. defined benefit
pension schemes it is the intention that employer contributions
will be resumed.

Other liabilities

Other liabilities included in the accounts that are being
actively managed include tax provisions of GBP256m relating to
older, primarily pre-merger issues and GBP140m of provisions
covering legal and environmental risks.

The Group has used invoice discounting facilities for several
years and the level of discounting at 31 March 2003 was GBP204m
(2002: GBP286m). Discounting facilities are repaid as businesses
are divested and the level of discounting will fall with the
announced disposal programme.

Board changes

Kathleen O'Donovan retired as Chief Financial Officer on 31
December 2002 and was replaced by Adrian Hennah. In January 2003,
Martin Jay, Chairman of VT Group plc, and Jean-Claude Guez, a
former management consulting partner of Accenture, were appointed
to the Board. Andrew Macfarlane, Group Finance Director of Land
Securities Group plc, joined the Board in March. Sir Graham
Hearne retired from the Board in March and Sir Philip Beck and
Lord Marshall have announced their intention not to stand for re-
election at the Annual General Meeting on 23 July. Martin Jay
will take over as Chairman following the Annual General Meeting.

Contract changes

In order that remuneration issues do not detract focus from the
more important operational goals of the management team, the
Remuneration Committee has agreed to the request by Rick
Haythornthwaite that his contractual notice period is reduced
from one year to one month and the existing change of control
provision is removed.

Dividend

As previously stated in the 15 April announcement, in the context
of the Group's performance for the year and the need to
strengthen the balance sheet, the Board is recommending no final
dividend be paid (2002: 1.0p). An interim dividend of 1.0p (2002:
1.0p) was paid on 4 March 2003.

Outlook

At this point it remains difficult to predict our markets. Our
focus over the coming year will remain the achievement of further
progress in our own productivity, in order to mitigate any
factors outside our control. The Production Management team last
year delivered a margin improvement of over two percentage
points, excluding Baan, and expect to deliver a further
improvement in the coming year, whether or not trading conditions
begin to strengthen. At the same time, the Group has a major
disposal programme underway and a detailed process to actively
manage the reduction of its liabilities.

To see financials: http://bankrupt.com/misc/Invensys_plc.htm

Contact:  INVENSYS PLC
          Victoria Scarth / Duncan Bonfield
          Phone: +44 (0) 20 7821 3529

          Brunswick
          Nick Claydon / Ben Brewerton
          Phone: +44 (0) 20 7404 5959


MARCONI CORP: Presents Preliminary Statement for 2002/2003
----------------------------------------------------------
-- Financial Restructuring complete; listing of Marconi
Corporation plc effective from 19 May 2003
-- Improved financial position post-Restructuring (March 2003
actual and pro forma)

     -- Marconi Group gross external debt reduced to GBP808m (pro
forma) from GBP3.9 bn (1)
     -- Adjusted cash balance GBP783m
     -- Net assets of GBP400m pro forma compared to net
liabilities of GBP3.3bn

-- Operational turnaround in Core business well advanced despite
lower sales volumes
-- Very tough market conditions translated to single-digit
declines in Core sales quarter on quarter to GBP426 million in
Q4; FY03 Core sales GBP1,874m
-- Seven point gain in Core gross margin (before exceptional
items) from 17.5% (Q1) to 24.4% (Q4); FY03 Core gross margin
(before exceptional items) 19.9%
-- Annualised Core operating cost run-rate (before goodwill
amortisation and exceptional items) reduced from GBP890m (March
2002) to GBP490m (March 2003)
-- GBP10m positive Core adjusted EBITDA in final quarter; FY03
Core adjusted EBITDA loss GBP140m
-- Two consecutive quarters of positive Core adjusted operating
cash flow after capex (Q3 GBP66m; Q4 GBP86m)

-- FY03 Group Key Figures:

    -- Group Sales GBP2.0bn; Group Operating Loss GBP729m; Group
Loss after Taxation GBP1.1bn; Group Loss per Share 39.9 pence

    -- Outlook: very tough market conditions prevail

      + Q1 04 Group sales expected to fall below GBP400m
      + FY04 financial targets revised: gross margin run-rate of
at least 27%; target annualised operating cost run-rate (before
goodwill amortisation and exceptional items) to be reduced below
GBP425m; Core breakeven sales reduced to around GBP1.5 billion

(1) Marconi plc reported Group debt of GBP3.9bn. Marconi
Corporation plc has higher Group debt of GBP4.8bn as Marconi
Corporation plc owed GBP403 million to Marconi plc and a
subsidiary of Marconi plc held GBP385 million of Marconi
Corporation plc bonds.

London - 29 May 2003 - Marconi Corporation plc (MONI) today
announced financial results for the three months and twelve
months ended 31 March 2003.

Commenting on the past year, John Devaney, Chairman of Marconi
Corporation plc, said: 'The successful completion of the
financial restructuring was a watershed for the business. It
enables us to look forward with greater optimism than at any time
since the downturn in our markets started two years ago.'

Commenting on the results, Mike Parton, Chief Executive, said:
'We have continued to make operational progress quarter on
quarter, reaching EBITDA positive in our Core business during the
final quarter as a result of improving margins and falling costs.
This is a tangible demonstration that the actions we are taking
to return the business to operational health are working. Our
markets remain very tough and we will continue to take the
actions necessary to build on this improved operational
performance.'

Important Notice

This news release should be read in conjunction with Marconi
Corporation's Preliminary Accounts and Notes to the Accounts
(Appendix 1) and Marconi Corporation's Operating and Financial
Review (Appendix 2), both for the financial year ended 31 March
2003.

Throughout the period of restructuring which has spanned the two
financial years ended 31 March 2002 and 2003, the Group incurred
significant exceptional items and recorded a significant
impairment of goodwill. In order to present more clearly the
underlying business in this Press Release and in the accompanying
Operating and Financial Review, management also presents and
focuses its commentary on adjusted gross margins, operating
losses and cash flows after removing the impact of these material
items. In addition, the commentary is focused on the Group's Core
business.

Analyst Presentation and Conference Call

Management will host a presentation for analysts and investors at
4:00 pm (UK time) on Thursday 29 May 2003.

Simultaneous conference call and audiocast facilities will be
available. The conference call can be accessed on Marconi's web-
site or by dialling +44 (0)20 8996 3900 (in the UK) or + 1 617
801 9702 (in the US) and quoting 'Marconi Annual Results'. A
replay facility will be available for 14 days by dialling +44 (0)
1296 618 700, access code 487136 (in the UK) or +1 888 286 8010,
access code 9979306 (in the US)

Presentation materials to accompany the conference call will be
available on the web-site from midday.

Overview

Financial Restructuring Complete

On 19 May 2003, the successful completion of the Group's
financial restructuring took place when the schemes of
arrangement for Marconi Corporation plc and Marconi plc became
effective. Marconi Corporation plc became the holding company of
the Marconi Group and trading commenced in its shares, new senior
and junior notes and warrants on the London Stock Exchange.

The Marconi Group emerges from the Restructuring with:

   -- a significantly improved financial position: following
completion of the Restructuring, the Group's gross external
financial indebtedness has been reduced from GBP3.9 billion1 at
31 March 2003 to GBP808 million on a pro forma basis; this is
largely offset by the Group's cash balance at 31 March 2003 which
amounted to GBP783 million when adjusted to reflect the
completion of the Restructuring and the ESOP derivative
settlement. Also, Group net liabilities at 31 March 2003 of some
GBP3.3 billion have translated to Group net assets of
approximately GBP400 million on a pro forma basis mainly as a
result of the cancellation of Scheme claims.

   -- a strengthened Board of Directors: following completion of
the Restructuring, the appointments of Kathleen Flaherty and Ian
Clubb as non-executive directors of Marconi Corporation plc have
taken effect. Kathleen and Ian join Kent Atkinson and Werner
Koepf who were appointed non-executive directors in December 2002
and executive directors Mike Parton (Chief Executive Officer),
Mike Donovan (Chief Operating Officer) and Chris Holden (Interim
Chief Financial Officer) on the Board, chaired by John Devaney.

   -- a sharper focus on telecommunications equipment and
services: during the financial year to March 2003, Marconi
completed further disposals of non-core assets, generating a
total of GBP433 million net cash proceeds. These included the
Group's mobile communications businesses - Strategic
Communications and Tetra, Marconi Online and the unwind of the
Group's share in Ultramast (through a capital reduction).
Marconi's remaining non-core assets include the Group's remaining
Italian-based mobile communications subsidiary, UMTS and its
interests in joint ventures, associates and investments such as
the Group's 72.7 per cent financial stake in Easynet plc and 6.3
per cent stake in Bookham Technology, its 50 per cent stake in
Confirmant, a joint venture with Oxford GlycoSciences.

Core Business Performance

Markets and Customers

A continued deterioration in the market for telecommunications
equipment and services translated into single-digit sales
declines quarter on quarter throughout the financial year, with
Core sales during the final quarter falling to GBP426 million (Q1
GBP510 million). Annual Core sales amounted to GBP1,874 million,
a reduction of 32 per cent compared to the previous financial
year (GBP2,773 million). This was mainly the result of
significantly lower levels of capital expenditure by public
network operators world-wide.

The Group has experienced some stability in sales volumes quarter
on quarter in its major continental European (Germany, Italy) and
Asia-Pacific (Australia, Malaysia) markets but this has been
offset by sequential reductions in sales in other regions,
particularly in the United States, Middle East and China. Sales
in CALA remain at a low level following the economic and
political uncertainty in the early part of the year. Conditions
in the U.K. market remain challenging mainly as a result of the
continued absence of any significant capital spending by second
tier operators.

Sales of Network Services accounted for 40 per cent of Core Sales
during the year and were generally more resilient than sales of
Network Equipment (60 per cent) due to the typically higher
proportion of communications-related service activities provided
to customers outside the telecommunications industry, such as
government agencies, large enterprise customers and public
utilities.

Despite the tough market conditions and increased competition in
certain territories, Marconi has continued to enjoy the full
support of its strong customer base throughout the challenging
period of the Group's Restructuring. During the year, Marconi's
ten largest customers - BT, BellSouth, Metro City Carriers,
Qwest, Telecom Italia, UK Government, US Government, Vodafone
Group, Verizon and Wind - accounted for 48 per cent of Core sales
(FY02 37 per cent).

Major new contract awards include:

   -- in Optical Networks: preferred supplier status for the
supply of next generation SDH and DWDM to Telstra (Australia) as
well as a contract for the supply of Marconi's ServiceON network
management systems; a new SDH 3 year frame contract with TATA
(India); a new 2 year frame contract with Telecom Italia for the
supply of an optical backbone network based on Marconi's new
optical switching technology (MSH2K). Most recently, the Group
announced the renewal of two frame contracts for a further two
years by Telecom Italia for the supply of SDH and DWDM equipment
respectively.

   -- in European Access: successful business wins for the
Group's new multi-service access node, the Access Hub, with
Telecom Italia, Wind (Italy), Telkom South Africa and LDCOM
(France) while Jersey Telecom became the first operator to deploy
a combination of the Access Hub and the Group's recently launched
SoftSwitch to build a next generation access network; a major new
frame contract with O2 (Germany) for the supply of fixed wireless
access equipment to support the roll-out of the customer's 3G
mobile network

   -- in Network Services: a number of long-term service
contracts in Europe including services for the West Coast
Mainline and Jubilee Line rail projects in the United Kingdom and
for Deutsche Bahn and Netcologne in Germany

   -- in Broadband Routing & Switching: the first sales of
Marconi's newly launched multi-service switch-router, the BXR-
48000, to the US Federal Government and to a large European
financial institution

Operational Performance

Marconi has continued to take rapid and decisive actions in order
to continuously re-align its cost base to the declining sales
volumes.

Over the year, the Group reported a seven percentage point
increase in Core gross margin (before exceptional items) from
17.5 per cent of sales in the first quarter to 24.4 per cent in
the final quarter. This improvement resulted mainly from cost
reduction actions taken in the Group's supply chain and Network
Services field-forces. In the second half of the year, the Group
also began to benefit from cost reductions designed into its
newly launched products such as the SDH Series 4 range as the
first units of the new products were delivered to customers. For
the year as a whole, Core gross margin (before exceptional items)
totalled 19.9 per cent of sales (FY02 21.6 per cent).

By 31 March 2003, the Group had exceeded its previously disclosed
target annualised operating cost run-rate (before goodwill
amortisation and exceptional items) of GBP520 million and exited
the year at a run-rate of approximately GBP490 million,
approximately 45 per cent down from the GBP890 million run-rate
at 31 March 2002. Savings were achieved across all categories of
operating expenditure and were driven mainly by headcount
reductions and site closures and consolidation. Reduced levels of
materials spend and lower depreciation in research and
development as well as lower spend on marketing programmes also
contributed to this trend. At 31 March 2003, Marconi employed
approximately 15,300 people in its Core business, a reduction of
over 19,000 employees since 31 March 2001. Net operating
expenditure (before goodwill amortisation and exceptional items)
in the Core business for the year as a whole amounted to GBP636
million, down 42 per cent compared to GBP1,092 million in the
previous year.

The improvements in Core gross margin (before exceptional items)
and reduced operating expenditure (before goodwill amortisation
and exceptional items) led to a significant reduction in the Core
operating loss (before goodwill amortisation and exceptional
items) over the year from GBP115 million in the first quarter to
GBP17 million in the final quarter. Overall, the Core operating
loss (before amortisation and exceptional items) amounted to
GBP263 million compared to a loss of GBP493 million in the
previous year.

The quarterly reductions in the Core operating loss (before
goodwill amortisation and exceptional items) fed through to
quarterly improvements in Core Earnings before exceptional items,
Interest, Tax, Depreciation and Amortisation (EBITDA). The Group
was able to turn the first quarter GBP81 million EBITDA loss into
GBP10 million positive EBITDA in the final quarter. This,
combined with substantial improvements in working capital
management achieved largely through an increased focus on cash
collections from debtors and increased stock turns, enabled the
Group to record two consecutive quarters of positive operating
cash flow after capital expenditure but before exceptional items
in the second half of the year in the Core business (Q3 GBP66
million; Q4 GBP86 million). This followed a total operating cash
outflow after capital expenditure but before exceptional items in
the Core of GBP124 million during the first half.

Outlook

Market conditions remain very tough and the Group expects a
further contraction in market volumes and Group sales during the
current financial year as telecom operators continue to maintain
tight controls over capital expenditure.

In the near term, the continued low levels of capital expenditure
are exacerbated by ongoing instability in the Middle East and the
impact of the SARS virus in APAC (particularly China). As a
result, the Group expects sales to fall below GBP400 million
during the first quarter ending 30 June 2003. Whilst the Group
plans to make further progress in reducing its cost of goods sold
and operating costs, the expected lower volume of sales will have
an adverse impact on gross margin during the period.

The Group monitors its sales forecasts on a weekly basis and will
continue to take all actions necessary to align its cost base to
projected sales volumes. The Group is now targeting to reach a
gross margin run-rate of at least 27 per cent of sales during the
current financial year, at the top end of its previously
disclosed target range. In addition, the Group will continue to
initiate cost saving actions during the year in order to reduce
its annualised operating cost run-rate to below GBP425 million by
March 2004. In this way, the Group is targeting to reduce the
level of sales required to reach operating breakeven (EBITA) to
around GBP1.5 billion per annum. The Group's target gross margin
and operating cost run-rates relate to Marconi's Core business
world-wide. This includes all three of the Group's main US
businesses (BBRS, OPP and North American Access) but excludes the
impact of activities which remain in the former Capital division
(eg Mobile-UMTS) and which will be reported as 'Other' from the
period ending 30 June 2003. The Group today announced that it is
initiating steps to close UMTS. The Group will continue to seek
buyers for this business during the closure process.

The Group plans to achieve the targeted cost savings through a
combination of headcount and other cost reduction initiatives
such as product cost reductions and savings in third party
professional spend. The Group expects that headcount will have
declined to approximately 13,000 employees by the end of March
2004 and already has plans and proposals to reduce headcount to a
level of approximately 13,500 employees.

The Group expects to incur exceptional non-operating cash
outflows of approximately GBP100 million during the year in
relation to its ongoing operational restructuring. Approximately
half of this amount will arise from the utilisation of provisions
previously created through  exceptional charges to cover onerous
leases and the reorganisation of the Group's manufacturing
operations. In addition during the first quarter of the financial
year, the Group will incur further exceptional non-operating cash
costs in relation to its financial restructuring: GBP340 million
cash distribution to creditors, GBP35 million cash payment in
settlement of ESOP claims and a further GBP15 million of advisor
fees and other related costs to complete the Restructuring, which
were accrued at 31 March 2003.

However, off-setting these exceptional cash outflows in the
current financial year, the Group is targeting to achieve a
positive operating cash inflow through further improvements in
operating performance and some contribution from working capital.
Reductions in working capital will be driven mainly by further
improvements to inventory management and, to a lesser extent,
through the Group's continued focus on improvements in its debtor
and creditor day ratios.

As a result of the Restructuring and the substantial decrease in
gross debt, the Group's interest burden will be significantly
reduced to around GBP70 million per annum from the year ending 31
March 2005. This comprises mainly 8 per cent cash interest
payable on GBP450 million of new Senior Notes and 10 per cent
interest if paid in cash on GBP306 million of new Junior Notes as
well as some interest payable on the Group's bilateral debt.
Marconi has the option to pay interest in cash at 10 per cent or
in kind (PIK) at 12 per cent on the new Junior Notes and will
take this decision and make the necessary notifications on a
quarterly basis. Interest on the new Senior and Junior Notes is
payable quarterly in July, October, January and April and began
to accrue from 1 May 2003. The Group expects interest paid to be
partially offset by modest amounts of interest received on its
cash balances. During the year ending 31 March 2004, the Group
expects net interest payable to amount to approximately GBP40
million.


Summary Group Financials

Summary Profit & Loss

The Group (excluding Group share of joint ventures) recorded
total sales for the year ended 31 March 2003 of GBP2,002 million
(FY02 GBP4,310 million), gross profit (before exceptional items)
of GBP408 million (FY02 GBP1,057 million) and operating loss of
GBP729 million (FY02 GBP6,115 million). Operating loss (before
goodwill amortisation and exceptional items) was GBP308 million
(FY02 GBP474 million). Sales from non-Core businesses (Capital
and Discontinued Operations) reduced to GBP4 million in the final
quarter (Q4 02 GBP211m) as a result of business disposals.

Goodwill amortisation amounted to GBP104 million (FY02 GBP431
million).

Operating exceptional items (excluding Group share of joint
ventures) totalled some GBP317 million. Of this amount, GBP195
million related to the Group's ongoing operational restructuring
and GBP103 million to the Group's financial restructuring
process. Group operating loss (excluding joint ventures) amounted
to GBP729 million (FY02 GBP6,115 million).

The Group recorded a net non-operating exceptional gain of GBP141
million (FY02 GBP838 million). The main non-operating exceptional
item was a GBP123 million release from provisions following the
settlement of the ESOP derivative claims, which became effective
on 19 May 2003. This is recorded as a non-operating exceptional
as the original charge for these share options was recorded as a
de-merger cost in the year ended 31 March 2000. A GBP5 million
loss on disposal of discontinued operations and a GBP26 million
net gain on disposal of fixed assets and investments in
continuing operations were also included in the net non-operating
exceptional gain.

In addition, the Group wrote down investments totalling GBP40
million including Arraycom and Bookham.

Marconi Corporation plc recorded a GBP315 million write-off of
funding receivables from Marconi plc in the context of the
Restructuring (FY02 nil). Net interest payable amounted to GBP242
million during the year (FY02 GBP244 million). Of this amount,
GBP115 million related to accrued but unpaid interest on the
Group's bond and bank debt, which was subsequently included in
the Scheme claims.

Group loss after taxation amounted to GBP1,143 million (FY02
GBP6,075 million) following a current tax credit of GBP185
million (FY02 tax charge GBP210 million). The tax credit arose
mainly from the release of tax provisions established in prior
years.


Summary Group Cash Flow

Total cash flow improved significantly in the second half of the
year when the Group recorded two consecutive quarters of positive
cash inflow (Q3 GBP37 million; Q4 GBP44 million) following an
outflow of GBP132 million during the first half notwithstanding
the net receipt of GBP387 million of cash proceeds from business
disposals. This improvement was driven by operating cash inflows
after capital expenditure but before exceptional items in the
Core business and reduced outflows in non-Core businesses, a
slight reduction in the quarterly run-rate of exceptional cash
costs for restructuring, and the reduced level of cash interest
paid on the Group's syndicate bank and bond debt as a result of
the Restructuring. Marconi also received a tax refund of GBP45
million during the third quarter and approximately GBP44 million
of cash proceeds mainly from the disposal of its stake in
Ultramast during the final quarter.

Marconi achieved the improvement in Core operating cashflow
mainly as a result of the sequential reduction in Core operating
losses (before goodwill amortisation and exceptionals) and
significant improvements in working capital management.
Reductions in working capital contributed GBP202 million to
operating cash flow during the year, GBP172 million of which was
generated in the second half. This was driven largely by improved
cash collections through better management of overdue debts and
the reduction in Core net debtor days from 107 in September 2002
to 94 in March 2003. Improved management and utilisation of
inventory was also a significant contributor to cash generation
with Core net stock turns increasing throughout the year from 4
in March 2002 to 7.1 in March 2003.


Summary Balance Sheet

Marconi Corporation plc's total cash balance at 31 March 2003
amounted to GBP1,158 million (31 March 2002 GBP1,361 million).
When adjusted to reflect the subsequent payment of GBP340 million
to the Group's creditors in the context of the Restructuring and
the payment of GBP35 million to the Group's ESOP derivative
providers, this is reduced on a pro forma basis to GBP783
million. Approximately GBP297 million of this amount represented
restricted balances relating to cash collateral on performance
bonds (GBP177 million) and 'trapped' cash mainly held within the
Group's subsidiaries and joint ventures (GBP120 million). Gross
debt, on a pro forma basis, amounted to approximately GBP808
million comprising $717 million (GBP450 million) Senior Notes,
$487 million (GBP306 million) Junior Notes and approximately
GBP52 million of bilateral debt. Gross debt at 31 March 2003
prior to Restructuring amounted to GBP4,775 million, consisting
of debt external to Marconi plc and Marconi Corporation plc of
GBP3,987 million, Marconi Corporation bonds of GBP385 million
held by a subsidiary of Marconi plc, and amounts due by Marconi
Corporation plc to Marconi plc and its subsidiaries of GBP403
million.

Provisions for liabilities and charges amounted to GBP300
million, a decrease of GBP156 million compared to GBP456 million
at 30 September 2002. The reduction related mainly to the
utilisation and release of share option provisions arising from
the ESOP settlement and the de-listing of Marconi plc. The
balance remaining at 31 March 2003 related mainly to warranties
and contract guarantees, business restructuring, litigation,
industry injury and business disposals. On a pro forma basis,
provisions are GBP265 million at 31 March 2003 following the
settlement of the ESOP derivative for GBP35 million on 19 May
2003.

In addition, provisions for retirement benefits, under accounting
standard FRS17, amounted to GBP353 million, reduced from GBP439
million at 30 September 2002 as a result of revisions to certain
underlying actuarial assumptions and reduced experience losses.
The recently completed tri-annual valuation of the Group's
largest pension scheme, the U.K. plan, which accounted for GBP195
million of the deficit under FRS17 at 31 March 2003, showed the
plan as at 5 April 2002 to be 100 per cent funded on an on-going
basis and between 115-119 per cent funded on a minimum funding
requirement basis.

Overall, on a pro forma basis at 31 March 2003, the Group has
positive net assets of GBP400 million (actual GBP3,332 million
net liabilities).

About Marconi Corporation plc

Marconi Corporation plc is a global telecommunications equipment,
services and solutions company. The company's core business is
the provision of innovative and reliable optical networks,
broadband routing and switching and broadband access technologies
and services. The company's customer base includes many of the
world's largest telecommunications operators.

The company is listed on the London Stock Exchange under the
symbol MONI.

To see financials:
http://bankrupt.com/misc/MARCONI_CORPORATION.htm


MELVILLE DUNDAS: Threatens to Bring Down Subcontractors
--------------------------------------------------------
The fallout from the receivership of Melville Dundas is beginning
to be felt by even its smallest subcontracting partners,
according to The Herald.

The British paper on Thursday said one west coast subcontractor
is filing for liquidation this week after Melville failed to pay
an estimated GBP100,000 on work it had completed.  Unnamed
sources place Melville's trade debt and overall liabilities at
GBP45 million.  This includes roughly GBP15 million owed to its
bankers -- primarily the Bank of Scotland -- and potential
liabilities of GBP10 million linked to performance-related
guarantees on various construction projects, the paper said.

"The collapse of Melville is leading to cashflow problems across
the industry, as subcontractors are losing both money due and
future work on contracts that were previously believed to be in
hand.  Compounding these problems is a rush by construction
industry suppliers to collect on outstanding invoices," said The
Herald.

To limit losses, many suppliers to the construction industry, who
were previously willing to wait anywhere between 60 and 90 days
for payment, are now demanding payment within 30 days, if not
sooner, the paper said.

"This is leaving sub-contractors that are already struggling with
even less working capital to trade through the difficulties," The
Herald added.

Glasgow-based Melville went into receivership last week.  Ernst &
Young has been appointed the company's receiver.


NETWORK RAIL: Presnets Preliminary Results for Year 2002/2003
-------------------------------------------------------------
Announcing its preliminary results Thursday, Network Rail's
Chairman, Ian McAllister said that these results reflect a year
of significant change, major progress has been achieved but much
remains to be done. He commented: "It was a year in which the
first steps were taken to address the difficulties of the past.
It will take several years, but our goal is to build a rail
infrastructure which will demonstrate sustainable improvement in
performance at an acceptable cost to the nation."

The financial and performance highlights for 2002/3 (comparison
with 2001/2) include:-

-- Exit from special Railway Administration
-- Loss before tax of GBP290 million compared to GBP295 million
profit for 2001/2 (restated)
-- Renewals spend increased 32% at GBP2.5 billion from GBP1.9
billion
-- Maintenance spend increased by 33% at GBP1.2 billion from
GBP0.9 billion
-- Temporary speed restrictions reduced by 28% at 537 from 750
-- Broken rails reduced by 17% at 445 from 534 - lowest ever
recorded
-- Signals passed at danger down 7% at 405 from 434 (severe SPADs
down 14%) - lowest ever recorded
-- Network Rail caused train delays up 9% at 14.7 million minutes
from 13.4 million
-- TPWS installed at 96% of signals, the project is on time and
on budget, with the system now delivering 90% of its safety
benefit
-- The financial year began with the Company six months into
Special Railway Administration and ended some six months after
its acquisition by Network Rail with the publication of its
business plan.

Commenting on the year, Chief Executive, John Armitt said: "The
last year has been one of continuous change. At the end of it the
organisation has been transformed in ownership and structure and
has taken the first steps in re-organising itself to meet the
challenges it faces. These challenges are clearly identified and
plans are in place to meet them."

"Despite all this change, it was a year that saw some good
performance in key areas such as reductions in broken rails,
temporary speed restrictions and a decreasing number of signals
passed at danger as the now widely installed new safety system,
Train Protection and Warning System, takes effect.

"The year saw us begin to take dramatic steps to take greater
control over the maintenance activity on our network. The New
Maintenance Programme, under which the Company will determine
what work is done, where and when, has been introduced in one
part of the country with the remainder to follow in the next 12
to18 months. Furthermore in three maintenance contract areas
Network Rail will undertake the maintenance itself. One of these
will be taken in-house this summer with the others to follow in
2004.

"Ultimately, however, it is the reliability of the train service
which is the barometer of the success of the industry and in this
area we saw a setback as infrastructure caused delays rose.
Clearly this was an unacceptable performance and one that gives a
clear focus for the year ahead.

"It's not possible to review the year without recalling the
accident at Potters Bar on 10 May 2002. This accident underlines
that a safe railway is our first priority and no one at Network
Rail under estimates the need to continue to strive to improve
the safety of Britain's railways."

The Chairman concluded: "We are being realistic about the
challenges we face. Substantial growth on the network allied to a
history of under investment has left us with a fragile network
which is expensive to put right. Improving performance and
reducing total cost must be our focus but we must also work with
our contractors to make up the significant backlog in renewals.

"Sustained improvement in the performance of the rail network
will take several years. However, we now have clear plans and
know the direction we must take."


Notes to editors

The results of Network Rail Infrastructure Limited provide a like
for like comparison with those of the operation of the railway
infrastructure as carried out by Railtrack PLC. The Company has
changed its fixed asset policy to better reflect the economic
value of the rail network. Previously a mixture of historic cost
and renewals accounting has been used and mindful of the
forthcoming introduction of International Accounting Standards
which do not permit renewals accounting, Network Rail is using a
single consistent treatment for valuing fixed assets.
Depreciated replacement cost gives a clearer and more accurate
assessment of the economic value of the rail network. The key
financial impact of this change is a reduced depreciation charge
by circa GBP1.5 billion in this financial year.

The preliminary results for Network Rail Limited are also
published today and are those for the six months since it took
ownership of the infrastructure.


NETWORK RAIL: Results Reflect Ownership of Infrastructure
---------------------------------------------------------
Network Rail Limited, the ultimate parent company of Network Rail
Infrastructure Limited (NRIL), formerly Railtrack PLC, today
unveiled its results alongside those of its infrastructure
company NRIL.

Announcing the results of Network Rail Limited, Chairman Ian
McAllister said:

"The financial information presented represents six months
ownership of the railway infrastructure and highlights the
challenges we face in stabilising the network both financially
and organisationally. The results offer a chance to draw a line
under the past with regard to Railtrack entering and exiting
administration.

"Our focus is now on the future and the need to make progress on
the delivery of a safe and reliable rail infrastructure at an
affordable cost. Sustained improvement of the rail network will
take several years and the first steps have been taken. We now
have clear plans and know the direction that we must take."

Notes to editors:

The results of Network Rail Limited are those for the six months
since it acquired the shares of Railtrack PLC through its wholly
owned subsidiary Network Rail Holdco Limited.
The results for the full year of the operation of the network are
found in those published by Network Rail Infrastructure Limited
and provide a like for like comparison with those of the
operation of the railway infrastructure as carried out by
Railtrack PLC.


ROYAL MAIL: Faces Fine for Missing Delivery Targets
---------------------------------------------------
Postal services regulator, Postcomm, admitted last week it is
mulling penalties against Royal Mail after learning that the
company had failed to reach performance targets, the Times said
late last week.

"We will consider what action we will take, including financial
penalties, at the next postal commissioner's meeting," said the
regulator in a statement to the Times.

Postwatch, an independent postal services watchdog, revealed
recently that Royal Mail had failed to meet 80% of its delivery
targets and had failed nearly twice as many performance targets
as last year.  It added that Royal Mail missed the minimum
performance levels for the delivery of first- and second-class
post and also failed to meet targets for its heavily advertised
special delivery service.  This meant that more than one million
first-class letters a day did not arrive on time, Postwatch said.

"These are very disappointing results coming at a time when
customers are paying higher prices for their post," Postwatch
Chairman Peter Carr told the Times.

Royal Mail, for its part, challenges the figures.  On the
contrary, it said, first class service was the most reliable it
has been for seven years.  The average delivery performance for
first class mail has risen by 2 percent over the past year.  A
Royal Mail spokeswoman told the Times the results, which are
judged on just two months of the year, were "misleading" and that
the service was improving.

"We're not saying we have done brilliantly, but some of the
targets were missed very narrowly," she said.  "The cumulative
results for the whole year do demonstrate an improvement."

The license issued by the regulator sets a year-end target for
the months of February and March.  Performance was 91.7 percent
against a target of 92.5 percent, the paper said.

Jerry Cope, Royal Mail's managing director for the U.K., told the
Times: "We are disappointed to have failed the license target by
a small margin but we are encouraged that the improvement over
last year demonstrates that the efforts of our people to drive up
performance are working."


TELEWEST COMMUNICATIONS: Doubts Rebel Bondholders Has Numbers
-------------------------------------------------------------
Telewest Communications will not stop at anything, including a
threat by a pesky bondholder to scupper the company's plan to
file for a scheme of arrangement with the High Court next month.

According to The Times, Telewest is intent on submitting the
final documentation of its restructuring plan to the court even
if Bill Huff, who runs WR Huff Asset Management, challenges the
move.  The decision is based on the belief that Mr. Huff does not
have the numbers -- 25 percent of shareholding -- to block the
rescue transaction.

Mr. Huff has previously claimed he holds 20 percent of the
company's notes, but this is impossible to confirm because bond
investors are not required to disclose their exact holdings.
Still, the company and other bond investors doubt the hedge fund
manager's shareholding is as big as he claims.

The paper says Mr. Huff had initially supported the restructuring
plan unveiled last year, but he later bolted a creditors'
committee that was negotiating with the company.  Since then, he
has been dogged in his objections, holding up progress by as much
as several weeks.  Some of the issues he has raised include a
complaint that an allocation of 3 percent of the reconstructed
company to existing shareholders was too high.  Many, however,
believe his real goal is to maximize his influence over the
company to the point where he becomes the single most important
investor, the paper said.

"This would allow him to mirror his position in the Telewest
rival NTL, which completed its own financial restructuring in
January.  He is the biggest shareholder in NTL and sits on the
board.  Mr. Huff also acted as chairman at NTL on an interim
basis.  His fund would clearly benefit if the two companies were
to complete their long-expected merger," the Times said.

"The rescue will be concluded by a scheme of arrangement, a
court-sanctioned process, which will be triggered when the
restructuring documentation is published.  About a month after
the document appears, the company's creditors will have to vote
on the deal; approval depends on the support of three quarters of
each class of investors by value," said The Times, explaining the
process that follows the filing of documentation.

"The scheme will then have to be approved by the High Court
before it takes effect, at which point Telewest will re-list,
free of its GBP3.5 billion of bond debt," the paper added.

The Times said Telewest has the support of Liberty Media and
Deutsche Telekom.  IDT, which has links to Liberty Media, and
which recently bought out the stakes of Microsoft in Telewest, is
also expected to vote in favor of the restructuring plan.


SECURICOR PLC: Sued in U.S. for Security Breach on Sept. 11
-----------------------------------------------------------
Security services firm, Securicor Plc, disclosed recently it is
facing a number of lawsuits in the United States for alleged
mishandling of airport security in the days leading to the
September 11 terrorist attacks.

"Argenbright [a U.S. subsidiary] is now being sued and a number
of lawsuits have been served upon it.  Securicor PLC itself has
been named in some of the lawsuits," the company said in a
statement.

AFX News says Argenbright was responsible for security at Newark
and Washington airports, the departure points of two of the
hijacked planes.

The company maintains it did not breach any security protocol and
therefore "should have no liability for the losses that occurred
subsequently."

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      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-
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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.

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