/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/030616.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 16, 2003, Vol. 4, No. 117 Headlines F I N L A N D FINNAIR PLC: Partners with Swiss, Air France, SN Brussels HUHTAMAKI OYJ: Expects Earnings to Fall Below 2002 Figures F R A N C E QUICK RESTAURANTS: GIB Converts EUR38 Million Loan Into Equity VIVENDI UNIVERSAL: Bronfman Secures Backing for Bid, Sources Say G E R M A N Y BAYER AG: More Baycol Cases Seen Before Filing Deadline Expires HEIDELBERGCEMENT: Posts Terms of Intended Cash Capital Increase MEDIA! AG: Files for Bankruptcy Together with Mediarent GmbH NETLIFE AG: Eberhard Weiss to Retire from Management Board July WESTLB: Results of Probe at Principal Finance Unit Due Soon WESTLB: Considers Divesting Principal Finance Business I R E L A N D WATERFORD CRYSTAL: Mulls Extension of Summer Holiday Shutdown I T A L Y ALITALIA SPA: Still Pursuing Meridiana Alliance, Says CEO ALITALIA SPA: Workers Demand Talks, Warn of Further Strikes TELECOM ITALIA: New EUR15.5 Billion Credit Facility Rated 'BBB' N E T H E R L A N D S GETRONICS N.V.: On Watch Positive Due to Reduced Liquidity Risks KONINKLIJKE AHOLD: Promises to Reveal Final Probe Results At Once KONINKLIJKE PHILIPS: To Appeal US$319 Mln Award to Volumetrics LAURUS N.V.: To Construct New Frozen Distribution Center NUTRECO HOLDING: Expects 1st-half Results to Fall Below Forecast N O R W A Y ELOPAK: Considers Closure of Roeyken Factory; 100 Jobs at Risk S W I T Z E R L A N D ABB LTD: Decision on Asbestos Settlement Out in Two Weeks WINTERTHUR GROUP: Churchill Sale a Good Strategy, Says Fitch U N I T E D K I N G D O M AWG PLC: Approves Resolution to Return Capital to Shareholders BAE SYSTEMS: Thousands of Jobs Depend on Hawk Jets Contract BARR HOLDINGS: Chairman's Departure Triggers Reorganizations BOOTS PLC: Halts Operation of Wellbeing, Pure Beauty Concept BRITISH MIDLAND: bmibaby Announces New Routes, Expansion Plans BRITISH MIDLAND: Urges Greater Competition in Airport Management CAMP BROTHERS: Files for Receivership; Blames Poor Summer Sales CHUBB PLC: Board Backs Cash Offer of UBS Investment, JPMorgan CORDIANT COMMUNICATIONS: Seeks Approval for Sale of Aussie Unit LOMBARD MEDICAL: Announces Resignation of Directors LONDON PACIFIC: Changes Name to Berkeley Technology Limited MELROSE RESOURCES: Posts Update of Recent Activity SCHRODER EMERGING: To Push for Liquidation in EGM Next Month SOMERFIELD PLC: Springwater Withdraws Interest to Offer Bid SOMERFIELD PLC: Sainsbury Offer Undervalued Firm, Maintains Board STIRLING GROUP: Independent Directors Consider Possible Offer TRINITY MIRROR: Rival Express Rumored to Takeover Business YEOMAN GROUP: Presents Interim Results, Restructuring Plans ********* ============= F I N L A N D ============= FINNAIR PLC: Partners with Swiss, Air France, SN Brussels --------------------------------------------------------- Finnair is introducing new code-share destinations and connections in Europe with its partners Air France, Swiss and SN Brussels Airlines. There will be connections from all four daily Helsinki-Paris return flights to Lyon, Marseilles, Bordeaux and Nice with Air France starting June 12. Passengers will be able to travel with Finnair route numbers all the way to these destinations. Six domestic destinations in Finland will correspondingly receive Air France route numbers. The new Air France code-share destinations in Finland via Helsinki are Turku, Tampere, Oulu, Kuopio, Jyvaskyla and Vaasa. Code-share with Swiss Finnair and Swiss will expand their cooperation as from June 16 2003 by adding new code-share destinations Graz and Luxembourg via Zurich. Swiss will code-share with Finnair to Jyvaskyla via Helsinki. In addition, there will be also a new midday routing from Helsinki to Zurich via Stockholm and morning evening code share connections from Helsinki to Basel via Dusseldorf as well as a morning connection from Basel to Helsinki via Zurich. New code-share Destinations via Brussels Finnair and SN Brussels Airlines have added more code-share destinations via Brussels to Spain and the United Kingdom. Passengers are now able to fly with Finnair route number to Bilbao, Sevilla, Bristol and Birmingham. Passengers will be able to earn Finnair Plus points on all these flights. Finnair Oyj Communications HUHTAMAKI OYJ: Expects Earnings to Fall Below 2002 Figures ---------------------------------------------------------- Consumer packaging specialist Huhtamaki said last week the earnings per share this year will not match the 2002 figures due to the company's poor first half performance. Although it expects second half performance to be better, the company said it "will not compensate for the softness experienced in the first half." The company blamed volatile plastic raw materials prices and stronger euro for its first half woes. CONTACT HUHTAMAKI OYJ Mr. Timo Salonen, Chief Financial Officer Espoo, Finland Phone: +358-9-6868 8401 Juha Salonen, Group General Counsel Markku Pietinen, Group Communications =========== F R A N C E =========== QUICK RESTAURANTS: GIB Converts EUR38 Million Loan Into Equity -------------------------------------------------------------- At an extraordinary general meeting held on June 12, 2003, the shareholders of Quick Restaurants S.A. unanimously approved a new share issue totaling EUR66.5 million. The issue consists of: (a) A public offering of a maximum of 5,813,975 new shares with VVPR strips attached, at the price of EUR4.82 per share, in respect of which preferential subscription rights will apply, and (b) The conversion of EUR38.5 million of debt held by GIB SA, at the same price of EUR4.82 per share. Preferential subscription rights may be exercised during the period from June 18 to July 2, 2003 inclusive, on presentation of coupon no. 9, which will be traded on the Euronext Brussels market from June 18 onwards. All other terms and conditions of the offer are specified in the prospectus, which was approved by the Banking and Finance Commission on June 10, 2003 and will be available from June 18. Conversion into capital of the debt held by GIB has enabled Quick to conclude a significant agreement with its banking partners on June 6, 2003, rescheduling its bank loan over 5 years. This agreement covers the repayment of a syndicated loan of EUR88 million, which has been aligned with the Company's anticipated available cash flow. The agreement enables Quick to consolidate its financial structure and, together with the recovery now being seen in its operating profit, constitutes a key factor in securing the Company's long-term prosperity. Quick is continuing along the road to recovery and views the future with confidence. The improving trend noted in 2002 has been sustained over the first four months of 2003. Like-for-like consolidated system-wide sales to the end of April increased by 4.3%, while operating profit grew to EUR6.6 million, a rise of EUR3.6 million (unaudited). Quick and its teams are confident that maintaining this momentum is realistic. This confidence is shared by GIB, which has agreed to convert EUR38.5 million of debt into capital, and by the Company's banking partners, with which its has been able to negotiate the rescheduling of its loan. The Company is confident that all its shareholders, whose loyalty has remained unswerving throughout a number of difficult years, will demonstrate their continuing confidence by exercising their preferential subscription rights. CONTACT: QUICK RESTAURANTS Quick Restaurants S.A. Grotesteenweg 224/b5 B-2600 Berchem Home Page: http://www.quick-restaurants.com Jean-Paul Brayer E-mail: jeanpaul.brayer@quick.fr Phone: +33 (0)1 49 89 63 11 (France) Phone: +32 (0)3 286 19 00 (Belgium) Nicolas Hein E-mail: nicolas.hein@quick.fr Phone: +33 (0)1 49 89 63 13 (France) Phone: +32 (0)3 286 18 11 (Belgium) VIVENDI UNIVERSAL: Bronfman Secures Backing for Bid, Sources Say ---------------------------------------------------------------- The consortium formed by Edgar Bronfman Jr. to bid for the U.S. entertainment assets of Vivendi Universal has gathered a pool of private equity investors as backers, according to people familiar with the matter. Mr. Bronfman, former owner of the same Universal entertainment empire he is now bidding for, has convinced Boston-based private equity firm Thomas H. Lee, as well as the private equity shop Blackstone, to join the group, which already includes a syndicate led by Wachovia Corp., according to sources of Dow Jones Newswires. There could even be additional backers that could possibly take on some Vivendi debt, one of the sources said. Oilman Marvin Davis, who is also interested in the assets, has already offered to take on US$5 billion of Vivendi debt. The private equity investors will compete with Mr. Davis, Viacom Inc., Liberty Media Corp., and Metro-Goldwyn-Mayer, for the entertainment assets, which include cable TV networks, Universal Studios and theme parks. Spokesmen for Bronfman and Thomas H. Lee had no comment. A spokesman for Blackstone was not immediately available, according to the report. The support will enable Mr. Bronfman to have enough financing to make a bid for Vivendi's entertainment assets, as well as the music group, which has not yet been put up for sale. Mr. Bronfman's consortium is currently having a series of due diligence meetings. Vivendi Universal is selling the entertainment group to trim down debts. ============= G E R M A N Y ============= BAYER AG: More Baycol Cases Seen Before Filing Deadline Expires --------------------------------------------------------------- The number of cases launched against Bayer AG over its withdrawn drug Baycol could rise as the deadline for submission of new cases approaches in some states, lawyers told Dow Jones Newswires. "We expect the number of cases to keep rising as the August deadline gets nearer," said Sonia Kinra, a lawyer at Kenneth B. Moll & Associates, which represents around two thousand plaintiffs. Bayer recently disclosed that the number of cases pending increased from 8,800 since its last reporting in May to 9,400. The rise in the figures surprised analysts who had expected a downward trend after Bayer won two cases in Texas and Mississippi, according to the report. A Bayer spokeswoman said Wednesday: "It is possible plaintiff attorneys will try to file before the August deadline." The majority of U.S. states require new cases to be filed within two years of a drug's withdrawal from the market. Bayer withdrew the drug, also known as Lipobay, from the market in August 2001 after it was linked to 100 deaths. The drug maker is at present waiting for the ruling of Judge Michael Davis whether he will allow users of Baycol to lodge a class action. HEIDELBERGCEMENT: Posts Terms of Intended Cash Capital Increase --------------------------------------------------------------- The Managing Board and Supervisory Board of HeidelbergCement AG posted these details of its intended cash capital increase: (i) The share capital shall be increased by an amount of approximately EUR79.6 million; (ii) HeidelbergCement shareholders shall be offered subscription rights in a ratio of 11 to 5; (iii) For 11 existing shares each, shareholders may subscribe for 5 new shares with dividend bearing rights for the entire business year 2003; (iv) The subscription price amounts to EUR13; (v) The two-week subscription period commences on June 17, 2003. As a consequence of the capital increase, for which far reaching upfront subscription commitments and sub-underwriting commitments of major shareholders exist, the company is supposed to receive a gross amount of approximately EUR400 million in cash. Dresdner Kleinwort Wasserstein and Deutsche Bank will act as Joint Lead Managers for the capital increase. MEDIA! AG: Files for Bankruptcy Together with Mediarent GmbH ------------------------------------------------------------ MEDIA! AG and mediarent GmbH filed for bankruptcy last Thursday, a brief company statement released last week said. Earlier this year, the company reported a consolidated net loss of EUR8.4 million for the first nine months of fiscal year 2002-03. A EUR2.8 million provision for risks negatively impacted the results, the company said. As of March 31, 2003, the company had equity capital of EUR6.9 million. CONTACT: MEDIA! AG Thomas Diepenbruck, Chief Financial Officer Phone: +49 - 89 - 620 111 217 Fax: +49 - 89 - 620 111 513 NETLIFE AG: Eberhard Weiss to Retire from Management Board July --------------------------------------------------------------- The contract of Netlife AG Hamburg CFO Eberhard Weiss expires with effect from July 31, 2003. Mr. Weiss will retire from the company effective this date. Consequently, Chief Executive Officer Wolfgang Ahrens will solely represent the company's Management Board. Jorg Fahrenbach shall assume responsibility for finance, administration & personnel beginning August 1, 2003, a company statement released last week reads. WESTLB: Results of Probe at Principal Finance Unit Due Soon ----------------------------------------------------------- WestLB CEO Jurgen Sengera said the German financial regulator, BaFin, is expected to report its findings on the investigation regarding the bank's principal finance unit this week. The regulator is looking into the department headed by Robin Saunders, focusing on the financing made by WestLB to Boxclever, the UK television rental company that incurred losses of GBP350 million. Mr. Sengera, who is also subject of the investigation, revealed this development to the budgetary committee of the parliament of the state of North-Rhine Westphalia, WestLB's ultimate owner. A supervisory board meeting has been called for July 2 to discuss the BaFin findings and an extraordinary general meeting is due to follow in mid-July, according to the Financial Times. Mr. Sengera also gave his outlook for the bank, saying he saw no need for a capital increase and significant write-downs or risk provisions this year. WestLb wrote-down EUR1.9 billion last year, triggering a EUR1.7 billion- loss. He, however, did not rule out a possible need for capital injection for the bank from 2004, committee members said. "That is a worry because no one can afford to put up more money," said one, according to the report. During the meeting, Mr. Sengera also admitted that its investment in 31%-owned travel group Tui was carried on its books at EUR20 million, or a third higher than the current share price. WESTLB: Considers Divesting Principal Finance Business ------------------------------------------------------ WestLB CEO Jurgen Sengera is getting the bank's principal finance business valued with the possibility of unloading it, The Independent reports. The unit, headed by banker Robin Saunders, is under investigation from German regulator BaFin in relation to the financing of struggling TV rentals business, Boxclever. The division had also been involved in other complex financing arrangements that made observers conclude even before that its sale is forthcoming. It emerged that Citibank and Goldman Sachs were the two banks appointed by WestLB to carry out valuations of the principal finance unit, according to the Financial Times. Ms. Saunders is understood to be interested in the unit after she tried to buy it out last year. She is believed to have received indications of support from personal contacts and institutions for a possible offer of around GBP1 billion for the equity alone. "A sale would be only one alternative among several," Mr. Sengera told a German business magazine. ============= I R E L A N D ============= WATERFORD CRYSTAL: Mulls Extension of Summer Holiday Shutdown ------------------------------------------------------------- The management and unions at Waterford Crystal might decide to prolong its summer holiday shutdown in order to avoid job cuts at plants in Waterford city and Dungarvan, according to The Irish Examiner. The report cited insiders saying the summer closure in late July would be extended by a week. Last week, the company sent home 1,600 of its 1,700 employees for seven days to maintain demand and supply balance for its products. "A review is to take place at the end of June. One of the likely options for the company seems to be adding on to the annual shutdown at the end of July, extending into the middle of August," one source said. In March, Waterford Wedgwood blamed the war in Iraq, which affected luxury goods market particularly in the US where the Waterford brand is strong, as the reason for its difficulties. There are speculations that the glassware firm would cut costs further by increasing its levels of outsourcing of manufacturing to low-cost Eastern European countries, which means further job cuts in Britain. ========= I T A L Y ========= ALITALIA SPA: Still Pursuing Meridiana Alliance, Says CEO --------------------------------------------------------- Alitalia CEO Francesco Mengozzi said Italy's state-controlled airline is still pursuing the plan to set up a strategic alliance with Meridiana, the third largest Italian carrier, according to Dow Jones Newswires. The effort is despite the fact that exclusive talks between the parties ended April. The alliance with Meridiana could see loss-making Alitalia buy a 20% stake in the company that could help it stay afloat in the current crisis. The report cited Mr. Mengozzi's advice to shareholders last month that Alitalia must merge with other airlines and slash costs in order to survive the industry-wide slump. But Alitalia's acquisition of a 20% stake in Meridiana might meet opposition from Italy's competition regulator, said Dow Jones, citing a pronouncement by the regulator last week. The regulator had said Alitalia's dominant market position gives it the power to undercut low-cost carriers that are trying to enter the market. Alitalia already has a partnership with Air France. ALITALIA SPA: Workers Demand Talks, Warn of Further Strikes ----------------------------------------------------------- Unions threatened to launch more strikes at Alitalia unless the company agrees to hold further negotiations regarding its cost-cutting plan. The crew, which demonstrated its protest over Alitalia's plan to cut flight attendants from four to three by calling in sick at the beginning of the month, said the next strike may affect in-flight services, Mauro Rossi of the CGIL labor confederation, said, according to Dow Jones. He said other flight personnel could also stage broader strikes. ANSA news agency said CGIL union leader Guglielmo Epifani insisted the cost-cutting drive could ultimately make Alitalia less competitive. But Alitalia's newly appointed Chairman Giuseppe Bonomi also stressed this week it must pursue the program. As for the comment from Transport Minister Pietro Lunardi that Alitalia could go bust within a few months if it does not reduce its workforce, Mr. Bonomi said the company is not yet putting a threat of bankruptcy in the balance. The unions want the government to head the talks with the management of the state-controlled airline. Alitalia CEO Francesco Mengozzi said Wednesday that the company was "always open to dialogue." TELECOM ITALIA: New EUR15.5 Billion Credit Facility Rated 'BBB' --------------------------------------------------------------- Standard & Poor's Ratings Services said it has assigned senior unsecured debt ratings to the combined EUR15.5-billion credit facility of Italian telecommunications operators Telecom Italia SpA (BBB+/Stable/A-2) and parent Olivetti SpA (BBB/Watch Pos/--). The first facility, a EUR6.5 billion multi-tranche revolving credit facility available to the new Olivetti-Telecom Italia merged entity or to Telecom Italia SpA and Telecom Italia Finance S.A., with an irrevocable and unconditional guarantee by Telecom Italia SpA, was assigned a 'BBB+' rating. The second facility, a EUR9 billion multi-tranche term loan for Olivetti, was assigned a 'BBB' rating. At the same time, the latter rating was placed on CreditWatch with positive implications. "The ratings on both facilities are in line with Standard & Poor's corporate credit ratings on Olivetti and Telecom Italia, respectively, as the facilities are senior unsecured obligations of the companies," said Milan-based Standard & Poor's credit analyst Guy Deslondes. Both facilities have various tranches, with final maturities ranging from April 2004 to April 2006. In addition, certain tranches have term-out options ranging from six to 12 months. Olivetti's term loan will be used to finance cash-out payments to dissenting Olivetti shareholders and to finance the cash consideration payable upon completion of Olivetti's voluntary partial tender offer for Telecom Italia shares. It will also be used to finance the merger's transaction costs. The revolving loan taken on by Telecom Italia and Telecom Italia Finance will be used in part to cover short-term financial requirements, repay commercial paper, and refinance existing debt. It will replace Telecom Italia's existing EUR7.5 billion senior unsecured credit facility. The facilities' margins ratchet in line with the respective borrowers' corporate credit ratings. Financial covenants for both facilities include a ratio of consolidated total net debt to consolidated EBITDA that does not exceed 4x. "Taking into account Olivetti's pending merger with Telecom Italia and the related cash-out offer, Standard & Poor's believes that the group should fully comply with these financial covenants over the next few years," added Mr. Deslondes. The facilities do not carry any rating triggers. Once the merger between Olivetti and Telecom Italia is final, and assuming no other material change in Olivetti-Telecom Italia's credit profile, the long-term corporate credit and debt ratings on Olivetti will be equalized with those on Telecom Italia, and the long- and short-term ratings on the merged entity Olivetti-Telecom Italia will match those currently assigned to Telecom Italia ('BBB+'/'A-2'), with a stable outlook. ===================== N E T H E R L A N D S ===================== GETRONICS N.V.: On Watch Positive Due to Reduced Liquidity Risks ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it had revised the implications of the CreditWatch placement of its 'B-' long-term corporate credit rating and 'CCC' subordinated debt rating on the Dutch IT Services provider Getronics N.V. to positive from developing. The ratings were placed on CreditWatch on March 31, 2003. "The change to CreditWatch positive reflects Getronics' substantially reduced liquidity risks," said Standard & Poor's credit analyst Patrice Cochelin, "as the holders of its EUR575 million subordinated bonds have accepted a non-detrimental proposal for a EUR325 million cash payment at the end of June 2003, with the balance of EUR250 million to be amortized until September 2008." The bonds were initially set to mature in April 2004 and March 2005, but carried a minimal coupon (.25%, compared to the 13% newly agreed upon). The new bonds will remain contractually subordinated, but will lose conversion rights. "The June 2003 cash payment will be made using EUR315 million in proceeds from the May 28, 2003, disposal of Getronics' Dutch subsidiary, HR Solutions (not rated), and EUR11 million from the sale of Getronics' stake in the Norwegian IT services company Merkantildata (not rated). As a result, the threat of early repayment of outstanding bonds has been removed," added Mr. Cochelin. Standard & Poor's expects to resolve the CreditWatch placement within a week, following a complete review of Getronics' remaining operations and improved financial position. Following the resolution, the long-term corporate credit rating is likely to be in the 'B' category, reflecting Getronics shrunken business base and still depressed operating measures. KONINKLIJKE AHOLD: Promises to Reveal Final Probe Results At Once ----------------------------------------------------------------- The results of three final internal investigations into the events leading to the profits overstatement at Royal Ahold's U.S. Foodservice unit could come out soon, according to Reuters. A spokeswoman for the world's third largest retailing and food services group said last week the firm would "publish the results as soon as it is available." The reports due are for Ahold's Dutch headquarters, its Spanish operations and an unnamed third entity -- could be in Eastern Europe according to sources -- although Ahold's Polish and Czech operations have already been cleared. The operations are among the 14 cleared of any irregularities. The investigations into Ahold's other units follow the discovery that aside from an $880 million profit overstatement at Ahold's U.S. Foodservice subsidiary, there is still some US$29 million in overstatements, primarily at Tops Markets in the U.S. Audits at Santa Isabel in Chile and Disco in Argentina are also pending. The results of the final probes will first be discussed in Ahold's audit committee of supervisory board members, according to the report. KONINKLIJKE PHILIPS: To Appeal US$319 Mln Award to Volumetrics -------------------------------------------------------------- Royal Philips Electronics (AEX: PHI, NYSE: PHG) announced Thursday that a trial judge in Winston-Salem, North Carolina (USA) has confirmed a jury verdict decided in January 2003 against a subsidiary in the ultrasound business of Philips Medical Systems. The original verdict consisted of compensatory damages of US$106 million and US$45 million in punitive damages. The trial judge denied the subsidiary's motions to set aside the verdict and for a new trial and has granted the plaintiff's motion to treble the compensatory damages. The resulting verdict, in favor of Volumetrics, Inc., is for approximately US$319 million plus interest. The trebling of damages eliminates the punitive damages verdict. The existence of this claim and the jury verdict were previously disclosed in Philips' annual report on February 11, 2003. Philips is disappointed with this decision and has decided to appeal. The accounting treatment resulting from this decision is under review. LAURUS N.V.: To Construct New Frozen Distribution Center -------------------------------------------------------- Netherlands' second-largest supermarket operator Laurus N.V., which is selling five of its Super De Boer supermarkets in the country, is going to build a distribution center for deep-freeze products in Drachten, northern Netherlands. Dutch News Digest said Laurus would be opening the new distribution by mid-2004, which adds to the three frozen distribution centers it is currently operating in the country. This center will employ around 60 people and will supply approximately 50% of frozen products sold at Laurus' 350 Dutch supermarkets. TCR-Europe previously quoted Laurus as saying that consumer sales from its Dutch core activities dropped 6.4% to EUR1.425 billion for the first quarter of 2003, compared with figures for 2002. The company said the overall Dutch food retail market is difficult compared with 2002. Laurus posted a net loss of EUR128 million in 2002. It has sold off most of its loss-making Belgian operations to discount retailer Colruyt and used the proceeds to reduce long-term loans. CONTACT: LAURUS N.V. Parallelweg 64, P.O. Box 175 5201 AD Hertogenbosch, The Netherlands Phone: +31-73-622-3622 Fax: +31-73622-3636 Homepage: http://www.laurus.nl/bis/page-1-2.html NUTRECO HOLDING: Expects 1st-half Results to Fall Below Forecast ---------------------------------------------------------------- Nutreco Holding N.V. provides an update on the developments in the first five months of this year, ahead of the publication of its first-half results. The continuing low salmon prices, particularly in Europe and the persistency of the bird flu (Avian Influenza) consequences, negatively impacted first-half results. Nutreco has embarked on a major restructuring of its Marine Harvest business in Europe affecting about 300 jobs. Nutreco Aquaculture The persistently low salmon prices in Europe are affecting Nutreco's results. In view of these developments, Nutreco's Marine Harvest business has embarked on a major restructuring program in Norway and Scotland. In Norway, two processing plants will be closed, this in addition to the two plants closed last year. Within 12 months, Marine Harvest Norway has reduced its processing facilities from seven to three. It will continue to operate with two primary processing plants and one plant for value added products. With the closure of the two processing plants 210 jobs will be made redundant, or 26% of the workforce. In Scotland all processing will be concentrated at one location, instead of two, affecting 82 jobs (15% of the work force). Furthermore, the absence of recovery in salmon prices in Europe necessitates an additional depreciation of the capitalized goodwill from the Hydro Seafood acquisition in 2000. In February, Nutreco announced that an impairment would be unavoidable if salmon prices would not recover in the short term. As of December 31, 2002, the capitalized goodwill of Hydro Seafood amounted to EUR150 million. This depreciation is a non-cash item and Nutreco's balance sheet will remain strong. The measures taken will allow Nutreco to restore the profitability of its Norwegian activities in 2004. Nutreco Agriculture The bird flu outbreak in the Netherlands and Belgium is resulting in a bigger impact than initially expected. Due to this, the negative effect on first-half results is expected to be around EUR15 million instead of the estimated EUR5-10 million announced in April this year. Although no outbreaks have occurred since approximately 4 weeks, the actual supply side will be affected for several months. This will impact efficiencies in the Nutreco processing plants in the Benelux. The breeding activities of Euribrid can be negatively influenced for an even longer period of time. Since this is a global business, its revival depends upon the re-opening of borders of importing countries. At this moment, it is too early to predict the long-term impact of bird flu on the Benelux poultry business of Nutreco. Nutreco will publish its first-half results on August 5, 2003. Nutreco Holding N.V. is an international company with leading positions in high-quality food for human and animal consumption. The company is present at various stages of the fish, poultry and pork production chains. These activities are organized into two Business Streams, Nutreco Aquaculture and Nutreco Agriculture. Eight Business Groups, each comprising several Business Units, operate within these Streams, incorporating more than 120 production and processing plants in 22 countries with approximately 13,000 employees. Since its flotation in June 1997, Nutreco made acquisitions in the Netherlands, Spain, Germany, Canada, Poland, Chile, France, Portugal, Scotland, Belgium, Hungary, Norway, Australia and the United States of America. Nutreco's sales in 2002 were EUR3,809.6 million. Nutreco is quoted on the Official Segment of the stock market of Euronext (Amsterdam) and is included in the Amsterdam Midkap Index, the Euronext 150 Index and the Next Prime Index (Euronext). CONTACT: NUTRECO HOLDING N.V. F.A.C.(Frank) van Ooijen Corporate Communications Director Phone: +31 33 - 422 61 41 Mobile: +31 6 55 340 012 =========== N O R W A Y =========== ELOPAK: Considers Closure of Roeyken Factory; 100 Jobs at Risk -------------------------------------------------------------- As many as 100 jobs in Roeyken, west of Oslo, are being threatened as packaging company Elopak considers shutting down its factory there, Norway's Aftenposten said. Elopak, which has established operations in several countries, is aiming to consolidate production at fewer factories. It may decide on closing the Roeyken factory in Norway or the one in Finland. According to local newspaper Roeyken og Hurums Avis, cost-cutting at Roeyken factory could mean closure in about 15 months with a loss of 80 to 100 jobs. However, if the factory in Finland closes, production at the Roeyken site would instead be expanded. A decision is expected at a board meeting scheduled June 18. Elopak is one of the world's leading suppliers of packaging systems for liquid food products. It aims to satisfy market needs for attractive carton- and plastic-based packaging systems for liquid fresh and long-life food products. CONTACT: ELOPAK P.O. Box 124 N-3431 Spikkestad Norway Phone: +47 31271000 Fax: +47 31271500 ===================== S W I T Z E R L A N D ===================== ABB LTD: Decision on Asbestos Settlement Out in Two Weeks --------------------------------------------------------- The approval of ABB Ltd.'s complex asbestos settlement in the U.S. could come in the next two weeks, Dow Jones Newswires cited a source as saying. According to the report, David Austern, who is working closely with ABB on the deal, said: "(The ruling will come) almost certainly in the next two weeks, but (judge Judith Fitzgerald) is writing her opinion and we are no longer before her on a daily basis, so it's hard to give an exact date." The decision to the case, which is being heard at a Delaware bankruptcy court, was expected at the beginning of April, but had been delayed a couple of times. The suit is related to ABB's Combustion Engineering, which produced boilers that were insulated with asbestos. More than 100,000 people claiming to have come in contact with the cancer-causing fiber have filed a case against the firm. The asbestos liability package is a key factor in ABB's turnaround strategy, which includes the sale of its oil, gas and petrochemicals business. ABB plans to use the proceeds of the sale, estimated at up to $1.4 billion, to pay down its $8 billion debt. ABB is confident the package will be accepted, given that more than 90% of asbestos claimants have already done so. ABB spokesman Wolfram Eberhardt told Dow Jones that the asbestos settlement is "progressing according to plan." The company expects a "positive outcome," he added. WINTERTHUR GROUP: Churchill Sale a Good Strategy, Says Fitch ------------------------------------------------------------ Fitch Ratings views Winterthur Suisse Insurance Company's proposed sale of Churchill, its 100% owned UK based insurance subsidiary, as an important strategic step towards reinforcing its capital position and reducing its risk profile. The transaction is expected to close during the third quarter of 2003. From a strategic perspective, the agency considers the disposal would reduce, to a limited extent, the group's business position and diversification. Equally, Fitch recognizes the positive impact on Winterthur group earnings that has been derived from the strong earnings performance of Churchill and expects to discuss with Winterthur management the longer term strategic implications for the group. The proposed transaction to sell Churchill for approximately GBP1.1 billion would be entirely paid in cash and Fitch expects a substantial positive impact on Winterthur's capital adequacy due to both the generation of a capital gain and the reduction of the risk-based capital requirement at the group level. As noted above, from a business standpoint, the disposal of Churchill would significantly reduce the involvement of Winterthur in the UK market and, thus, the group's business diversification. At year-end 2002, Churchill's net premium written accounted for more than 12% of Winterthur's premium and over 66% of the group's UK business. In terms of total non-life premium volumes, Churchill accounted for approximately 27% of the Winterthur group non-life total for 2002. Excluding Churchill's contribution, approximately 63% of Winterthur's premium originated from outside of Switzerland in 2002 against the actual figure of 68%. This implies that substantial business diversification will remain following the disposal of Churchill. The Insurer Financial Strength ratings of Winterthur Suisse Insurance Company and Winterthur Life are 'AA'. The Long term rating of Winterthur Suisse Insurance Company is 'AA-' (AA minus). The Outlook is Negative. =========================== U N I T E D K I N G D O M =========================== AWG PLC: Approves Resolution to Return Capital to Shareholders -------------------------------------------------------------- At the Extraordinary General Meeting for holders of ordinary shares in AWG Plc, the ordinary resolution relating to the proposed return of capital of approximately GBP177 million and the 201 for 250 Ordinary Share consolidation was approved. The Ordinary Share consolidation took place after close of business on Friday, June 13, 2003. The new number of Ordinary Shares in issue following the consolidation will be 142,670,403. A copy of the resolution passed at the above meeting will shortly be available for inspection at the UK Listing Authority's document viewing facility. BAE SYSTEMS: Thousands of Jobs Depend on Hawk Jets Contract ----------------------------------------------------------- BAE Chairman Richard Evans warns 2,000 job losses could occur in the industry if the government does not award the defense group a GBP10 billion contract to manufacture Hawk jets for the Royal Air Force. Mr. Evans said: "If the Government were to decline to endorse this product (Hawk), the prospect of us selling it across the world would decline rapidly." He warned of potential negative effects of the loss of the aircraft contract to an overseas company on BAE's export prospects. He was responding to reports that the Treasury is not satisfied with BAE's bid to manufacture 30 Hawk training jets, according to The Times. The report cited the Treasury saying offer does not give value for money. Jobs at BAE's factory at Brough, near Hull, will "obviously" be affected, according to Sir Richard. He did not particularly say the plant could close, but BAE later said the fact understandably makes the factory under threat. Mr. Evans also accused British taxpayers of effectively subsidizing foreign companies if the government were to source the jets abroad. BARR HOLDINGS: Chairman's Departure Triggers Reorganizations ------------------------------------------------------------ Significant changes in power among the directors of troubled construction giant Barr Holdings took place after Chairman Bill Barr resigned from his post last month, The Herald found out. Executive Chairman Tony Rush, along with three other directors, increased their stake in operating subsidiary Barr Ltd., the report said. Brothers John and Duncan Barr stayed as board executives, but their one-third stake, together with that of Bill, another brother, were heavily diluted. People in the industry were inclined to believe the company's bankers introduced the reorganization because of the heavy losses the firm sustained over the last two years. Mr. Rush commented on the speculations saying: "It's no secret that Barr has had a difficult time. It would be unusual if there had not been discussions (with the Royal Bank of Scotland). We have their support and involvement going forward." Barr Holdings had a GBP3.1 million pre-tax loss on turnover of GBP122 million in 2002. During the previous year, Barr had a GBP2.4 million loss. Under the new management, the company will operate under the same name Barr, but it would refocus on its core sports stadia and retail construction businesses, together with quarrying. Mr. Rush will run down or scrap the Barr Homes, the company's residential housing subsidiary, and Barr facilities management. Another subsidiary, Barr Environmental, handles 60% of Ayrshire's waste, but that business too will not be developed further, according to the report. Barr's 76% stake in the club Ayr United, where Bill Barr is chairman, is also "under review," according to Mr. Rush. BOOTS PLC: Halts Operation of Wellbeing, Pure Beauty Concept ------------------------------------------------------------ Boots Group Plc, one of the best-known retail providers of health and beauty products in the UK, has withdrawn its loss-making Wellbeing unit and outlets in the Netherlands and Italy. It has also discontinued operations of its Pure Beauty concept, online news agency Leisure Opportunities said. The retail company will discontinue Wellbeing Services, including osteopathy, physiotherapy, homeopathy, herbalism, nutrition, Alexander Technique, aromatherapy and reflexology. These services were made available from 12 Boots centers. Meanwhile, the six existing Pure Beauty stores in London, Manchester, Chester and Richmond, will either be closed or converted in Boots The Chemist formats. The proposed closures are two of a number of initiatives aimed at improving future trading performance at the company and reducing the need for further investment in the ventures concerned, the report said. Up to 700 jobs will be made redundant. Boots will continue to offer its Dentalcare and Footcare services in 56 locations throughout the UK. Boots Opticians, including LASIK, will remain unaffected by the changes to Wellbeing Services. Boots recently released full year figures to March 31, and revealed pre-tax profits for the period down nearly 17%. BRITISH MIDLAND: bmibaby Announces New Routes, Expansion Plans -------------------------------------------------------------- Forget the recent press speculation about who's going to Barcelona, it's finally been revealed and Tiny, spokesbaby for bmibaby, just couldn't keep quiet any longer, he's kicking off services to the Catalan Capital from Manchester on October 1. Bmibaby, Europe's third largest low cost airline, will also be keeping its European competition campaign going this Autumn from Manchester with the only service by a UK airline to the Czech capital, Prague. The airline, which launched services from Manchester last month to six European destinations, will be offering services to Barcelona and Prague from October 1, with Internet fares starting from just GBP37.50 one way inclusive of tax and insurance surcharges. Bmibaby will be the only low cost airline serving both destinations and is expecting them to be a winning combination both for the airline and for travelers in the North West. The new routes will both be served on a daily basis with mid morning departures from Manchester to Barcelona and late afternoon departures from Manchester to Prague. Services from Manchester to Cork are also set to increase due to the overwhelming popularity of the route, which is currently served on a daily basis. From October 1, the route will now be served on a twice daily basis. Bmibaby will also shortly be announcing routes to be served from its fourth base at Teesside Airport and it's entire winter program from Manchester, Cardiff and East Midlands airports. The airline asked public opinion on where it should fly to from Teesside and is currently looking at the 4,000 requests it received. Tony Davis, managing director, bmibaby, said: "We've got a great mix of business and leisure routes and our passenger figures just keep going up and up. In fact, it was only in May that we experienced our busiest ever month when we carried over a quarter of a million passengers. We're pleased to announce our expansion plans for the autumn and we're sure that travelers from Manchester, especially football fans, will be particularly delighted that a low cost carrier will soon be serving the popular routes of Barcelona and Prague. With fares from just GBP37.50 one way including tax there's no excuse for not hopping over to Spain and following your favorite footballer wherever they may go! "We're also offering travelers between Manchester and Ireland even more flights with the introduction of a second daily service between Manchester and Cork from 1 October. The response from the Northwest to our initial summer services has been fantastic." bmibaby fares to both new routes will be on special offer from June 13-19, costing from just GBP19.99 (GBP32.49 including tax) one way excluding tax when booked on line at http://bmibaby.com,a saving of 5 on the normal ticket price. BRITISH MIDLAND: Urges Greater Competition in Airport Management ---------------------------------------------------------------- BMI British Midland called for Britain's airport expansion strategy to be used "as a tool of competition policy, which should deliver greater choice and benefit for future generations of travelers," as it outlined details of its submission to the Government's 30-year capacity consultation. The airline laid out three key elements to its submission, at a press conference in London. It is calling for expansion of the nation's most congested airport, Heathrow, through a new third runway; new operators to construct and run new facilities at Heathrow and other congested airports; and a 'pay for what you get, not what you're going to get' rule for charging for new airport facilities. Sir Michael Bishop, chairman of British Midlands, said: "BMI has been a driver of new competition in the air industry for thirty years. We were the first real competition to the national flag-carrier, the first real competitor on Europe's trunk routes and the true pioneer in delivering affordable air travel for millions of new travelers. "From long experience, we know that one of the greatest blocks to competition is airport congestion, particularly at Heathrow. Our nation needs a world-class hub airport and without a new runway at Heathrow, there is no feasible way we will achieve that. "Many other options have been raised but this process should be driven by an 'expansion where expansion is needed' approach -- and that means new runway capacity at Heathrow. We therefore strongly support the introduction of mixed mode operations in the short term and construction of a third runway in the long term. But this cannot be expansion at any price." BMI also called for any new development around Heathrow or other congested airport sites to be managed by alternative operators, creating a competitive environment in the management of airport capacity. Sir Michael added: "We have had strong and positive relationships with BAA for more than 30 years. I have great admiration for their skills in airport management and I believe we have played a significant part in their development into one of the most successful PLCs in the country. Over the last three decades, no airline has consistently grown its business with BAA more than BMI. "But the temptations of a monopoly position are strong indeed. And recent events suggest that BAA has succumbed. The T5-based increase in Heathrow landing charges -- 40 percent in real terms over the next five years -- means we, or our customers, have to pay for many years for something from which we will see no benefit. Indeed, for significant improvement of our own customers' facilities we will have to wait a further two years beyond the opening of T5. During periods where comparative facilities are so inequitable, we will expect to see suitable compensatory measures. "Airlines and travelers should pay for what they get now, not what they will get in the future. It is a principle that applies to every other area of business -- and Government must ensure it applies here. "As an airline, we have to put the needs of our customer first. And it is clear from recent events that the current regulation of BAA's operations does not serve their needs at all. We have therefore been forced to the conclusion that the competitive dynamic around BAA's position is broken and it must be fixed. "That does not have to mean the break-up of the company's South East operation, as others have mooted in the past. But we are asking that Government first consider ring-fencing BAA at its current sites to existing operations -- and that the construction and operation of new facilities, including runways, should involve new operators, offering a truly competitive environment. We now have a range of experienced and successful airport operators in this country and they should be given the opportunity to bring their skills to the congested airports in the South East. Only in this way will cost-effective new airport capacity bring the benefits to travelers, and to UK plc, that the Government clearly recognizes are needed." Sir Michael finished by reaffirming the airline's commitment that all airport capacity development should be managed in an environmentally sustainable manner. He said: "We strongly support the concept of sustainable development, which takes full account of all impacts -- economic, social and environmental -- of new airport capacity. We will work with relevant parties over the coming months and years to develop environmental mitigation, compensation and performance improvement measures." ***** The short-haul airline has come under increasing pressure as a result of competition from low-cost carriers and the downturn in the aviation market. CONTACT: BRITISH MIDLAND AIRWAYS LIMITED Donington Hall, Castle Donington, Derby, DE74 2SB. CAMP BROTHERS: Files for Receivership; Blames Poor Summer Sales --------------------------------------------------------------- Scotland's largest ice-cream manufacturer has fallen into receivership after discussions with creditors broke down, The Scotsman reports. Camp Brothers Ltd., the Schotts-based firm who blamed poor sales last summer for its demise, appointed Glasgow accountants Wylie and Bisset as receivers. Senior partner Michael Sheppard told The Scotsman they are hopeful that the business could be sold as a going concern. He added that Camp Brothers would still continue trading and that there will be no job losses as it is "running on a skeleton staff at the moment." Camp Brothers manufactures a range of dairy and non-dairy ice cream, dairy-free and sugar-free products. It has contracts with FarmFoods, Asda and Tesco, and employs 32 staff. The company's debt is still unknown when the receivers were called, but at its last accounts the figure stands at GBP425,322 net. CONTACT: CAMP BROTHERS (CAFE) LTD Gilburn Place Shotts Airdrie ML7 5ES Phone: 01501 822546/00 44 (0) 1501 822546 Fax: 01501 823770/00 44 (0) 1501 823770 Homepage: www.campsicecream.com CHUBB PLC: Board Backs Cash Offer of UBS Investment, JPMorgan ------------------------------------------------------------- The boards of Chubb and UTC are pleased to announce that they have agreed the terms of a recommended cash offer for Chubb. The Offer will be made outside the U.S. by UBS and JPMorgan on behalf of the Offeror, a wholly owned subsidiary of United Technologies Corporation and in the US by the Offeror. The Offer will be 75 pence in cash for each Chubb Share, valuing the entire issued share capital of Chubb at approximately GBP622 million. In addition, Chubb Shareholders will receive a special interim dividend of 1 pence per Chubb Share after the Offer becomes or is declared wholly unconditional. The Chubb Directors, who have been so advised by Rothschild, consider the terms of the Offer to be fair and reasonable and intend unanimously to recommend that Chubb Shareholders accept the Offer, and have irrevocably undertaken to do so (or procure to be done) in respect of their own beneficial holdings of, in aggregate, 101,538 Chubb Shares representing approximately 0.01% of the existing issued share capital of Chubb. Commenting on the Offer, George David, Chairman and CEO of United Technologies Corporation, said: "Chubb fits directly into UTC's business mix and acquisitions strategy. The company is a market leader in commercial security services and fire protection, and these businesses have substantial markets. Chubb is further positioned well internationally, and UTC's already high aftermarket and international revenues will increase following the acquisition. Most of all, we like the overlaps in our customer populations. UTC already sells to exceptionally high numbers of buildings in the world, and Chubb's installations will both overlap with and augment this large presence. We see lots of potential for synergies among Otis, Carrier and Chubb. We like this deal a lot." Commenting on the Offer, Sir Robert Horton, Chairman of Chubb, said: "Chubb has a fine portfolio of businesses, a strong brand name and talented and committed people. We believe that there is considerable long-term potential in the Chubb Group and we have a clear strategy to deliver it. However, this potential is likely to be realized more quickly within a major global group like UTC with substantial resources. UTC's offer provides shareholders with the certainty of cash now in uncertain and difficult markets." To view full announcement and recommended cash offer: http://bankrupt.com/misc/Chubb_plc.htm CONTACT: UNITED TECHNOLOGIES CORPORATION Peter Murphy Phone: +1 860 728 7977 Paul Jackson Phone: +1 860 728 7912 UBS INVESTMENT BANK Emma Goodrick Phone: 020 7567 8000 Leanne Gordon-Kagan Phone: 020 7567 8000 JPMORGAN Mark Breuer Phone: 020 7777 2000 Edward Banks Phone: 020 7777 2000 CHUBB Jonathan Findler Phone: 020 7766 4800 Juliet Burland Phone: 020 7766 4800 ROTHSCHILD Philip Swatman Phone: 020 7280 5000 Crispin Wright Phone: 020 7280 5000 Stuart Vincent Phone: 020 7280 5000 CITIGROUP Philip Robert-Tissot Phone: 020 7986 4000 Ed Matthews (broking) Phone: 020 7986 4000 CSFB Tom Reid (broking) Phone: 020 7888 8888 Stuart Field (broking) Phone: 020 7888 8888 FINSBURY Morgan Bone Phone: 020 7251 3801 CORDIANT COMMUNICATIONS: Seeks Approval for Sale of Aussie Unit --------------------------------------------------------------- Cordiant Communications Group plc announces that it is posting Thursday a circular to its shareholders seeking their approval for the disposals of 70% of The Communications Group, comprising its principal Australian businesses, and its 77.3% interest in Scholz & Friends. The details of these disposals were announced on May 29, 2003 and June 9, 2003 respectively. The extraordinary general meeting is to be held at 11.00 am on Saturday June 28, 2003. It is being held on this date because of the requirement that the disposal of The Communications Group is completed in Australia no later than June 30, 2003, the long stop date for completion. On April 29, 2002, Cordiant announced that it had received very preliminary approaches that could lead to an offer for the Company. Since then, Cordiant has been actively evaluating a range of more detailed proposals, including possible offers for the Company or involving its re-capitalization. Cordiant has maintained a continuous dialogue with Cordiant's major clients who have indicated their preference for Cordiant to seek an industry partner. The Board continues to advance its discussions with various parties and is seeking to bring them to a conclusion in the very near future in the best interests of the stakeholders of the Group and its clients. The Board expects to write to shareholders on this matter shortly. These disposals will allow Cordiant to effect an important reduction in Cordiant's debt position. As of April 30, 2003, the Group's gross debt balance was GBP262.6 million, cash was GBP61.4 million and net debt GBP201.2 million. The increase in net indebtedness of GBP49.5 million between December 31, 2002 and April 30, 2003 is principally due to cash spent against the restructuring provision held in the December 31, 2002 balance sheet, a normal seasonal working capital movement and the impact of reduced media buying activity in the U.S. In addition there are material make-whole arrangements and other fees which are payable contingent on Cordiant's financial performance. In the opinion of the directors, the Group does not, following completion of either or both of the disposals, currently have sufficient working capital for at least 12 months from the date of the circular. However, the Company continues to enjoy the support of its lenders, has resources to meet its current obligations and is actively taking steps to address the longer term working capital position, including constructively working with its lenders to secure long-term funding, execution of the disposal program and consideration of a possible sale, or re-capitalization, of Cordiant. During 2002 Cordiant implemented a restructuring program to form the Bates Group to substantially reduce costs. The significant steps taken have created a cost base better aligned to the prevailing market conditions and have, in part, mitigated the impact of significant losses in the US during 2002, in particular Wendy's and Hyundai. The Group has traded broadly in line with expectations in the first three months of this year, but since then has found it increasingly difficult in the current circumstances to win new business and retain revenue from existing clients due primarily to its current financial position. The outlook for the Group is likely to be below the Board's original expectations, notwithstanding the benefits of the restructuring which will mitigate to some extent the adverse impact of revenue shortfalls. CONTACT: COLLEGE HILL Phone: +44 (0) 20 7457 2020 Alex Sandberg Adrian Duffield LOMBARD MEDICAL: Announces Resignation of Directors --------------------------------------------------- Lombard Medical plc announces that, at its Annual General Meeting held Thursday, these resolutions were passed: (a) Resolution 1 relating to the approval of the audited financial statements for the period ended September 30, 2002; and (b) Resolution 6 relating to the appointment of PricewaterhouseCoopers LLP as auditors to the Company and to authorize the Director to fix their remuneration. Following yesterday's announcement that Messrs Terry, Elbrick and Potter had resigned as directors of the Company on June 9, 2003, resolutions 2, 4 and 5 relating to their re-appointment were withdrawn. Mr. P Nigel Gray agreed to resign as a director of the Company with effect from completion of this morning's AGM so resolution 3, relating to his re-appointment, was also withdrawn. With effect from the completion of this morning's AGM, these persons have resigned as directors of Lombard Medical: Christopher G Stainforth P Nigel Gray Professor Martin T Rothman CONTACT: LOMBARD MEDICAL Simon Stock, Director Phone: 020 7710 4500 LONDON PACIFIC: Changes Name to Berkeley Technology Limited ----------------------------------------------------------- London Pacific Group Limited posted last week the documents on Special Resolution passed at Annual General Meeting. A copy of this document, which relates to the changing of the Company's name to Berkeley Technology Limited has been submitted to the UK Listing Authority, and will shortly be available for inspection at the UK Listing Authority's Document Viewing Facility, which is situated at the address detailed below. The name change will become effective on approval by the Jersey Financial Services Commission. ***** In March, London Pacific Group Limited reported a consolidated net loss for the 12 months ended December 31, 2002 of $205.5 million, or $4.05 per diluted share and $40.49 per diluted ADR, compared with a net loss of $344.8 million, or $6.76 per diluted share and $67.62 per diluted ADR, for the same period in 2001. CONTACT: FINANCIAL SERVICES AUTHORITY 25 The North Colonnade Canary Wharf London E14 5HS Phone: (0)20 7676 1000 MELROSE RESOURCES: Posts Update of Recent Activity -------------------------------------------------- Melrose Resources plc announces that at the Annual General Meeting Thursday, the shareholders of the Company approved all of the resolutions put before the meeting. At the meeting Robert Adair, Chairman, gave this update of recent activity and of the outlook for the Group. "I am very pleased to report significant further achievements by the Group in recent months. In Bulgaria, construction work on the production platform for the Galata field continues and we are on schedule for first production in January 2004 at rates of around 40 MMcfpd. "In the USA, we have now commenced an active drilling program out of cashflow: two wells have recently been drilled on the Jalmat Unit and are scheduled for completion this month. The initial indications are encouraging and we expect our daily production in the USA to increase to over 800 boepd once these wells are on production, which represents an increase of over 30% since last year-end. These good results confirm the exploitation upside of our US assets. Further drilling is planned for the remainder of this year. "We are very excited about our exploration success on the El Mansoura concession in Egypt with the recently announced third consecutive discovery in the shallow Pliocene formation. We have also confirmed that the Miocene discovery, which we announced in February, is now much bigger than originally believed. We expect gross production from the concessions in Egypt of around 100 MMcfepd by the first quarter of next year, increasing to over 150 MMcfepd in 2005. In 2006, gross production from fields already discovered in Egypt is expected to be over 200 MMcfepd. "I believe that El Mansoura is now proving to be a major league exploration concession. We have only just begun to prove up the potential of the first two horizons on the concession. The deeper Oligocene structures, where reserves could be significantly greater, are still to be tested. Prospects and leads have already been identified on the concession with targets totaling over 2.5 Tcf. This year in Egypt we have added net reserves of around 70 Bcfe, which compares with our net reserves in Egypt at the beginning of the year of 13 Bcfe. "By 2005, we anticipate that total Group net production from existing fields in all areas should exceed 70 MMcfepd (11,600 boepd) with additional production expected from success in the planned exploration program. We have the potential, therefore, to dramatically increase reserves and production over the next few years and hence shareholder value." ***** In March, Melrose Resources reported loss on ordinary activities after taxation of GBP2,232,000 (2001-GBP415,000 profit). It also announced a rights issuance to raise up to GBP14 million to reduce borrowings and provide additional working capital. CONTACT: MELROSE RESOURCES PLC Robert Adair, Chairman Phone: 0184 553 7037 David Curry, Chief Executive Phone: 0131 225 6678 Chris Thomas, Corporate Development Director Phone: 0207 462 1600 BINNS & CO PR LTD Ben Willey Phone: 020 7786 2812 SCHRODER EMERGING: To Push for Liquidation in EGM Next Month ------------------------------------------------------------ The Board of Directors of Schroder Emerging Countries Fund plc announces that it proposes to recommend reconstruction proposals to be implemented pursuant to section 110 Insolvency Act 1986 giving shareholders the option, as part of a voluntary winding-up of the Company, to roll over their investment into an existing Schroder authorized unit trust, Schroder Global Emerging Markets Fund (Schroder GEM), and/or to receive cash in accordance with their entitlements in the winding-up. As of the close of business on June 11, 2003, the middle market price of an Ordinary Share was 49.5 pence (representing a discount of 16.1 % to the estimated net asset value of 59.0 pence as at that date) and the middle market price of a Warrant was 3.0 pence. Background Last year the Company's directors introduced a number of measures with the aim of improving the Company's performance. These measures included a proposed change in the individual portfolio manager responsible for the day-to-day investment of the Company's portfolio; a reduction in the base fee payable to the Company's investment manager from June 1, 2002; the concurrent introduction of a performance fee; and a reduction in the notice period required for termination of the management contract, to take effect from this year's Annual General Meeting, scheduled for September. In order to allow a period for the new arrangements to have an effect on performance, while also allowing shareholders an opportunity to consider whether the Company should continue in its present form at an earlier date than was previously envisaged, the Board also undertook that shareholders would be given the opportunity to consider, at this year's Annual General Meeting, whether the Company should continue as an investment trust. This year's Annual General Meeting is due to take place in September and it is at that meeting that a continuation vote would have been proposed. However, in reviewing the Board's recommendation to shareholders on the continuation vote, the Board has considered the Company's recent performance, the continuing wide discount at which the Ordinary Shares have been trading and the views expressed by a number of the Company's major shareholders. In the circumstances, the Board has concluded that the interests of shareholders are best served by the early introduction of reconstruction proposals. The Scheme Shareholders The Scheme provides two options for shareholders, the rollover option and the cash option. The rollover option Shareholders electing this option will receive units in Schroder Global Emerging Markets Fund unit trust, an existing authorized unit trust. The number of units which a shareholder will receive will be based on the net asset value of the Ordinary Shares held by that shareholder less their pro rata share of the costs of formulating and implementing the Scheme (other than the payment to the Investment Manager described below in the section headed Expenses). There will be no initial charge on issue of units under the Scheme. Schroder GEM has a similar investment policy and investment management team to the Company. It is an authorized unit trust with net assets of approximately GBP92 million, which has been in existence for over nine years. The rollover option allows those shareholders who wish to remain exposed to emerging markets to do so. At the same time the rollover option will not crystallize a gain or loss for UK tax resident shareholders, with the acquisition cost of the units they acquire being deemed, for tax purposes, to be, in effect, the original acquisition cost of their shares. The cash option Shareholders electing this option will receive a cash distribution in sterling equal to the net asset value of the Ordinary Shares held by them less (i) their pro rata share of the costs of formulating and implementing the Scheme, (ii) the payment to the investment manager described in the section below entitled 'Expenses' and (iii) the costs of disposal of the portfolio assets forming part of the liquidation pool (essentially the difference between the actual selling price after commission and other expenses and the market quotations on the basis of which net asset value is calculated). The disposal costs will depend on market conditions at the time and on the proportion of the portfolio, which has to be sold. By way of example, had it been necessary to realize half the portfolio on an average trading day during the last month, the Investment Manager estimates that disposal costs would have represented approximately 1.25% of net asset value per Ordinary Share. Shares and cash Shareholders may elect to roll over only part of their shareholding and to receive cash for the remainder. Shareholders who do not make a valid election will be deemed to have elected for the rollover option in respect of their holding of Ordinary Shares. Shareholders should be aware that the net asset values relevant to the options available to them will be different from the current net asset value of the Company because the assets of the Company will be subject to market movements in the period between now until the date upon which the Scheme will be implemented and because the Company will incur costs in relation to the Scheme, including the costs of realizing some holdings. Warrant holders Under the Scheme, Warrant holders will receive cash at the rate of 3.25 pence per Warrant, constituting a small premium to the sum the Warrant holders would otherwise receive in a straightforward liquidation of the Company (namely the average market price of a Warrant as derived from the London Stock Exchange Daily Official List over the period of 10 business days prior to this announcement, being 3.0 pence per Warrant). Mechanics of the Scheme The Company's directors will shortly dispatch a circular to shareholders and warrant holders convening two Extraordinary General Meetings and a Warrant holders Meeting accompanied by a Form of Election to enable shareholders to choose whether to roll over all or part of their shareholdings into Schroder GEM, or to realize all or the remainder of their shareholdings for cash. At the First Extraordinary General Meeting, a special resolution will be proposed to approve the Scheme (and approve the changes to the Company's articles of association necessary for its implementation). If the resolution is approved those shareholders who elect to roll over into Schroder GEM will hold A Shares giving them the right to receive units in Schroder GEM on a winding-up of the Company and those shareholders who elect for cash will hold B Shares giving them the right to receive cash on a winding-up of the Company. If the Scheme is approved by warrant holders at the Warrant holders Meeting, warrant holders will be entitled to receive cash at the rate of 3.25 pence per Warrant, representing a small premium to the 3.0 pence per Warrant which they would otherwise receive on a winding-up. After the First Extraordinary General Meeting, if shareholders approve the Scheme, the Company's assets will be divided into two pools, the Rollover Pool and the Liquidation Pool, according to the elections made or deemed to be made by shareholders. At the Second Extraordinary General Meeting, another special resolution will be proposed to put the Company into voluntary liquidation and to appoint James Robert Drummond Smith and Nicholas James Dargan of Deloitte & Touche as Liquidators. Immediately after their appointment the Liquidators will provide for the outstanding and contingent liabilities of the Company and then distribute the Liquidation Pool (which will be cash following the realization of the investments in the Liquidation Pool during the period between the First and Second Extraordinary General Meetings) to the B Shareholders. At the same time the assets in the Rollover Pool will be transferred to Schroder GEM in exchange for an issue of units direct to the A Shareholders. The number of units to be issued will be calculated on the basis of the net asset value per A Share and the issue price for units at the time of the transfer. No initial charge on the issue of these units will be made. Portfolio Realization The vast majority of the Company's portfolio is held in readily realizable stocks with a settlement period of five business days or less. It is therefore intended that the Company should retain these stocks in the portfolio up until the date of the First Extraordinary General Meeting. Following that meeting, and assuming that the Scheme has received the requisite approval from shareholders, the Company's assets will be divided into two pools, the Rollover Pool and the Liquidation Pool; the investment manager will seek to realize stocks held within the Liquidation Pool with the intention that all necessary realizations will have been effected and settled by the time of the Liquidator's appointment at the Second Extraordinary General Meeting. The Investment Manager may however seek to initiate the realization process prior to the First Extraordinary General Meeting in respect of the small minority of stocks within the Company's portfolio which the investment manager considers may be particularly illiquid or which may require a protracted settlement period. Benefits of the Proposals The Company's directors believe the Scheme to be in the best interests of shareholders as a whole because: (a) The Scheme offers shareholders greater flexibility than in a straightforward liquidation, with shareholders who wish to retain an equity exposure to emerging markets being able to do so through the Schroder GEM portfolio (b) Shareholders who elect to roll over into Schroder GEM can also maintain continuity of investment manager, investment objective and investment style (c) Shareholders wishing to roll over into Schroder GEM will, as a result of Schroder GEM's open-ended structure, have the ability to realize their investment in due course at a price close to its underlying asset value at the time of sale (d) Shareholders wishing to realize their holding for cash will be able to do so in a timely manner and at a price closer to net asset value than the prices at which shares have been trading recently Conditions Implementation of the Scheme is conditional on the passing of the necessary resolutions at the Extraordinary General Meetings and the approval of the warrant holders at the Warrant holders Meeting. If the Scheme is approved by shareholders but not warrant holders, the Directors intend to recommend that the Company commence a straightforward winding-up, which does not require the consent of the warrant holders, at the Second Extraordinary General Meeting. If such a liquidation is approved warrant holders will receive 3.0 pence per Warrant (the average market value for the warrants over the ten business days preceding this announcement) while shareholders will receive cash based on the realized value of the assets after all the Company's liabilities have been discharged. Expenses The expenses (inclusive of VAT) incurred in relation to the Scheme, including financial advice, legal advice and the Liquidator's charges (but excluding management agreement termination costs and costs in relation to the warrants), are currently estimated to amount to some 1.20% of the estimated net asset value of the Company as at the close of business on June 11, 2003. The shareholders will met these expenses by on a pro rata basis and regardless of the elections a shareholder may make. Those shareholders who have elected to receive cash will meet costs in respect of the realization of assets in the Liquidation Pool. The investment manager is entitled to twelve months' notice of termination of its investment management agreement with the Company. However the Company and the investment manager have agreed that the Company will pay the equivalent of only six months' fee (0.375%) on that portion of the portfolio that is realized to fund payments to shareholders who elect to receive cash, notwithstanding that less than 12 months' notice of termination will have been given. This termination payment will be borne by those shareholders who elect to receive cash. The investment manager will not receive any performance fee. ISAs and PEPs Beneficial holders of Ordinary Shares held through a Schroder PEP or a Schroder ISA will receive a letter from their nominee explaining in further detail their entitlements under the Scheme and the action which they should take. Beneficial owners of Ordinary Shares held through any other PEP or ISA scheme should consult their PEP or ISA scheme manager. Shareholder Meetings and Warrant holders Meeting The Scheme requires the approval of shareholders. Notices of the requisite Extraordinary General Meetings will be set out in the circular that will be dispatched to shareholders shortly. Both Extraordinary General Meetings will be held at 31 Gresham Street, London EC2V 7QA. First Extraordinary General Meeting The First Extraordinary General Meeting is expected to be held at 11:30 a.m. on July 16, 2003. At this meeting a special resolution will be proposed which will (a) change the Company's articles of association so as to confer the 'A' Rights and 'B' Rights on Ordinary Shares for the purposes of the Scheme and (b) sanction the implementation of the Scheme. This resolution will require the approval of at least 75% of the votes cast at the Meeting. Second Extraordinary General Meeting The Second Extraordinary General Meeting is expected be held at 9:00 a.m. on July 25, 2003. At this meeting a special resolution will be proposed for the winding-up of the Company and the appointment of the Liquidator(s) and an extraordinary resolution will also be proposed to confer appropriate powers on the Liquidator(s). Each of these resolutions will require the approval of at least 75 % of the votes cast at the Meeting. Warrant holders Meeting The implementation of the Scheme also requires the approval of the Warrant holders. The requisite Warrant holders Meeting is expected to be held at 12 noon (or as soon thereafter as the First Extraordinary General Meeting has concluded or been adjourned), on July 16, 2003 at 31 Gresham Street, London EC2V 7QA. To See Expected Timetable: http://bankrupt.com/misc/Expected_Timetable.htm Dresdner Kleinwort Wasserstein Securities Limited, which is regulated by the Financial Services Authority, is acting for the Company and for no-one else in connection with the contents of this document and will not be responsible to anyone other than Schroder Emerging Countries Fund plc for providing the protections afforded to customers of Dresdner Kleinwort Wasserstein Securities Limited, or for affording advice in relation to the contents of this announcement or any matters referred to herein. CONTACT: SCHRODER EMERGING COUNTRIES FUND PLC The Hon. Rupert Carington, Chairman Phone: (020 7658 3206) SCHRODER INVESTMENT MANAGEMENT LIMITED Robin Stoakley Phone: (020 7658 3567) DRESDNER KLEINWORT WASSERSTEIN Andrew Zychowski Phone: (020 7623 8000) SOMERFIELD PLC: Springwater Withdraws Interest to Offer Bid ----------------------------------------------------------- Springwater, the consortium formed by John Lovering and Bob Mackenzie to consider a possible offer for Somerfield, is withdrawing its interest in a possible offer. Springwater had proposed to the Board of Somerfield a cash offer for the Company at a price of 120p per share, representing a premium of over 70% to the closing share price of Somerfield on April 10, 2003, the day before Springwater's initial approach was made. Springwater had proposed a short timetable to complete limited and routine due diligence, and to obtain regulatory clearances for all aspects of its transaction, prior to launch of the offer. The financing for the offer was to be provided by Morgan Stanley. The Board of Somerfield was not prepared to provide due diligence information to Springwater. Springwater does not wish to pursue an offer without the cooperation of the Board and, accordingly, is withdrawing its interest. In accordance with Rule 2.8 of the Takeover Code, Springwater will not make or participate in an offer for Somerfield during the next 6 months except that it reserves the right to do so within that period in the event that: (i) such an offer is recommended by the Board of Somerfield; or (ii) there is an announcement by a third party of a firm intention to make an offer for the Company. Bridgewell and Morgan Stanley are acting for Springwater Bidder and no one else, in connection with the possible offer, and will not be responsible to any other person for providing the protections afforded to their respective clients or for providing advice in relation to the possible offer. SOMERFIELD PLC: Sainsbury Offer Undervalued Firm, Maintains Board ----------------------------------------------------------------- The Board of Somerfield notes the announcements made Thursday by Sainsbury's and Messrs Lovering and Mackenzie. The Board is pleased that Sainsbury's and Messrs Lovering and Mackenzie have finally clarified their position and are not making an offer for the issued share capital of Somerfield. The Board of Somerfield had made it clear to Sainsbury's and Messrs Lovering and Mackenzie that their proposals undervalued the Company substantially. The Board of Somerfield also notes that Sainsbury's is filing a Merger Notice with the Office of Fair Trading regarding clearance to acquire 171 stores from Somerfield. Sainsbury's has not informed the Board of Somerfield which 171 stores are involved. The Board wishes to make clear that this is a unilateral act by Sainsbury's and is being made without the support of the Board of Somerfield. In accordance with Rule 2.8 of the City Code, neither Sainsbury's nor Messrs Lovering and Mackenzie may make or participate in an offer for Somerfield during the next six months, other than in the event of a recommendation by the Somerfield Board, or the announcement of a firm intention to make an offer for the Company by a third party. Furthermore, Sainsbury's may not otherwise pursue its interest in acquiring the Somerfield stores, save for the filing of the Merger Notice. CONTACT: CUBITT CONSULTING Fergus Wylie Phone: 020 7367 5100 STIRLING GROUP: Independent Directors Consider Possible Offer ------------------------------------------------------------- In the announcement on December 4, 2002, the Independent Directors informed shareholders that the executive directors had been given permission to explore the possibility of a public to private transaction. On June 10, 2003, the Company confirmed in its preliminary results announcement that discussions with the Executive Directors were continuing. The Independent Directors confirm that the Executive Directors have indicated that they are investigating a possible offer for the Company at a price of 22 pence per ordinary share net of the final dividend announced on June 10, 2003. This indicative proposal is preliminary and subject, inter alia, to due diligence and completion of financing arrangements. Consequently, there can be no certainty that a firm offer will be made. Any offer involving the Executive Directors, if made, must be in cash at no less than 22 pence per ordinary share (net of the final dividend announced on June 10, 2003) save in the event of an announcement of a firm intention to make an offer by a third party at a level of less than 22 pence which is recommended by the Independent Directors or unless otherwise agreed by the Independent Directors. This announcement has been reviewed by and agreed with the Executive Directors and their advisers PricewaterhouseCoopers Corporate Finance. A further announcement will be made as appropriate in due course. CONTACT: STIRLING GROUP Robert Coe Phone: 020 7724 6060 NM ROTHSCHILD & SONS LIMITED Richard Bailey Phone: 0161 827 3800 TRINITY MIRROR: Rival Express Rumored to Takeover Business ---------------------------------------------------------- A meeting two weeks ago between Richard Desmond, owner of Express Newspapers, and Sir Victor Blank, Trinity Mirror chairman, has fueled speculations that Mr. Desmond is about to takeover the rival's operations. But Mr. Desmond, chairman of the Northern & Shell group behind the Express titles, while confirming Sir Victor was sounding out his bid intentions in the meeting, said: "I don't understand regional newspapers and I think the Mirror titles are in terminal decline." Trinity Mirror's flagship title Daily Mirror has suffered from a significant decrease in circulation following a disastrous price war with U.K.'s best-selling paper, the Sun. According to the Financial Times, the stance of the Daily Mirror editor, Piers Morgan, to take a harsh anti-war stance before and after hostilities in Iraq broke out has also been blamed for the drop in readership. Mr. Morgan decided to focus on "hard news" and less on celebrity gossip following the September 11 attacks. The report said Trinity Mirror confirmed the meeting, but played down suggestions that Sir Victor was trying to flush out a bid or seek a deal. The speculations on a possible transaction between the parties prompted formal inquiries from City fund managers last week, according to the Financial Times. YEOMAN GROUP: Presents Interim Results, Restructuring Plans ----------------------------------------------------------- The Yeoman Group released last week its latest financial and operational results. The highlights are: (a) Loss before amortization of goodwill of GBP3.2 million* (2002-GBP4.1 million loss). (b) Cash outflow substantially reduced in core Mobile Navigation division. (c) Proven robust technology platform in place on which to base future developments (d) Decision to focus on core mobile navigation business: (e) Planned disposal of Brookes & Gatehouse (f) Laser-Scan to be placed into administration for controlled disposal Commenting on the results Vincent Geake, Chief Executive of YEOMAN, said: "We have reduced our half-year losses despite a reduction in sales. This has been achieved through a combination of reduced research and development costs and tight management. "YEOMAN now has the capability to become a leading European telematics service provider, with a wholly owned robust and expandable technology platform proven to support a wide range of current and future devices. "However, the telematics market continues to develop slowly, and the Group needs to conserve and maximize its financial resources to be in a position to plan for the longer-term. Therefore we have decided to dispose of our other activities to focus on the anticipated consolidation opportunities in European telematics. YEOMAN is now well placed to take advantage of such opportunities when they arise." To View Full Financial Results: http://bankrupt.com/misc/YEOMAN_GROUP.htm CONTACT: YEOMAN GROUP PLC Vincent Geake, Chief Executive Charles Marshall, Finance Director Phone: 01590 679 777 GAVIN ANDERSON & CO Neil Bennett Ken Cronin Phone: 020 7554 1400 ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Kimberly MacAdam, Larri-Nil Veloso, Ma. Cristina Canson, and Laedevee Gonzales, Editors. Copyright 2003. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. 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