/raid1/www/Hosts/bankrupt/TCREUR_Public/030702.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Wednesday, July 2, 2003, Vol. 4, No. 129
Headlines
F I N L A N D
BENEFON OYJ: Net Result for First Quarter Negative
F R A N C E
ALSTOM SA: State-owned Areva to Bid for Transmission Biz
ALSTOM SA: Internal Probe Discovers Bigger Losses at U.S. Unit
VIVENDI UNIVERSAL: Issues High-yield Notes to Refinance SIT
VIVENDI UNIVERSAL: Unsecured Notes Rated (P) B1; Outlook Stable
VIVENDI UNIVERSAL: To Appeal Severance Pay Awarded to Ex-CEO
G E R M A N Y
DAIMLERCHRYSLER AG: To Restructure Truck Division Next Year
EM.TV & MERCHANDISING: Joins Group that Bagged KirchMedia Assets
WESTLB AG: Moody's Downgrades Financial Strength Rating to D-
N E T H E R L A N D S
GETRONICS N.V.: Moody's Upgrades Ratings to B2 from Caa2
ING GROEP: German Unit Cuts 217 Jobs as Part of Restructuring
KONINKLIJKE AHOLD: Completes Internal Forensic Accounting Probe
R U S S I A
METROMEDIA INTERNATIONAL: Closes Russian Unit's Sale to Grosco
S W E D E N
OM AB: Streamlines Business Ahead of HEX Merger
S W I T Z E R L A N D
SWISS INTERNATIONAL: Poll Shows Aversion to Further Govt Aid
SWISS INTERNATIONAL: To Face Difficulty Finding New Financing
SWISS INTERNATIONAL: Analysts Doubt New Strategy Will Work
SWISS INTERNATIONAL: Lufthansa Dangles CHF200-300M for 1/3 Stake
ZURICH FINANCIAL: To Transfer Zurich Capital Products to BNP
U N I T E D K I N G D O M
BERKELEY BERRY: Operating Loss in Line with Market Expectations
BRITISH ENERGY: Sells Interest in General Hydrogen Corporation
EQUITABLE LIFE: Ombudsman Clears Regulator of Fault in Collapse
EQUITABLE LIFE: Non-executive Directors Claim Innocence
HAMLEYS PLC: Independent Directors Cancel Soldier Recommendation
INTER-ALLIANCE: Half-year Results Below Expectations
MARCONI CORPORATION: Inks Preliminary 3-year BT Supply Contract
MEAN FIDDLER: Issues Preliminary Results for Financial Year 2002
MEAN FIDDLER: To Get GBP3.5 Mln from Sale of Loss-making Assets
MEPC LIMITED: Moody's Reviews Ratings for Possible Downgrade
NETWORK RAIL: Union to Strike if Lay-off Plan Goes Ahead
PHOTO-ME INTERNATIONAL: Discloses Better Results Behind Loss
ROYAL MAIL: Mulls Price Hike to Meet Liabilities
TADPOLE TECHNOLOGY: Posts Finance Chief's Wall Street Briefing
TELEVISION CORPORATION: Molinare in 'Extremely Difficult' State
*********
=============
F I N L A N D
=============
BENEFON OYJ: Net Result for First Quarter Negative
--------------------------------------------------
As stated in the FY2002 result report of February 11, 2003, the situation of
the company turned critical with the delays of the sought funding solution.
As disclosed in the bulletins early in the year, the situation evolved
through various turns to the effect that on April 24, 2003, the company
filed an application for statutory corporate reorganization. The draft
business plan attached to the application comprises radical cost cutting
measures dimensioned to turn first the cash flow and then the result
positive with the foreseen business operations. Further, the proposed
program includes debt reorganization for reconstructing an appropriate
equity position within the constraints of the projected cash margin.
Further, as also reported, due to the delayed processing of the
reorganization application, the company requested and was granted extended
schedule for the interim report 1Q2003. The Turku court of first instance
decided on June 26, 2003, that the reorganization procedure applied for by
the company will be started on that date. The extraordinary shareholders'
meeting convening on the same day decided to confirm the financial report of
FY2002 on the condition that the court will confirm the reorganization
program devised in the procedure so that the company can again be considered
to fulfill the criteria of a going concern.
Consequently, the interim report issued now is also conditional to the
confirmation of the reorganization program. Regarding the draft
reorganization plan, it comprises two significant extraordinary asset
write-offs. The first one comprises the capitalization of the R&D
expenditures of the new mobile telematics product platform worth EUR5.8
million. This is because the completion of the development of the said
product platform has had to be put on hold. The second one comprises a EUR2
million- write-off of the parts inventory due to the devaluation of the
parts inventory according to the prudently projected development of the
sales and component consumption in the draft reorganization plan.
The cash situation of the company has stayed very tight which has resulted
in extreme cost cutting and which also has interfered with the operations.
The utilized cost cutting measures include the implemented temporary forced
leaves as a result of the industrial co-operation procedure that ended in
May. The company has, however, succeeded in keeping crucial business
operations and customer service functions running. New products have been
developed and brought to market, through which the company seeks to grow the
sales and the value added of the sales. Reduction of the material inventory
is an essential part of the cashflow plan.
Development of the business
The sales, marketing and product development efforts of the company in 2002
were focused in the mobile telematics market. In the core of Benefon's
mobile telematics solutions there are a range of terminals and supporting
software products and services. The terminal range covers both personal
security applications and vehicular and machine-to-machine communications
applications together with asset tracking. The business environment stayed
challenging but mobile telematics is considered a promising growth market.
As part of the new strategy of the company, according to which the
operations will be extended also to application software products and
service solutions, the company made in the beginning of year 2003 an
acquisition offer for Ismap S.A. In the offer, the company offered
altogether 400,000 shares for the whole stock of Ismap in a share swap.
Nearly all Ismap shareholders accepted the swap offer, which was intended to
be realized in February but which was left waiting for the funding solution
of Benefon.
The very tight financing situation of the company has impeded the sales in
an essential manner even though the company has managed to secure customer
service and product deliveries. The sales in January-March were at a low
level due to the drop of the sales of especially GSM products but also of
NMT 450 products. However, the sales margin stayed at the level of the
preceding quarter, which was achieved because the share of mobile telematics
sales with better margins has increased further and already makes most of
the sales.
The company has managed to keep going the central R&D programs needed to
secure the near-term operations despite the difficulties but the development
program of the new mobile telematics product platform first had to be slowed
down and then put on hold according to the drafted reorganization plan.
Financial performance in the period
The net sales in 1Q2003 were EUR1.6 million whereas in the preceding quarter
4Q2002 they were EUR2.1 million and in the same quarter 1Q2002 a year before
they were EUR4.7 million. The significant fall in the sales was mainly
caused by the essential fall of the GSM and NMT 450 sales. In addition of
the sales income, the company received in the reported period EUR1.8 million
of other income, mostly from the EDC agreement. The tight financial
situation of the company interfered with the sales.
The operating result in 1Q2003 before extraordinary items was (EUR2.0
million). It should be noted that, in the new situation, R&D expenditures
now have not been capitalized. The corresponding operating result in the
previous quarter 4Q2002 was (EUR4.5 million) and the same in the same
quarter 1Q2002 a year before was (EUR5.0 million).
Coming mostly from the already mentioned write-offs of the R&D expenditure
capitalization of EUR5.8 million and the parts inventory devaluation of
EUR2.0 million, this interim report includes extraordinary one-time charges
altogether worth EUR8.1 million. Therefore, the operating result turns out
to be an exceptional (EUR10.1 million) which, consequently, is not
comparable with the operating result in the prior quarter or with that in
the same quarter a year before.
The net result in the period 1Q2003 was (EUR10.3 million).
The total of the balance sheet at the end of 1Q2003 was EUR15.4 million.
The total of the balance sheet at the end of the previous quarter 4Q2003 was
EUR24.3 million and at the end of the same period 1Q2002 a year before it
was EUR39.9 million. The amount of Shareholders' equity at the end of
1Q2003 was (EUR6.3 million), i.e. (41%) of the total. The interest-carrying
net debt was EUR8.0 million. The total liabilities at the end of the period
were EUR21.7 million, when they were EUR20.4 million at the end of the prior
quarter 4Q2002 and EUR30.2 million at the end of the same quarter 1Q2002 a
year before. Of the total liabilities at the end of 1Q2003, long-term
liabilities were EUR1.1 million and current liabilities EUR20.6 million and
the financing situation stayed very tight.
Investments
The total investments in the period were EUR0.1 million.
Personnel
The number of personnel in the period 1Q2003 averaged 149. At the end of the
period the number of personnel was 151 when at the end of the prior quarter
4Q2002 it was 146 and at the end of the same quarter 1Q2002 a year before it
was 328.
Special measures for improving the finances
The drafted reorganization plan is based on radical cost-cutting measures
through e.g. forced leaves of the personnel and hard cost control by means
of which the company will already in June 2003 reach about 50% lower level
of fixed monthly costs compared with the actual cost level of the early
year, and on strict concentration in measures producing cash flow and result
already in short term and, further, on continuing reduction of the parts
inventory. The development of the sales income, being the base item of the
operating result, has been estimated cautiously but the monthly sales are
estimated to grow in average over the next 12 months.
Future outlook
The future outlook depends in a decisive manner on the confirmation of the
reorganization program being devised in the reorganization procedure started
in June 26, 2003. The confirmed reorganization program prescribes positive
cash flow and that the company will reach also positive result and, further,
that the debt is re-arranged within the payment margin in a way that the
amount of the shareholders' equity will meet the legal requirements. The
core of the draft reorganization plan consists of the significant reduction
of the costs and of the gradual increase of the sales. The company is also
seeking a moderate amount of equity funding for increasing the cash margin
even if the presented draft reorganization plan does not presume such
additional funding. In this regard, as also reported, the company has
initiated the preparations of a new share issue of targeted 1-2 Million to
be offered to all shareholders.
Equity issue authority of the board
The ordinary Shareholders' Meeting of May 17, 2002, authorized the Board of
Directors, within the time limit of one year from the meeting granting the
authorization, to decide on the increase of share capital by rights issue,
issue of options or convertible bonds in one or more installments such that
in the issue of convertible bonds or options or in the rights issue, in
total a maximum of 1.930.977 new investment shares with a book parity value
of EUR 0.34 (not the exact value) per share, shall be entitled to be
subscribed for. The share capital may, based on the authorization,
therefore be increased by a maximum of EUR649.533,97.
This authority was used in the directed share issue of July 2002 for 104,800
shares.
In the beginning of year 2003 an acquisition offer was made for Ismap S.A.
In the offer, the company offered altogether 400,000 shares for the whole
stock of Ismap in a share swap. Nearly all Ismap shareholders accepted the
swap offer but the offer was left waiting for the clearing of the financial
situation of Benefon.
The authority was used in March 2003 in the share issue for nearly 100,000
euros directed to Xpediant LLC in which share issue 294,117 new S-shares
were issued.
The authorization includes the right to deviate from the pre-emptive right
of the shareholders, referred to in Chapter 4, Section 2 of the Companies
Act, to subscribe for new shares, convertible bonds or options and the right
to decide on prices of the subscriptions, those entitled to subscription,
the terms and conditions of the subscription and the terms and conditions of
the convertible bonds and options. The authorizations may be used in
deviation from the shareholders' pre-emptive right provided that there is a
weighty financial reason from the company's point of view, such as financing
of corporate acquisition or other arrangement relating to the development of
the company's business operations or strengthening the company's balance
sheet, to do so. When the share capital is increased by a rights issue on
other basis than convertible bonds or options, the Board of Directors is
authorized to decide that the shares can be subscribed for in kind, using
the right of set-off or on other specific terms.
To See Financial Statements:
http://bankrupt.com/misc/BENEFON_OYJ.pdf
===========
F R A N C E
===========
ALSTOM SA: State-owned Areva to Bid for Transmission Biz
--------------------------------------------------------
Nuclear company, Areva, is reportedly interested in bidding for Alstom SA's
transmission and distribution business, said online news agency Nuclear News
Flashes. In a move that is widely seen as a favor to the French government,
the supervisory board of Areva is expected to approve a management proposal
to buy the most profitable part of Alstom.
The report, citing sources close to Areva, said the Alstom transportation
and distribution business unit met the group's criteria for external growth
and would make Areva "the world leader in services and products for the
utility industry."
Alstom is currently disposing assets to offset an expected EUR1.3 billion
loss in the year to March 2003. It was able to secure credit lines of EUR1
billion to stave off a crisis in the short term, but it is reliant on the
capital increase working. Earlier this year, it sold a turbines business to
Siemens for EUR1 billion.
Areva, meanwhile, is a state-owned nuclear vendor group that is aiming for
the revival or sale of its long unprofitable connectors unit, resolution of
which would be critical for the success of any stock offering in the future.
CEO Anne Lauvergeon wants to partially privatize Areva by year-end.
CONTACT: ALSTOM S.A.
G. Tourvieille/M. Dowd
Phone: +33 1 47 55 23 15
E-mail: internet.press@chq.alstom.com
Investor relations
E. Rocolle-Teyssier
Phone: +33 1 47 55 25 78
E-mail: investor.relations@chq.alstom.com
ALSTOM SA: Internal Probe Discovers Bigger Losses at U.S. Unit
--------------------------------------------------------------
Alstom is conducting an internal review assisted by external accountants and
lawyers following receipt of letters earlier this month alleging accounting
improprieties on a railcar contract being executed at the Hornell, New York
facility of Alstom Transportation Inc., a U.S. subsidiary.
Initial reviews have found out that losses have been significantly
understated in Alstom Transportation Inc.'s accounts, in substantial part
due to accounting improprieties by the understatement of actual costs
incurred, including by the non-recognition of costs incurred in anticipation
of shifting them to other contracts, and by the understatement of forecast
costs to completion. The contracts concerned are all fixed-price contracts
and there is therefore no financial impact on customers.
An additional net after tax charge equivalent to 51 ME is being recorded in
Alstom Transportation Inc.'s accounts for the year ended 31 March 2003. The
Chairman & Chief Executive of the company will propose to the Board of
Directors for approval modifications to the consolidated accounts for the
year ending 31 March 2003, including an additional net after tax charge of
51 ME. It will also be proposed to the Board of Directors to approve a
resolution providing that such modified accounts be submitted for approval
to the Annual Shareholders Meeting of the Company to be held on 2 July 2003.
Both the Senior Vice President and the Vice President of Finance of ATI have
been suspended pending the completion of the review.
The Company has been advised of informal inquiries related to Alstom
Transportation Inc., by the United States Securities and Exchange Commission
and the United States Federal Bureau of Investigation. Alstom is
cooperating fully with the investigating authorities.
CONTACT: ALSTOM
Investor relations:
J-G. Micol/A. Rebiere
Phone: +33 1 47 55 26 34
E-mail: Investor.relations@chq.alstom.com
VIVENDI UNIVERSAL: Issues High-yield Notes to Refinance SIT
-----------------------------------------------------------
Vivendi Universal (Paris Bourse: EX FP; NYSE: V) announced Monday the launch
of a private offering of EUR1.11 billion of 5-year high yield notes
denominated in euros and dollars and issued by Vivendi Universal SA.
The purpose of this offering is to refinance the EUR1.3 billion credit
facility entered into in January 2003 by Societe d'Investissement pour la
Telephonie (SIT), a wholly owned and consolidated subsidiary of Vivendi
Universal, which was created in connection with the acquisition from BT
Group of a 26% stake in Cegetel Groupe. Loans under this credit facility
were partially repaid with the dividend paid in April 2003 by Cegetel
Groupe, resulting in loans outstanding totaling EUR1.11 billion at the end
of June 2003.
This transaction is a further step in the group's financial restructuring.
It will allow Vivendi Universal to simplify the ownership structure of the
26% stake in Cegetel Groupe acquired in January 2003, and thereby to
consolidate its access to dividends from Cegetel Groupe. The refinancing of
the SIT credit facility will also allow the group to reduce its interest
costs and extend its average debt maturity.
Vivendi Universal controls 70% of Cegetel Groupe, France's leading private
telecommunications operator, and 56% of SFR, the second mobile telephone
operator in France with a market share of more than 35% and 13.7 million
customers at the end of the first quarter of 2003.
CONTACT: VIVENDI UNIVERSAL
Investor Relations
Paris
Daniel Scolan
Phone: +33 (0) 171 71 32 91
Laurence Daniel
Phone: +33 (0) 1 71 71 12 33
or
New York
Eileen McLaughlin
Phone: +(1) 212.572.8961
VIVENDI UNIVERSAL: Unsecured Notes Rated (P) B1; Outlook Stable
---------------------------------------------------------------
Moody's Investors Service assigned a (P) B1 rating to Vivendi Universal's
EUR1.1 billion senior unsecured notes offering. The issuance is aimed at
refinancing a EUR1.3 billion secured bank debt at its special purpose
vehicle, Societe d'Investissement pour la Telephonie S.A. (SIT). The rating
outlook is stable.
The rating agency says proceeds from the proposed issue of notes due 2008
(subject to final documentation), will rank pari passu with all existing and
future unsecured senior debt of Vivendi Universal.
SIT will be dissolved after the repayment of its facility, effectively
allowing Vivendi Universal to have direct access to all of the dividends it
receives for its 70% holding in Cegetel, which was acquired through the
special purpose vehicle. The deal will also remove an element of structural
subordination.
Moody's says the transaction is moderately positive for Vivendi Universal's
rating level, which includes a Ba3 senior implied rating, and B1 senior
unsecured rating.
VIVENDI UNIVERSAL: To Appeal Severance Pay Awarded to Ex-CEO
------------------------------------------------------------
On June 27, 2003, the arbitration tribunal constituted in New York under the
aegis of the American Arbitration Association to resolve the dispute between
Vivendi Universal and Jean-Marie Messier, its former Chairman and Chief
Executive Officer, relating to his severance indemnities, issued its award.
The arbitration tribunal rejected Vivendi Universal's claim that Mr.
Messier's so-called U.S. Termination Agreement dated July 1, 2002, be
voided. Although the Board of Directors of Vivendi Universal never approved
this agreement, the arbitration panel ordered Vivendi Universal to pay Mr.
Messier the aggregate amount of EUR20,555,342 provided for this agreement.
After reviewing the tribunal findings, Vivendi Universal intends to
challenge this decision through all available legal actions, both in France
and in the United States.
=============
G E R M A N Y
=============
DAIMLERCHRYSLER AG: To Restructure Truck Division Next Year
-----------------------------------------------------------
DaimlerChrysler's Commercial Vehicles Division will be restructuring its
Truck Unit as of January 1, 2004. The new organizational structure will be
more closely aligned to the Commercial Vehicles Division's strategic aims.
Consequently truck development will be consolidated under one management
team; the Powersystems Unit will be wound up and regional responsibilities
for truck production will be expanded. The objective is to make even more
effective use of existing synergy potential.
Dr. Eckhard Cordes, Member of the Board of Management and Head of
DaimlerChrysler Commercial Vehicles, said: "The future organization of our
division is a crucial factor if we are to ensure that the strategic
initiative 'Turning Scale into Profit' is pursued with increasing success."
It is anticipated that the potential synergy will equate to around two
thirds of the material costs of a truck. This will be due largely to the
standardization of major components -- the engines, transmission and
axles -- but the chassis and cab modules also offer promising prospects.
The 4P Organization -- the new central development unit
In order to make more effective use of this not insignificant synergy
potential, the various truck development units, which are currently managed
on a decentralized basis, will be grouped globally under the same
management. This will not only tie the existing development units more
closely to one another, but -- looking to the future -- will also allow for
opportunities for cooperation with the Mitsubishi Fuso Truck and Bus
Corporation and possibly other partners in Asia.
Dr. Gerald Weber, currently responsible for the Powersystems Unit, will take
over the management of the newly created development unit, the 4P
Organization, which will encompass the following four functional areas:
product planning, product development, procurement and production strategy
and planning.
According to Dr. Eckhard Cordes: "The new development unit brings together
the expertise of all of the truck development units within the Group and
synchronizes their activities. Global networking will allow the best ideas
and concepts to prevail, helping to prepare the Commercial Vehicles Division
for the challenges and opportunities which the future will bring."
As a result of the strategic aims, third-party trade in major components is
being discontinued, and in future -- apart from a few isolated exceptions --
only internal brands will be supplied. The Powersystems Unit is therefore
being wound up and the plants producing major components are being assigned
to the regional vehicle units.
Dr. Klaus Maier, currently Head of the Business Unit Trucks Europe/Latin
America with responsibility for the Mercedes-Benz brand will additionally be
put in overall charge of the German component plants. Similarly, Rainer
Schmuckle, Head of the Business Unit Trucks Nafta with responsibility for
the brands Freightliner, Sterling and Western Star will also be given
responsibility for the component plants in the U.S.
Dr. Eckhard Cordes said: "The structure of regional units with strong brands
has proved in the past to be the key to our success."
Speaking of the completed changes, he went on to say "Together we can be
proud that we are capable of making these important structural changes
within our Division. The entire team contributed some outstanding ideas
during the course of the constructive dialogue process and will now press
ahead with ensuring the success of the new organizational structure."
The business units Mercedes-Benz Vans, DaimlerChrysler Buses and Coaches and
DaimlerChrysler Off-Highway are already structured to meet the challenges of
the future and they will therefore be unaffected by the changes.
EM.TV & MERCHANDISING: Joins Group that Bagged KirchMedia Assets
----------------------------------------------------------------
EM.TV & Merchandising AG joined the consortium consisting of KarstadtQuelle
New Media AG and Dr. h.c. Hans-Dieter Cleven, which acquired sports
broadcaster DSF and Internet platform Sport1 from KirchMedia. The required
shareholder agreements were signed Monday. Accordingly, via its subsidiary
EM-Sport Sportmarketing GmbH, EM.TV holds a share of 50.1% in the
subholding, which owns 77.78% of DSF and Sport1 and, until now was wholly
owned by KarstadtQuelle New Media.
This means that EM.TV's resulting shareholding in DSF and Sport1 amounts to
38.97% qualifying for consolidation, while that of KarstadtQuelle New Media
amounts to 38.81%. The remaining 22.22% of DSF and Sport1 is held directly
by sports investor Dr. Cleven.
In a second step the parties intend to increase the subholding's share in
DSF and Sport1 by 3.35% to 81.13%. Thus EM.TV's resulting share qualifying
for consolidation in DSF and Sport1 would increase to 40.65%, while
KarstadtQuelle New Media would hold 40.48 percent. The remaining 18.87% in
DSF and Sport1 would be held by Dr. Cleven. This intended shifting of
shares is still subject to the approval of the Bayerische Landeszentrale fur
Neue Medien.
CONTACT: UNTERNEHMEN GMBH
Frank Elsner Kommunikation
Phone: +49 - 5404 - 91 92 0
Fax: +49 - 5404 - 91 92 29
WESTLB AG: Moody's Downgrades Financial Strength Rating to D-
-------------------------------------------------------------
Moody's Investors Service concluded a review started in May on WestLB by
downgrading the financial group's financial strength rating to D- from D to
reflect concerns over the loss content of WestLB's current international
portfolio. The rating is kept on further review for possible downgrade.
The rating agency is particularly concerned in the area of project and
principal finance, as well as on the group's capacity to manage the risks
involved and to absorb further potential losses.
According to Moody's, WestLB's high operating loss in 2002, including the
release of hidden reserves, had to be absorbed by the bank's capital. The
rating agency will determine on the ongoing review whether similar high-risk
charges can be expected for 2003.
The rating agency maintained the bank's Aa1/P-1 debt and deposit ratings and
the guaranteed debt ratings of its wholly owned affiliates with a stable
outlook as well as the Aa1/P-1 deposit ratings and C- FSR of its Irish
subsidiary WestLB Covered Bond Bank.
Germany's eighth-largest banking group had consolidated assets of EUR265
billion as of December 31, 2003.
=====================
N E T H E R L A N D S
=====================
GETRONICS N.V.: Moody's Upgrades Ratings to B2 from Caa2
--------------------------------------------------------
Moody's Investors Service upgraded Getronics N.V.'s senior implied and
senior unsecured issuer ratings to B2 from Caa1 and B3, respectively, to
reflect the company's improved liquidity position and reduced leverage.
These improvements were achieved following the sale of the company's GCRS
human resources division and proposed restructuring of the company's senior
subordinated bonds. The leading network integration and software services
company was able to pay EUR325 million of obligations ahead of deadline and
refinance its remaining EUR250 million debt with new bonds with amended
terms.
Affected ratings are:
(i) Senior implied rating upgraded to B2 from Caa1
(ii) Senior unsecured issuer rating upgraded to B2 from B3
(iii) Subordinated convertible notes ratings withdrawn
(iv) Senior unsecured bank facility rating withdrawn
(v) EUR250 million 13% senior subordinated notes due 2008
assigned a (P) Caa1 rating.
Moody's says Getronics ratings continue to be constrained by several
factors: challenging operating environment, limited visibility with respect
to future demand for ICT products, the loss of cash flow from two of its
most profitable operations, execution risks, sizeable pension deficit of
EUR183 million at December 2002, and the on-going challenge of managing a
broad base of multi-national operations.
After Getronics' major disposals, Moody's says the company is now dependent
on additional cost cuts as well as operational and financial management
improvements to further stabilize its financial position.
Moody's also assigned a prospective (P) Caa1 rating to the company's EUR250
million senior subordinated bonds due 2008. The prospective ratings are
contingent on final documentation acceptable to Moody's. The ratings for the
company's existing bank facility and subordinated convertible bonds have
been withdrawn. The outlook for all ratings remains negative, reflecting
the challenges inherent in executing on the company's business restructuring
plan combined with a difficult operating environment.
ING GROEP: German Unit Cuts 217 Jobs as Part of Restructuring
-------------------------------------------------------------
BHF-Bank AG, the German unit of Dutch bank and insurer ING Groep N.V., which
recently posted a net profit down 85% to EUR167 million for the first
quarter, is expected to announce another set of job-cuts that are part of a
strategic restructuring of the company.
BHF spokesman Jurgen Heine revealed last Friday that 217 jobs will be made
redundant this year via attrition, largely affecting corporate banking but
will also include other business sectors. Dow Jones Newswires reported that
BHF had already announced 200 job-cuts out of its staff of 2,300. The extra
job-cuts are part of BHF's attempt to reduce the amount of capital dedicated
to its loan portfolio.
ING has publicly said it has no plans to sell the loss-making BHF unit,
although it warned that the unit must be profitable before the end of next
year, the news agency said.
KONINKLIJKE AHOLD: Completes Internal Forensic Accounting Probe
---------------------------------------------------------------
Ahold announces that all internal forensic accounting investigations at
Ahold, its subsidiaries and its joint ventures have been completed. The
forensic accountants have identified, for review by Ahold management and the
Audit Committee of the Supervisory Board, an approximately additional EUR73
million of intentional accounting irregularities related to improper
purchase accounting. Ahold may be required to reduce pre-tax earnings by
this additional amount.
The EUR73 million excludes the pre-tax earnings reductions of an expected
US$856 million (compared to approximately US$880 million previously
announced) related to U.S. Foodservice and approximately US$29 million
principally related to Tops Markets in the U.S., also previously announced.
This amount also excludes a reduction of pre-tax earnings of approximately
Euro 8 million related to Disco S.A. The investigation at Disco has
identified questionable transactions, including inaccurate documentation,
and control weaknesses.
The investigations confirmed or identified for management review various
other accounting issues and internal control weaknesses. Ahold management
and the Audit Committee are studying the findings to assess whether
additional adjustments may be required to correct any accounting errors, and
to identify needed improvements in controls and procedures at relevant
companies.
In total, all of the forensic accounting investigations found approximately
EUR970 million of accounting irregularities that may require adjustments in
the year 2002 and restatements in one or more prior years.
A task force reporting to the Audit Committee has been created consisting of
members of Ahold management and outside advisors. Ahold's Internal Audit
function, reporting directly to the CEO as well as to the Audit Committee,
will play a central role in this task force. The task force will address
the various accounting practices and internal control weaknesses raised, or
confirmed, as a result of the investigations, and will oversee
implementation of required changes. It is expected that these required
changes will be implemented by the end of 2003. In addition, Ahold has
made, or is in the process of making, personnel changes involving U.S.
Foodservice, Disco, Tops and the Ahold parent company.
As previously announced, although the forensic accounting work at U.S.
Foodservice has been completed, the internal legal investigation at U.S.
Foodservice is continuing.
With respect to the status of the Ahold 2002 audit, Ahold announced that its
auditors at all of the company's operations have resumed audit work.
Management is working closely with its auditors to expedite completion of
the audit of Ahold's 2002 consolidated financial statements. Under its
EUR2.65 billion credit facility, Ahold is required to deliver its audited
consolidated 2002 financial statements by August 15, 2003 to the syndicate
of the banks involved.
Ahold is filing a Notification of Late Filing with the U.S. Securities and
Exchange Commission relating to its Form 20-F for the fiscal year ended
December 29, 2002. Ahold's Form 20-F would otherwise have been due on June
30, 2003. Ahold currently expects to file its Annual Report on Form 20-F
for fiscal year 2002 as soon as possible after completion of the audit of
its fiscal year 2002 consolidated financial statements.
===========
R U S S I A
===========
METROMEDIA INTERNATIONAL: Closes Russian Unit's Sale to Grosco
--------------------------------------------------------------
Metromedia International Group, Inc. (OTCBB:MTRM - Common Stock and
OTCBB:MTRMP - Preferred Stock), the owner of interests in various
communications and media businesses in Eastern Europe, the Commonwealth of
Independent States and other emerging markets, announced that it has sold
its entire business interest in Technocom Limited to Grosco Holding Limited,
a Cypriot company, for cash consideration of US$4.5 million.
Technocom, a wholly owned subsidiary, held interests in several Russian
telecommunication enterprises including satellite-based transport operator
Teleport-TP.
Simultaneous with the sale of Technocom, the company entered into agreements
intended to settle all historical claims concerning Technocom-related
businesses; including claims arising from the litigation in Guernsey that
Technocom initiated in 2002 concerning its majority-owned subsidiary Roscomm
and from arbitration proceedings initiated in 2003 in connection with that
Guernsey litigation.
The Company further expects that the broad releases, from and among all
potential claimants contained in the settlement agreements will avoid any
further dispute in connection with Technocom, its subsidiary businesses, or
its past or present stakeholders.
In making these announcements, Mark Hauf, Chairman and Chief Executive
Officer of MIG, commented: "The sale of Technocom and settlement of claims
with its historical stakeholders ends a long and unfortunate cycle of steady
erosion of the value of our interests in this business unit. We are pleased
to have obtained a fair price for the business in its present condition and
to have finally resolved all disputes with our former partners in this
business on amicable terms. In addition to increasing the company's cash
reserves, sale of this non-core business and settlement of long-standing and
expensive disputes connected with it frees Company resources for more
productive application to the further development of our core businesses."
The company is continuing with the marketing efforts of its non-core media
businesses, which include eight (8) Cable TV businesses in seven (7)
countries and seventeen (17) Radio Broadcast businesses in six (6)
countries.
As disclosed in the Company's February 3, 2003 press release, Communications
Equity Associates has been engaged to assist the Company in this marketing
effort. Communications Equity Associates contact information is provided
below. In connection with this marketing process, Ernie Pyle, the group's
Chief Financial Officer, commented: "The Company's steadily improving
liquidity position provides us the opportunity to be selective in pursuing
proposals that we believe will enable the company to achieve the highest
cash proceeds for our non-core businesses. In particular, we need not
entertain offers at less than satisfactory value to simply meet short-term
liquidity requirements."
About Metromedia International Group
Metromedia International Group, Inc. is a global communications and media
company. Through its wholly owned subsidiaries and business ventures, the
company owns and operates communications and media businesses in Eastern
Europe, the Commonwealth of Independent States and other emerging markets.
These include a variety of telephony businesses including cellular
operators, providers of local, long distance and international services over
fiber-optic and satellite-based networks, international toll calling, fixed
wireless local loop, wireless and wired cable television networks and
broadband networks and radio broadcast businesses.
CONTACT: METROMEDIA INTERNATIONAL GROUP, INC.
Prinzregentenstrasse 56
80538 Munich
Germany
Ernie Pyle, Senior Vice President Finance,
Chief Financial Officer, Treasurer and Secretary
Phone: (212) 527-3800, # 112
CEA BERATUNGS- UND BETEILIGUNGSGESELLSCHAFT MBH
Christian von Drathen, Executive Director
Phone: 49 (89) 290725-120
E-mail: drathen@cea-europe.com
Daniel Rutz, Associate Director
Phone: 49 89 290 725 131
E-mail: rutz@cea-europe.com
===========
S W E D E N
===========
OM AB: Streamlines Business Ahead of HEX Merger
-----------------------------------------------
OM is implementing a cost reduction program, which is estimated to lower the
company's costs by SEK578 million and result in lower revenues of SEK105
million on a yearly basis. These measures aim to achieve sound
profitability and create a stronger company in preparation for the merger
with HEX.
OM's markets remain weak and no turnaround is expected in the short term.
As a result, OM has decided to streamline and focus its business on the
financial markets.
(a) Effective July 1, 2003, OM will be organized in two
divisions, Stockholmsborsen and OM Technology. OM
Technology, in turn, will consist of three business areas:
Banks & Brokers, Financial Markets and Global Services.
(b) The Energy Market business area and the OM Technology
product portfolio will be restructured at the same time as
changes are being made within the parent company and
Stockholmsborsen. In addition, OM's operations will be
concentrated in fewer offices.
(c) The total costs of implementing these measures is estimated
at SEK623 million before tax (SEK544 million after tax)
which will be expensed in the results for the second quarter
2003. The total negative effect on cash flow is estimated
at SEK193 million.
(d) Of OM's more than 1,600 positions, further redundancies of
approximately 140 positions will be made. This is in
addition to the just over 100 redundancies communicated
earlier.
"Implementing these measures will enable OM to reach an acceptable level of
profitability within all business areas from the first quarter 2004. When
these steps have been completed, OM will be a strong and profitable company
that is better positioned to capitalize on all the interesting opportunities
on our markets," says OM Acting CEO Magnus Bocker.
OM's energy market business is being restructured and consolidated
The UKPX and NGX energy exchanges will be divested and OM is currently in
discussions with a number of industry players. At the same time, a review
of the product portfolio targeted at energy market end customers will be
carried out. In order to increase cost-efficiency within OM, the
marketplace and clearing systems for energy exchanges as well as other
energy market competence will be moved to the Financial Markets business
area. Consequently, the Energy Markets business area will no longer exist as
an independent business area.
OM's technology portfolio to be restructured
In addition to the above stated changes, OM will also restructure its
technology operations product portfolio, partly through the consolidation of
a number of products, including the solutions for Corporate Actions, Front
Office and Settlement, and partly through an increased investment in
services for existing customers.
OM's operations to be concentrated in fewer offices
OM's operations in Edinburgh are being closed down and parts are being
divested as per July 1, 2003. OM's operations in Copenhagen are also being
divested. At the same time, OM will focus its North American operations in
New York and its German operations in Hamburg.
Changes within the parent company and Stockholmsborsen
Several changes are being made within the parent company OM AB and
Stockholmsborsen. These changes include work to increase efficiency,
adjustment of the group's existing premises and a coordination of common
group functions.
Financial effects
These measures aim to secure sound profitability within all business areas
from the first quarter, 2004. Altogether the measures are expected to
reduce the company's costs by SEK578 million before tax and will result in
lower revenues of SEK105 million on a yearly basis, calculated according to
levels of operations from the second quarter 2003. These cost reduction
measures are expected to give full effect from the first quarter, 2004. The
earlier cost reduction program from March 2003, which included cost cutting
of SEK60 million, is included in the above. The total cost of implementing
these measures is estimated at SEK623 million before tax (SEK544 million
after tax) which will be expensed in the second quarter, 2003. These costs
consist of write-downs of SEK234 million and other costs of SEK389 million.
The write-downs include termination of products, office closures and changes
in the operations that result in a subsequent change in asset value. The
other costs include redundancy costs, unutilized office space and
termination of contracts with subcontractors.
The total costs are gross and do not include possible net contingent
positive effects of planned divestment of operations or tax claims. It is
estimated that implemented measures will lower OM shareholders' equity by
SEK544 m as per the second quarter, 2003. The total negative effect of the
measures on cash flow is estimated at SEK193 million, excluding positive
effects from planned divestment of operations and costs for unutilized
office space.
Personnel redundancies
Redundancy measures are expected to lead to approximately 240 job losses, of
which 220 are from OM's technology operations and of which just over 100
have previously been announced in a press release on March 5, 2003.
Approximately 200 of the 240 affected positions are in Sweden. In total,
360 jobs are expected to be eliminated, including positions within divested
companies (approximately 70) and consultants (approximately 50).
CONTACT: OM AB
SE-105 78 Stockholm
Sweden
Phone: +46 8 405 60 00
Fax: +46 8 405 60 01
Homepage: http://www.om.com
Magnus Bocker, acting CEO
Phone: +46 8 405 66 44
Jakob Hakanson, VP Investor Relations
Phone: +46 8 405 60 42
Anna Eriksson, VP Marketing & Communications
Phone: +46 8 405 66 12
=====================
S W I T Z E R L A N D
=====================
SWISS INTERNATIONAL: Poll Shows Aversion to Further Govt Aid
------------------------------------------------------------
The Swiss people ruled out further capital injection for Switzerland's flag
carrier that is currently cutting staff due to a slump in air travel.
News24.com, citing a survey published in Le Matin and the SonntagsZeitung
newspapers, said nearly 80% of those surveyed are not in favor of dumping
more public funds in Swiss International, despite the fact that more than
50% of them believe the country needs a national airline. Out of the 607
people questioned in the June 25 to 27 survey, 52% said a national airline
is necessary, but 78% rejected the idea of providing it government support;
17% said taxpayers should back the airline.
The government ministers had since have the same sentiment. Swiss Transport
Minister Moritz Leuenberger told Blick newspaper further equity injection is
currently not being considered. The government had already provided CHF2.1
billion when Swiss was formed on the basis of regional airline Crossair and
now-bankrupt flag carrier Swissair.
Swiss said last week it was cutting about 3,000 staff, and 34 aircraft on
its fleet to lessen the effect of the slump in air travel. It made a CHF980
million- net loss in its first year of operations in 2002.
SWISS INTERNATIONAL: To Face Difficulty Finding New Financing
-------------------------------------------------------------
Swiss has hired British bank, Barclays, to help search for a new investor
willing to pump in some CHF500 million (US$370 million) needed to sustain
operations of the troubled national airline.
The national carrier is reducing capacity and shedding a third of its
workforce in a bid to survive. CEO Andre Dose said last week he plans to
intensify the airlines' focus on low-cost market and reduce emphasis on the
market for premium passengers.
Analysts predict a difficult future ahead in Swiss' hunt for more cash to
ensure its long-term survival.
"I think people will be wary of lending more money [and] throwing good money
after bad," Lloyd Brown, a London-based analyst at Ernst and Young, told
Swissinfo. "They will struggle to raise additional funds from the private
market."
Swiss burns between CHF2 million and CHF3 million a day, making investors
worry that its cash levels could fall below the CHF500 million required to
keep the company solvent under Swiss law.
Mr. Brown predicts the trend to afford the airline less than a year to work
out its restructuring plan -- a span he considers not "very long" for the
airlines' size.
SWISS INTERNATIONAL: Analysts Doubt New Strategy Will Work
----------------------------------------------------------
Analysts are concerned about Swiss' strategy of offering premium and budget
services on the same flight in an effort to lure both high and low-paying
passengers.
Swiss plans to offer cut-price tickets for its economy-class seats on
flights within Europe at the start of winter to tackle competition from
low-cost carrier, such as EasyJet. The airline will offer tickets without
meals, while providing passengers the option to buy snacks and drinks on
board.
"Historically, we gave them free newspapers and food. Now, they are saying
'we would rather choose on board... and if we don't want to eat, we don't
want that built into our ticket price'," William Meaney, chief commercial
officer at Swiss told Swissinfo.
Expatriate Swiss businessman, Marc Faber, however, said: "In general, you
can have a luxury airline that has premium prices like Singapore Airlines,
or you have a budget airline... I'm not sure the concept will work very
well."
Aviation analyst Oliver Sutton, meanwhile, said that Swiss had been forced
to act to ensure its survival.
SWISS INTERNATIONAL: Lufthansa Dangles CHF200-300M for 1/3 Stake
----------------------------------------------------------------
Deutsche Lufthansa AG is in acquisition talks with Switzerland's struggling
national carrier, Swiss International Air Lines, according to Dow Jones
Newswires.
Swiss press SonntagsZeitung, which cited insiders, was quoted by Dow Jones
to have said that Lufthansa offered between CHF200 million and CHF300
million for a third of Swiss Air.
Swiss management reportedly indicated reservations for the plan. A
spokesman declined to confirm the information, although he said Swiss is
currently "having lots of talks with lots of airlines."
Lufthansa couldn't be reached for comment. Management and labor problems
have plagued Swiss ever since it was formed with the help of the Swiss
government in March 2002.
CONTACT: SWISS Corporate Communications
P.O. Box, CH-4002 Basel
Phone: +41 848 773 773
Fax: +41 61 582 3554
E-mail: communications@swiss.com
Homepage: http://www.swiss.com
ZURICH FINANCIAL: To Transfer Zurich Capital Products to BNP
------------------------------------------------------------
BNP Paribas and Zurich Financial Services have signed a Letter of Intent on
the transfer of certain structured products from New York-based Zurich
Capital Markets to BNP Paribas. The envisaged deal provides a framework for
transferring transactions and related assets to BNP Paribas, including
structured products linked to alternative investment funds managed by Zurich
Capital Markets, together with the hiring of some supporting staff. Further
information will follow upon execution of definitive agreements.
Zurich Capital Markets has established an attractive niche as provider of
services to hedge fund investors and managers. In line with Zurich strategy
to focus on its core insurance activities, it has decided to divest of this
business line.
The transaction will enable BNP Paribas, already a European leader in
structured funds of funds products, to become one of the top players in this
business in the U.S. The transaction will accelerate BNP Paribas
development in the U.S. equity derivatives market. It is in line with BNP
Paribas strategy to make targeted developments in the U.S in order to
accelerate growth in business lines where the Group is already recognized
worldwide.
===========================
U N I T E D K I N G D O M
===========================
BERKELEY BERRY: Operating Loss in Line with Market Expectations
---------------------------------------------------------------
Berry Birch plc, the financial services distribution group, announces its
preliminary results for the 12 months to 31 March 2003.
Key Points
(a) Turnover increased from GBP24.9 million for the 14 month
period ended 31 March 2002 to GBP55.9 million for the year
ended 31 March 2003
(b) Operating loss of GBP6.9 million before exceptional items
and goodwill, this is in line with market expectations
(c) Insurance and Network divisions increased revenues by 20%
and 4% on an annualized basis
(d) Average productivity per adviser increased to GBP81,000
(e) Increasing financial adviser numbers from 634 to 750
(f) Raising GBP20 million of new capital in October from
institutional investors to support the Group's strategy
(g) Increasing the number of institutional investors from 5 to
11
(h) Acquiring two financial advisory firms Weston (December) and
PFS (January)
(i) Launching new sales initiatives in each division
encompassing non regulated and employee benefit services and
products
Commenting on the results, Stephen Ingledew, CEO of Berkeley Berry Birch,
said: "This has been a difficult year for our industry, sector and business.
Despite this we have increased revenue from our Insurance and Network
divisions. Our recent acquisition's Weston's and PFS are also generating
good organic growth. Our operating loss for the year has been primarily due
to the underperformance of the Financial Advisory division. As a result we
have taken action to address these issues and have inserted new management
into this division who have addressed the sales management issues and
reduced cost. This will result in annualized cost savings of approximately
GBP2.5 million. In addition we have closed our acquisition vehicle and new
network proposition. The annualized savings from these measures will be
approximately GBP1.5 million. We have taken the actions necessary to
rectify performance and given Berry Birch plc's model, business plans and
financial strength, I remain confident that the group will deliver value to
shareholders."
Commenting on the market outlook for the Group, Clifford Lockyer, Executive
Chairman, said: "We are still experiencing harsh market conditions and are
in a period of rapid and radical change that is prevalent across the whole
of the U.K.'s financial services market. Our strategy continues to be the
U.K.'s premier financial services group focused on our current customer and
business market segments. We are very well placed to continue growing our
offer in the financial services sector under our current divisional
structure and making acquit ions and implementing initiatives that will
complement the shape of the business."
To View Full Report and Financials:
http://bankrupt.com/misc/Berkeley_Berry.htm
CONTACT: BERKELEY BERRY BIRCH PLC
Stephen Ingledew, Chief Executive
Phone: 07774 185779
Craig Butcher, Finance Director
Phone: 07968 486750
Grandfield
Matthew Jervois
Phone: 0207 417 4170
BRITISH ENERGY: Sells Interest in General Hydrogen Corporation
--------------------------------------------------------------
Following the decision to sell its North American assets, British Energy
announced Monday that it has sold its 3.4% interest in General Hydrogen
Corporation to Bruce Power for a cash consideration of US$4 million.
British Energy sold its 82.4% interest in Bruce Power in February 2003.
General Hydrogen Corporation provides complete hydrogen energy delivery
solutions for industrial, commercial and consumer markets.
Since acquiring its interest in General Hydrogen Corporation on 28 March
2002 for a consideration of US$4 million, British Energy has received no
dividends from General Hydrogen Corporation. In British Energy's accounts
for the year ending 31 March 2003, British Energy's interest in General
Hydrogen Corporation had zero net book value as it was expensed on purchase.
The sale proceeds will be applied for general purposes.
Contact: BRITISH ENERGY
Paul Heward, Investor Relations
Phone: 01355 262 201
EQUITABLE LIFE: Ombudsman Clears Regulator of Fault in Collapse
---------------------------------------------------------------
Parliamentary Ombudsman Ann Abraham dashed any hope of policyholders
claiming government compensation for the alleged failure of the City
regulator to perform its duties diligently.
According to the Telegraph, Ms. Abraham cleared the regulator of any
responsibility for Equitable Life's collapse, dousing any claim for
compensation based on negligence. Citing the ombudsman's findings, the
paper said the probe found "no evidence to suggest that the Financial
Services Authority had failed in their responsibilities during the period
under investigation."
The inquiry, though, was focused only at the supervision of the society's
solvency by the FSA when it was acting on behalf of the Treasury between
January 1999 and December 2000, as the limits of Ms. Abraham's jurisdiction
prevented her from looking into the actions of Equitable itself, its
auditors and actuarial advisers, or those regulating the conduct of
business, the report said. The investigation, therefore, was not able to
"establish all the facts relating to the closure of Equitable to new
business in December 2000."
MPs and policyholders wanted her to include the period before 1999, but she
said: "I do not believe anything would be gained from my further
interventions, nor do I believe I could meet the expectations of
policyholders in terms of the remedies they are seeking."
EQUITABLE LIFE: Non-executive Directors Claim Innocence
-------------------------------------------------------
The nine former non-executive directors of Equitable Life, facing a damage
suit for failing to prevent the company's collapse, recently urged the High
Court to dismiss the case, The Times said.
They denied responsibility, claiming they were not provided sufficient
knowledge of the insurer's financial state by the firm's executives. The
non-executives include Jennie Page, former chief executive of the New
Millennium Experience Company, and Peter Davis, former National Lottery
regulator.
They will have to wait for the court's resolution on September to know
whether they will be freed from the lawsuit brought by Equitable Life's new
management.
The new administration is also suing the former executive directors, who are
not involved in the non-executives' action, according to the report.
HAMLEYS PLC: Independent Directors Cancel Soldier Recommendation
----------------------------------------------------------------
Further to the announcement made by the committee of independent directors
of Hamleys on Friday, 27 June 2003, the Independent Directors have met to
consider their advice to shareholders. This follows the increased offer
announced by KPMG Corporate Finance on behalf of Soldier Limited at 7:00
a.m. on Friday 27 June 2003 and the offer by ING Investment Banking on
behalf of Children's Stores Holdings Limited at 3:28 p.m. on Friday 27 June
2003.
The Independent Directors intend to hold further discussions with the
parties interested in acquiring Hamleys with a view to formulating their
advice to shareholders and, pending the outcome of these discussions, have
decided to withdraw their recommendation of the Soldier Offer.
Until the conclusion of these discussions, the Independent Directors advise
shareholders to take no action in respect of either the Children's Stores
Offer or the Soldier Offer.
A further announcement will be made in due course.
CONTACT: HAMLEYS PLC
Phone: 020 7479 7316
Simon Burke, Executive Chairman
CLOSE BROTHERS CORPORATE FINANCE LIMITED
Phone: 020 7655 3100
Richard Grainger
Christopher Lewey
BRUNSWICK
Phone: 020 7404 5959
Rebecca Blackwood
Melissa McVeigh
Carolyn Esser
INTER-ALLIANCE: Half-year Results Below Expectations
----------------------------------------------------
On 20 May 2003, the company announced its preliminary results for the year
ended 31 December 2002 and has on Monday posted its Report and Accounts for
that period. In the results statement it was noted that business levels in
the first quarter of the year were disappointing.
There was an upturn in April, sustained throughout the second quarter,
although not at the levels anticipated by the Directors. The Directors
believe that the shortfall against their plan is due in large part to the
difficult trading conditions for regulated business experienced across the
sector and, as a consequence, the greater extent to which its IFAs were
engaging in non-regulated business previously not conducted by the company.
The company has launched a new initiative which will enable non-regulated
business to be conducted within the Inter-Alliance Group. While this
initiative has only been in place for 6 weeks, the initial performance is
encouraging.
In the period since March 2003, the company has taken steps to significantly
reduce its cost base and the benefits of these actions are already apparent.
Whilst still improving the service to its IFAs, the company believes that
costs can be reduced further through the continued implementation of its
sector-leading IT platform, which was successfully launched earlier this
year, and through other planned measures. However there have been a number
of unforeseen additional items of expenditure arising from the Group
restructuring.
Despite cost reductions, the Directors believe that the Group's
under-performance, the additional costs and the consequent cash outflows in
the second quarter will cause the half year results to 30 June 2003 to be
materially below their expectations.
In light of the current trading conditions, the Board continues to take
actions to reduce the Group's costs, to improve the productivity of the
business and to consider all strategic opportunities.
MARCONI CORPORATION: Inks Preliminary 3-year BT Supply Contract
---------------------------------------------------------------
Marconi Corporation (London: MONI) announced that it has been selected by BT
Group for the supply and installation of its AccessHub multi service access
node to support the ongoing rollout and development of BT's broadband access
service in the U.K.. The companies have signed a Heads of Terms agreement,
and expect to sign a three-year frame contract in the near future, the first
that will be awarded by BT towards building its '21st Century Network'.
The agreement represents a major success for Marconi and broadens the
vendor's strategic position within BT's network - to now span next
generation broadband access, as well as core switching and transmission and
interactive web phones. Marconi has also agreed in principle to revise the
terms to its existing frame contract for the supply of optical transmission
equipment, which expires in 2006, where Marconi will continue to supply a
minimum of 70 percent of all BT's future core optical network requirements.
BT's ambitions to build Broadband Britain are well underway, said Paul
Reynolds, CEO BT Wholesale, "but we have much more to do to deliver against
our ambition of securing five million BT Broadband customers by 2006. This
agreement will support us in delivering on our ambitions and underlines both
BT's and Marconi's commitment to broadband which will deliver social,
environmental and economic benefits to U.K. plc. It also puts Marconi at
the cornerstone of BT's 21st Century Network development strategy."
Mike Parton, Marconi chief executive, said: "This agreement with BT
represents an important further endorsement of our access technology and
will strengthen significantly our competitive position in ongoing
discussions with our customers around the world as they evolve towards next
generation networks. The Marconi Access Hub is a truly world-beating, best
in class product."
In addition to the Access Hub platforms, Marconi is expected to provide BT
with network installation, commissioning and support, as well as its Service
On Access network management system. Marconi's Access Hub is already in use
in operator networks in Italy, France, Germany, the UK the Middle East and
South Africa. It is a multi-service access node that uses existing telephone
lines to provide high bandwidth services. The platform is typically located
in an operator's local exchange or central office and is capable of
delivering multiple access technologies from a single unified platform,
enabling narrowband Plain Old Telephony Services (POTS) and broadband xDSL
connectivity on the same line, as well as multimedia video and data
services. This allows operators to switch customers between narrowband and
broadband services remotely, with the simple click of a mouse button.
Marconi Access Hub is establishing the next generation of access platforms
to deliver multiple broadband services, not just high speed Internet. It
has been designed to carry high-speed data, Ethernet, video and broadcast
TV, as well as traditional voice telephony. The Access Hub combines the
functionality of Digital Subscriber Line Access Multiplexers with the
ability to aggregate all traffic types with one of the industry's highest
port densities and lowest running costs. Digital Subscriber Line Access
Multiplexers are devices usually located in an operator's central office or
telephone exchange. They aggregate DSL connections, typically a pair of
copper wires running to each customer's premises, grooming, sending and
receiving their traffic to and from the core network. With up to 40Gbit/s
of bandwidth on the backplane, the Access Hub is ideal for operators
migrating their network to meet future demand for high bandwidth services.
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.
Additional information about Marconi Corporation can be found at
http://www.marconi.com
CONTACT: MARCONI CORP.
Investor enquiries
Heather Green
Phone: 0207 306 1735
E-mail: heather.green@marconi.com
MEAN FIDDLER: Issues Preliminary Results for Financial Year 2002
----------------------------------------------------------------
Mean Fiddler released recently its preliminary results for FY2002. These
are the highlights:
(a) Disposal of loss-making Bars and Restaurant division for
GBP2.3 million cash
(b) Agreement to sell AM radio station for GBP1.5 million cash
(GBP0.5 million deferred)
(c) Company to focus on remaining three core profitable
divisions: Festivals, International Touring and Live Venues
(d) Turnover GBP39 million (2001: GBP3.3 million)
(e) Loss before amortization of goodwill and exceptional items
GBP4.4 million (2001: GBP1 million)
Vince Power, Chairman, commented: "We have reacted quickly to the difficult
trading conditions in 2002 by disposing of the loss-making Bar and
Restaurant division and agreeing terms for the sale of the radio station at
a good profit for the Company. I believe there is tremendous potential for
profitable growth in our three remaining divisions, Festivals, International
Touring and Live Venues."
To view full report and financials:
http://bankrupt.com/misc/Mean_Fiddler.htm
CONTACT: MEAN FIDDLER
Vince Power, Chairman
Phone: 020 8961 5490
HANSARD COMMUNICATIONS
Adam Reynolds / Ben Simons
Phone: 020 7245 1100 / 0771 309 0135
MEAN FIDDLER: To Get GBP3.5 Mln from Sale of Loss-making Assets
---------------------------------------------------------------
The company announces that it has sold the remaining businesses in its Bars
and Restaurant division to Lynnet Leisure Group Limited for a consideration
of GBP2 million in cash. The bars sold are Bartok, ION, Point 101 and
Powers. In the last accounts to December 31, 2002 these bars had a net book
value of GBP2.35 million achieving a net loss of GBP179,000 and turnover of
GBP3.24 million.
The company also announces that it has agreed terms to sell its AM radio
station to Sunrise Radio Limited for a consideration of GBP1.5 million in
cash, of which GBP0.5 million is deferred consideration which will be
received in the first quarter of 2004. The agreement is subject to
completing any formalities required by the Radio Authority. In the last
accounts to December 31, 2002, the radio station had a net book value of
GBP300,000 achieving a net loss of GBP119,000 and turnover of GBP2,000.
The sale of the bars and the agreement in respect of the radio station
enables the Company to focus on its three core divisions of Festivals,
International Touring and Live Music Venues.
CONTACT: HANSARD COMMUNICATIONS
Adam Reynolds/Ben Simons
Phone: 020 7245 1100/0771 309 0135
GRANT THORNTON
Andrew Scade
Phone: 020 7728 2400
MEPC LIMITED: Moody's Reviews Ratings for Possible Downgrade
------------------------------------------------------------
Organizational changes in business park investor and developer, MEPC
Limited, prompted Moody's Investors Service to place the firm's Ba2
long-term senior unsecured rating on review for possible downgrade.
The ratings placed under review are for MEPC Limited's senior unsecured
bonds and issuer rating, currently at Ba2; and MEPC International Capital
LP's rating for guaranteed preferred securities, now at B1.
MEPC said earlier this month that five of its directors are to leave the
company shortly. Moody's expects the move to put into uncertainty the
firm's future operational and financial strategy.
The rating agency will also review the ratings on concerns that weak
occupational demand in the U.K. business park market will negatively impact
profitability and asset values. It will also look into the financial
flexibility of the group, which is expected to be reduced following an
increase in net debt.
Further, Moody's will consider the outlook for the group's asset valuations,
rental income and development program against a challenging market
background.
MEPC Limited has GBP1.2 billion portfolio of investment properties at March
2003.
NETWORK RAIL: Union to Strike if Lay-off Plan Goes Ahead
--------------------------------------------------------
Union leaders hinted about more rail strikes after reports came out that
not-for-profit company Network Rail plans to cut 2,000 jobs as part of a
plan to slash costs.
The firm that succeeded Railtrack last year plans to embark on a program
aimed at saving billions of pounds through measures, including job losses
and tighter control over contractors. Earlier, unions and passengers scored
the firm's award of GBP1.8 million in bonuses to directors last year,
despite claiming that the firm needs to cut cost.
General secretary of the Rail, Maritime and Transport Union, Bob Crow,
commented on this inconsistency: "It is huge bonuses for the directors and
P45s for the rest. We will resist any compulsory redundancies, with
industrial action if necessary."
Network Rail has been criticized for its huge spending amidst poor
performance. It is expected to spend GBP12 billion more by 2006 than
allowed by rail regulator Tom Winsor, despite the fact that it only runs
four trains on time out of the five it has.
PHOTO-ME INTERNATIONAL: Discloses Better Results Behind Loss
------------------------------------------------------------
Photo-Me International, the world's leading operator of photo booths and a
significant manufacturer of photo processing equipment, announces a much
better year to 30 April 2003 than a pre-tax loss of GBP2.2 million (before
exceptionals) and GBP3.4 million (after exceptionals) might imply.
(a) The loss in part derives from the year being a transitional
one for Manufacturing and is slightly less than long-
standing market expectations.
(b) EBITDA remained substantial at GBP35.4 million
(c) Net debt reduced by GBP18.0 million to GBP33.4 million
(d) UK photo booth Operations were stabilized, ahead of
expectations.
(e) The DKS 1500 digital mini-lab was successfully launched,
winning the top industry award
(f) An OEM agreement was signed with Kodak for the System 89
version of the DKS 1500
(g) The asset base of the Gretag high volume 'central lab'
business was acquired, completing PMI's photoprocessing
range.
(h) The second half result was substantially better than that in
2001/02 second half.
With regard to prospects, Serge Crasnianski, chief executive officer, said:
"France is expected to continue to trade well, whilst the U.K. and Japan are
expected to make a small recovery from the effects of predatory competition
and prolonged recession, respectively.
"As was stated in the interim announcement and with the subsequent re-launch
of the Gretag business, Manufacturing has promising prospects for a
materially positive contribution to results.
"Photo-Me International continues to believe that 2003/04 will register not
just a material improvement in results but also a further material reduction
in indebtedness, reflecting the cash generative nature of Photo-Me
International's operations and the improved result of its manufacturing."
To view full report and financials:
http://bankrupt.com/misc/PHOTO_ME_INTERNATIONAL.htm
CONTACT: PHOTO-ME INTERNATIONAL PLC
Phone: 01372-453399
Vernon Sankey (Deputy Chairman)
Phone: 020-7444 4140
Serge Crasnianski (Chief Executive Officer)
Phone: 020-7444 4140
Jean-Luc Peurois (Group Finance Director)
Phone: 020-7444 4140
Bankside Consultants Limited
Charles Ponsonby
Phone: 020-7444 4166
ROYAL MAIL: Mulls Price Hike to Meet Liabilities
------------------------------------------------
Royal Mail is considering raising the price of its postage to stem losses in
its pension fund, AFX said citing a spokesman interviewed by The
Independent. The courier is understood to be planning a penny increase,
according to the report.
The move could bring in GBP170 million a year for the company which is
plagued by a GBP4.6 billion- hole in its pension fund.
The state-owned courier, just seven weeks ago, also hiked the price of first
and second-class stamps by a penny.
"We're going to fund our pension schemes come what may," a Royal Mail
spokesman is reported as saying. "Postcomm is proposing unrealistic prices
for access services which threaten to unravel the price control and
destabilize our turnaround... Irresponsible prices for access might have to
be balanced by price increases for everyone else."
Royal Mail plans to cut GBP1.4 billion of costs to turn the company around.
TADPOLE TECHNOLOGY: Posts Finance Chief's Wall Street Briefing
--------------------------------------------------------------
The Wall Street Transcript has published an in-depth interview with Keith
Bigsby, Group Finance Director of Tadpole Technology plc (London:TAD.L), in
which he talks about the road map for the company following its strategic
transformation from a niche portable hardware vendor into an enterprise
applications and software business.
The entire 3,200 word interview is available free online at
http://www.twst.com/ceos.htm
Mr. Bigsby explains, "Software is a far more attractive business if you have
vanilla application products. Basically, you write them once and you can
bank them many times. With hardware, particularly in the portable Unix
space, business is less rewarding. Its niche, increasingly commoditized,
has a huge inventory risk, and you've large R&D overheads. With software,
capital needs are lower, risks are minimized, and returns are significantly
higher. So software can enable us to deliver shareholder value."
Mr. Bigsby states, "Tadpole has a history of investing money in developing
new products, but not in exploiting them. That's the driving focus of the
new management team. Our focus is to start to return a profit to
shareholders, and get to breakeven in short order. We've the financing in
place to deliver that."
Looking forward, Mr. Bigsby states, "We would expect to be a substantial
software company. I think we have the technology and the architecture for
the way the industry is moving. It's absolutely right for web deployment and
web utilization and as we start to get market traction, we'll get further
traction. I think we have compelling products. They're technologically
advanced against the competition, and play neatly into expanding market
segments. They have compelling ROIs for customers, either in cost savings
or revenue development, and are ideal for some exciting areas of potential
growth for the future."
This interview is part of the Technology Sector of the Wall Street
Transcript and is available at http://www.twst.comor by calling
212/952-7433
The Wall Street Transcript does not endorse the views of any interviewees
nor does it make stock recommendations. For subscription information call
800/246-7673.
TELEVISION CORPORATION: Molinare in 'Extremely Difficult' State
---------------------------------------------------------------
The Television Corporation reports on current trading. The Group overall
has experienced a slow start to the year which has been compounded by
extremely difficult conditions at Molinare. This will result in the Group
reporting a loss for the half year of approximately GBP1 million before tax,
goodwill and exceptional costs. Accordingly, the Board believes the Group's
profit (including Molinare) will be substantially below current market
expectations for the full year.
Losses at Molinare have increased significantly over the last two months and
are expected to be approximately GBP1 million for the half year. This
performance is extremely disappointing in the light of the restructuring of
this business in recent years but reflects the severity of the downturn in
the post-production industry. Management action to improve prospects at
Molinare includes the appointment of Mark Foligno, a new MD who has joined
from Sony Broadcast. Mark has been given responsibility to achieve a rapid
increase in sales and improvement in performance. A decision as to the
future of this business will be taken by the end of the current year and the
Board is considering an impairment provision against the assets of this
business.
The Content businesses have also had a slow start but the prospects for the
second half are more encouraging. Mentorn has over two thirds of last years
revenues already commissioned which leads the Board to believe that revenues
for the full year will comfortably exceed last year, albeit at a reduced
margin. This in part reflects the contribution from Paradise Hotel which
launched with good audience ratings on Fox in the US last week. The Board's
expectations for Mentorn exclude any further commissions or sales of
Paradise Hotel.
The delay in completing further advertiser funded programs, which remain in
negotiation, have impacted on Sunset & Vine's half-year performance. Whilst
the board continues to be optimistic that advertiser funded programs will be
commissioned during the second half it recognizes that in the absence of
such revenues, the full year performance of Sunset & Vine will not meet
expectations.
Visions performance is lower than at this stage last year partly as a result
of fewer one off events. However it is moving into the busy summer period
and is now expected to perform in line with budget.
In the light of the above, the Board will not propose an interim dividend
and will review the dividend policy in the light of the outturn for the full
year. The Group is also currently reviewing the structure of its borrowings
with a view to having restructured and extended facilities in place in the
near future.
CONTACT: THE TELEVISION CORPORATION PLC
Jeff Foulser / Malcolm Gardner
Phone: 020 7258 6800
BUCHANAN COMMUNICATIONS
Mark Edwards
Phone: 020 7466 5000
*********
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. Larri-Nil Veloso, Ma. Cristina Canson, and Laedevee
Gonzales, Editors.
Copyright 2003. All rights reserved. ISSN 1529-2754.
This material is copyrighted and any commercial use, resale or publication
in any form (including e-mail forwarding, electronic re-mailing and
photocopying) is strictly prohibited without prior written permission of the
publishers.
Information contained herein is obtained from sources believed to be
reliable, but is not guaranteed.
The TCR Europe subscription rate is US$575 per half-year, delivered via
e-mail. Additional e-mail subscriptions for members of the same firm for
the term of the initial subscription or balance thereof are US$25 each. For
subscription information, contact Christopher Beard at 240/629-3300.
* * * End of Transmission * * *