/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/030714.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 14, 2003, Vol. 4, No. 137 Headlines F R A N C E ALSTOM SA: E.U. Commission OKs Sale of Turbine Unit to Siemens METALEUROP SA: Board Postpones Closure of FY2002 Books RHODIA SA: Workers to Stage Strike Friday this Week G E R M A N Y ALLIANZ AG: Repays MILES Bond with Munich Re Shares ALLIANZ AG: Asset Management Chair Belies Rumored Spin-off ANTWERPES AG: Forecasts Negative Operating Result for Q2 DEUTSCHE TELEKOM: S&P Affirms 'BBB+' Ratings after Review DRESDNER BANK: Issues EUR1.5 Billion Bonds to Refinance Debt MUNICH RE: Receives Nationwide Operating License in China ZAPF CREATION: To Stop Producing Designer Collection Dolls H U N G A R Y KERESKEDELMI ES HITELBANK: Execs Admit Fraud, Resign I R E L A N D ELAN CORPORATION: To Sell Patch Business to Japanese Rival MANUFACTURERS SERVICES: Closure Threatens 200 Athlone Jobs N E T H E R L A N D S KONINKLIJKE AHOLD: Considers Sale of CRC Ahold Stake Next Year ROYAL KLM: Delays Job-cuts Due to Pressure from Union ROYAL PHILIPS: Analysts Foresee Another Quarterly Loss N O R W A Y AKER KVAERNER: Onshore Contract to Provide Work to 500 Employees PAN FISH: Leads Move to Balance Supply of Salmon in Market P O L A N D SZEPTEL SA: Minor Investor Rumored to Up Stake Via Debt Swap UPC POLSKA: S&P Cuts Rating to 'D' Over Bankruptcy S W I T Z E R L A N D ABB LTD.: Asbestos Settlement Plan Finally Gets Approval ABB LTD.: Rating Unaffected by Court Ruling in Asbestos Case SEZ GROUP: Expects Order Upswing to Continue in Second Quarter U N I T E D K I N G D O M ABBEY NATIONAL: To Redeem Outstanding Series A Preference Shares AES DRAX: Reconsiders Use of Pollutant as Fuel Alternative BALTIMORE TECHNOLOGIES: Cancels Plan to Sell Entire Business BRITISH AIRWAYS: New Flight Schedule Focuses on Viable Routes CORDIANT COMMUNICATIONS: Publicis Denies Collusion with Ojjeh GLAXOSMITHKLINE PLC: Reaches Settlement in Augmentin ITC Lawsuit HAMLEYS PLC: Baugur Gets 26% Acceptance on Takeover Offer HAWTIN PLC: Finance Director Leaves to Look for Job Elsewhere MANGANESE BRONZE: Sells Loss-making Property for GBP8 Million ROYAL & SUNALLIANCE: Announces New Appointments to Board SWISS LIFE: Divestment of U.K. Business in Final Stage YELL GROUP: Expects at least GBP2 Billion from IPO ********* =========== F R A N C E =========== ALSTOM SA: E.U. Commission OKs Sale of Turbine Unit to Siemens -------------------------------------------------------------- The European Commission has cleared an operation by which Siemens AG acquires Alstom's small/medium gas turbines and industrial steam turbines. The Commission concluded that the acquisition of these turbines, to be used for mechanical drive applications and power generation, does not raise any competition concerns in Europe. At the end of May, Siemens notified the Commission of its plans to buy the small and medium gas turbines business of Alstom as well as its industrial steam turbines business. Alstom retains its large gas turbine business and will also remain active as an independent supplier of large steam turbines. The Commission's market investigation focused on the markets for gas and steam turbines, which constitute distinct markets and can be further broken down on the basis of their power output. In the gas turbines market, Siemens presently has only a limited presence in the lower output range of gas turbines and, therefore, there are no major horizontal overlaps. It will also continue to face sufficient competition from several competitors. As regards industrial steam turbines, for which Alstom is the current market leader in Europe, the Commission also concluded to the absence of serious concerns. This is because the market presents the characteristics of a bidding market and that, under all possible market definitions, there will remain a sufficient number of established and viable competitors capable to bid for new projects and, therefore, to constrain the combined power of Siemens and Alstom. Siemens is a German-based diversified industrial corporation active in numerous fields including information and communication, automation and control, power generation, transmission products and related services, transportation, lighting and medical applications. Alstom is a French company whose main activities are the production of equipment for energy generation, transmission and distribution, power conversion, shipbuilding and railway. METALEUROP SA: Board Postpones Closure of FY2002 Books ------------------------------------------------------ The Metaleurop Board, in a meeting on July 2, 2003, decided to postpone the closure of its statutory and consolidated accounts for the fiscal year ending December 31, 2002. The Board considers it justified before closing the accounts in a going concern perspective, to wait for additional information on Metaleurop capacity to: (a) Reach an agreement with its banks with regards to its short- term debts. (b) Insure the exploitation financing after August 2003. The loan agreement between Metaleurop SA and Glencore International AG, which came into force in April 2003, will normally expire at the latest at the end of August 2003. Meanwhile, in accordance with article L421-4 of the French Monetary and Financial code, The Commission des Operations de Bourse asked Euronext to halt the trading of the share until the release by Metaleurop SA of its accounts for fiscal year ending December 31, 2002 in the BALO. CONTACT: METALEUROPE SA Pascal Ragot Direct phone: 33 1 42 99 47 73 Mobile: 33 6 85 72 35 43 RHODIA SA: Workers to Stage Strike Friday this Week --------------------------------------------------- Over 600 Rhodia workers, who recently voted to strike over company plans to close the salary pension scheme to new entrants, have announced that their first strike day will be Friday, July 18, 2003. GMB and Amicus members are striking over the French-owned chemical company's decision to close the final salary pension scheme to new members. Workers at plants in Oldbury in the West Midlands and Widnes in Cheshire are angry at the decision to end the current pension arrangements as a result of being under-funded for years. The move was taken after union negotiations with Rhodia failed to change the company's position, while the union's efforts to restart the discussions failed repeatedly. This is the first time British industrial workers have walked out to defend pensions after strike threats previously forced BAE Systems and Rolls Royce to back down over proposed benefits reductions. Derek Simpson and Roger Lyons, Joint General Secretaries of Amicus, said: "The decision to strike has not been taken lightly by our members. The three to one backing for strike action demonstrates the strength of commitment by workers to defend their own and future colleagues right to a living wage in retirement." Kevin Curran, GMB General Secretary said: "GMB members know that closing the scheme to new entrants puts the long term viability of the scheme at risk. Their security in retirement is being put in jeopardy by the decisions being made by the company now. Rhodia have refused to have a proper debate on our members' pensions and have left us with no option but to strike. We hope that the united voice of our members will be heard by Rhodia and the pension issue can finally be addressed." The decision by Rhodia to cut their final salary scheme comes after the company has enjoyed a partial pensions holiday, dropping their contributions from 18% to 14% over the last three years. Strike action at Oldbury and Widnes have also been scheduled for August and September. ***** GMB members at Oldbury voted 70.7% in favor of industrial action and members at Widnes voted 95.5% in favor. Amicus members at the Oldbury site voted 58% in favor and members at Widnes voted 66% in favor of strike action. In a recent survey of Amicus members, 90% said they would be prepared to take industrial action if their employer stopped contributing to their pension, while 99% of the respondents expressed a preference for a final salary pension as compared to a money purchase pension. ============= G E R M A N Y ============= ALLIANZ AG: Repays MILES Bond with Munich Re Shares --------------------------------------------------- Allianz will be repaying a first tranche of about 50% of MILES bond issued in January 2001 ahead of schedule by releasing Munich Re shares. The number of Munich Re shares to be used to redeem the bond will be based on the DAX Index and the average stock-market price of the Munich Re share during a 20-day reference period, which commences on July 18, 2003 and ends on August 14, 2003. The repayment in Munich Re shares will be made on August 25, 2003. As already announced in March, this transaction should be regarded in conjunction with Allianz' intention to reduce the shareholding in Munich Re to around 15%. Partial redemption of the index-linked convertible bond will presumably reduce the shareholding by around 3%. The MILES index-linked exchangeable bond was issued on January 12, 2001 with a nominal value of then EUR2.0 billion. The current market value of the bond is around EUR1 billion. It matures on February 20, 2004. ALLIANZ AG: Asset Management Chair Belies Rumored Spin-off ---------------------------------------------------------- Allianz AG's unit, Allianz Dresdner Asset Management, will losses until 2005 due to its acquisition of U.S. unit Pimco, AFX News reported, citing Frankfurter Allgemeine Zeitung. In an interview, Allianz Dresdner Asset Management chairman Joachim Faber said charges related to its acquisition of the unit will cancel net profit each year until 2005. Mr. Faber also commented on the remark of Michael Diekmann, the recently appointed chairman of Allianz, that the German bank may get rid of Allianz Dresdner Asset Management to focus the group on insurance. He explained asset management is "undoubtedly" a core business of the group, and a spin-off or a listing has never even been considered. "Back to basics' ... does not mean 'back to insurance. In any case Allianz has more pressing problems to solve than thinking about a spin-off or a listing of Allianz Dresdner Asset Management," he further said. Allianz offers a range of insurance products and services through some 100 subsidiaries and affiliates, including life, health, and property & casualty. Other businesses include risk consulting and public investment funds. Its operating performance deteriorated significantly over the past two years. The group posted a bottom-line loss of EUR1.2 billion, mainly due to operating losses at Dresdner Bank of EUR2.0 billion. CONTACT: ALLIANZ AG Koniginstrasse 28 D-80802 Munich, Germany Phone: +49-89-38-00-00 Fax: +49-89-34-99-41 Home Page: http://www.allianz.com Contact: Paul Achleitner Member of the Management Board (Finance) ANTWERPES AG: Forecasts Negative Operating Result for Q2 -------------------------------------------------------- According to provisional calculations, in the 2nd quarter of 2003 antwerpes ag (ISIN DE0005471007 // WKN 547100) achieved a turnover of between EUR3.1 million and EUR3.2 million and a negative operating result (EBIT) of between (EUR0.3) million and (EUR0.4) million before provision for restructuring costs. Turnover in the 1st six months is between EUR6.8 million and EUR6.9 million, around 6-8% above the previous year's values (EUR6.4) million. A negative EBIT of between EUR0.2 million and EUR0.3 million before restructuring costs (previous year: EUR+0.1 million) is provisionally expected for the 1st half year. In the 2nd quarter provision of around EUR0.4 million will be made to cover restructuring. By restructuring, the Board of Directors is attempting to reduce operating costs (personnel, depreciation, other operating expenses) in the 2nd half of 2003 by around 15%, or EUR0.6 million, compared with the 1st half of 2003. As of June 30, 2003, the stock of liquid funds and fixed financial and current assets was in the region of EUR30.3 million, or EUR5.13 per share, therefore slightly below the previous quarter's value (EUR30.5 million). The clear deterioration in the operating result situation in the face of increasing sales and comparable costs is caused by gross yield being down in the 1st six months of 2003 by around 10% on the 1st half of 2002. Final figures for the 2nd quarter will be announced by antwerpes age at the beginning of August. CONTACT: ANTWERPES AG Tanja Mumme Corporate Communications Vogelsanger Str. 66 D-50823 Cologne Phone: +49-221-92053-139 Fax: +49-221-92053-133 E-Mail: ir@antwerpes.de DEUTSCHE TELEKOM: S&P Affirms 'BBB+' Ratings after Review --------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'BBB+' long-term and 'A-2' short-term corporate credit ratings on Germany-based fixed-line and mobile telecommunications operator Deutsche Telekom AG and related entities following a review. The outlook is stable. "The ratings on Deutsche Telekom continue to be underpinned by the expectation that the group can deliver on its demanding free cash flow targets despite its aggressive leverage," said Standard & Poor's credit analyst Guy Deslondes. "Deutsche Telekom is targeting EUR5 billion to EUR6 billion free cash flow per year from 2003, and Standard & Poor's assessment of the group's credit quality is heavily reliant on the expectation of this free cash flow generation over the medium term." Deutsche Telekom's ratio of net debt to EBITDA for the 12 months ended March 31, 2003, was about 3.5x (adjusted for leases, securitized debt, and unfunded pension liabilities). Deutsche Telekom's 2003 EBITDA target is EUR17.2 billion to EUR17.7 billion ($19.5 billion-$20.1 billion), which would be lease adjusted upward. This implies that the group could achieve an adjusted net debt-to-EBITDA ratio of 3.3x-3.6x at calendar year-end 2003. The achievement of EUR5 billion to EUR6 billion ($5.7 billion-$6 billion) free cash flow for 2004 could then enable Deutsche Telekom to achieve an adjusted net debt-to-EBITDA ratio of about 3x during 2004 (which is assumed in the ratings), assuming no change in financial policy and no operational underperformance. "Although Deutsche Telekom is over leveraged for the ratings, the group's ratio of adjusted net debt to EBITDA is expected to improve over time to a level that will not materially exceed 3x including pension liabilities, due to the sale of assets, controlled EBITDA growth, and capital expenditure cuts to sustain free cash flow," added Mr. Deslondes. "We expect Deutsche Telekom to continue to meet its challenging free cash flow targets and sustain its focus on deleveraging." DRESDNER BANK: Issues EUR1.5 Billion Bonds to Refinance Debt ------------------------------------------------------------ The EUR1 billion and EUR500 million bond issuance of Dresdner Bank are priced at 99.707%, and 99.977% respectively, according to AFX. The EUR1 billion bond has a maturity of three years and variable interest, while the EUR500 million bond has a maturity of five years. The coupon rate for the EUR1.0 billion bond is at 15 basis points above the 3 month euribor, and for the EUR500 million bond, it is 35 basis points above mid-swaps. The lead manager in the deal is Dresdner Kleinwort Wasserstein. Proceeds of the offering will be used to refinance existing debt, according to industry sources. Dresdner lost more than 11,000 jobs since May 2000 as the company's position in the market drops. It went down from being the ninth top company in the field of advising global mergers in 2001, to 18th last year, Bloomberg data showed. It also fell to 32nd in global sales from 17th in 2001. CONTACT: DRESDNER BANK Dr. Hartmut Knuppel Phone: +49 (0)69 2 63-49 74 Karl-Friedrich Brenner Phone: +49 (0)69 2 63-8 36 37 Elke Pawellek Phone: +49 (0)69 2 63-1 67 12 MUNICH RE: Receives Nationwide Operating License in China --------------------------------------------------------- Munich Re has become the first international reinsurer to receive from the Chinese Insurance Regulatory Committee a countrywide composite reinsurance operating license in the People's Republic of China. Commenting on the event, company Board Member Karl Wittmann, said: "We are delighted to receive this honor. This milestone marks the beginning of a new era in Munich Re's long-standing collaboration with the Chinese market." Munich Reinsurance company has had business connections in the People's Republic of China since 1956 and is currently represented by offices in Beijing, Shanghai and Hong Kong. With its license Munich Re will be eligible to participate in the Renminbi Yuan denominated reinsurance business, which was previously reserved for local companies only. At an annual double-digit growth rate the Chinese insurance market is an integral part of one of the most dynamic and promising economies in the world (PRC Gross Premium Income 2002: US$37 billion overall or 44% growth over 2001, thereof US$27 in life and US$10 billion in non-life). Munich Re will now be in a perfect position to benefit from its long-standing network of strategic relationships with the Chinese insurance industry by cooperating in all life, health and non-life business lines. ***** Munich Re's capital position significantly eroded last year as it was affected by the woes of the banking sector through its 26% stake in HVB. Badly hit by the downturn on world stock markets, it received sharp investor criticism over its financial and stock market performance. The company took a EUR5.7 billion- writedown on shares in 2002, but reported a return to profit in the first three months this year. CONTACT: MUNICH RE Rainer Kuppers Phone: +49 (0) 89/38 91-25 04 ZAPF CREATION: To Stop Producing Designer Collection Dolls ---------------------------------------------------------- Zapf Creation, Europe's leading manufacturer of play and functional dolls including accessories, announced Thursday it will withdraw from the niche segment for high-quality designer and collector dolls. In the past three years, involvement in this area in the form of the Designer Collection product line, which is produced in Roedental and sold primarily in Germany and the USA, has suffered considerably from consumer restraint, particularly with regard to high-priced items. Sales declined by 30% to nearly EUR2.8 million between the years 2000 and 2002, while personnel and marketing costs rose slightly during the same time. The continuing slump in consumer spending and the current order situation indicate that sales in the Designer Collection line will continue to deteriorate. By 2002, costs could no longer be covered in the production of this product line. The ongoing weakness of the dollar in fiscal year 2003 continues to negatively add to this effect. In light of this, the management board of Zapf Creation AG has made the strategic decision to discontinue the Designer Collection product line as of fiscal year 2003. Additionally, smaller production lots from other product areas, which are still being produced in Roedental in order to fully utilize existing capacities, will be transferred to the Far East for technical and economic reasons. Currently, 78 of 529 employees worldwide are involved in production. The personnel measures that will be undertaken as a result of this will primarily affect the area of production. Discussions have already begun with the works council regarding socially acceptable staff reductions. The company plans to maintain a production competence team in Roedental. The guidance regarding sales (adjusted for currency effects: +15%) and operating income (EBIT, independent of currency: +15%) for fiscal year 2003 will not be influenced by this. The net income for the year will be affected by one-off special expenses for the reconciliation of interests and the redundancy payments scheme; the valuation adjustment for raw materials and supplies in stock; partial write-downs of the inventory of finished products; and the costs of disinvesting fixed assets that are no longer needed. The exact amount cannot be stated until negotiations with the works council have been completed, but the figure will be in the lower single-digit millions of euros. CONTACT: ZAPF CREATION AG Monika Collee Director IR/Corporate PR Phone: +49 (0) 9563-725 195 Fax: +49 (0) 9563-725 321 E-Mail: monika.collee@zapf-creation.de Monika Worofsky PR Manager Phone: +49 (0) 9563-725 Phone: +49 (0) 9563-725 511 Fax: +49 (0) 9563-725 321 E-mail: monika.worofsky@zapf-creation.de ============= H U N G A R Y ============= KERESKEDELMI ES HITELBANK: Execs Admit Fraud, Resign ---------------------------------------------------- Tibor Rejto, chief executive of Kereskedelmi es Hitelbank, resigned after admitting fraudulent activities involving as much as EUR76 million in investments in the bank, AFX said. Mr. Rejto said the bank's brokers indeed knowingly promised high returns on as much as EUR76 million in investments from high net-worth and institutional investors. The scam involves 100 to 150 clients. The accused broker, Attila Kulcs, himself admitted the existence of a fraud that run for "several years." He also revealed the scheme was no secret saying the "two highest managers at the bank knew of the fraud." Jakobs Ludo, deputy CEO at the bank in charge of internal control, also resigned. Kereskedelmi es Hitelbank is Hungary's second-largest financial institution. Its owners are Belgium's KBC Bank & Insurance Group, which owns a 59% stake, and ABN Amro Bank of the Netherlands with 40%. Its clients include the government's National Highway Authority. The bank last year recorded consolidated after-tax profit of HUF11.3 billion (EUR43 million). ============= I R E L A N D ============= ELAN CORPORATION: To Sell Patch Business to Japanese Rival ---------------------------------------------------------- Ireland's Elan Corporation, the biopharmaceutical company whose debt and obligations are expected to amount to US$1.3 billion by the end of this year, will divest its U.S.-based patch business unit to Japan's Nitto Denko, according to Inpharma.com. Elan Transdermal Technologies sells proprietary and generic controlled-release transdermal products for a wide range of therapies. Nitto Denko is the market leader in transdermal delivery in its home market. It plans to use Elan Transdermal Technologies as a platform to extend the reach of its in-house technologies, particularly in the U.S. The firm would like to tap into the patch business' manufacturing base, regulatory expertise and patent portfolio, online agency Inpharma.com said. A deal between the two companies can be regarded as the first stage of a strategy to roll out Nitto's drug delivery technologies around the world, the report said. Elan has sold assets in a last-minute move to raise cash for payment of its debt and obligations. Its latest divestment included its primary care business, which was acquired by King Pharmaceuticals of the U.S. for US$750 million, and its stake in Ligand Pharmaceuticals in return for GBP68 million. MANUFACTURERS SERVICES: Closure Threatens 200 Athlone Jobs ---------------------------------------------------------- The Midlands, which has seen job losses in flagship industries such as Elan and Ericsson in the past two years, could see yet another mass layoffs, as Manufacturers Services Limited decides to close its plant in Athlone, as part of an ongoing restructuring. Business Plus Online quoted the company saying the reason for shutting down the facility is "the continuing global downturn in the electronics industry." Former Digital executive Kevin Melia established Manufacturers Services Limited in Athlone in 1994. The facility's closure could mean the loss of over 200 jobs, in addition to the 23 voluntary job losses sought from the administration sections last January 23. General manager Mike Stenson told the online news agency: "During the nine years operating at the Athlone site, Manufacturers Services Limited has made significant contributions to the local economy. However, given the business climate and ongoing cost pressures, we are left with no alternative but to cease operations in Athlone." A 30-day consultation process with employees and their representatives will be conducted, and support and consultancy services to help those leaving the company to secure alternative employment have been assured by the management. Manufacturers Services Limited is one of the largest electronics manufacturing services companies in the world. It has a worldwide operation and produces printed circuit boards alongside a range of other electronics products. Hit by the two-year economic downturn, the company has aimed to streamline its operations, reduce general and administrative expenses and enhance its earnings leverage. It is currently undergoing a restructuring that could see up to 4,500 job losses globally. However, its operation in Galway, which employs 250 people, is understood not affected by the restructuring. CONTACT: MSL Ireland Garrycastle Athlone Co. Westmeath Ireland Phone: +353-902-20800 Fax: +353-902-20801 MSL 300 Baker Avenue Concord, Massachusetts 01742 Phone: (978) 287-5630 Fax: (978) 287-5635 Email: info@msl.com ===================== N E T H E R L A N D S ===================== KONINKLIJKE AHOLD: Considers Sale of CRC Ahold Stake Next Year -------------------------------------------------------------- Embattled retailer Royal Ahold NV may sell half its stake in CRC Ahold Ltd., the manager of a supermarket chain that operates under the Tops banner. Online news agency Seafoodnews.com cited a report by the Bangkok Post saying Ahold has plans of selling the stake as it continues to shed non-core assets to cut more than EUR12 billion in debts. Royal Ahold signed a contract in 1997, giving the local retail company Central Group the option in 2004 to buy back half of the company it founded. Ahold started its series of divestments in November. It recently divested the small drugstore chain De Tuinen and candy store chain Jamin. CONTACT: ROYAL AHOLD Corporate Communications Phone: +31.75.659.57.20 ROYAL KLM: Delays Job-cuts Due to Pressure from Union ----------------------------------------------------- Dutch airline KLM Royal has agreed to give itself at least one month to reconsider a plan to cut 4,500 jobs after its works council threatened to resist the move, according to Reuters. Europe's No.4 four airline is cutting jobs as part of a wider plan to reduce costs by EUR650 million (US$740 million). The original plan was to cut 3,000 jobs, but the carrier indicated last month it might increase the number to 4,500, with 700 forced layoffs. The move follows the group's posting of its biggest-ever annual loss due to the worldwide economic slowdown, the effects of SARS on Asian traffic, and heavy competition from no-frills carriers. The workers' union, which KLM has consulted in accordance to Dutch laws, has already approved the terms of the redundancies, but they were not asked to approve the total number of job-cuts. The council wants to block the job-cuts at the Dutch airline because the plan does not take account of employees' length of service. KLM agreed to delay the plan, but intends to take it up again after the allotted time, according to a spokesman. "After 30 days KLM can still implement the plan... The council has indicated it would ask a judge to try to block it," KLM spokesman Bart Koster said, according to Reuters. The airline has a market capitalization of about EUR375 million. ROYAL PHILIPS: Analysts Foresee Another Quarterly Loss ------------------------------------------------------ Analysts are expecting Netherlands-based electronics conglomerate, Philips Electronics, to post its eight quarterly loss in nine quarters next week, according to Reuters. The net loss, though, will be narrower than last year's, the consensus of 16 analysts interviewed by Reuters said. Second-quarter loss will be EUR75.7 million (US$86 million), down from EUR1.36 billion a year ago. Losses are predicted in chips and television sets, which will offset solid profits on light bulbs and shavers. At an operating level, Philips is expected to report a meager EUR2.5 million profit. Sales are likely to be down 16% to 6.74 billion. Philip units currently under close monitor by investors are its ailing semiconductor and U.S. consumer electronic businesses. The semiconductor division is currently trying to focus on growth areas such as mobile phones, flat TVs and digital recorders. The U.S. consumer electronics unit, which is suffering under heavy price pressure, is expected to be in the black by the fourth quarter. "The second quarter will be very weak, but if they can say that there has been some progress during the quarter, that will be regarded as positive," said analyst Jeroen Bos at Fortis Bank, according to the report. Philips is currently suffering from low demand and tight competition from Asian rivals in several of its units. =========== N O R W A Y =========== AKER KVAERNER: Onshore Contract to Provide Work to 500 Employees ---------------------------------------------------------------- Statoil has issued a letter of intent to Aker Kvaerner's yard, Aker Stord, for a large program of installation work at the gas terminal Karsto in Norway. This will prepare the facility to receive gas from the Kristin field starting in 2005. The work, which has an overall value of more than NOK700 million, has been awarded on behalf of the Gassco operating company. The job will provide work for some 500 employees over a period of 15 months. The Karsto contract is a breakthrough for Aker Stord where land-based process facilities are concerned. The company already has almost 30 years' experience in the construction of fixed and floating offshore process facilities in the form of production platforms. Aker Stord will assemble at its own yard a series of pipe-racks and equipment units for delivery to the Karsto facility. These units will weigh between 35 and 450 tons. For the company to deliver pipe-racks and equipment units to Karsto is an important development - previously the owners of Norwegian land-based plants have for the most part purchased these products from foreign suppliers. "Aker Stord has been awarded the contract against strong competition from Norwegian and foreign suppliers," says Statoil's project manager Knut Magne Vagen. "It is gratifying that the Norwegian supply industry has shown itself to be competitive and that Aker Stord submitted the best overall bid." "The fact that Aker Stord has now demonstrated its competitiveness in the onshore market is strategically important - and very satisfying for us," says Aker Stord's president Stian Vemmestad. "This is something all the employees have contributed to, for example through cost reductions and greater efficiency." The company starts mobilization at Karsto in September and installation work there will begin in January 2004. Known as Karsto Expansion Project 2005, this stage of development at Karsto has a total cost framework of NOK5.74 billion. It will enable the plant to receive and process rich gas from Statoil's Kristin field in the Norwegian Sea when production begins on October 1, 2005. The construction of a semi-submersible gas production platform for Kristin is well under way at Aker Stord. The platform will be ready for tow-out at the end of March 2005. The Karsto facility is the largest of its kind in Europe and the third largest in the world. CONTACT: AKER KVAERNER Torbjorn Andersen Vice President, Group Communications Phone: +47 2294 5390 Mobile: +47 928 85 542 Tore Langballe Investor Relations Phone: +47 6751 3106 Mobile: +47 907 77 841 PAN FISH: Leads Move to Balance Supply of Salmon in Market ---------------------------------------------------------- For two days a week the Pan Fish group in Norway will suspend the feeding of all salmon over one kilo. This measure is being instigated in order to help reduce the supply of salmon on the market. Every month this measure will reduce the growth and thereby the supply of salmon from Pan Fish in Norway by between 700 and 1,000 tons. Managing director Arne Barmen in Pan Fish Norge says that the company will continuously evaluate how long the measure is to remain in place and is assuming that other fish farmers in Norway will follow suit, thus helping to bring more balance to the market as quickly as possible. In Norway, Pan Fish has 45 licenses, 6% of Norway's total number of licenses. "If the whole industry follows up this lead, the production of salmon in Norway will be reduced by 10 - 15 thousand tons per month, and we can expect to achieve balance between supply and demand in the space of a few months", says Mr. Barmen. Moreover, Mr. Barmen points out that voluntary measures like this, combined with the Ministry of Fisheries' current draft proposal in which it has chosen to follow up the industry's (FHL's) joint resolution on reduced feeding quotas for 2004, will be sufficient to ensure a new upswing in the Norwegian fish-farming industry. The financial effect for Pan Fish depends on price developments in the time ahead, but in the short term the effect will be positive, on both operating expenses and liquidity. ***** Pan Fish is the world's number two salmon farmer after Dutch Nutreco, and was once one of Norway's hottest seafood producers. It suffers from low prices for salmon and a strong Norwegian currency, and was only saved from total collapse last year by a refinancing agreement that allowed it to continue operations with its banks effectively in charge. CONTACT: PAN FISH NORGE Arne Barmen, Man. director Phone: +47 971 73 490 PAN FISH ASA Atle Eide, Chief Executive Officer Phone: +47 911 52 977 =========== P O L A N D =========== SZEPTEL SA: Minor Investor Rumored to Up Stake Via Debt Swap ------------------------------------------------------------ Szeptel S.A., the ailing publicly listed telecom operator in Poland, showed signs of recovery under the nursing of minor investor Media Net Interactive, according to Warsaw Business Journal. Media Net Interactive, which specializes in providing value-added services for telecom operators, recently bought PLN20 million of Szeptel's debt from bank Pekao, giving the Polish telecom operator an opportunity to improve its financial condition. Media Net Interactive controls only a 5.4% stake in Szeptel, but it may become a significant shareholder through a debt to equity swap with Szeptel, analyst Radoslaw Solan of BDM PKO said. Media Net Interactive head, Piotr Konig, told Warsaw Business Szeptel stands a good chance of increasing its revenues if it manages to improve its internal situation. Szeptel's revenue in 2002 was ZL20 million. He said: "We are experienced in providing modern telecom services and we are able to help Szeptel." Konig added that Media Net Interactive was also negotiating debt-restructuring conditions with creditor banks. Szeptel's debts amounted to ZL39 million in 2002. CONTACT: Przedsiebiorstwo Telekomunikacyjne Szeptel S.A. ul. Raclawicka 99 02-634 Warszawa Phone: + 48 22 844 91 26 Fax: + 48 22 844 25 72 E-mail: biuro@szeptel.pl UPC POLSKA: S&P Cuts Rating to 'D' Over Bankruptcy -------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Polish cable operator UPC Polska Inc. to 'D' from 'CC' and lowered the senior unsecured debt rating on the company to 'D' from 'C'. The downgrade follows the company's announcement that it filed a petition for relief under Chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York on July 7, 2003. The company has also filed a pre-negotiated plan of reorganization. UPC Polska has already entered into a debt restructuring agreement with United Pan Europe Communications N.V. subsidiaries UPC Telecom and Belmarken Holding B.V. and a committee of third-party bondholders that collectively hold the majority of UPC Polska bonds. The ratings will subsequently be withdrawn. ===================== S W I T Z E R L A N D ===================== ABB LTD.: Asbestos Settlement Plan Finally Gets Approval -------------------------------------------------------- U.S. Bankruptcy Judge Judith Fitzgerald approved on Thursday ABB Ltd.'s US$1.2 billion asbestos settlement plan subject for further approval by District Judge Alfred Wolin. A so-called omnibus hearing on the case was scheduled Friday in Pittsburg to iron out minor details of the plan. The ruling concerns asbestos lawsuits related to its U.S. unit Combustion Engineering, which had more than 100,000 lawsuits pending. The settlement plan involves a Chapter 11 bankruptcy protection for the U.S. unit, which in turn would give ABB protection from future asbestos claims. ABB has now spent US$2.3 million in relation to the asbestos lawsuits, according to Dow Jones. The settlement will add another US$100 million. The judgment is understood to hasten the sale of the engineering company's oil, gas, and petrochemicals division. The asset is expected to raise as much as US$1.5 billion. Proceeds of the sale will be used to reduce ABB's debt that is estimated to be between $6.5 billion to US$8.2 billion by the end of the year. Possible buyers for the unit could include Cooper Cameron Corp., General Electric Co. and Candover Investments PLC are interested in the division, according to analysts. ABB LTD.: Rating Unaffected by Court Ruling in Asbestos Case ------------------------------------------------------------ Standard & Poor's Ratings Services said its ratings on Switzerland-based engineering company ABB Ltd. (BB+/Negative/B) are unaffected by the long-awaited court ruling in favor of the ABB group's proposed asbestos plan. In an order issued Thursday, Judge Judith Fitzgerald of the U.S. Bankruptcy Court in Wilmington, Del., recommended confirmation of the plan to the U.S. District Court and implementation of a channeling injunction including all claims that ABB and its affiliates had proposed to be covered. Accordingly, such an injunction would not only protect subsidiary Combustion Engineering Inc., but also subsidiaries ABB Lummus Global Inc. and Basic Inc. The positive ruling is a major breakthrough in ABB's efforts to end asbestos-related litigation against the group. Although the plan is still subject to confirmation by the U.S. District Court, the ruling is expected to significantly improve ABB's ability to tap capital markets for refinancing and accelerate the group's disposal program. Large asset disposals in ABB's Oil, Gas, and Petrochemicals division will still likely be subject to a positive asbestos ruling from the U.S. court. There has, however, already been good progress on small and mid-size disposals. Only last week, ABB announced it had reached an agreement to sell the Scandinavian operations of its Building Systems unit for net proceeds of about US$170 million, which was earlier than Standard & Poor's had expected. Further details on the court proceedings ahead are available in a commentary, "U.S. Bankruptcy Court Ruling a Positive Sign for ABB Ltd.'s Asbestos Plan," published by Standard & Poor's on June 27, 2003. SEZ GROUP: Expects Order Upswing to Continue in Second Quarter -------------------------------------------------------------- The SEZ Group (SWX Swiss Exchange: SEZN), the market leader and premier innovator in single-wafer cleaning technology for the semiconductor industry, announced that in the second quarter of 2003, the company registered a 36% increase in order intake to CHF37.2 million over the first quarter of 2003 (second quarter 2002: CHF75.3 million). Accumulated, SEZ Group's order intake in the first half of the current business year was CHF64.6 million (first half-year 2002: CHF108.8 million). In the second quarter of 2003, the SEZ Group expects net sales of CHF35.7 million, compared to CHF47.4 million in the second quarter of the previous year. In the first half, SEZ expects consolidated net sales of CHF69 million, compared to CHF96.6 million in the first half of 2002. This corresponds to a book-to-bill-ratio of 0.94 compared to 1.1 in the same period of the previous year. The order backlog on June 30, 2003, stood at CHF37.3 million. Given expected net sales of CHF69 million for the first six months of 2003, SEZ management stands by its previously stated guidance estimating sales between CHF130 million and CHF165 million for the full year 2003. Commenting on SEZ's second-quarter performance, Chief Marketing Officer Kurt Lackenbucher credited the semiconductor industry's accelerating transition to 300-mm wafer processing for the company's improved bookings. "Clearly, in spite of the protracted global downturn, the 300-mm migration is picking up speed, fueling technology buys across the broader process technology spectrum," said Mr. Lackenbucher. "In fact, it is the surging adoption of our 300-mm Spin-Processing tools-which accounted for a record high of approximately half of our second-quarter order-intake figure-that contributed to this quarter's bookings, with several fabs and foundries from the Asia-Pacific region dominating our order books during the period. Moreover, we've seen an upswing in orders from Japan, signaling market resurgence and underscoring SEZ's market strength in this highly competitive environment. We're very pleased by the groundswell of support for our technology from these critical regions." This update caps a quarter in which SEZ marked a new milestone on its wet surface preparation technology roadmap. In June, the company unveiled its Da Vinci series-a wet-clean technology platform that unites high throughput and minimized footprint to provide the greatest level of serviceability and reliability possible in a single-wafer approach. The modular, multi-chamber design delivers SEZ's proven process capabilities to significantly reduce cost of ownership and meet the high-volume manufacturing needs of customers worldwide. Featuring a "best-of-breed" combination of both production-proven and newly integrated SEZ technologies, the Da Vinci series is designed to help speed the industry's transition from batch processing to single-wafer cleaning technology. The Da Vinci series is expected to bolster the leadership position enjoyed by the SEZ Group with its legacy single-wafer wet-clean systems, with the first Da Vinci tool poised to tap into the 300-mm migration trend. Quarterly comparison (un-audited) in CHF million in EUR million in USD million Q2/03 Q1/03 Q2/02 Q2/03 Q1/03 Q2/02 Q2/03 Q1/03 Q2/02 Net 35.71) 33.3 47.4 23.61) 22.7 32.3 26.71) 24.4 29.0 sales Order 37.2 27.4 75.3 24.6 18.7 51.3 27.7 20.1 46.0 intake Order 37.3 36.4 59.0 24.1 24.7 40.1 27.5 26.9 39.8 backlog by end of quarter Book-to-bill-ratio 1.04 0.82 1.59 1.04 0.82 1.59 1.04 0.82 1.59 1) estimate Upcoming Financial Dates August 27, 2003 - Press release and conference call on half-year 2003 results October 22, 2003 - Press release and conference call on third-quarter 2003 results About SEZ Group SEZ Group is the leading provider of single-wafer, wet-clean processing solutions for the global semiconductor industry, with an installed base of over 700 tools representing nearly 1000 process chambers. The company maintains operations in Europe, Asia-Pacific, Japan and North America. SEZ Holding AG is traded on the SWX Swiss Exchange under the symbol SEZN. Additional information about the company is available on the Internet at http://www.sez.com =========================== U N I T E D K I N G D O M =========================== ABBEY NATIONAL: To Redeem Outstanding Series A Preference Shares ---------------------------------------------------------------- Abbey National plc hereby confirms that it has given notice in accordance with the terms of its Non-Cumulative Dollar Denominated Preference Shares, Series A, that on July 22, 2003 it will redeem all outstanding Dollar-Denominated Preference Shares, Series A, at the redemption price of US$25.70 per American Depositary Share and accrued pro rata dividends payable per ADS from the date of the last dividend payment July 6, 2003 to July 22, 2003 of US $0.0875 per ADS. CONTACTS: ABBEY NATIONAL In relation to Preference Shares: Ron Friend, Head of Legal and Documentation Phone: 001 44 20 7756 4737 For general enquiries: Jon Burgess, Head of Investor Relations Phone: 001 44 20 7756 4182 AES DRAX: Reconsiders Use of Pollutant as Fuel Alternative ---------------------------------------------------------- AES Drax may withdraw its application to use pollution-causing petcoke as fuel after being advised by Selby MP John Grogan against the hazards of its byproducts to the environment. Petcoke is a high-sulfur oil-byproduct, and while often cheaper than coal, it produces higher amount of sulfur emissions that causes acid rain. The U.K. coal-fired power plant lodged an application to the Environmental Agency last year to co-burn petcoke to save as much as GBP30 million a year. But Mr. Grogan, a secretary to the all-party parliamentary coalfields group, of which AES is a member, has advised the company against the use of petcoke due to voters' pressures, according to Dow Jones. The unit of U.S. utility company AES Corporation said in a statement it will "will review the points that Mr. Grogan raises and after serious consideration will reply to him in full within the next few days." AES is launching a wide-ranging restructuring in the wake of a drop of U.K. power prices to record low levels. Approval of the cost-saving scheme is expected to ease out its restructuring talks with lending banks and bondholders. BALTIMORE TECHNOLOGIES: Cancels Plan to Sell Entire Business ------------------------------------------------------------ On Thursday, Baltimore Technologies plc (London: BLM) announced that the controlled sale process it commenced on May 22, has been closed. While there have been offers for the whole of the company's share capital, the Board does not believe that pursuing those offers would allow maximizing the overall return to shareholders. Therefore, the company is no longer in an offer period as defined by the City Code on Takeovers and Mergers. However, negotiations regarding the disposal of certain managed service related offerings will continue. Focusing on the authentication business to support our growing customer base is the priority. On an unaudited management accounts basis, Baltimore had GBP14.47 million cash at bank on 30 June 2003. This balance excludes the GBP8.3 million due in respect of the sale of the Select Access business announced on July 4, as well as at least GBP2-3 million expected in the next 6 months from earlier divestments. In effect, the half-year cash balance of GBP14.47 million represents a net reduction of only GBP3.42 million for the first six months of 2003. The business remains debt free other than a GBP300,000 mortgage. Bijan Khezri, Chief Executive Officer, said: "The software industry continues to represent a significant potential for consolidation worldwide. As the world's leading PKI-based authentication vendor for high-end applications in Finance and Government, we will continue carefully monitoring the situation and pursue negotiations regarding the disposal of managed service related offerings. The cash balance as well as the expected future inflows will ensure that we continue making the development, support and maintenance of our authentication business a priority." About Baltimore Technologies Baltimore Technologies' products, services and solutions solved the fundamental security and trust needs of e-business. Baltimore's e-security technology gave companies the necessary tools to verify the identity of who they are doing business with and securely manage which resources and information users can access on open networks. Baltimore Technologies is a public company, principally trading on London. For more information on Baltimore Technologies please visit http://www.baltimore.com CONTACT: SMITHFIELD FINANCIAL Andrew Hey Phone: 020 7903 0676 Nick Bastin Phone: 020 7903 0633 Will Swan Phone: 020 7903 0647 BRITISH AIRWAYS: New Flight Schedule Focuses on Viable Routes ------------------------------------------------------------- British Airways has announced its route schedule for the winter 2003 season. The new schedule reflects the airline's strategy of focusing on commercially viable routes. The network changes, which start on October 26, 2003 unless specified, are: (a) A new service from London Gatwick to Turin, which will operate on a daily basis until December, 2003, when a twice daily service commences. In addition, from April, 2004, there will be a new service from London Gatwick to Dubrovnik in Croatia which will operate three times each week. (b) A new twice-daily service from Manchester to Copenhagen. (c) Additional frequencies from London Gatwick to the Caribbean commencing in December 2003. Flights to Antigua will increase from seven to 10 each week and flights to Barbados will increase from eight to 10 each week. (d) Flights to Bilbao in Spain will switch from London Gatwick to London Heathrow. (e) Services from London Gatwick to Bremen and Brussels will be suspended from September 1, 2003, and the service between London Gatwick and Dusseldorf will be suspended from October 1, 2003. The service between London Heathrow and Zagreb in Croatia will be suspended from September 14, 2003, and the service between London Heathrow and San Diego will be suspended from October 26, 2003. Martin George, British Airways' director of marketing and commercial development, said: "These announcements continue our strategy of focusing on commercially viable routes and suspending those services which don't make a financial contribution to our business. Although some routes are being suspended, we are starting three new European services and adding extra frequencies on our popular Caribbean routes." Another change for the winter 2003 season is that British Airways' flights from London Heathrow to Johannesburg and Tokyo will operate from Heathrow's Terminal 1 instead of Terminal 4 from October 26, 2003. Both these routes have a high number of transfer passengers, many of whom will no longer have to swap terminals at Heathrow for their connecting flights. This is the first phase of British Airways' flight switches between Heathrow terminals, which will help make better use of the existing facilities prior to the opening of Terminal 5 in 2008. To support these additional long-haul services, a major program of infrastructure improvements is taking place at Terminal 1 including new lounges and check-in facilities. CORDIANT COMMUNICATIONS: Publicis Denies Collusion with Ojjeh ------------------------------------------------------------- Publicis, the French advertising group, which previously had designs for rival Cordiant Communications, denied that its link with Syrian investor, Nahed Ojjeh, has something to do with the U.K. advertising company. Mrs. Ojjeh's stakebuilding in Cordiant Communications previously aroused suspicions she could be working with a party in relation to the auction of the advertising firm. Publicis communications director Eve Magnant admitted Mrs. Ojjeh, who owns 1% of Publicis "knows [Publicis chairman] Maurice Levy and various other people in the group" through business, but denied a talk between the two regarding Cordiant ever occurred. She equally denied any such discussions with Active Value, Cordiant's largest shareholder. "I can fully deny any project coming from our group. We have no project for Cordiant," Ms. Magnant told the Financial Times. Aside from the shareholding, the names of the two were mentioned together when Publicis' adviser, French law firm Veil Jourde La Garanderie, acted for Mrs. Ojjeh when she disclosed her 10.75% stake in Cordiant. According to the report, the Takeover Panel on Thursday confirmed it is launching an inquiry into whether there are manipulations concentrated to control Cordiant, but failed to mention names involved in the inquiry. Publicis had teamed up with U.S. investment fund Cerberus Capital Management for the acquisition of Cordiant until the party lost the bidding to WPP three weeks ago. Cordiant has recommended a rescue takeover offer from WPP Group that values its equity at GBP10 million. GLAXOSMITHKLINE PLC: Reaches Settlement in Augmentin ITC Lawsuit ---------------------------------------------------------------- Novartis announced that its affiliate companies have reached an agreement with GlaxoSmithKline over lawsuits related to GlaxoSmithKline's claimed Augmentin trade secrets. The lawsuits were filed with the U.S. International Trade Commission and state courts in Colorado and North Carolina. Under the terms of the agreement, GlaxoSmithKline will receive single-digit percentage royalties on U.S. sales of generic versions of Augmentin sold by Novartis or its affiliate companies for the four-year period from July 2002 through June 2006. Further details of the settlement agreement remain confidential. The termination of the International Trade Commission proceeding is subject to approval by the Administrative Law Judge and the International Trade Commission. Novartis remains committed to ensuring that its high quality generic alternative continues to be available to prescribers and their patients in the U.S. The agreement does not affect International Trade Commission's appeal against Novartis' subsidiary Geneva Pharmaceuticals relating to Augmentin patents. The U.S. Court of Appeals of the Federal Circuit heard the patent appeal case on March 5, 2003 and a decision is expected this year. Novartis AG is a world leader in pharmaceuticals and consumer health. In 2002, the group's businesses achieved sales of US$20.9 billion and a net income of US$4.7 billion. The group invested approximately US$2.8 billion in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ about 77 200 people and operate in over 140 countries around the world. For further information please consult http://www.novartis.com. HAMLEYS PLC: Baugur Gets 26% Acceptance on Takeover Offer --------------------------------------------------------- Nordic retailer Baugur, which has emerged as the preferred bidder for Hamleys, said on Thursday, it was able to secure acceptances for 26% of Hamley's shares. Baugur's bid vehicle, Soldier, outbid Tim Waterstone's 230p-a-share offer for the toy store last week with his 253p-a-share bid. Mr. Waterstone refused to comment after the defeat, according to the Financial Times. Hamleys chief operating officer John Watkinson and finance director Ian Parker are working with Baugur. The retailer plans to strengthen its U.K. retail assets with the acquisition. CONTACT: HAMLEYS PLC Phone: 020 7479 7316 Simon Burke, Executive Chairman HAWTIN PLC: Finance Director Leaves to Look for Job Elsewhere ------------------------------------------------------------- The company on Thursday announced that Finance Director W.J. Dixon has given notice to the Board of his resignation. Following the company's recent announcements relating to the disposal of several of the group's trading businesses, Mr. Dixon has decided that the role that he has fulfilled since November 1999, is no longer relevant to his experience and he seeks, in time, to find another position outside of the group. Meanwhile, Mr. Dixon, who has a one-year rolling contract, will continue to serve as Finance Director, assisting with the disposal transactions through his notice period. Hawtin previously sold its U.K.-based swimming pool equipment manufacturing and distribution business, Certikin International Limited and its 95% French subsidiary, MMC SARL. This was after it sold its loss-making U.K.-based wetsuit and watersports distribution business, Gul International Limited. In the twelve months to December 31, 2002, Gul made a loss before taxation of GBP310,000 on turnover of GBP6.3 million. Net assets as at that date were GBP900,000. Hawtin said it will utilize the proceeds of the sale to further reduce group borrowings. MANGANESE BRONZE: Sells Loss-making Property for GBP8 Million ------------------------------------------------------------- Manganese Bronze Holdings PLC is pleased to announce that it has conditionally agreed to sell its freehold property at Holyhead Road, Coventry to Matega Limited for a consideration of GBP8 million, payable in cash on completion. Matega will acquire the Property subject to a 20-year lease in favor of LTI Limited in respect of that part of the Property currently occupied by it. The disposal is conditional upon the approval of Manganese Bronze shareholders. A circular containing a notice convening an Extraordinary General Meeting to approve the disposal is being dispatched to shareholders shortly. The Directors have recommended that subject to shareholders' approval at the EGM of the transaction and the Components Division disposal announced earlier and following completion of both of the disposals, a special dividend will be declared of 25p per Ordinary Share, amounting to a total distribution of GBP4.5 million. The additional proceeds from the disposals will be applied to further reduce bank debt, make additional pension contributions of GBP1 million into the Manganese Bronze Group closed defined benefit pension scheme and to provide resources to support the continued development of the Group. Ian Pickering, chief executive, Manganese Bronze, says: "This transaction is a further milestone in our strategy of reshaping Manganese Bronze in order to create value for all our shareholders. It will assist our development as a focused specialty automotive products and services group by further strengthening our balance sheet and thereby enhancing our growth prospects. "The proposed special dividend of 25p per ordinary share is a clear demonstration that we are delivering significant value for all shareholders." Coventry Property The Property is the location of LTI's taxi manufacturing site, which occupies part of the overall site, along with Godfrey Hall, the owner of Matega who operates a BMW vehicle dealership on the front of the Property. The Property was included in the Group's interim accounts as at January 31, 2003 at a value of GBP5.8 million. The Property has been valued by DTZ Debenham Tie Leung at a market value of GBP6.0 million and on this basis the consideration represents a premium of GBP2.0 million before costs of sale. The Property disposal to Matega is subject to a lease of that part of the Property currently occupied by LTI, a subsidiary of Manganese Bronze. The lease is for 20 years on the factory at an annual rent of GBP375,000 for the first five years. In the event that planning permission is obtained for the redevelopment of the site within a period of 10 years from completion or if later from the termination of the lease, 25% of the redevelopment profit in excess of base value of GBP5 million (base value adjusted upwards for environmental costs up to a maximum of GBP450,000) would be payable to Manganese Bronze. Details relating to the background to and reasons for the disposal will be contained in the shareholder circular. Effect on Manganese Bronze of the disposal Completion of the Property disposal will result in the loss of an annual rental profit on the Property of GBP198,000 as well as incurring rent on the leaseback but this is largely offset by the reduced interest charge associated with the reduction in the Group's borrowings. The Property disposal will result in a pro forma profit of GBP2 million. CONTACT: MANGANESE BRONZE HOLDINGS PLC Tim Melville-Ross, 020 7153 1002 Chairman Mark Fryer Group Finance Director ERNST & YOUNG LLP John Stephan Phone: 020 7951 4462 Phil Sharpe Phone: 020 7951 3770 FINANCIAL DYNAMICS Andrew Lorenz Phone: 020 7269 7273 ROYAL & SUNALLIANCE: Announces New Appointments to Board -------------------------------------------------------- Royal & Sun Alliance Insurance Group plc announced that Edward Lea and John Maxwell are to join the Group as non-executive directors with immediate effect. Edward Lea was Finance Director of BUPA from 1991 to 2001 and is currently Chairman of Redbourn Group plc, an unquoted property development and investment company. John Maxwell was previously Director General/Chief Executive of The Automobile Association and an Executive Director of Prudential Corporation plc and is currently a non-executive director of a number of companies, including Provident Financial plc and The Big Food Group plc. The Chairman, John Napier, also announced that John Baker, Deputy Chairman and Chairman of the Audit & Compliance Committee, Nicholas Barber, Chairman of the Remuneration Committee and Carole St Mark are to retire from the Board at the end of September 2003. Commenting on the changes he said, "I am delighted to welcome Edward Lea and John Maxwell to the Board. I would also like to thank John, Nicholas and Carole for their contribution to the Group over the years and, in particular, for their personal encouragement and support in progressing the transformation of the Company." CONTACT: ROYAL & SUNALLIANCE For Analysts: Malcolm Gilbert Phone: +44 (0) 20 7569 6134 SWISS LIFE: Divestment of U.K. Business in Final Stage ------------------------------------------------------ Shares in Swiss Life rose slightly on the Swiss market after the Liverpool-based insurer said it is close to selling its U.K. operation to an undisclosed buyer. "We are close to a solution which we will present shortly," a spokesman in Switzerland said, according to icLiverpool. The business is thought to be worth around GBP200 million. Swiss Life offered the business for sale as part of an effort to raise almost GBP400 million in a rescue rights issue last year in the wake of a global fall in stock markets. Admin Re, a unit of Zurich-based Swiss Re, was rumored to buy the business last month, but Swiss Life denied any truth about the matter at that time. The report, citing the Daily Post, said Swiss Re declined to comment last week when asked whether it is the unnamed buyer. Swiss Life U.K. managing director, Brian Hurd, was also not available for comment. Swiss Life (U.K.) has established a niche market offering insurance policies. It moved its office to leased premises at the Albert Dock two years ago where it now employs around 500 people. YELL GROUP: Expects at least GBP2 Billion from IPO -------------------------------------------------- Yell Group plc announces that an offer price of 285p per share has been set in respect of its initial public offering. At the offer price, Yell will have a market capitalization* of approximately GBP2.0 billion. As a result of strong investor demand, the offer size was increased to GBP1.14 billion (400 million ordinary shares), excluding any over-allotment arrangements, from the previously announced offer size of GBP850 million. The indicative price range for the Global Offer was 250p to 300p. John Condron, Chief Executive of Yell, said: "We are delighted with the way new investors have embraced the Yell story. The strong response to the Yell share offer reflects the quality and potential of the business. "We believe we are well positioned to deliver growth and continued strong cash conversion, and we look forward to creating further value for our new and existing shareholders." About 400 million shares are being made available under the Global Offer, comprising a primary offer of approximately 152 million ordinary shares and a secondary offer of approximately 248 million ordinary shares. In addition, over-allotment arrangements representing up to 15% of the Global Offer -- or 60 million ordinary shares -- have been entered into with Merrill Lynch International on behalf of the underwriters of the Global Offer. Following the Global Offer, funds managed or advised by Apax Partners and Hicks, Muse, Tate and Furst will each hold approximately 19%* of Yell's ordinary shares, and management and employees will hold approximately 5%*. Assuming full exercise of the over-allotment arrangements, these holdings would be 15%* and 5%* respectively. Investors in the Global Offer will own approximately 65%* of the Company's issued share capital, assuming the over-allotment arrangements are exercised in full (57%* if no shares are acquired pursuant to the over-allotment arrangements). Gross proceeds of the Global Offer will be GBP1,140 million, comprising approximately GBP433 million from the primary offer and approximately GBP707 million from the secondary offer. If the over-allotment arrangements are exercised in full, gross proceeds will increase to approximately GBP1,311 million. None of the proceeds arising from the exercise of the over-allotment arrangements will be received by Yell. The net primary proceeds of the Global Offer (of approximately GBP403 million, after all direct expenses of the offering) will be used by Yell principally to reduce indebtedness. This will include repayment of 35%, or approximately GBP173 million, of the aggregate principal and accreted amounts under the Company's outstanding high yield bonds. After the application of the net primary proceeds to pay down debt and the exchange of certain shareholder bonds into equity, Yell's consolidated net debt will be approximately GBP1.3 billion. Conditional dealings are expected to commence at 8:00 a.m. on Thursday. Admission to the Official List of the U.K. Listing Authority and commencement of unconditional dealings on the main market of the London Stock Exchange are expected to take place at 8:00 a.m. on July 15, 2003. The shares will be listed on the London Stock Exchange under the symbol YELL. Merrill Lynch International and Goldman Sachs International are acting as joint global coordinators and joint bookrunners in connection with the Global Offer. Merrill Lynch International is acting as sponsor to Yell. Listing Particulars are expected to be published July 10, in respect of the Global Offer. * Calculated including approximately 9 million shares which are currently unissued but which would be issued upon the exercise of options held by employees under existing share option plans, all of which are in the money at the offer price. CONTACT: CITIGATE DEWE ROGERSON Phone: +44 (0) 20 7638 9571 Anthony Carlisle Mobile: +44 (0) 7973 611888 MERRILL LYNCH INTERNATIONAL Bob Wigley Phone: +44 (0) 20 7995 2194 Rupert Hume-Kendall Phone: +44 (0) 20 7996 2441 GOLDMAN SACHS INTERNATIONAL Simon Dingemans Phone: +44 (0) 20 7774 4615 Tim Bunting Phone: +44 (0) 20 7774 5969 ********* 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 * * *