/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/030717.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 Thursday, July 17, 2003, Vol. 4, No. 140 Headlines F I N L A N D BENEFON OYJ: Varma-Sampo Cuts Shareholding to Below 1/10 F R A N C E VIVENDI UNIVERSAL: Metro Goldwyn Ups Bid, Demands More Details G E R M A N Y BERTELSMANN AG: E.U. Delays Antitrust Inquiry into Disposal EUROBIKE AG: Files for Insolvency Together with Subsidiaries EUROBIKE AG: Company Profile KAMPS AG: Lets French Unit Exercise Call Option in Harrys SAS PLASMASELECT AG: Continues to Tread Growth Track for the Year SINNERSCHRADER AG: Q3 Results Shows Worsening Condition VIVANCO AG: Debt Cancellation Ushers Successful Reorientation I R E L A N D VALENTIA TELECOMMUNICATIONS: Fitch Rates Proposed Notes 'BB+' I T A L Y FIAT SPA: CEO Denies Quoting General Motors on 'Put' Option M A C E D O N I A MACEDONIAN TEXTILES: Posts Notice of International Public Tender N E T H E R L A N D S KLM ROYAL: In Talks with Air France over Possible Alliance ROYAL PHILIPS: Reports Q2 Net Profit of EUR42 Million P O L A N D BANK MILLENNIUM: To Publish Quarterly Report Ahead of Schedule DAEWOO-FSO: Government, MG Rover Move to Protect Creditors LOT AIRLINES: Market Snubs Receivers' Call for Offers PHS STEEL: LNM Granted Rights to Pursue Exclusive Discussions UPC POLSKA: Submission Deadline for Required Documents Extended R U S S I A METROMEDIA INTERNATIONAL: Remedies Default Condition With Filing S W E D E N INTENTIA INTERNATIONAL: New Share Issue Fully Subscribed S W I T Z E R L A N D ZURICH FINANCIAL: Japanese Staff to Protest Likely Sale of Unit ZURICH FINANCIAL: Pays Shareholders CHF1 per Registered Share U N I T E D K I N G D O M BRITISH AIRWAYS: Prepares Way for Full-blown merger with Iberia FOCUS WICKES: S&P Assigns 'BB-' Ratings, Stable Outlook INTERNET PLC: Joint Liquidators Offer Business for Sale NEC SEMICONDUCTORS: Files Petition to Reduce Share Capital NORWICH UNION: Announces Transfer of Cheadle Operations NORWICH UNION: 900 Employees to Lose Jobs in Shakeup PUBLIC NETWORK: Board Resolves to Wind Up Firm, Suspend Trading ROYAL MAIL: Hikes Postal Order Fees for First Time in Years SIMON GROUP: Makes Available Circular on Disposal of Seawheel SSL INTERNATIONAL: '02 Operating Profit Tripled, Says Chairman THOMAS COOK: Downsizing of Fleet to Cost 340 Jobs WELCOME BREAK: Fitch Downgrades Notes, Retains Watch Negative YELL GROUP: Redeems Note Issued to British Telecommunications YELL GROUP: Rating Raised to 'BB'; Removed from CreditWatch ********* ============= F I N L A N D ============= BENEFON OYJ: Varma-Sampo Cuts Shareholding to Below 1/10 -------------------------------------------------------- According to the information received by the company, the holding of Keskinainen Elakevakuutusyhtio Varma-Sampo of the share capital of Benefon has as of July 14, 2003, been reduced to below one tenth (1/10) to 9.69% which is 6.45% of all voting rights. ***** The company filed an application for statutory corporate reorganization in April, including radical cost-cutting measures, and debt reorganization. Currently, it is seeking equity funding for increasing cash margin through a 1-to-2-million share issuance to be offered to all shareholders. CONTACT: BENEFON OYJ Jorma Nieminen Chairman of the Board =========== F R A N C E =========== VIVENDI UNIVERSAL: Metro Goldwyn Ups Bid, Demands More Details -------------------------------------------------------------- Hollywood studio operator Metro Goldwyn-Mayer increased its preliminary bid for Vivendi Universal's U.S. media assets by US$300 million to US$11.5 billion, according to the Financial Times citing people familiar with the matter. In the letter outlining the revised bid, Metro Goldwyn-Mayer CEO Alex Yemenidjian at the same time threatened to pull out the bid Monday next week unless it is provided with more information about the businesses. Vivendi's media assets housed under Vivendi Universal Entertainment, which includes film, television and theme park businesses. Metro Goldwyn-Mayer is conducting due diligence on Vivendi Universal Entertainment together with Liberty Media, and a consortium led by Edgar J. Bronfman, the Vivendi board member and former chief executive of Seagram. NBC is still mulling whether to submit a firm offer, and Viacom is just waiting for any progress. Metro Goldwyn-Mayer made the highest first-round bid, and its demand is part of the due diligence. It is understood to be particularly interested in the carriage agreements that Vivendi's U.S. cable channels have struck with cable operators, and commitments made by Universal Studios. Vivendi, which is selling the assets to trim down its heavy debt load, is understood to have denied the request, according to the Financial Times. The report cited one person close to the process saying the French company would only provide such information to the rival when the parties are already in exclusive negotiations. Both Vivendi and Metro Goldwyn-Mayer refused to comment, according to the report. ============= G E R M A N Y ============= BERTELSMANN AG: E.U. Delays Antitrust Inquiry into Disposal ----------------------------------------------------------- The European Union Commission has implemented a two-week extension to the antitrust review into the acquisition of BertelsmannSpringer on Monday, Dow Jones Newswires reported. The EUR1.05 billion acquisition by U.K. venture capital firms Candover Investments PLC and Cinven Group Ltd. of Bertelsmann AG's academic publishing unit BertelsmannSpringer was made in May. The review was supposed to conclude on July 16, wherein the parties would find out whether the E.U. would clear the deal or subject it to an in-depth four-month investigation. The new deadline for the review is July 29. According to Dow Jones, extensions of this kind usually mean the parties have submitted changes within the first three weeks of the initial one-month review period. The extra two weeks gives the Commission, the E.U.'s executive branch, more time to review divestments or other commitments. Another reason for a delay could be that a member state of the European Economic Area has asked to review part or whole of the deal at national level. The U.K. venture capital firms bought BertelsmannSpringer with a plan to merge it with Dutch Kluwer Academic Publishers, and rename the combined company, Springer, which will become the world's second largest academic publisher behind Elsevier Science, a unit of U.K.-based Reed Elsevier PLC. BertelsmannSpringer, based in Berlin, has 70 publishing houses producing 700 science and trade journals and 4,000 new book titles a year, while Kluwer Academic publishes a similar number of scientific and technical journals and some 1,200 books a year. Analysts said the deal is sensible because of scale advantages in the specialty publishing business, which is driven by subscriptions rather than advertising. German media group Bertelsmann agreed to sell BertelsmannSpringer to reduce its EUR2.7 billion ($3.12 billion) debt and pursue acquisitions in other areas, including music, television, and consumer publishing. Last month, Moody's said trading environment for Bertelsmann's key activities "remains tough" and its domestic market remains threatened by a further economic downturn. The gloomy outlook loomed even after the operating media and media services company successfully reduced debt burden incurred with the late 2002 acquisition of music company, Zomba, through the disposal of a scientific publishing unit. CONTACT: BERTELSMANN AG Carl-Bertelsmann-Straae 270 33311 Gtersloh Germany Phone: ++49.5241.80-0 Fax: ++49.5241.80-9662 EUROBIKE AG: Files for Insolvency Together with Subsidiaries ------------------------------------------------------------ Eurobike AG (ISIN DE 000 570 6600, DE 000 540 8843), Dusseldorf, announces, that it has filed for insolvency at the court of Dusseldorf on grounds of illiquidity. At the same time the subsidiary companies Hein Gericke Holding GmbH, Hein Gericke Vertriebs GmbH and Paul A. Boy GmbH have filed for insolvency, too. The concrete offer of an investor has been declined. The injection of the necessary funds and a waiver of the credit terminations could not be achieved. The necessary restructuring and financing measures to secure the continuation of the business can now possibly be implemented in the course of the insolvency proceeding. EUROBIKE AG: Company Profile ---------------------------- NAME: Eurobike AG Camilla Lowenberg Reisholzer Werftstr. 19 D-40589 Dusseldorf PHONE: ++49 (0) 211-9898-774 FAX: ++49 (0) 211-9898-603 EMAIL: ir@eurobikeag.com WEBSITE: http://www.eurobike-ag.com/ TYPE OF BUSINESS: EUROBIKE AG is the management holding company of 12 domestic and 8 foreign companies. The EUROBIKE Group operates retail and wholesale businesses in the field of motorbike clothing and accessories. It has operations in Germany, the rest of Europe and the USA. Its core competencies are product development, design, marketing and sales. The total of 276 shops (Germany: 191, abroad: 80) are managed in most countries by self-employed sales representatives. EXECUTIVE BOARD: Dr. Peter Mrosik, Chairman Mr. Winfried Klar SUPERVISORY BOARD: Dr. Eberhard Freiherr von Perfall, Chairman Volker Walther, Vice-Chairman Werner Pehlemann Hein Gericke Diter Junemann Werner Muller Georg Wahlicht Jorg Meinrich Ulrich Krauskopf NUMBER OF EMPLOYEES: 373 GROUP NET LOSS: EUR13.392 million (October 1, 2002 to March 31, 2003) CURRENT ASSETS: 36.746 million (as of March 31, 2003) TOTAL ASSETS: EUR202.752 million (as of March 31, 2003) EQUITY CAPITAL: EUR21,474,259.01 NUMBER OF SHARES: 8.4 million SHAREHOLDERS: (July 10, 2003) DIC Deutsche Investors' Capital Holding AG (23.94%) Invision AG (2.92%) Julius Bar Kapitalanlage AG (3.45%) Hein Gericke (10%) Free float (49.69%) To See Latest Financial Statements: http://bankrupt.com/misc/Eurobike_Financials.pdf KAMPS AG: Lets French Unit Exercise Call Option in Harrys SAS ------------------------------------------------------------- Kamps AG has decided to have its subsidiary Kamps (France) SAS exercise its call option for the remaining 51% shares in Harrys SAS. The respective call option had been granted in the year 2000 in connection with the acquisition of 49% of the shares in Harry SAS from Artal Holland B.V. The closing of the transaction is contractually due at the end of December 2003. Because the payment of the purchase price for the remaining 51% in Harrys SAS would result in an inadequately high level of debt at Kamps AG, the purchase will be financed through a loan to Kamps (France) SAS by Finbakery Netherlands B.V., a company controlled by the ultimate majority shareholders of Kamps AG. Furthermore, Kamps AG and Finbakery Netherlands B.V. have agreed on the granting of respective put and call options for 100% of the shares in Kamps (France) SAS and, as a result, for 100% in Harrys SAS. The put option is exercisable as of end of December 2003. The agreed purchase price for the 49% participation in Harrys SAS already held by Kamps (France) SAS amounts to EUR300,000,000. In 2000, Kamps AG paid EUR254,000,000 for the 49% shareholding. The entire proceeds of the sale can be used for a substantial reduction of the liabilities of Kamps AG. PLASMASELECT AG: Continues to Tread Growth Track for the Year ------------------------------------------------------------- PlasmaSelect AG continues to follow the positive trend started in the first quarter throughout the 1st half-year (December 1 to May 31). During the first six months of this financial year, the Hospital Solutions segment (DeltaSelect) increased its sales 6% over prior-year levels to kEUR13,821. Group sales, which are currently being generated solely by DeltaSelect, shrank 7% year-on-year, reflecting the KEUR1,857 in sales generated the previous year by the adsorber-technology segment. The segment has since been sold. Group EBIT also improved, moving from (kEUR4,095) to (kEUR535). While first-quarter earnings still stood at (kEUR435), the Group succeeded in reducing the operating loss in the second quarter to (kEUR100). EBIT for the Hospital Solutions segment was kEUR415, which was slightly higher than in the previous year. At kEUR355, pre-tax earnings in the first half-year were only marginally more than in the previous quarter, mainly because of the kEUR620 in losses realized from financial assets. Earnings per share stood at kEUR0.03 for the first half-year. PlasmaSelect AG is already expecting to see its sales and EBITDA boosted by RenaSelect, the subsidiary it acquired in May of this year. Orders on hand have developed extremely well. PlasmaSelect will continue to pursue its strategy of expansion this year and will tap into even more new markets. The share buy-back program will also be continued. SINNERSCHRADER AG: Q3 Results Shows Worsening Condition ------------------------------------------------------- SinnerSchrader releases figures for the third quarter and the first nine months of the 2002/2003 business year. The SinnerSchrader Group generated turnover of EUR3.1 million and an EBITA operating result of (EUR0.4 million) in the third quarter of 2002/2003 (March 1 to May 31, 2003). The company has thereby largely confirmed its preliminary figures published in the ad hoc release of June 3, 2003. The worsening in the operating result compared to the previous quarter is attributable to the effects of significantly reduced project margins, the full scale of which could still not be completely assessed at the time the ad hoc report was released. Over the first nine months of 2002/2003, turnover was EUR9.7 million (a year-on-year decrease of 16%, compared with EUR11.6 million in the same period last year) while EBITA came in at (EUR0.7 million) [compared with (EUR3.1 million)]. Taking the positive financial result into account, net earnings for the period were (EUR0.2 million) [compared with (EUR16.6 million) in the same period last year). Given the weak level of booked orders in the third quarter, the SinnerSchrader expects a further decline in turnover and earnings in the fourth quarter. For the whole 2002/2003 business year, the company forecasts turnover at between EUR12 million and EUR12.5 million and an EBITA of between (EUR1.5 million) and (EUR2.0 million). Liquid reserves at the end of the third quarter were EUR25.8 million. As of May 31, 2003, the company held 539,502 of its own shares, representing 4.7% of share capital. 9 months 9 months 3rd quarter 3rd quarter 2002/2003 2001/2002 2002/2003 2001/2002 Sales revenues (EUR) 9.7 million 11.6 million 3.1 million 2.9 million EBITDA (EUR) (0.3) million (2.6) million (0.3) million (1.1) million EBITA (EUR) (0.7) million (3.1) million (0.4) million (1.3) million Net result (EUR) (0.2) million (16.6) million (0.2) million (1.3) million Net result per share (EUR) (0.01) (1.44) (0.02) (0.11) Number of employees (period end) 176 205 176 205 Liquid funds (EUR) 25.8 million 27.5 million 25.8 million 27.5 million VIVANCO AG: Debt Cancellation Ushers Successful Reorientation ------------------------------------------------------------- As part of the implementation of the structural concept developed jointly for Vivanco Gruppe AG with the Roland Berger business consultancy, the pool banks and other major creditors have waived debts totaling EUR15.4 million and declared waivers of priority with conditional debt extinguishments for further credit claims totaling EUR7.3 million. The total contribution of the financial partners thus amounts to EUR22.7 million. Debtor warrant agreements have been made with all waiver creditors according to which the original claims are revived in the event of improvement, in particular if Vivanco Gruppe AG records a net profit for the year, equivalent to up to 50% of that net profit. For other remaining credit claims and credit lines a uniform recovery interest rate, effective as from May 1, 2003, has been agreed with the creditor banks for the year 2003. Due to continuing poor consumer demand in Germany and abroad the Board of Management of Vivanco Gruppe AG has decided to considerably accelerate the restructuring measures currently underway in order to be able to restore Vivanco's former earnings strength despite the difficult market situation. Thanks to the measures implemented to date, the long-term liquidity and balance sheet situation of Vivanco Gruppe AG has been substantially improved and the successfully initiated recovery has been brought a major step forward. ============= I R E L A N D ============= VALENTIA TELECOMMUNICATIONS: Fitch Rates Proposed Notes 'BB+' ------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB+' long-term senior unsecured debt rating to the proposed EUR500 million (US$566 million) notes to be issued by Ireland-based Valentia Telecommunications Ltd., which is in the process of converting into an unlimited public company. In addition, Standard & Poor's assigned its 'BB+' senior subordinated debt rating to related entity eircom Funding Unlimited Public Co.'s proposed EUR500 million notes. At the same time, Standard & Poor's affirmed its 'BBB-' long-term corporate credit and senior unsecured bank loan ratings on Valentia, the 100% owner of former incumbent Irish fixed-line telecommunications operator eircom Ltd., following a review. The outlook is stable. The proceeds from the proposed notes will be used as part of the refinancing of Valentia's outstanding EUR2.4 billion bank loan. The notes mature in 2013 and there are no ratings triggers causing debt acceleration. Valentia plans to refinance the remainder of the bank loan with a new EUR1.4 billion bank loan and pay a net dividend of EUR462 million. The ratings on the notes are notched down once due to structural subordination, as priority obligations exceed 20% of total adjusted assets. "Standard & Poor's expects Valentia to remain covenant compliant, as covenant headroom for its bank loan and notes indentures is sufficient, assuming that eircom does not deviate from its current business and financial plan," said Standard & Poor's credit analyst Michael O'Brien. The ratings on Valentia are supported by the continuing strong market position and consequent strong profitability of eircom's fixed-line business. The ratings also benefit from the significant improvement in eircom's operational performance, following the closure and sale of a number of loss making businesses since the takeover of eircom by Valentia, and improved capital efficiency helped by lower capital expenditures. "Valentia's high leverage represents the main risk factor and, furthermore, Standard & Poor's believes it will be challenging for the group to improve profitability significantly in the future, as eircom's core fixed-line business has limited growth potential given its already high market share," added Mr. O'Brien. "In addition, eircom will continue to face significant regulatory risk as ComReg, the regulatory authority, is taking further action to increase competition." It is assumed that Valentia will gradually improve its debt protection measures over the coming years, thus conforming with its debt repayment schedules and senior debt covenants. The group is expected to grow its free operating cash flow and will continue to improve its capital and operating efficiency, mitigating the margin pressure driven by regulatory actions, fixed-line competition, and continued migration of fixed-line voice traffic to mobile. The ratings also assume no credit-dillutive acquisitions will occur. ========= I T A L Y ========= FIAT SPA: CEO Denies Quoting General Motors on 'Put' Option ----------------------------------------------------------- The chief executive of Fiat, Giuseppe Morchio, denied General Motors had warned him personally that legal problems make the Italian firm's put option to sell its auto operation unenforceable. Mr. Morchio's 'view' that General Motors believes the "put" option was invalid was based on reading between the lines of General Motor's public statements, not on discussions with General Motors, the Financial Times said, citing insiders who confirmed Mr. Morchio had told shareholders of his 'view.' "I never made any remarks on the position of General Motors with regard to the put," Mr. Morchio said referring to an earlier report of the Financial Times. "Our point of view is well-known. The put is a right that begins in 2004 and lasts until 2009." General Motors was known to have asked the cancellation of the agreement as a condition for its participation in a EUR5 billion (US$5.6 billion) recapitalization of Fiat Auto. The U.S. company's stake in the division was halved to 10% after Fiat injected some EUR3 billion in the unit by canceling intra- company loans. Fiat has given General Motors 18 months to take part in the recapitalization of the car operation. ================= M A C E D O N I A ================= MACEDONIAN TEXTILES: Posts Notice of International Public Tender ---------------------------------------------------------------- Invitation to International Public Tender Macedona Textiles Makedonka Predilnica COMPANY: Makedonka Predilnica AD LOCATION: Stip, Republic of Macedonia. DESCRIPTION: The factory produces yarn for textile production. SPECIALIZATION: Spinning of cotton yarn, mixed yarn and polyester yarn. PROCEDURE: The assets will be sold in 1 package through a public tender. REQUIREMENTS FOR PURCHASERS: No requirements to make any future employment or investment commitments. MINIMUM PRICE: There is no minimum price. Deadline: The deadline for the receipt of bids is 16.00 on September 2003. Interested parties wishing to receive more detailed information regarding this tender, must pay a non-refundable processing fee of EUR200 (or the Macedonian equivalent). For more general information please visit http://www.mpa.org.mk/action_plan.htmor contact: BANKRUPTCY TRUSTEE Viktor Todorov Makedonka-Predilnica Str. Bregalnicka bb, 200 Stip Republic of Macedonia Phone: +389 33 274 212 Fax: +389 33 272 159 Mobile: +389 70 213 059 LIQUIDATION ADVISOR Simon Beamish or Assia Novachkova Lion's Bridge C/o Grant Thornton Consulting Dame Gruev, 14a 1000 Skopje, Macedonia Phone: +389 23 214 700 Fax: +389 23 214 710 Mobile: +389 70 827 744 E-mail: simon.beamish@grant-thornton.co.uk ===================== N E T H E R L A N D S ===================== KLM ROYAL: In Talks with Air France over Possible Alliance ---------------------------------------------------------- KLM Royal Dutch Airlines admitted on Monday talks with its possible alliance with Air France in SkyTeam has gone a step ahead of the same negotiations with British Airways. "Talks with Air France are more intense than with the other alliance candidate British Airways," KLM spokesman Bart Koster told Dow Jones Newswires. KLM Royal, however, said it has not yet chosen either Air France or British Airways. The talks may still be swayed by other airlines with which KLM has an agreement," Mr. Koster said. The negotiations with Air France are being pursued on pressures from the latter, Mr. Koster said. According to him, both have offered very concrete plans. KLM Royal has the option of joining OneWorld Alliance where British Airways, and AMR Corporation's American Airlines are members; or SkyTeam, home to Air France, Delta Air Lines Inc., and Korean Air Co. Ltd. The Dutch airline already has an extensive alliance with NorthWest and a codesharing deal with Continental. Delta Airlines also has an alliance with Continental Airlines Inc. and NorthWest Airlines Inc. Two other KLM partners include Malaysian Airlines and China Southern Airlines. The Dutch airline needed to find a strong European partner by the end of the year to ensure long-term viability. It prefers a private company or one that is on the process of becoming so, and wants "assurance," of the status of any possible candidate, Mr. Koster said. Air France is still 54% state-owned, but shareholders have given approval for the state to cut its stake, according to the report. ROYAL PHILIPS: Reports Q2 Net Profit of EUR42 Million ----------------------------------------------------- (a) Comparable sales decrease 1% -- weaker currencies main cause for 18% nominal sales decline (b) Income from operations a loss of EUR26 million (c) 3% sequential comparable segment revenues increase (USD) at Semiconductors, excluding Mobile Display Systems (d) Medical Systems income from operations of EUR153 million (e) Strong positive contribution from unconsolidated companies (f) Overhead cost reduction target of EUR300 million surpassed The second quarter 2003 Philips recorded a net profit of EUR42 million (a profit of EUR0.03 per share) versus a loss of EUR1,355 million (a loss of EUR 1.07 per share) in the same period last year. This year's quarter included special items of positive EUR5 million, whilst last year's special items amounted to a negative EUR1,539 million. Sales decreased by 18% over the same period last year, negatively impacted by the weakening of the US dollar and related currencies (13%), the downward effect from various divestments in 2002 (4%) and lower consumer spending. Income from operations was a loss of EUR26 million, including EUR84 million in net special charges (before tax), versus a profit of EUR165 million last year, which included EUR96 million net special gains (before tax). The overhead cost reduction program delivered EUR338 million to-date, already surpassing by more than 10% the annual savings' target of EUR300 million. Integration savings at Medical Systems are in line with the EUR350 million targeted savings by year-end 2003. The overall cost reduction programs are on-track to achieve the targeted EUR1 billion in savings by 2004. Cash flow from operating activities was a cash inflow of EUR148 million. Inventories as percentage of sales came to another record low for a second quarter of 12.8%, compared to 13.4% last year. During the quarter the net debt position decreased by EUR133 million to a level of EUR5.4 billion. Gerard Kleisterlee, Philips' President and CEO: "It is encouraging to see that our change program is paying off. Helped by a good contribution from unconsolidated companies and the progress of the cost reduction programs, our improvement was driven by a strong performance at Medical Systems, reflecting the progress of the integration process. Lighting and DAP were able to protect their bottom line from weaker markets. Semiconductor losses have narrowed and we remain dedicated to bring the division back to profitability in the fourth quarter. CE is suffering most from weak consumer spending, but, as our increased Brand investment illustrates, we remain equally determined here to meet our goals. Focus on cost and asset management clearly remains the best course given the fragile market conditions, while we are continuing to invest in product and marketing innovation to delight our customers." To View Financials: http://bankrupt.com/misc/Philips_Group.htm =========== P O L A N D =========== BANK MILLENNIUM: To Publish Quarterly Report Ahead of Schedule -------------------------------------------------------------- The Management Board of Bank Millennium SA announces that the reports: (a) Quarterly report of the Bank for the period from April 1, 2003 to June 30, 2003, the disclosure date of which was previously set up for July 31, 2003 and (b) Consolidated quarterly report of Bank Millennium Group for the period from April 1, 2003 to June 30, 2003, the disclosure date of which was previously set up for August 7, 2003 (current report of January 31, 2003) will be published on July 18, 2003. ***** Bank Millennium, formerly BIG Bank Gdanski, completed a restructuring program, which includes job cuts, improvements in risk management procedures, capital injection, and new product launches. However, Fitch says, "overall profitability at Bank Millennium remains fragile, distorted in 2001 and 2002 by large one-off items." DAEWOO-FSO: Government, MG Rover Move to Protect Creditors ---------------------------------------------------------- The government and MG Rover are persuading banks, in a move to protect Daewoo-FSO's creditors, to accept a new proposal stating that properties of the troubled Polish carmaker will remain in the company. An article by the Warsaw Business Journal said the aim of the negotiations is to better protect creditors after the birth of a new manufacturing company, the New Small Company, created on the basis of Daewoo-FSO. MG Rover representatives believe that although there is little time left to conclude the negotiations, a compromise could be reached within several days, the report said. Vice president to the company, Nick Stephenson, said: "We support the government's proposal that Daewoo-FSO's property will not be owned by the New Small Company, but leased. This will protect the creditors' interests." Daewoo-FSO's vice-president Janusz Wozniak further explained: "We are talking about machines and equipment that are the company's most valuable goods. In this manner, the creditors will be able to fully control their liabilities." Daewoo-FSO in 2001 lost PLN1.1 billion after losing PLN2 billion in 2000. It is presently carrying a PLN4.8 billion debt burden. Trouble for the Polish carmaker started brewing when it posted a net loss of PLN2.3 billion in 2000. General Motors took over most of the operations, although it did not include the Polish investments in its acquisition. General Motors has offered to hand over intellectual property rights that concern production of the company's Matiz and Lanos models by the plant owned by Daewoo-FSO. CONTACT: DAEWOO-FSO MOTOR CORPORATION Ul. Jagielloivska 88 03-215 Warszawa Phone: +48-22-676-3955 Fax: +4822-676-1501 Homepage: http://www.daewoo.com.pl LOT AIRLINES: Market Snubs Receivers' Call for Offers ----------------------------------------------------- A sale of Poland's national carrier, LOT Polish Airlines, seems far-fetched, as offers have failed to attract the attention of the market, according to Warsaw Business Journal The report said the situation of the carrier has become so unattractive that the company's receiver has temporarily given up looking for an investor that would help the company revive its operation. The receiver cited the change in the company's board of directors as one of the many setbacks to any deal. Erland Olsen of SAS told Warsaw Business Journal: "The new chairman has to present his strategy first." Another major hindrance is the fact that the company has a majority shareholder, the treasury, which is reluctant to sell its stake. A member of the bankrupt SAirgroup, LOT has not seen any profit on its operations since 1997. TCR-Europe reported a net profit for the airlines in 2002, but it had been because some of its aircraft were resold to their leasing companies. The carrier still needs to undergo deep restructuring, TCR-Europe said. CONTACT: LOT POLISH AIRLINES Al. Jerozolimskie 65/79, 00-697 Warszawa ul. Krolewska 11 Hotel Victoria, 00-065 Warszawa Phone: (22) 827 52 86 PHS STEEL: LNM Granted Rights to Pursue Exclusive Discussions ------------------------------------------------------------- The Polish treasury has chosen LNM Group, the U.K. based steel company, as the preferred bidder for state-owned steel maker Polskie Huty Stali in a transaction that could potentially go on record as the largest European privatization this year, reports say. LNM, which outbid rival U.S. Steel in the possible acquisition, was given until August 22 to hold exclusive negotiations with the Polish government, Polskie's management and trade unions. The company has to reach an accord with the parties or lose the right to exclusively pursue the buyout negotiations. The report did not disclose details of the bid, but said the deal is expected to be more than US$1 billion, including US$400 million of old debt. U.S. Steel said it was "disappointed" of the outcome, but it was still interested in the company. The privatization is independent of the Polish government's plans to restructure the company, which suffers from a heavy debt burden, and outmoded facility. The state wants to scale down the company's capacity with the loss of 20,000 jobs. UPC POLSKA: Submission Deadline for Required Documents Extended --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave UPC Polska, Inc., an extension of time to file its schedules of assets and liabilities, statements of financial affairs and lists of executory contracts and unexpired leases required under 11 U.S.C. Sec. 521(1). The Debtor has until August 21, 2003 to file these required documents. UPC Polska, Inc., who holds headquarters in Denver, Colorado, is an affiliate of United Pan-Europe Communications N.V. The Debtors is a holding company, which owns various direct and indirect subsidiaries operating the largest cable television systems in Poland. The Company filed for chapter 11 protection in July 7, 2003 (Bankr. S.D.N.Y. Case No. 03-14358). Ali M.M. Mojdehi, Esq., and Ira A. Reid, Esq., at Baker & McKenzie, represent the Debtor in its restructuring efforts. As of March 31, 2003, the Debtor listed $704,000,000 in total assets and $940,000,000 in total debts. =========== R U S S I A =========== METROMEDIA INTERNATIONAL: Remedies Default Condition With Filing ---------------------------------------------------------------- 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, on Tuesday announced that it filed with the Securities and Exchange Commission its 2002 Annual Report on Form 10-K and its first quarter 2003 Form 10-Q. The company delivered a copy of these SEC filings to the Trustee of the Company's 10 1/2 % Senior Discount Notes, along with required compliance certificates, and thereby remedied within the allowed cure period a default condition under the Senior Discount Notes Indenture. As previously reported, the Trustee had advised the Company on May 15, 2003 that it must provide the Trustee its filed 2002 Form 10-K, first quarter 2003 Form 10-Q and Indenture compliance certificates by July 15, 2003 or there would be an Event of Default under the Indenture. In making Tuesday's announcement, Ernie Pyle, Senior Vice President Finance and Chief Financial Officer of Metromedia International Group, commented, "The completion and filing of these public reports presented a tremendous challenge to the Company, due principally to the considerable restructuring underway at the company since late February 2003. In an effort to address liquidity concerns facing the company for more than a year, we undertook substantial work force and professional service cutbacks. Although these measures have contributed to a material improvement in our liquidity outlook, they made production of financial statements and reports considerably more difficult. In summary, I am pleased that this task is behind us so that we can return our attention to growth and development of our core businesses and the further execution of our initiatives to resolve the Company's liquidity issues". Mark Hauf, Chairman and Chief Executive Officer of Metromedia International Group, further commented, "As set forth in Tuesday's public filings, we have a defined strategy for growth and development that should lead to additional value creation for the company. Although considerable work remains to achieve our goals, we are better positioned today to take on those challenges." Mr. Hauf further commented: "We anticipate that execution of our present strategy will provide us with the capacity to continue servicing of our Senior Discount Notes on current terms. Nonetheless, we continue to evaluate refinancing opportunities as they arise. Refinancing discussions, begun earlier this year with representatives of holders of a substantial portion of our Senior Notes; however, were recently suspended." The company also announced that to facilitate any potential future refinancing of the company's Senior Discount Notes, the company has elected to not declare a dividend on its 7 1/4% cumulative convertible preferred stock for the quarterly dividend period ending on June 15, 2003. 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. New York Home Page: http://www.metromedia-group.com Ernie Pyle Phone: 212-527-3800 ext. 112 =========== S W E D E N =========== INTENTIA INTERNATIONAL: New Share Issue Fully Subscribed -------------------------------------------------------- Intentia International AB (publ) (XSSE; INT BE) announces that it has finalized its new share issue with preferential rights for current shareholders. This provides the company with approximately SEK400 million after transaction costs related to the share issue and the offer to purchase convertible notes. The company's shareholders subscribed for approximately 98% of the shares by exercising their preferential rights. The remaining shares have been subscribed for with subsidiary preferential rights by the company's shareholders within the limits set by the highest amount of the share issue. This means that the offer to note holders will be carried out according to the terms previously made public. Liquidity of the convertible offer, including the 5% interest coupon that is due for payment on July 15, 2003, amounts to EUR36.3 million (approximately SEK332 million). "We are pleased by the strong support Intentia's shareholders have shown for the Board's proposal to resolve the uncertainty related to the outstanding convertible loan," says Bjorn Algkvist, Intentia's CEO. The transactions that have now been completed will increase Intentia's equity/assets ratio pro forma to approximately 38% (22% as of March 31, 2003). Liquid assets will increase by approximately SEK68 million after the share issue and payments pursuant to the offer to purchase convertible notes. "This will create a much more stable base on which to continue doing business," Algkvist adds. "In addition, the resulting stronger balance sheet increases our competitive edge, as potential customers increasingly focus on the long-term stability of the suppliers they evaluate." The new shares are estimated to be traded on the Stockholm Stock Exchange's O-list as from the end of July, 2003. After completion of the share issue, the total number of shares will be 109,719,600, divided into 3,403,920 Series A shares and 106,315,680 Series B shares, which is the equivalent of a share capital of SEK1,097,196,000. Carnegie has acted as financial advisor to Intentia in connection with the tender offer to note holders and the rights issue. About Intentia Intentia is one of the world's leading suppliers of collaboration solutions. Our vision is to become the leading global collaboration solutions vendor by supplying our customers with tomorrow's solutions today. Intentia offers a one-stop shop for all collaboration needs within numerous industry segments. We develop, implement and maintain our own solutions to produce the highest possible level of customer satisfaction. The Intentia Solution consists of applications covering customer relationship management, enterprise management, supply chain management, business performance measurement, e-business and value chain collaboration. Intentia has more than 3,200 employees and serves over 3,500 customers in the manufacturing, maintenance and distribution industries via a global network spanning some 40 countries. Intentia is a public company traded on the Stockholm Stock Exchange (XSSE) under the symbol INT B. CONTACT: INTENTIA INTERNATIONAL AB Bjorn Algkvist, President and CEO Phone: +46 8 5552 5605 Fax: +46 8 5552 5999 Cell phone: +46 733 27 5605 E-Mail: bjorn.algkvist@intentia.se Hakan Gyrulf, Vice President and CFO Phone: +46 8 5552 5825 Fax: +46 8 5552 5999 Cell phone: +46 733 27 5825 E-Mail: hakan.gyrulf@intentia.se Thomas Ahlerup Head of Corporate and Investor Relations Phone: +46 8 5552 5766 Fax: +46 8 5552 5999 Cell phone: +46 733 27 5766 E-Mail: thomas.ahlerup@intentia.se Homepage: http://www.intentia.com ===================== S W I T Z E R L A N D ===================== ZURICH FINANCIAL: Japanese Staff to Protest Likely Sale of Unit --------------------------------------------------------------- Employees at Zurich Financial Services' operation in Japan could let everybody know they strongly do not want to be ditched and left jobless by their Swiss parent. Zurich Financial's Japanese labor union threatened to go on strike if the Swiss insurance group sells its Japanese operations to U.S.-based AIG, according to the Financial Times. The report cited Norihiro Yoshida, chairman of the Zurich union and an internal auditor, saying the union believes the insurer could announce the sale soon. "We have very solid information that the final details [of a sale] are being worked out, and an announcement could come this week," said Emi Katsui, the union's vice-chairman, according to the report. Hideki Kasai, a Zurich internal auditor, said AIG had already completed a due diligence. The union fears the buyout could result to job losses, and they "are considering, and are prepared to take, appropriate action," according to Mr. Yoshida. Union representatives, who stand in behalf of 200 members, were demanding a meeting with Zurich Financial's senior management in Japan, according to the report. "We are asking the company to guarantee our jobs. More specifically, we want to continue to work for Zurich, not for AIG," said Mr. Yoshida. Both Zurich Financial Services and AIG declined to comment, according to the report. The group, which last year posted a US$3.43 billion consolidated loss on total revenues of US$40.4 billion, made its first pre-tax profit in its Japanese life assurance business after 17 years in the market. ZURICH FINANCIAL: Pays Shareholders CHF1 Per Registered Share ------------------------------------------------------------- Zurich Financial Services pays out to shareholders the reduction in nominal value of each registered share of CHF1, as approved by the Annual General Meeting on April 30 of this year. After completing the necessary requirements, Zurich has reduced its share capital by CHF144,006,955 from CHF1,440,069,550 to a new total of CHF1,296,062,595 by reducing the nominal value of each registered share from CHF10 to CHF9. Zurich Financial Services is an insurance-based financial services provider with an international network that focuses its activities on its key markets of North America, the United Kingdom and Continental Europe. Founded in 1872, Zurich is headquartered in Zurich, Switzerland. It has offices in approximately 60 countries and employs about 68,000 people. CONTACT: ZURICH FINANCIAL SERVICES Media and Public Relations 8022 Zurich, Switzerland Phone: +41 (0)1 625 21 00 Fax: +41 (0)1 625 26 41 Homepage: http://www.zurich.com =========================== U N I T E D K I N G D O M =========================== BRITISH AIRWAYS: Prepares Way for Full-blown merger with Iberia --------------------------------------------------------------- British Airways has decided to merge with Spanish flag-carrier Iberia in an effort to turn the business around, and benefit from the ongoing consolidations in Europe. The airlines top executives, Rod Eddington of British Airways, with the backing of his entire "leadership" team, and Fernando Conte Garcia, of Iberia, met for two days in Madrid last month to iron out details of the plan, according to Independent News. The report quoted Mr. Eddington telling shareholders at British Airways' annual general meeting on Tuesday: "I see Iberia as an absolutely key partner for us. Our first priority is to restore the fortunes of BA and our next priority is to take advantage of consolidation in Europe. I have no doubt our relationship with Iberia will be the cornerstone of that." The emerging company stands to have 82,000 employees, a market capitalization of more than GBP 3 billion and 63 million passengers a year. British Airways already owns a 10% stake in Iberia, and controls two board seats in the Spanish carrier. Both are asking the European Commission to allow them to codeshare on routes between U.K. and Spain. Iberia has an operating margin last year of 5.4%, whereas British Airways has 3.8%. Iberia has a stock market capitalization of EUR1.64 billion (GBP1.15 billion), while British Airways is currently valued at GBP1.93 billion. British Airways officials consider the merger the most preferable on the Continent, as it would allow them to cover the Far East and Middle East markets -- which British Airways dominates -- and Latin America, where Iberia has a strong position. FOCUS WICKES: S&P Assigns 'BB-' Ratings, Stable Outlook ------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB-' long-term corporate credit rating to Focus Wickes (Finance) PLC (FWF) and Focus Wickes (Investments) Ltd. (FWI), which are the parent companies of U.K. DIY retailer Focus Retail Group Ltd. The outlook on both FWC and FWI is stable. At the same time, Standard & Poor's withdrew its 'BB-' long-term corporate credit and 'B' senior unsecured debt ratings on Focus Retail Group Ltd., because this entity no longer has financial debt following a financial reorganization at the group. In addition, Standard & Poor's assigned its 'B+' long-term subordinated debt rating to FWF's proposed GBP225 million (US$362 million) notes and its 'BB-' long-term rating to FWI's GBP525 million senior secured syndicated bank loan. "The ratings on FWC and FWI reflect the Focus group's highly leveraged financial profile, offset by its strong free cash flow generation, and underpinned by its joint number-two position in the growing and largely noncyclical U.K. DIY retail market, which should enable it to rapidly reduce debt and improve credit measures," said Standard & Poor's credit analyst Hugues de la Presle. The GBP225 million notes of FWF are only rated one notch below the corporate credit rating because they rank junior only to the GBP525 million senior debt and ahead of all operating companies' creditors, including trade creditors. This reflects that they benefit from second security on exactly the same security package as afforded to senior debt. In addition, all companies are located and operate in the U.K., which is a very creditor-friendly jurisdiction. Standard & Poor's expects the group will reduce its current high debt and improve credit measures. In particular, earnings before interest, taxes, debt, amortization, and rents (EBITDAR) coverage of cash net interest plus rents is expected to improve by 2004 to 1.6x. INTERNET PLC: Joint Liquidators Offer Business for Sale ------------------------------------------------------- Frank Wessely & Robert Keyes of Numerica, Joint Liquidators of Internet PLC offer for sale the company name Internet plc and wholly owned dormant subsidiaries: Internet Holland Limited; Internet France Limited; Internet Belgium Limited; Internet Sweden Limited; Internet Netherlands Limited; Internet Germany Limited; Internet USA Limited; Internet Luxemburg Limited; Internet Greece Limited; Internet Finland Limited; Internet Austria Limited; Internet Spain Limited; Internet Italy Limited; Internet Denmark Limited; and Internet Portugal Limited. Domain names: http://www.internetplc.com;http://www.internetplc.org; http://www.internetplc.co.uk;and http://www.internetplc.net. CONTACT: Richard Birch & Co Phone: 01442 878 7333 E-mail: sales@richardbirch.co.uk NEC SEMICONDUCTORS: Files Petition to Reduce Share Capital ---------------------------------------------------------- In the High Court of Justice No. 004379 of 2003 Chancery Division Companies Court In the Matter of NEC Semiconductors (U.K.) Limited and in the Matter of the Companies Act 1985 Notice is hereby given that a Petition was presented to Her Majesty's High Court of Justice, Chancery Division on 4th July 2003 for the confirmation of the reduction of share capital of the above named company from GBP750,000,000 to GBP86,400,000 and notice is further given that the said Petition is directed to be heard before the Registrar of the Companies Court at the Royal Courts of Justice, Strand, London WC2A 2LL on Wednesday the 23rd of July 2003. Any Creditor or Shareholder of the said Company desiring to oppose the making of an Order for the confirmation of the said reduction of share capital should appear at the time of the hearing in person or by Counsel for the purpose. A copy of the said Petition will be furnished to any person requiring the same by the undermentioned Solicitors on payment of the Regulated Charge for the same. CONTACT: Clifford Chance Limited Liability Partnership 200 Aldersgate Street London EC1A 4JJ Ref: KO Solicitors to the Company NORWICH UNION: Announces Transfer of Cheadle Operations ------------------------------------------------------- Norwich Union announced that it is transferring its processing operations from Cheadle to other existing administrative operations across the U.K. As a result of an operational review of administration in the life and pensions business, the Cheadle operation will be closed by the end of March 2004, resulting in the loss of 280 jobs. All affected staff are being individually briefed and informed of what options are available to them. Mike Kirsch, operations director, Norwich Union, said: "Following a review of the company's operations we have decided to transfer the work currently undertaken by the Cheadle office to our existing administrative sites across the U.K. As a result the work will be moved from Cheadle on a phased basis with the site closing by the end of March 2004. "This is a difficult decision and we will do our utmost to ensure that all staff receive full support throughout this difficult period." ***** Norwich Union is the UK's largest insurer. It is a leading provider of life, pensions and investment products and one of the leading IFA providers. IFAs provide around 70% of the company's long-term savings business. Norwich Union has strategic alliances with building societies and other leading UK brand names including Tesco Personal Finance and The Royal Bank of Scotland Group. Norwich Union's news releases and a selection of images are available from Aviva plc's internet press center at http://www.aviva.com/media NORWICH UNION: 900 Employees to Lose Jobs in Shakeup ---------------------------------------------------- Norwich Union has announced that 900 jobs are to go in its U.K. general insurance and life and pensions businesses, including the closure of its life and pensions administration office in Cheadle. The majority of jobs affected are at four locations -- Norwich, Perth, Worthing and Cheadle -- although there will be some minor changes in other areas across the country. Where possible, staff will be found alternative roles within Norwich Union. However, due to the specialist nature of many roles, it will not be possible to redeploy all staff and it is expected that these changes will result in approximately 600 compulsory redundancies across the life and general insurance businesses. Norwich Union and parent company Aviva employ around 33,000 staff in the UK and the majority of staff will be unaffected by these changes. There is minimal impact on customer-facing staff. These announcements are not connected with the recent opening of an Aviva call center operation in India. Commenting on this announcement, Patrick Snowball, group executive director, Aviva plc, said: "We operate in an extremely competitive market and have to continually look at ways to achieve greater efficiency and effectiveness. "Making decisions that affect our staff is always difficult, but we believe these changes are necessary to adapt to changing market conditions and make our business fit for the future." General Insurance The changes follow a review across all areas of the business to achieve greater efficiency and effectiveness, as well as to further strengthen the focus on delivering excellent customer service. These changes -- which follow the recently announced reorganization of the senior management team -- are designed to re- align business operations to reflect the new structure. The review looked at processes, ways of working and the organizational structure of the general insurance business, to centralize some activity and remove duplication. In the general insurance business there will be 630 job losses, around half of which are expected to be compulsory. The review of the general insurance business will be completed for most staff by the end of August. Life and pensions business As a result of an operational review of administration in the life and pensions business, the Cheadle administration office will close, resulting in the loss of 280 jobs, most of which will be compulsory redundancies. The business currently processed by this office will be transferred to other Norwich Union operational sites. The Cheadle office will be closed by the end of March 2004. ***** Norwich Union and parent company Aviva employ around 33,000 staff across the U.K. -- approximately 14,500 work in the life and pensions business, 14,000 in the general insurance business and the remainder in other business areas. Norwich Union is the U.K.'s largest insurer with a general insurance market share of around 16%, which is more than 1.5 times the size of its nearest rival. It is a leading provider of life, pensions and investment products and one of the leading IFA providers. Norwich Union's news releases and a selection of images are available on the Aviva internet press center at http://www.aviva.com/media PUBLIC NETWORK: Board Resolves to Wind Up Firm, Suspend Trading --------------------------------------------------------------- The Board of Public Network plc have, over the past few weeks, been attempting to raise additional finance in order for the Group to continue trading as a going concern. At a board meeting, it was considered unlikely that adequate finance would be raised in an appropriate period and the directors therefore resolved to put the company into creditors' voluntary liquidation and to instruct the directors of the subsidiary companies to do the same. As a consequence of the above, trading in the Company's shares has been suspended. CONTACT: PUBLIC NETWORK PLC Simon Banks-Cooper/David Martin Phone: 020 8547 0220 ROYAL MAIL: Hikes Postal Order Fees for First Time in Years ----------------------------------------------------------- Post Office Ltd. announced that from July 17, fees for postal orders will increase for the first time since 1996. The increases range from 5p to 25p depending on the face value of the order. "The increase brings fees in line with the rise in inflation over the last seven years i.e. they cost the same in real terms as they did in 1996. It is simple commercial common-sense to cover increased costs," said Simon Carter, Post Office Ltd. "Postal orders remain an inexpensive and convenient way to send money, especially for customers who don't want to use a bank account." Postal orders can be bought and cashed at all U.K. Post Office� branches. They can be used for a wide range of services including mail order purchases, bill payment and as a secure alternative to cash or providing credit card details when shopping on the Internet. ***** TCR-Europe previously said Royal Mail is considering raising the price of its postage to stem losses in its pension fund. 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. Royal Mail plans to cut GBP1.4 billion of costs to turn the company around. CONTACT: POST OFFICE LTD. 148 Old Street London EC1V 9HQ Homepage: http://www.postoffice.co.uk Phone: 020 7250 2468 SIMON GROUP: Makes Available Circular on Disposal of Seawheel ------------------------------------------------------------- Simon Group plc announces that the circular to shareholders pursuant to the proposed related party disposal of Seawheel Holdings Limited, announced on July 11, 2003, was posted Tuesday. The circular will shortly be available to the public for inspection at the U.K. Listing Authority's Document Viewing Facility, which is situated at the Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS (Phone: +44 (0)20 7066 1000), during normal business hours on any weekday (Saturdays, Sundays and public holidays excepted). ***** Simon Group, which reported continuing loss (pre exceptional items) of GBP7.6 million for 2002, has conditionally agreed to sell Seawheel Holdings to Silbury 274 Limited for a cash consideration of GBP1. The company said in May it was reviewing the progress of the business performance of Seawheel, which it said remained slow, and is unlikely to return to profit for the year. CONTACT: SIMON GROUP PLC Phone: 01737 372660 Timothy Chadwick Tim Redburn Hoare Govett Limited Phone: 020 7678 8000 Philip Dayer Andrew Chapman Gavin Anderson & Company Phone: 020 7457 2345 Elizabeth Morley Ken Cronin SSL INTERNATIONAL: '02 Operating Profit Tripled, Says Chairman -------------------------------------------------------------- At the Annual General Meeting on Tuesday, Ian Martin, Chairman, made this statement to shareholders: "I am pleased to report that, in the year that ended on March 31, we made strong progress in restoring your company to full financial health. In particular our sales have recovered, our operating profit after charging exceptional items of GBP61 million is almost three times higher than the previous year and sales of our key branded products have advanced. I am also pleased to report your company has a much firmer financial footing than at any time since the group was formed in 1998. The dividend for the year has been maintained. "All this was achieved in the face of tough markets, particularly in the United States and continental Europe. "You may have seen reports in the newspapers about your company being the subject of an offer to buy the group, by a third party. We announced previously that the board is in preliminary discussions, which may or may not lead to an offer for the group. I am afraid that the rules prevent me giving further details at this stage although if there is more to report I will do my best to ensure all shareholders have access to the information at the same time. As always the interests of shareholders are at the front of our minds. In all other respects it is business as usual for the management team -- the last thing you would want is for us to be distracted from running the business. "An important discipline of managing any business is to review regularly the brands, products and resources - in terms of skilled staff and financial resources - in order to make sure you are exploiting your strengths to greatest effect. As a result of a thorough review your board decided that the best way forward is to focus all our efforts on exploiting the exceptional brands and capabilities we have in the consumer healthcare side of SSL and to divest our medical business. Our new strategy is simple: build on brands and grow sales, develop new products and cut costs to meet and beat industry benchmarks. "Our disposal program is well advanced and on course. The cash we get from these sales will be used to reduce the group's borrowings, which will, in turn, give us flexibility to grow the consumer side of the business. "Destocking in Italian pharmacies has continued and we have experienced some slowdown in the first quarter in the Far East due to the SARS epidemic. Notwithstanding these challenging trading conditions, the year has begun satisfactorily and overall group profits to date are in line with our expectations. "Be assured that your Board recognizes that whilst we have made a good start and have the building blocks in place there is still a long way to go in building shareholder value." CONTACT: SSL INTERNATIONAL PLC Phone: 020 7367 5760 Ian Martin, Chairman Brian Buchan, Chief Executive The Maitland Consultancy Phone: 020 7379 5151 William Clutterbuck Brian Hudspith THOMAS COOK: Downsizing of Fleet to Cost 340 Jobs ------------------------------------------------- Another series of job cuts could hit tourism company Thomas Cook as the company pursues a program of saving EUR600 million over the next two years starting January, Dow Jones Newswires reported, citing spokesman Markus Ruediger. According to Mr. Ruediger, the management told employees attending staff assemblies held at two of the company's German locations that more cuts might be needed beyond the savings program. Thomas Cook reportedly said it is considering cutting an additional five jets from its fleet, with a corresponding loss of 340 jobs. Ruediger said: "The worst-case scenario is that we'd need to take a further five aircraft out of the fleet." The move could affect about 340 of the 3,200 employees in the airline division. Thomas Cook has already taken eight of its 49 planes out of service. "We're looking at various possibilities to keep these aircrafts flying," including possibly leasing the jets and crews to other airlines, he said. However, no firm decisions have been made yet and no timeline for when the cuts would take place. Thomas Cook has struggled along with the rest of the tourism industry over the past two years amid the drop in traveling from terrorism, war and a weak economy. It posted a EUR120 million after-tax net loss for 2001/2002. CONTACT: THOMAS COOK AG Corporate Communications Phone: ++49(0)6171 / 65-1700 Fax: ++49(0)6171 / 65-1060 Home Page: http://www.thomascook.info WELCOME BREAK: Fitch Downgrades Notes, Retains Watch Negative ------------------------------------------------------------- Fitch Ratings, the international rating agency, has downgraded the notes issued by Welcome Break Finance Plc as listed. All notes remain on Rating Watch Negative. GBP72 million Class A1 secured floating-rate notes due 2007 to 'BB' from 'BBB-'. GBP110 million Class A2 secured floating-rate notes due 2011 to 'BB' from 'BBB-'; GBP127 million Class A3 secured notes due 2015 to 'BB' from 'BBB-'; GBP9.75 million revolving facility to 'BB' from 'BBB-'; GBP67 million Class B secured floating-rate notes due 2017 to 'CCC' from 'B+'; The rating action results from the lack of growth reported by the company in its trading to May this year, and consequently its likely inability to meet scheduled amortization payments when they start in June 2004. The downgrade to the 'CCC' category for the Class B notes reflects their high risk of default given the refinancing proposals put forward by the company, which, as drafted, would result in a default of these notes. The Rating Watch Negative reflects the continued uncertainty caused by the refinancing proposals, and the potential for the ratings to be negatively affected. Given the continued lack of improvement in financial performance and likely financial difficulties the company will face once amortization commences, Fitch has decided to downgrade all classes. In the agency's opinion, the refinancing proposals being put forward by the company indicate management's views of the underlying problems it faces. The fact that some form of debt refinancing, restructuring or equity injection will be required in order to make future scheduled repayments means an investment grade rating is no longer warranted. Welcome Break issued a revised term sheet on July 9, for the repurchase of notes at below par. This proposes that GBP210 million of the GBP250 million net proceeds received from a sale and leaseback of nine of its motorway service areas be used to repurchase notes at 92.5% of par for the Class A notes, and 42.5% of par for the Class B notes. One key difference between this and the two previous term sheets is that there would be no obligation on senior note holders that don't accept the offer to sell their notes for less than par following consent from 75% of each class of note holders. A condition precedent to the transaction is that GBP150m of class A noteholders agrees to sell at 92.5% of par. Any remaining cash from the GBP181.8 million allocated to the class A notes would be deposited into the net disposals proceeds escrow account. This cash would be restricted for use only in redeeming Class A notes in accordance with the terms of the documentation or for repurchase of Class A notes in the open market rather than being used for compulsory repurchase of notes for less than par. This feature has led Fitch to determine that the ratings of the Class A notes would not automatically fall to the 'D' rating category, as was the case with the previous proposal, as there would be no forced loss of principal to remaining senior note holders. This class would continue to be rated based on the transaction's performance, collateral and structure as determined once an accepted proposal is known. Fitch's previously published guidance on the ratings of the Class B notes remains valid, however, and if the plan is completed, the agency expects the ratings of this class of notes would fall to the 'D' rating category, reflecting the fact that noteholders would suffer a principal loss on their investments. Fitch published press releases on previous financing proposals on June 6, June 20, and July 2. The agency will continue to monitor the transaction closely and issue updates on a regular basis. YELL GROUP: Redeems Note Issued to British Telecommunications ------------------------------------------------------------- British Telecommunications announces that it has received full repayment of the Vendor Notes issued to British Telecommunications by Yell Limited at the time of British Telecommunications's sale of Yell in 2001. Including accrued interest, British Telecommunications has received a cash payment of GBP109.5 million. ***** Standard & Poor's placed its 'BB-' long-term corporate credit rating on Yell on CreditWatch with positive implications following the announcement that U.K.-based classified directory publisher Yell Group PLC intends to float on the London stock exchange. Yell wants to reduce its cash paying net debt to GBP1.30 billion (US$2.20 billion) in financial 2003/2004 from GBP1.55 billion at the end of March 2003, to repay GBP100 million of vendor loan notes held by British Telecommunications PLC. The ratings on Yell reflect the group's leading position in U.K. printed classified telephone directories, but offset by the group's highly leveraged capital structure, according to the rating agency. YELL GROUP: Rating Raised to 'BB'; Removed from CreditWatch ----------------------------------------------------------- Standard & Poor's Ratings Services said it raised its corporate credit rating on U.K.-based directories publisher Yell Group PLC to 'BB' from 'BB-', following the company's IPO and listing on the London Stock Exchange. The outlook is positive. At the same time, the senior unsecured debt rating was raised to 'B+' from 'B' and the 'BB-' senior secured rating on Yell's GBP1.13 billion syndicated loan facility was withdrawn after the facility was replaced with new bank loan funding on completion of the IPO. All ratings were removed from CreditWatch, where they were placed on July 1, 2003. "The rating action reflects the fact that Yell's aggressive financial profile will improve after the IPO due to the debt reduction measures set out in the listing particulars," said Standard & Poor's credit analyst Anna Overton. "Stock exchange listing also means a wider equity capital markets access in the future." Pro forma for the IPO, Yell has net debt of about GBP1.34 billion (US$2.2 billion), or 4.3x lease-adjusted EBITDA in the year to March 2003, compared with the pre-IPO level of about 5x. Based on the IPO price of 285 pence sterling, Yell has a market capitalization of about GBP2 billion. Yell's venture capitalist sponsors Apax and Hicks Muse Tate & Furst have reduced their share to below 40% of equity in the company, while management retains a 5% stake. Yell's classified directories business is stable and has low capital intensity, which should allow it to generate free cash flow after capital expenditure and equity dividends of about �100 million per year. These expectations are supported by Yell's history of organic revenue growth in the mid-single-digit percentage range, as well as potential for operating margin improvement within the U.S. business. "The ratings may be raised if Yell demonstrates the ability to sustain a lease-adjusted net debt-to-EBITDA ratio at the mid-3x level," said Ms. Overton. ********* 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 * * *