/raid1/www/Hosts/bankrupt/TCREUR_Public/030815.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
Friday, August 15, 2003, Vol. 4, No. 161
Headlines
C Z E C H R E P U B L I C
VITKOVICE A.S.: Posts Greater-than-expected First-half Loss
F I N L A N D
FINNAIR OYJ: Asian Passenger Traffic Picking Up
F R A N C E
ALSTOM SA: Mass Meeting Called at Washwood Heath Facility
ASSURANCES GENERALES: Casualty Insurance Business Recovers
G E R M A N Y
ACG AG: First-half Sales, other Key Figures Down
ALLIANZ AG: Plans to Unload Beiersdorf Stake by Year's End
BREMER WOLL-KAMMEREI: Expects Negative Full-year Results
PROSIEBENSAT1.MEDIA: Moody's Hints Downgrade After Rating Review
PROSIEBENSAT.1 MEDIA: Saban to Form New Supervisory Board
H U N G A R Y
KERESKEDELMI ES HITELBANK: Appoints John Hollows New Chief
K&H EQUITIES: Denies Liquidation Is in Offing
I R E L A N D
WHYTE AND MACKAY: West LB Considers Selling 40% Stake
SHORTS: Fires 300 Employees; May Axe a Thousand More
I T A L Y
CAPITALIA GROUP: Fitch Upgrades Individual Rating to 'D'
FIAT AUTO: Recapitalization Complete; Ifil Maintains Stake
N E T H E R L A N D S
GETRONICS N.V.: Operational, Financial Recovery Continues
KONINKLIJKE AHOLD: Shares in Argentine Subsidiary Attached
KONINKLIJKE AHOLD: Sells Dutch restaurant 'De Walvis' to Nestede
LAURUS N.V.: Sells 20 Belgian Stores to Carrefour Belgium
MILACRON CAPITAL: Moody's Lowers Rating to 'Caa1'
N O R W A Y
PETROLEUM GEO: Tapping Linklaters as Special English Counsel
P O L A N D
LOT AIRLINES: Passenger Traffic in First Seven Months Up 9.5%
STOCZNIA GDYNIA: Reaches Settlement with Creditors
STOCZNIA GDYNIA: Debt Restructuring Has No Merit, Suppliers Say
S W E D E N
OM AB: To List Shares on Helsinki Exchanges Prior to HEX Merger
SCANDINAVIAN AIRLINES: More Jobs to go in Cost-cutting Drive
SKANDIA: Credits Restructuring for Improved First-half Results
S W I T Z E R L A N D
SWISS INTERNATIONAL: To Entertain OneWorld Invitation
U N I T E D K I N G D O M
BRITISH AIRWAYS: Suspends Saudi Flights on Security Concerns
CORUS GROUP: Plans to Offload North American Distribution Biz
GOLDEN WONDER: To Close One Factory, Lay off 375 Employees
JOHNSON SERVICE: Disposes Loss-making Johnsons Washroom Services
LONDON FORFAITING: FIMBank Obtains Acceptances for 64% of Shares
*********
===========================
C Z E C H R E P U B L I C
===========================
VITKOVICE A.S.: Posts Greater-than-expected First-half Loss
-----------------------------------------------------------
Financial results of VITKOVICE a.s. for the first half of this year finished
with the loss CZK234 million, which is about CZK120 million more that the
management presumed. Of the increase, more than 60% is related with the
staff restructuring and fulfillment of complex program on support of the
employees VITKOVICE STROJIRENSTVI, a.s. The other negative influences that
the management had to solve were the current privatization and recession on
the mechanical engineering market.
"The economic results were influenced first of all by restructuring of
VITKOVICE STROJIRENSTVI, a.s. The government change of the way of the
holding privatization caused a delay in selling of the affiliated companies
that resulted in more intensive market recession and forced to perform
radical solution concerning the largest affiliated company," said Lenka
Hatlapatkova, press speaker VITKOVICE, a.s. "In spite of seeming
unfavorable economic results of the whole holding, the company has
sufficient financial reserves, good payment morale and fulfills the
obligations following from the contracts. It is proven by the trust of our
commercial partners."
As a result of recession on the market of mechanical engineering products at
the beginning of 2003 there were not concluded contracts on a part of
production in the joint-stock company VITKOVICE STROJIRENSTVI. Despite a
complicated situation, VITKOVICE STROJIRENSTVI managed to make a good
bargain for several perspective orders on the Czech and on the Russian and
German market. Finishing of the holding privatization will expedite the
negotiations of the present management of the affiliated company VITKOVICE
STROJIRENSTVI, a. s., about new orders.
Table 1: Summary of financial indices of affiliated companies VITKOVICE,
a.s., for the First half 2003 (in CZK million)*.
Plan Ist
Sales + outputs 3,546 3,048
Added value 723 643
Economic result for accounting period -103 -234
Assets total 3,560 3,930
* The data concern 9 affiliated companies with 100% share of VITKOVICE,
a.s., there are mentioned here also the results of VITKOVICE STROJIRENSTVI,
a. s. The results of VITKOVICE STROJIRENSTVI, a.s. are in consolidation
OSINEK, a.s.
=============
F I N L A N D
=============
FINNAIR OYJ: Asian Passenger Traffic Picking Up
-----------------------------------------------
In July 2003 Finnair carried a total of 538,800 passengers, which is 5.8%
less than the year before; 415,400 of the passengers were carried in
scheduled traffic (-7.7%) and 123,400 in leisure traffic (+1.3%). The total
passenger traffic (RPK's) decreased by 3.3%, while the capacity (ASK) was up
by 2.7%, resulting in a passenger load factor (including leisure flights) of
72.9%, 4.5 points lower than last year.
Cumulative January-July traffic (RPK) was 3.2% below 2002 level on a
capacity increase of 3.4%. Passenger load factor was 68.3% (-4.7% -points).
Total number of passengers carried was 3,887,600 (-6.4%).
Departure punctuality of scheduled flights was 92.0% (based on a fifteen
minute standard), exactly the same figure than in July 2002. Including
leisure flights departure punctuality was 91.2% (-0.4 p.u).
As from January 2003 the traffic performance report will also include the
figures of Finnair's associated company Aero Airlines AS, to which Finnair
handed over most of it's Helsinki-Tallinn operations in June 1st 2002. In
July Aero carried 7,100 passengers (+24.4%) with a PLF of 48.5%.
Scheduled traffic
(a) total passenger traffics in scheduled traffic (international + domestic)
decreased by 3.2%. The change in capacity was +3.6%. Passenger load factor
was 67.3%, 4.7 percentage points lower than last year.
(b) In scheduled international traffic, premium traffic decreased by 12.1%,
while the total number of passengers was down by 6.4%. Capacity in ASKs was
+4.8%, while total passenger traffics decreased by 2.6%.
(1) In European scheduled traffic, ASKs remained on the same level as last
year, and as total passenger traffics decreased by 3.7%, the passenger load
factor was 63.2% , down 2.4 points from previous year.
(2) In North Atlantic scheduled traffic, capacity increased by 3.1%. Change
in total passenger traffics was -6.7%, and passenger load factor for July
was 84.1%, 8.8 p.u. lower than previous year. Premium traffic decreased by
27.4%.
(3) In Far East scheduled traffic, capacity increase was 15.5%. The
passenger traffic was up by 1.2%. Passenger load factor was 72.5%, 10.3
percentage units down. The number of premium passengers increased by 1.1%.
(c) Domestic scheduled traffic decreased by 10.0% on a capacity decrease of
6.8%. Passenger load factor decreased by 1.9 p.u. to 54.0% .
Leisure traffic
(a) ASKs for leisure traffic increased in July by 0.2%, and total passenger
traffics decreased by 3.5%, resulting in a passenger load factor of 89.4%,
3.4 points lower than last year.
Cargo
(a) Cargo traffic decreased by 16.7% in terms of cargo tonnes carried. The
decrease was caused mainly by cancellation of chartered cargo capacity.
Cargo tons in scheduled traffic decreased 3.3%. In the Far Eastern traffic
0.7% increase was obtained. Cargo tons were up by 9.0% in North Atlantic
traffic and down by 8.7% in European traffic.
Full traffic performance data
Next release on traffic statistics will be released on September 10, 2003 at
9 a.m. (6 a.m. UTC).
Finnair Oyj
Communications
July 13, 2003
CONTACT: FINNAIR
Taneli Hassinen
Financial Communications
Phone: +358 9 818 4976
Mr. Petri Pentti, SVP and CFO
Phone: +358 9 8184950
Mr. Christer Haglund, VP Corporate Communications
Phone: +358 8184007
Mr. Petteri Kostermaa, VP Traffic Planning
Phone: +358 9 8188504
Mr. Timo Riihimaki, Director Marketing, Cargo
Phone: +358 9 8185487
===========
F R A N C E
===========
ALSTOM SA: Mass Meeting Called at Washwood Heath Facility
---------------------------------------------------------
Amicus, U.K.'s largest private sector union, on Thursday attended a mass
meeting with Alstom bosses and members at Alstom's Washwood Heath site in
Birmingham. The meeting follows the French owned Multinations' decision to
close the plant, making 1,500 people redundant despite winning a GBP100
million contract to build carriages for the London Underground's Jubilee
Line.
The existing Jubilee carriages had been built at the Birmingham site where
the skills and resources needed to build the new carriages are still
available to fulfill the new order. Alstom is instead planning to build the
Jubilee carriages in Spain. The problem, according to the company, is that
the work being carried out at the plant at present on Virgins high tech
Pendolino leaning trains will finish in September 2004 and the work for the
Jubilee line trains won't come in until February 2005. Alstom are using
this as their basis for closing the plant.
However Amicus suspects that the real reason for closing the Washwood Heath
site is the inadequate employment protection laws in the U.K. unlike those
in the rest of Europe. Amicus deems that because it is cheaper and easier
to sack British workers Alstom are using this as a way to slash British
plants and move work to Spain.
Tom Keogh, Amicus Regional Officer said, "This meeting is a review stage to
look at what is happening and the outcome for our members. Eighteen years
of Tory under-investment has meant that the British train market is the
biggest in the world. European train manufacturers are feeding on it like
sharks while British jobs are chumming the waters as 250 years of history is
about to sink without trace."
"Britain helped build the transport infrastructure for the world and we are
not prepared to sacrifice that history without a fight," he added.
ASSURANCES GENERALES: Casualty Insurance Business Recovers
----------------------------------------------------------
In view of the current process in the closing of the accounts and after
examination by the Audit Committee mandated by the Board of Directors, AGF
is able to announce as preliminary results the items:
Net Income, ROE, NAV and Investment Income
(a) Consolidated net income group share totaled approximately
EUR490 million, or EUR2.86 per share (2), up 35% (up 17% on
a comparable basis as pro-forma net income at June 30, 2002
totaled EUR419 million, vs. EUR364 million published owing
to a EUR55 million restatement in the provision for
liquidity risk).
(b) Accordingly, the Group's first-half ROE neared 16.6%.
(c) Group net asset value should total EUR6.6 billion, or
EUR38.5 per share, representing an increase of 8.4% vs. 31
December 2002.
(d) In line with the conservative provisioning policy adopted
for the closing of the 2002 annual accounts, the calculation
of the provision for permanent write-downs resulted in a net
gain of EUR33 million due to additional allowances and
write-backs on notably the sale of certain securities.
Nevertheless, the December 31, 2002 treatment of the
provision for liquidity risk was maintained and generated an
additional allowance of EUR91 million. Consequently,
allowances for asset write-downs were limited to EUR58
million, vs. EUR980 million at December 31, 2002.
(e) The first half of 2003 benefited from the realization of
significant capital gains, chiefly from the sale of the
stake in Credit Lyonnais for EUR904 million. While no
recurrence of this level of capital gains is expected to be
realized in the second half, this operation should enable to
continue active management of the equity portfolio. In life
insurance, this operation was accompanied by the booking of
a EUR450 million allowance for the unallocated profit
sharing reserve earmarked primarily to fund the costs of
policyholders profit sharing in the second half. In property
and casualty insurance, first-half underlying profit(3)
benefited from a non-recurring level of investment revenue.
Notes:
1 on an annualized basis
2 non-diluted
3 net income before exceptional items, goodwill and tax
Underlying profit
(a) The underlying profit of operating companies advanced 53%
(1) y-o-y to approximately EUR795 million.
(b) In property and casualty insurance, underlying profit was up
70%(1) to approximately EUR370 million, marking the success
of measures to turn operating profit around. In France, the
combined ratio for all activities2 totaled 103.8%, vs.
112.2% at December 31, 2002, while the combined ratio for
international activities(2) stood at 100.7%, compared with
104.5% at 31 December 2002. Consequently the Group had a
combined ratio(2) of 102.6% at June 30, 2003, vs. 109.4% six
months earlier.
(c) In life and health insurance, underlying profit increased
27%(1) to approximately EUR300 million. In life and health
insurance in France, AGF's strategy has spurred improvement
in margins while maintaining mathematical reserves growth.
At June 30, 2003, the cost to mathematical reserves ratio(3)
was down 10 basis points to 0.8%, while investment income
minus payments to policyholders after allowance for
unallocated profit sharing reserve(3) improved 10 basis
points to 0.7%. Mathematical reserves are up more than 2%
on euro-denominated contracts, especially as a result of a
10bp decline in the surrender rate(3) to 1.3%.
(d) In credit insurance, underlying profit rose 17%(4) to
approximately EUR40 million. A selective underwriting
policy and continued technical improvements propelled the
combined ratio of the new Euler Hermes entity to
approximately 85%.
(e) Assistance activities reported strong resilience in
underlying profit, which totaled around EUR7 million.
(f) Banking and financial services activities posted a sharp
increase in underlying profit to approximately EUR60 million
on the back of a strong performance by Entenial, the newly
positive contribution from Banque AGF (a year ahead of
schedule), and the rise in income from asset management
activities.
Ongoing optimization of allocated capital
AGF continues to focus the Group on strategic activities and optimizing
allocated capital.
To this end, AGF is committed to reducing its exposure to banking risks
through the planned disposals of Entenial and AGF Belgium Banque. AGF has
also lowered its allocation to life insurance activities in Latin America by
selling its Chilean life insurance subsidiary. In addition, AGF is currently
negotiating the sale of its life insurance and asset management activities
in Brazil. Lastly, AGF sold brokerage operations in the Netherlands.
These operations illustrate the ongoing efforts of the Group to rationalize
its capital allocation and strengthen its solvency.
--------
Notes:
1 vs. pro-forma 30.June.2002
2 calculation based on the statutory accounts
3 calculation based on the statutory accounts and compared to pro-forma
30.June.2002
4 excluding Hermes integration effect
Outlook for 2003
Having reached the end of the first half of 2003, AGF remains confident in
achieving its combined ratio targets. The first six months of year
benefited from favorable investment income developments, leading to net
profit of approximately EUR490 million. In the absence of erosion in
financial markets and of any exceptional event during the second half,
continued improvement in technical results could allow AGF to reach at year
end a net income above EUR650 million.
A detailed presentation of the first-half accounts shall be issued in the
form of a press release on Wednesday, September 24, 2003, before market
opening. It will be followed by a press conference and an analysts meeting
in Paris in the morning, and another analysts meeting in London in the
afternoon. That meeting will be rebroadcast on the Internet.
CONTACT: AGF
For investors
Jean-Michel Mangeot
Phone: 33 (0)1 44 86 21 25
E-mail: jean-michel.mangeot@agf.fr
Marc de Ponteves
Phone: 33 (0)1 44 86 20 99
E-mail: marc.de_ponteves@agf.fr
Vincent Foucart
Phone: 33 (0)1 44 86 29 28
E-mail: vincent.foucart@agf.fr
=============
G E R M A N Y
=============
ACG AG: First-half Sales, other Key Figures Down
------------------------------------------------
In H1 2003, ACG achieved sales of EUR113 million (previous year: EUR143.6
million), which represents a reduction of 21%. The gross profit suffered a
volume-induced reduction of 18% to EUR15.8 million (2002: EUR19.3 million).
Gross profit margin improved to 14% (2002: 13.4%). The EBITDA was negative
at
-EUR1.4 million (2002:EUR1.0 million). The development of sales & gross
profits is to be put down to the reduction of high-volume, low-margin
transactions in the ACG TS division. The EBIT amounted to -EUR2.9 million
(2002: -EUR0.7 million) & the EBT to -EUR3.3 million (2002: -EUR0.3
million).
Net result amounted to -EUR2.7 million (2003: -EUR1.2 million). Free cash
flow to the amount of -EUR9.3 million was negative (2002: EUR1.0 million).
As per June 30, 2003, the liquid funds amounted to EUR8.7 million (December
31, 2002: EUR19.6 million).
Free cash flow and liquid funds were strained by the repayment of an input
tax reimbursement of EUR9 million to Wiesbaden
Inland Revenue Office in February, as comm. in Q1.
As per June 30, 2003, the equity ratio of the ACG Group was 60.9% (December
31, 2002: 60.6%). The TS division (semiconductors) achieved sales of
EUR68.3 million in the reporting period (previous year: EUR94.8 million).
The EBITDA was -EUR1.4 million (previous year: EUR0.3 million). The sales
in the ID division (smart cards/RFID) was EUR38.1 million (previous year:
EUR41.2 million). The EBITDA was slightly positive at TEUR112 (previous
year: -EUR380,000). Sales in the microIDENTT division decreased from EUR7.6
million in the first half of 2002 to EUR6.6 million in 2003. This is due
to the deconsolidation of cubit as per January 1, 2003. The EBITDA amounted
to EUR1.3 million (previous year: EUR1.1 million).
The disinvestments of companies not belonging to the core business was
started in Feb. 2003. The EBITDA of the ACG holding amounted to -EUR1.3
million. The ACG Board is satisfied with the effect the savings measures
are taking. Strategically, ACG is also continuing to work on a reduction of
complexity and focusing on the core areas. The disinvestments of peripheral
activities will be continued in Q3 by further sales. A strengthening of the
smart card and RFID market can only be expected in line with growth of the
general economy. The semiconductor market will only recover in Q4 according
to current market studies and only then will it have an improving effect on
the results. We see positive impulses in Asia/USA, but Q3 will nevertheless
remain difficult.
ALLIANZ AG: Plans to Unload Beiersdorf Stake by Year's End
----------------------------------------------------------
German insurer Allianz is doubling efforts to divest its 44% stake in
Beiersdorf, makers of Nivea skincare cream, under its plan of trimming down
industrial holdings. According to FT Deutschland, the troubled firm is
looking forward to finding solution for its Beiersdorf stake by the end of
this year.
Discussions regarding the future of Beiersdorf -- one of the few remaining
large European consumer goods groups seen as a takeover target -- was
revived after its 30% owner, Tchibo, undertook an unexpected ownership
shakeup. Tchibo sold cigarette maker Reemtsma, raising EUR5 billion of
cash at its disposal.
The German coffee-roasting empire is keen at buying Allianz's stake in
Beiersdorf stake, valued at about EUR4.27 billion, but it considers Allianz
asking price as too high, according to the report.
U.S. consumer product giant Procter & Gamble has also signed interest in
Beiersdorf, but it is understood unwilling to work with a large minority
shareholder such as Tchibo. L'Oreal, Henkel, Unilever and Johnson & Johnson
are also believed to be interested in the consumer group.
Allianz, which is being advised by Goldman Sachs, may consider issuing a
convertible into Beiersdorf shares, in order to cut its stake, if it does
not unload the stake in its entirety, according to the report.
Beiersdorf has a market capitalization of about EUR9.7 billion.
BREMER WOLL-KAMMEREI: Expects Negative Full-year Results
--------------------------------------------------------
BWK's financial result for the 1st half of 2003 fell short of expectations.
Worldwide economic uncertainty caused by the war in Iraq and the SARS
epidemic exacerbated the sluggish overall economic activity levels,
resulting in lower consumption along with a weak U.S. Dollar. These
conditions had a negative impact on the company's financial result in spite
of the successful restructuring measures carried out by BWK.
Sales increased by 9.4% to EUR63.9 million in comparison with the reporting
period of the previous year, as a result of higher wool prices that were
experienced by the Global Wool Trading companies. The Group shows a loss
of -EUR6.3 million according to IFRS, as a direct result of the weak demand
for wool tops and the overcapacity in the global combing plant industry.
This resulted in low combing tariffs.
Last year's strategic readjustment and restructuring of the Group resulted
in a significant reduction of costs and increased efficiency. However, due
to continuing weakness in the market the Group has not been able to achieve
similar gains in the 1st half-year 2003. However, we are confident that we
will have a competitive position when the market recovers.
The restructuring of the combing plant in Bremen is proceeding and the
Management expects that production will be resumed during the 1st quarter
2004.
As is customary, sales for the 3rd quarter 2003 are expected to slow down
modestly due to the vacation period throughout Europe. However improvement
is expected in the 4th quarter 2003, although this is not anticipated to be
sufficient to offset the result for the first half-year. Therefore, the
Management is expecting to record a loss for the business year 2003.
Issuer's information/explanatory remarks concerning this
ad-hoc-announcement:
The performance of the Wool Trading Companies of BWK Group varied during the
period. The 100% owned New Zealand subsidiary JSB generated another
satisfactory result. However the 50% owned Trading Companies BWK Elders
were affected by the sharp fall in prices for Australian greasy wool and
consequently contributed negatively to the Group result.
The man-made fibers division of the combing plant in Bremen made a positive
contribution to the Group result despite also being affected by unfavorable
market conditions in the textile industry and the strong Euro. Considering
the circumstances, the man made fibers division performed satisfactorily.
Key Data BWK Group
Profit and Loss Account Jan.-June Jan.-Dec Jan-June
2003 inTEur 2002 in TEur 2002in TEur
Sales revenues 65 133 127 871 59 533
of which
European Combing 25 401 48 837 26 822
Australian Combing and Logistics
5 808 16 936 8 756
Global Wool Trading 33 105 62 098 23 955
Other Business Operations* 819 - -
Inventory changes and
other own work capitalized
- 1 171 - 781 - 603
Total performance 63 962 127 090 58 930
Other operating income 1 797 17 714 3 562
Raw material and consumables
- 45 586 - 86 906 - 36 737
Personnel costs - 12 971 - 26 152 - 14 584
Depreciation - 3 614 - 7 809 - 3 411
Other operating expenses - 7 176 - 19 554 - 11 241
Financial result - 3 808 - 3 174 - 4 249
Extraordinary result - - -
Taxes on income and revenue 1 122 1 017 1 515
Share of the result accounted
for by minority shareholders -24 22 -
Result - 6 298 2 248 - 2 215
Balance sheet in TEur 30.06.2003 31.12.2002 30.06.2002
Fixed assets 97 103 96 874 101 435
Inventories 24 105 26 708 26 199
Other current assets 27 561 40 287 34 078
Balance sheet total 148 769 163 869 161 712
Liabilities 75 811 89 527 87 213
Reserves 22 445 20 298 23 804
Equity capital 50 458 54 013 50 695
Stocks held by other shareholders 55 31 -
Balance sheet total 148 769 163 869 161 712
Financial ratios June 30, 2003 Dec. 31, 2002 June 30, 2002
Cash Flow (TEur) - 304 118 1 812
Investments (TEur) 1 430 11 199 2 070
Employees 612 576 609
*including BREWA Umweltservice GmbH, which has been fully included in the
consolidated financial statement for the first time.
CONTACT: BREMER WOLL-KAMMEREI AG
PO box 71 01 80
D-28761 Bremen
Phone: (49) 04 21/6091-0
Fax: (49) 04 21/60 91-600
Telex: 2 44 482 bwkd
E-mail: info@bwk-bremen.de
Home Page: Internet: http://www.bwk-bremen.de
Mr. Gunther Beier
Contact: 0421/60 91-304
Mr. Thomas Bolte
Phone: 0421/60 91-205
PROSIEBENSAT1.MEDIA: Moody's Hints Downgrade After Rating Review
----------------------------------------------------------------
Moody's Investors Service placed ProSiebenSat.1 Media's Ba3 long-term rating
for senior unsecured debt on review after the acquisition of the
broadcasting company's ownership by P7S1 Holding LP, an indirect subsidiary
of Saban Capital Group Inc.
Moody's will review the rating, with a view of downgrading it, because of
the uncertain impact that the change of ownership might have on the future
business and financial risk profile of ProSieben.Sat1
The review will focus on P7S1's medium-term operational and financial
strategy for ProSieben.Sat.1, the degree of any liquidity and execution
risks, the extent to which any improvement in ProSiebenSat.1's operational
performance could be accelerated by settlement of the ownership issue, and
its position within a broader media network.
PROSIEBENSAT.1 MEDIA: Saban to Form New Supervisory Board
---------------------------------------------------------
Following the takeover of 36% of its share capital by the Saban Capital
Group, ProSiebenSat.1 Media AG is to receive a new Supervisory Board.
The future Supervisory Board will comprise Adam Chesnoff, Chief Operating
Officer of the Saban Capital Group; Wolfgang Hartmann, member of the
Management Board of Commerzbank AG; Ron Kenan, media consultant; Ynon Kreiz,
director of the Saban Capital Group; Arieh Saban, media businessman; and
Haim Saban, Chairman and CEO of the Saban Capital Group. Dr. Michael Jaffe,
attorney-at-law and insolvency administrator of KirchMedia GmbH & Co. KGaA,
and Dr. Mathias Dopfner, Chairman of the Management Board of Axel Springer
AG, are to keep their seats on the Supervisory Board. KirchMedia and Axel
Springer Verlag have retained equity interests totaling 28% in
ProSiebenSat.1 Media AG through a joint venture. Hubertus Meyer-Burckhardt,
member of the Management Board of Axel Springer AG, is envisaged as the
second representative of the publishing house.
As is usual in such cases, the new members of the Supervisory Board are to
be appointed as soon as possible by the competent court and for the period
up to the next general meeting.
CONTACT: PROSIEBENSAT.1 MEDIA AG
Dr. Torsten Rossmann, Corporate Spokesman
Medienallee 7
D-85774 Unterfohring
Phone: +49 [89] 95 07-11 80
Fax: +49 [89] 95 07-11 84
E-mail: Torsten.Rossmann@ProSiebenSat1.com
=============
H U N G A R Y
=============
KERESKEDELMI ES HITELBANK: Appoints John Hollows New Chief
----------------------------------------------------------
The board of directors of K&H Bank Rt appointed John Hollows as new chief
executive last week, according to Budapest Business Journal. They also
accepted the resignation of previous CEO Tibor E. Rejto and Deputy CEO Ludo
Jacobs.
The board changes follow the discovery of irregular investment transactions
at the brokerage subsidiary of the bank, K&H Equities (Hungary) Rt. Fake
transfer orders and fictitious securities sale contracts conducted through
offshore companies left 60-70 clients with financial damages estimated at
HUF10 billion.
Mr. Hollows, whose appointment is still subject to approval by the State
Financial Institutions Supervision, will also head the bank's corporate and
investment banking division. The position was left vacant after Tibor
Zarnoczi was terminated on August 6.
Mr. Hollows has been working for KBC as its regional director for the
Pacific region and Asia since 1999. He was also responsible for the
operations of the U.K.-based Barclays Bank in Taiwan between 1991 and 1995.
K&H EQUITIES: Denies Liquidation Is in Offing
---------------------------------------------
The shareholders of the brokerage are committed towards the company;
liquidation is not planned.
Reacting on the article "Liquidation can be initiated at Equities" printed
in Magyar Hirlap Aug. 9, 2003 issue, Equities states:
(a) The international and Hungarian shareholders of the brokerage are still
committed towards Equities and are to continue this operation within the
Banking Group;
(b) The aim of Equities is to continue its full and legitimate operation as
soon as HFSA allows, with harmony and satisfaction of the Supervisory;
(c) In the past few years Equities became one of the three most successful
players on the Hungarian market, currently it has almost 4000 clients in
Hungary and worldwide
(d) The irregularities revealed recently at Equities only relate to one
division of the brokerage, within that, only relate to one investment
advisor, within that only 60-70 of his clients -- companies and wealthy
individuals. Other clients of Equities or the Banking Group cannot be
affected and cannot witness any losses.
Equities meanwhile continues talks with the 60-70 customers likely to have
been affected by the illicit investment transactions. The brokerage company
hopes to reconcile the issue as soon as possible -- by August 31, 2003, the
deadline set by HFSA -- to the mutual satisfaction of the parties.
K&H Equities wishes to make it clear again, that all rightful claims
established by the reconciliation of accounts will be fully satisfied,
irrespectively of the amounts involved.
(e) The shareholders will decide on the technical details and possible legal
steps necessary for the compensation, in the near future.
CONTACT: K&H EQUITIES
Communications Directorate
Phone: 328 9947
Mobile: (06 70) 337 7700
Fax: 328 9220
=============
I R E L A N D
=============
WHYTE AND MACKAY: West LB Considers Selling 40% Stake
-----------------------------------------------------
German-based West LB is reportedly considering the sale of its stake in
whisky producer Whyte and Mackay, formerly known as Kyndal Spirits Ltd.
Online news agency Just-drinks.com, citing a report from the Scotsman, said
West LB announced it would sell off the investment "in the medium term"
along with the rest of its principle finance unit. The investment bank
gained its chunk of the whisky giant when it bankrolled its 2001 management
buy-out from Jim Beams.
VIVIAN Imerman, the 50% stakeholder and chief executive of Whyte and Mackay,
would be given pre-emptive rights, or first call, over West LB's stake when
it becomes available.
However, Whyte and Mackay countered perceptions that the chief executive
would be selling the business. They said: "Vivian Imerman has no intention
of selling the business. Should WestLB look to sell its shareholding he has
expressed an interest in acquiring these shares, depending on the conditions
attached."
The whisky distiller has been weighed down by debt since its buy-out in
October 2001.
CONTACT: Kyndal Spirits Ltd
310 St Vincent Street
Glasgow, Scotland
G2 5RG.
Contact: denise.marshall@kyndal.co.uk
Phone: +44 (0) 141 248 5771
Fax: +44 (0) 141 221 1993
SHORTS: Fires 300 Employees; May Axe a Thousand More
----------------------------------------------------
Aerospace company, Shorts, told union leaders on Wednesday 300 jobs will be
axed under the company's redundancy plans that was announced earlier this
year. The Canadian-owned firm already shed 600 employees out of its program
to part with 1,180 staff to counter the slump in aerospace orders of
Bombardier, its loss-making parent.
The Belfast-based company further warned that 1,000 jobs on loss-making
contracts were still at risk unless agreement was reached on a four-year pay
deal, according to the Telegraph.
For the past two years the company's workforce has narrowed by 1,600 to
5,700 at present.
The company is proposing a one-year pay freeze and increases linked to
inflation over the following three years. The shop stewards accepted the
deal after being assured of jobs, but workers rejected the agreement.
Bombardier, which lost US$600 million last year, is also pushing with a pay
freeze at its North American plants, and has already won backing.
=========
I T A L Y
=========
CAPITALIA GROUP: Fitch Upgrades Individual Rating to 'D'
--------------------------------------------------------
Fitch Ratings, the international rating agency, has upgraded Capitalia's
Individual rating to 'D' from 'D/E'. At the same time the agency has
affirmed the bank's Long-term, Short-term and Support ratings at 'BBB+',
'F2' and '2', respectively. The Outlook remains Stable. Fitch has also
affirmed the ratings for Capitalia's subsidiary Banco di Sicilia at
Long-term 'BBB+', Short-term 'F2' and Support '2'. The Outlook remains
Stable.
The rating action reflects improvements at Capitalia following the
integration of Bipop Carire and the creation of a new group structure in
July 2002. This has led to the establishment of a better risk management
structure, stronger capitalization, the disposal of non-core assets and
measures to tackle the group's main challenges -- sluggish profitability and
weak asset quality. While progress to date is impressive, Fitch notes that
improvements in profitability are likely to be gradual as revenue generation
is built up over time and the bank's portfolio of impaired loans, which has
weighed on profitability, remains large at over 100% of equity at end-2002.
Capitalia -- Italy's fourth largest bank by total assets at end-2002 -- was
created following a restructuring of the Banca di Roma group and the
integration of Bipop in July 2002. Capitalia is the holding company for the
traditional banking operations of Banca di Roma, Bipop and Banco di Sicilia,
and the investment banking operations of subsidiary MCC. It also controls
44% of Fineco, which holds the asset gathering operations of Banca di Roma
and Bipop, now consolidated under Capitalia. Banco di Sicilia's ratings are
based on the subsidiary's close integration into the Capitalia group, of
which it forms an integral part as it controls the distribution network in
Sicily.
FIAT AUTO: Recapitalization Complete; Ifil Maintains Stake
----------------------------------------------------------
After the offering of unexercised rights on the Stock Exchange carried out
last week, the capital increase approved by the Board of Directors on June
26, 2003 was concluded, without the participation of the Underwriting Group.
All of the 367,197,108 Fiat ordinary shares offered to stockholders in the
form of a rights offering at a price of EUR5 per share were subscribed, for
an overall amount of 1,836 million euros.
The stockholder Ifil subscribed to 108,921,617 shares, which enabled it to
maintain its stake of ownership of Fiat's voting capital above 30%.
*****
Fiat SpA, which includes the struggling Italian automaker unit, Fiat Auto,
narrows its net loss from EUR34 million to EUR27 million (US$30.6 million)
in the second quarter. Operating losses narrowed to EUR25 million ($28.4
million) from EUR127 million in the corresponding period a year earlier.
Fiat Auto also narrowed its operating loss to EUR234 million (US$266
million) from EUR394 million in the same period last year.
=====================
N E T H E R L A N D S
=====================
GETRONICS N.V.: Operational, Financial Recovery Continues
---------------------------------------------------------
Highlights of 2003 half-year results:
Recovery of Company's financial position
(a) Net debt was reduced to EUR125 million, resulting in an improved net
debt/equity ratio of 39% (December 31, 2002: 257%);
(b) Solvency ratio improved to 17% (December 31, 2002: 6%);
(c) The tax optimization program initiated in April 2003 resulted in a
release of tax liabilities amounting to EUR83 million, which has further
strengthened the Group's equity.
KEY FIGURES
(a) Net result for first half year is EUR230 million (2002: EUR4 million).
(b) Consolidated revenue of EUR1,363 million (first half 2002: EUR1,838
million) affected by the divestment of Getronics Government Solutions and
Getronics Human Resource Solutions and the decline in the market and
currency exposures.
(c) Product-services mix continued to improve with services now representing
73% of total revenue (first half 2002: 71%).
(d) Financial recovery in Q2 for the ongoing business compared to Q2 2002.
(e) Earnings before interest, taxes, amortization and exceptional operating
items (EBITAE) in Q2 increased by 17% to EUR14 million.
(f) EBITAE per employee increased by 27% during Q2.
(g) Services revenue per employee was 2% higher, whilst services gross
profit per employee was marginally lower than in Q2 2002 (at constant
exchange rate: +10% and +8% respectively).
(h) Selling, general and administrative expenses reduced by 20%.
(i) Average employees employed reduced by 8% to 23,559 in Q2 (Q2 2002:
25,729).
(j) Italian recovery plan being executed vigorously.
(k) Dutch profit improvement plan launched.
-*excludes divestitures
FRAGILE MARKET CONDITIONS REQUIRE CONTINUING COST BASE ADJUSTMENTS AND
PRODUCTIVITY IMPROVEMENTS
(1) The state of the global economy is weak despite encouraging signs of a
hesitant recovery. ICT market conditions remain tough and highly
competitive; with fierce price pressure a constant feature. Some
encouraging first signs of market stabilization are visible in some
countries in Q2, for example Australia, US, Netherlands, and Spain, but we
do not believe there will be any meaningful improvement of market
circumstances in 2003.
(2) The prospects for the global ICT services and solutions market remain
good in he mid-term, with an annual growth increase forecast by IDC and
Gartner in the global ICT services market between 2003-2007. Getronics,
with its blue chip and loyal client base, is expected to benefit from
forecast higher growth in managed services, and from increased opportunities
for outsourcing deals in the mid to lower categories, allowing the company
to improve revenue quality.
(a) We will continue to focus on further cost base adjustments and
productivity improvements.
(b) Through these actions we expect to see a continuing improvement in
employee productivity and consequently, in profitability.
STATEMENT FROM THE MANAGEMENT OF GETRONICS
"In the first quarter of 2003 the company was confronted with a further
decline of the Information and Communication Technology (ICT) market in all
major geographies. For Getronics, this decline was most notable in Italy.
On top of the decline in the ICT market, the company faced continuing
insecurity among stakeholders, employees and clients about its financial
viability. These events combined to cause a serious impact on the Company's
financial performance in Q1 2003.
When we started on February 21, we focused first on restoring the confidence
of clients, financial stakeholders, and employees and this led to the
implementation of the Entrepreneurial Solution. Italy required our
immediate attention having made a substantial loss in 2002 and a loss in Q1
2003. With the new Italian leadership team, and the action plan and
restructuring that is now being executed, we feel that the Italian
turnaround is proceeding to plan.
As a result of this focus we were able, during Q2, to lift the 'dark cloud'
that was hanging over Getronics and to form the basis for restoring
productivity and profitability per average employee. Based upon the
operational restructuring actions taken, we believe this trend will
continue, despite the current market circumstances.
We realize that the company still has a way to go. The company's
operational profit level for the ongoing business became negatively affected
with the sale of two highly profitable units. We firmly believe that the
core business of Getronics, Managed Services, has an excellent opportunity
to benefit from projected market growth in the coming years.
The company is positioned well, both geographically and through its client
segmentation for an ICT market that has changed from buying IT-consultancy
and ERP systems to optimizing existing IT infrastructures. It is clear to
us that Getronics also has further opportunities to decrease its direct cost
base to match the ongoing margin pressure, and can create value added
services for our existing customers through our business solutions and
infrastructure services.
We have initiated a global re-skilling program, including an intake of young
graduates, to further strengthen the Company's capabilities in innovative
technologies. We are aligning with strategic partners to strengthen our
core activities and develop our client offerings. We are generating new
business with both existing and new clients e.g. Shell, DSM, AVEBE,
Frankfurt Airport and Bayer. Further cost based reductions and creating
value added solutions will be our highest priorities in the coming 18
months, alongside the further strengthening of the Company's financial
position.
We would like to take this opportunity to thank our loyal clients for their
continuing faith in the Company's ability to deliver high quality solutions,
and to thank our employees for their dedication and focus on our clients.
We feel confident in our ability to deliver a strengthened Getronics for the
benefit of our clients, financial stakeholders, and employees."
Axel Ruckert Klaas Wagenaar
Chairman Vice-Chairman
MANAGEMENT INTRODUCTION
On February 21, 2003, the Supervisory Board appointed a new management team
to lead the Company. After reviewing the financial condition of the
Company, its commercial operations and assets, the new management concluded
that although Getronics was experiencing a very difficult market, the
underlying fundamentals of the company were in better shape than originally
thought. In particular, client loyalty proved to be stronger than expected.
Getronics has a very satisfied blue chip client base, strong strategic
relationships with leading technology partners, skilled and
service-orientated employees, and the ability to deliver high quality ICT
services.
The relatively healthy condition of the Company, together with selected
actions to improve operational performance and cash management, and a
strengthened focus on core business, led management and the Supervisory
Board to conclude that there was a more attractive route for the company to
strengthen its financial position than the proposed Revised Invitation To
Tender (RITT). This new route was described as The Entrepreneurial
Solution.
THE ENTREPRENEURIAL SOLUTION
The Entrepreneurial Solution included the following actions:
(a) Getronics' focus to remain on its core business of the end-to-end
integration and management of ICT systems;
(b) Strengthening of the company's balance sheet;
(c) Under-performing country operations to be turned around to restore
profitability;
(d) Divestment and/or liquidation of non-core and structurally
under-performing assets;
(e) The implementation of centralized cash management systems and procedures
to deliver a strongly cash focused company; and *A continuing review of the
Company's business strategy to refine its market positioning and to examine
the benefits of aligning with strategic partners in order to strengthen core
activities, geographic coverage and capacity.
FINANCIAL RESTRUCTURING
In order to safeguard the future position of Getronics, management
concentrated its first actions around the financial restructuring of the
company. As a result of the review of its assets, the company completed the
sale of the Getronics Human Resource Solutions (GHRS) business unit on May
28, 2003 for approximately EUR315 million cash proceeds, and sold its entire
10.3% interest in Merkantildata (a Norwegian ICT Company) on 4 June 2003 for
approximately EUR11 million cash proceeds.
The net proceeds from the divestment of non-core and under-performing assets
are being used for the repayment of debt, including bank debt. In May 2003
Getronics came to an agreement with the holders of the subordinated
convertible bonds 2004 and 2005 to amend the terms of the bonds. On June
30, 2003, Getronics paid its bondholders 2004 and 2005 EUR325 million in
cash and agreed an annuity scheme to repay the remaining EUR250 million
through quarterly payments from March 2004 till September 2008. Next to the
repayment scheme the amendment of terms includes an interest rate of 13%,
removal of the option to convert, and the possibility to repay the bonds in
full prior to September 2008.
The company was also able to reduce its bank debt under its then existing
credit facility from EUR55 million to EUR44 million. On June 27, 2003 the
company agreed a term sheet for a new credit facility with ABN AMRO, ING and
Barclays. The new facility amounts to EUR100 million and will allow the
release of the Company's cash collaterals of approximately EUR55 million.
This facility will replace the revolving credit facility announced on
December 23, 2002. This new facility reflects the potential working capital
needs of the company following the implementation of the main constituent
parts of the Entrepreneurial Solution. The facility was formalized on July
30, 2003.
In April 2003 the company initiated a tax optimization program to fully
utilize the current company structure and financial position on a global
basis. As a result of this tax optimization exercise the company has been
able to release EUR83 million from its tax liabilities and further
strengthen the Group's equity.
OPERATIONAL RESTRUCTURING
On April 28, 2003, Getronics announced that it was implementing further
restructuring and cost-effectiveness measures to match its operating costs
to current market conditions and anticipated revenues. These measures were
taken to ensure that the company could recover its profitability levels
following its divestiture of non-core assets. The measures consisted of the
following components:
(1) A reduction of approximately 1,400 employees in the overall workforce;
(2) The initiation of a global re-skilling program including an intake of
young graduates to further strengthen the company's capabilities in
innovative technologies such as security, Voice over IP, and Microsoft .NET
software developments;
(3) Consolidation of the Company's global data and helpdesk facilities and
supporting IT-infrastructure, resulting in the more cost-efficient and
effective support of customers' needs;
(4) The closure of redundant offices and associated
facilities/infrastructures; and 5. The closure or disposal of approximately
10 under performing assets, including stakes in underperforming joint
ventures.
The operational restructuring program is proceeding according to plan. In
Italy the company signed an agreement with the Ministry of Labour and the
Trade Unions to reduce per July 7, 2003 the workforce by circa 500 employees
mainly via a special wage guarantee fund (Cassa Integrazione). In the
Netherlands the company agreed in principle, on July 16, a social plan with
the Central Workers Council and Trade Unions, which involves a reduction of
600 employees during the remainder of 2003. Other actions and measures have
been initiated and many of them are already beginning to have an impact
during quarter two of the ongoing Getronics. Total restructuring costs are
estimated to be circa EUR65 million, of which circa EUR39 million have been
expensed in Q2 2003 through the profit and loss account. Most of the
restructuring provision will be cash compensated by the divesture of
non-core assets.
A number of key management positions at both subsidiary and corporate level
are being strengthened to reinforce performance improvement activities. In
addition, management has initiated a strategic review of the Company's
solution business, and a global competitive and positioning study. The
outcome of both initiatives is expected to be part of the business planning
cycle 2004-2005 to be initiated in the autumn of 2003.
INVESTOR RELATIONS
To create more transparency and to further restore confidence amongst all
our financial stakeholders the company will provide a trading statement for
Q3 2003 on November 5, 2003, and a trading statement for Q4 2003 on February
18, 2004.
Management will be reviewing the draft code for corporate governance
proposed by the Tabaksblat Committee.
The market remains difficult with limited ICT investments. Companies
restricted their ICT investments to the maintenance of installed systems or
investments that generated swift cost savings such as (partial) outsourcing.
Getronics believes it is maintaining its market position versus the
competition, particularly in areas where we have recognized expertise, such
as on-site services, network and desktop outsourcing, remote network and
systems management, and in software management.
The prospects for the global ICT services and solutions market remain good
in the midterm, with both IDC and Gartner, forecasting growth the global ICT
services market between 2003-2007. Getronics, with its global client
footprint and loyal client base, is expected to benefit from the higher
forecast growth for managed services, and from the increased opportunities
for outsourcing deals in the mid to lower categories (less than EUR100
million), particularly in Western Europe.
Consolidated revenue amounted to EUR1,363 million (first half 2002: EUR1,838
million). The decline of 26% was substantially affected by the divestment
of company activities (minus 10%), specifically Getronics Government
Solutions (GGS) and GHRS, the decline in the market (minus 11%), and
currency exposures (minus 5%). Services revenue declined by 23%, whereas
product revenue declined by 33%. Organically total revenue decreased by
11%, of which 3% for services revenue and 27% for products. Despite the
divestitures the product-services mix continued to improve during the first
half of 2003, with services now representing 73% of total revenue (first
half 2002: 71%). In general, the first half gross margins represent a tale
of two quarters; with quarter one (Q1) margins being more heavily impacted
by the difficult market conditions and the financial turmoil surrounding the
Company. Quarter two (Q2) showed a positive financial recovery.
Selling, general and administrative expenses, excluding exceptional
operating items, decreased by 22% to EUR220 million in the first half year
(first half 2002: EUR282 million).
Like many other companies, the increased unrecognized net actuarial loss of
defined benefit pension schemes le d to higher pension expenses in the first
half-year 2003. This increase mainly relates to defined benefit schemes in
North America and the U.K. Following the sale of Getronics Government
Solutions the related defined benefit pension plans remained with Getronics
and the related pension expenses have been classified as exceptional.
Approximately 18% of the total numbers of employees worldwide participate in
defined benefit pension schemes. Total pension expenses in the first
half-year amounted to EUR21 million, which represents an increase of 25% per
average employee. The pension obligations have been calculated consistently
with the previous year, using International Accounting Standard No.19 (IAS
19).
The losses in Italy of EUR17 million in Q1 and EUR7 million in Q2 had a
particularly negative impact on EBITAE. The remaining geographies were on
or above plan, except France and Mexico who reported modest operating
losses. Consolidated EBITAE amounted to EUR12 million (first half 2002:
EUR61 million).
(1) This amount is lower than the earlier announced EUR7.3 million, because
certain elements had already been provided for in previous years.
Exceptional operating items consist of costs relating to restructuring
expenses, an additional write-off in Italy for certain long-term projects
from 2002 of EUR16 million, the settlement with the previous Board of
Management, and the pension expenses related to GGS. As a result of the
operational restructuring program initiated in April 2003 the company
expensed EUR39 million (first half 2002: EUR3 million) of the total
estimated costs of EUR65 million.
Exceptional financing expenses of EUR23 million (first half 2002: nil), this
mainly concerns advisory and banking fees in connection with the (Revised)
Invitation To Tender, the EUR200 million revolving credit facility, and the
amendment of the terms of the subordinated convertibles.
The net result amounted to EUR230 million (first half 2002: EUR4 million)
and benefited from a net tax result of EUR74 million and the net income on
the sale of GHRS and other discontinued operations of EUR261 million.
Taking into account the dividend on cumulative preference shares, this
translates to EUR0.55 per ordinary share compared to nil in the first half
2002, based on the same number of outstanding ordinary shares (409,165,871).
HUMAN RESOURCES
The average number of employees (full-time equivalents: FTE) declined
substantially during the first half year 2003 to 24,200 (first half 2002:
28,524), a reduction of 15%. This was due to both the divestiture of
non-core assets and operational restructuring. The company expects to have
over 22,000 employees active in approximately 30 countries around the globe
by the end of 2003, barring unforeseen circumstances, and taking into
account the latest restructuring program and the normal movements of
personnel during the regular course of business.
The financial turmoil surrounding Getronics in the first half of 2003, and
the urgent need to quickly restructure the company to improve profitability
has made this a difficult time for Getronics employees. Management is
grateful that the Company's employees have remained committed to delivering
high quality services to our clients.
In the first half year of 2003, the Company's new management evaluated the
amortization period of the goodwill related to the Wang Global acquisition.
Previously this goodwill was amortized over a period of 25 years. Given the
significant impairment charges incurred during 2001 and 2002, and in line
with industry practice, management believes that an amortization period of
20 years is more appropriate. The remaining goodwill balance at 31 December
2002 of EUR603 million related to Wang Global will be written off over a
remaining period of approximately 16 years, resulting in a revised annual
amortization of EUR37 million. The impact of this change in the
amortization period on the first half-year result of 2003 is EUR5 million.
In the course of the first half year of 2003 the Company's new management
performed an evaluation of the profitability of a number of large long-term
prior year contracts in Italy. This evaluation resulted in an extra
write-off of EUR16 million. Management believes that this write-off should
not impact the ongoing 2003 operations and therefore the amount involved has
been disclosed as an exceptional operating item. Partly as a result of this
action the consolidated level of work in progress at June 30, 2003 is EUR28
million, compared to EUR75 million at June 30, 2002.
At June 30, 2003 cash and cash equivalents are EUR214 million compared to
EUR271 million at June 30, 2002. The remainder of the outstanding bond debt
of EUR250 million was converted into one subordinated annuity bond 2008,
which will be repaid in quarterly installments from March 2004. As a result
of the substantial debt reduction, net debt as a percentage of group equity
improved to 39% (December 31, 2002: 257%). The company's solvency ratio at
June 30, 2003 is 17% (31 December 2002: 6%).
As a result of management's tax optimization program the company was able to
release in its profit and loss account EUR83 million from its deferred tax
liabilities, which will further strengthen the Group's equity. Acting out
of prudence based on draft tax legalization, relating to the taxability of
the conversion of the convertible bonds during 2001, management accounted
for this potential tax liability and decreased shareholders' equity by EUR28
million (the related gains having been recorded in 2001).
The operational result on a cash basis led to a cash outflow of EUR22
million (first half 2002: cash inflow of EUR73 million), mainly due to
restructuring payments related to the Cost Alignment Program provided for at
the end of 2002. Working capital showed a slight increase of EUR9 million
compared to an increase last year of EUR49 million.
The 'dark cloud' hanging over Getronics due to the perceived financial
problems significantly negatively impacted the first quarter. DSO (Days
Sales Outstanding) in Q1 increased by 21 days. In the course of Q2 the
company took strong and focused actions leading to a DSO at June 30, 2003 of
85 days compared to 87 days last year. Since January 2002 the Company's
sliding 12 month average DSO has decreased by approximately 6 days, where
the 12 months average DPO (Days Payable Outstanding) has remained more or
less flat.
On June 27, 2003 the company agreed a term sheet for a new credit facility
with ABN AMRO, ING and Barclays. The new facility amounts to EUR100 million
and will allow the release of the Company's cash collaterals of
approximately EUR55 million. This facility will replace the revolving
credit facility announced on December 23, 2002. This new facility reflects
the potential working capital needs of the company following the
implementation of the main constituent parts of the Entrepreneurial
Solution. The facility was formalized on July 30, 2003.
GOING CONCERN
In the Company's 2002 Annual Report, released on March 25, 2003, management
concluded that there was uncertainty as to whether Getronics would be able
to continue as a going concern. As a result of the actions taken by the
company in 2003, including the divestment of non-core activities, selling
its interests in various participations and restructuring its bond debt,
management believes that such uncertainties no longer exist. The
fundamentals of the company have been re-established, creating a more stable
platform for profitable growth.
Due to the fact that the company has divested two subsidiaries that
contributed significantly to profit and cash flow, GGS in November 2002 and
GHRS in May 2003, management has decided to measure the operational and
financial performance of Getronics on an ongoing basis, restated for the two
divestures.
The quarterly breakdown of the first half-year based on actual rates shows a
depressed first quarter, mainly caused by the 'dark cloud' hanging over the
company which created many negative internal and external business effects.
Due to this exceptional impact, management will base analysis and comments
by geography as well as by line of business on the second quarter only.
Q2 2003 clearly demonstrates a serious improvement compared to both last
year and to Q1 2003. Services revenue decreased by 6% compared to Q2 2002
(constant exchange rate: 0%), however it increased per average employee by
2% (constant exchange rate: plus 10%). Gross profit on services revenue was
below last year (minus 9%), but by average employee was only slightly below
last year (0%, constant exchange rate: plus 8%).
Services revenue and gross profit (in euros and at constant rates) Taking
into account the negative impact of exchange rates, the company was able in
Q2 2003 to increase the margin on its service business per average employee
compared to last year despite price pressure as a result of the ongoing
fierce competition in the market place.
On the product business, however, the company faced serious reductions of
spend by customers. Product revenue in Q2 2003 dropped by 33% compared to
Q2 2002 and gross profit declined from 13.6% to 12%.
EBITAE resulted in 17% growth in Q2 2003 (constant exchange rate: 33%)
compared to last year or 2.1% of total revenue (Q2 2002: 1.5%). Per average
employee EBITAE increased by 27% compared to Q2 2002 (constant exchange
rate: 46%).
GEOGRAPHIC DEVELOPMENTS ONGOING
The overall market continued to be difficult for all major geographies
throughout the first half of 2003. On top of that our Asian Pacific
subsidiaries have also suffered from the impact of SARS. The general
economic climate and restricted capital expenditures caused clients to limit
their ICT expenditures and postpone investments.
Revenue was under pressure in both Q1 and Q2 compared to last year.
Services revenue in Q2 was 3% less then last year, but taking into account a
decrease of 10% in the average number of employees, this region regained
business traction. Whilst EBITAE for Q2 2003 was at the same level as last
year, EBITAE per average employee increased by 11%.
The Benelux, Central Europe, Spain and the UK performed on target in flat to
declining markets. Italy and France suffered from an extremely difficult
market environment with shrinking ICT investments and severe price pressure,
resulting in operational losses in both countries during the first half of
the year. Further cost savings and employee reductions were announced in
April and are expected to improve operational results in the course of 2004.
From the 1,400 people headcount reduction approximately 1,200 will take
place in EMEA starting in July.
Revenue in North America amounted to EUR224 million (first half 2002: EUR275
million). Services revenue in Q2 decreased by 11% compared to Q2 2002.
However taking into account the decrease of the dollar value against the
euro and the decreased number of average employees (minus 3%), Q2 2003 was
in line with Q2 2002. At constant rates services revenue in Q2 2003
increased by 7% compared to Q2 2002.
Due to reduced selling, general and administrative expenses, EBITAE
increased in Q2 by 60% compared to Q2 2002. Per average EBITAE increased by
65% compared to Q2 2002.
North America exceeded the Company's forecast in the first half year due to
a relatively strong market position, a talented pool of sales and delivery
capabilities and a satisfied client base, leading to a robust backlog.
The activities of Getronics in the Rest of the World relate to Asia Pacific
and Latin America. In these geographies the ICT market was flat to slightly
declining.
Operational performance in Asia Pacific and Latin America improved
significantly.
Brazil reported a slight operational profit compared to a loss in the first
half of 2002. Mexico continued to be slightly loss making, but is currently
profiting from its activities as near-shore software development and
infrastructure service centre for US headquartered companies. Chile and
Colombia operated in line with the Company's forecast.
The Asian Pacific countries have suffered from the impact of SARS, which
decreased customer demand but also prevented the company from performing
certain contractual obligations due to limits on our capabilities to move
resources around and into the region. Japan remains relatively stable and
in line with forecast, but the overall economic conditions continues to
influence financial performance. Australia had a reasonably strong first
half-year and exceeded the Company's target.
DEVELOPMENTS PER BUSINESS LINE ONGOING
Due to the subdued market situation, investments in new software solutions
or the integration of new infrastructure technology was limited. Services
revenue amounted to EUR959 million (first half 2002: 1,065 million) and
declined 10%. Product revenue declined substantially across all business
lines, totaling 30%.
MANAGED SERVICES ONGOING
Managed Services comprises Network and Desktop Outsourcing, which can be
performed either on site with the customer, or remotely through Getronics
Enterprise Service Centres. This business line is characterized by a high
percentage (more than 60%) of recurring services revenue through contracts
with an average length of 3 years. Due to high levels of client
satisfaction the company was able to maintain a renewal rate of more than
90%.
Although many large enterprises strive to achieve direct cost savings by
outsourcing their ICT infrastructure, this market segment is characterized
by fierce competition and ongoing price pressure. In order to safeguard
gross margins, Getronics is permanently evaluating efficiency in Managed
Services delivery through the use of offshore or nearshore Enterprise
Service Centers in countries such as Mexico, Eastern Europe and the Far
East. Services gross profit in Q2 in Managed Services amounted to 20.3% (Q2
2002: 21.4%).
INFRASTRUCTURE INTEGRATION ONGOING
Projects in Infrastructure Integration were limited and predominantly
consisted of system upgrades to extend the lifecycle of existing
infrastructures and system migrations to generate cost savings. With the
exception of investments in security, new technologies like Voice over IP
and Wireless Technology are being carefully evaluated by large enterprises,
but not yet being implemented on a large scale. Services revenue in Q2
amounted to EUR81 million compared to EUR69 million during Q2 in 2002.
BUSINESS SOLUTIONS ONGOING
The subdued market situation led to limited new software development and
integration projects. Overall services revenue in Q2 amounted to EUR107
million (Q2 2002: EUR119 million). Due to restructuring, utilization rates
slightly improved and now range from 65% to 73% depending on the country.
Gross margin amounted to 24.3% (Q2 2002: 16.8%).
KONINKLIJKE AHOLD: Shares in Argentine Subsidiary Attached
----------------------------------------------------------
Ahold has been informed by its legal counsel in Uruguay that Ahold's
objection to the attachment on the company's shares in Disco, its Argentine
supermarket subsidiary, has been denied. This attachment is the result of
legal action before a Uruguayan court by former account holders of Banco
Montevideo. Ahold is disappointed with this development. The company
intends to vigorously seek the lifting of the attachment. Ahold is
currently seeking legal advice on this matter and cannot comment further
until more is known.
CONTACT: KONINLIJKE AHOLD
Corporate Communications
Phone: +31 75 659 57 20
KONINKLIJKE AHOLD: Sells Dutch restaurant 'De Walvis' to Nestede
----------------------------------------------------------------
Ahold announced the divestment of its Dutch restaurant 'De Hoop op d'Swarte
Walvis' (De Walvis) located in Zaandam. The Nedstede Group has acquired the
restaurant through an asset sale and purchase agreement that includes
inventory and real estate. The agreement will take effect on September 8,
2003. The transaction sum was not disclosed.
The Nedstede Group is an Amsterdam-based Dutch real estate and investment
company.
All 26 associates currently working at the restaurant will transfer to the
new owner. De Walvis has been part of Ahold for several decades. The
divestment of the restaurant is part of Ahold's strategic plan to
restructure its portfolio to focus on core activities and to concentrate on
its mature and most stable markets.
LAURUS N.V.: Sells 20 Belgian Stores to Carrefour Belgium
---------------------------------------------------------
Laurus N.V. announces that an agreement has been signed with Carrefour
Belgium, which operates Supermarches GB and other stores, on the sale of 20
of the 28 Battard and Central Cash stores, which Laurus still operates in
Belgium.
Under this agreement:
(a) Laurus Belgium will continue to operate the 20 stores for the time being
under the Super GB Partner or Contact GB name. From September 2003 onwards,
they will be converted to these formats and will be operated by Laurus
Belgium until GB franchisees are nominated by Carrefour Belgium to take them
over. This exercise should be completed by April 2004. Laurus Belgium has
the possibility to sell the stores, which have not been transferred to GB
franchisees bij the end of April 2004 to GB, in case Laurus Belgium wishes
to do so.
(b) Until the stores are transferred to GB the staff will continue to be
employed by Echo SA, under the current terms of employment. In accordance
with the franchising collective labor agreement of June 30, 2003 between
Echo SA and the C.N.E. trade union, these terms of employment will remain in
force after the actual transfer to independent GB franchisees.
The agreement between Carrefour Belgium and Laurus Belgium applies to ten
Battard and ten Central Cash stores, located in Ath, Blaton, Boussu-Bois,
Ecaussinnes, Elouges, Kain, Hornu, Wasmes, Kuringen, Wervik, Andrimont,
Flemalle, Grace-Hollogne, Hamoir, Liege (Thier-a-Liege), Liege-Laveu,
Malmedy, Orp-Le-Grand, Ougree and Wellin.
Following the sale of a large proportion of its activities in Belgium to
Colruyt on April 30, 2003, as well as with this agreement, Laurus N.V. has
withdrawn from virtually all of its food retailing activities in Belgium.
This transaction represents significant progress by Laurus towards further
recovery. Negotiations on the sale of Laurus Belgium's eight remaining
stores have reached an advanced stage and further announcements will be made
as soon as possible.
This transaction has no material effect on Laurus' result or shareholders'
equity.
MILACRON CAPITAL: Moody's Lowers Rating to 'Caa1'
-------------------------------------------------
Moody's Investors Service downgraded to 'Caa1' from 'B2' the rating of
Milacron Capital Holding B.V. The action was in conjunction with the
downgrade of the ratings of its U.S.-based parent Milacron Inc.
The downgrade was prompted by Moody's mounting concern regarding the
prolonged weakness within Milacron's key end markets. The slump resulted to
a negative impact on the company's operating cash flow performance.
Milacron's total current liquidity (cash plus unused availability) has
declined by in excess of US$120 million versus estimates provided during the
preceding year.
The company's second quarter result was hit by postponement of deliveries
and competitive pricing prices.
Moody's also expressed concern about the company's capacity to refinance
more than US$300 million of debts that come due March 2004 and April 2005.
Milacron, headquartered in Cincinnati, Ohio, is a leading global supplier of
plastics-processing technologies and industrial fluids, with major
manufacturing facilities in North America, Europe and Asia.
===========
N O R W A Y
===========
PETROLEUM GEO: Tapping Linklaters as Special English Counsel
------------------------------------------------------------
Petroleum Geo-Services ASA is asking for authority from the U.S. Bankruptcy
Court for the Southern District of New York to employ and retain Linklaters
as Special English and International Coordinating Counsel.
The Debtor reports that it engaged Linklaters since September 2002.
Linklaters has served as counsel to the Debtor on myriad issues, including,
financial restructuring, international bankruptcy issues, numerous English
law matters related to the Debtor's finance agreements (primarily bank
facilities and finance leases) governed by U.K. law, and has been primarily
responsible for the coordination of legal matters relating to the Debtor's
debt restructuring initiative.
The Debtor expects that Linklaters, in its role as special counsel, will
continue to provide services to the Debtor respecting issues that arise
under U.K. law and will continue in its role as international coordinating
counsel on legal matters relating to the Debtor's proposed plan of
reorganization.
The Debtor assures the Court that Linklaters is prepared to work closely
with each professional in this case to ensure that there is no unnecessary
duplication of effort or cost. The matters that Linklaters will advise the
Debtor on are limited to issues that may arise under U.K. law. The Debtor
noted that none of the Debtor's other counsel has the background or
expertise to handle U.K. legal issues, which, as a result of the plan of
reorganization to be proposed by the Debtor, will be pertinent to the
conduct of this case. Further, Linklaters will assist in the international
coordination of legal matters implicated in this case.
Joseph Stephen Campion Windsor, a partner in Linklaters disclose that his
firm will charge the Debtor its current hourly rates, which are:
Robert Elliot Partner GBP475 per hour
Jo Windsor Partner GBP440 per hour
Bruce Bell Managing Associate GBP350 per hour
Laura Hensby Associate GBP225 per hour
Petroleum Geo-Services ASA, headquartered in Lysaker, Norway is a
technology-based service provider that assists oil and gas companies
throughout the world. The Company filed for chapter 11 protection on July
29, 2003 (Bankr. S.D.N.Y. Case No. 03-14786). Matthew Allen Feldman, Esq.,
at Willkie Farr & Gallagher represents the Debtor in its restructuring
efforts. As of May 31, 2003, the Debtor listed total assets of
$3,686,621,000 and total debts of $2,444,341,000.
===========
P O L A N D
===========
LOT AIRLINES: Passenger Traffic in First Seven Months Up 9.5%
-------------------------------------------------------------
Initial figures for the January-July period of this year show that 173
thousand more passengers flew with LOT Polish Airlines than in the previous
year. During 7 months, 1.995 million passengers chose to fly with the
national carrier, which represents a rise of 9.5% compared to last year,
even though the number of passengers on charter flights fell by 4.7%. The
growth in passenger numbers is the result of efforts by the Polish carrier
to bring its services more into line with the needs of the air transport
market, which at the moment is particularly competitive.
The best month for LOT turned out to be July. During the first month of the
holiday season, almost 403 thousand passengers flew with LOT, up more than
10% on last year. Increased passenger traffic was reflected in the company'
s improved financial results. After six months, LOT had an operating profit
(EBIT) of PLN9.1 million, and a net total profit of PLN36.11 million.
The number of passengers on international flights was 1.392 million, up
10.3% on the first 7 months of 2002. Seat load factor on international
flights was 71.1% - 1.5% more than for the equivalent period last year.
In the domestic sector LOT was able to maintain the growth trends of
previous years. Altogether, there were 422.8 thousand passengers on
domestic flights, almost 14% more than during January-July 2002. This
growth was reflected in the rise in occupancy rates - at 61.5%, 6.8% higher
than one year ago.
LOT's results are all the more impressive when viewed in the context of IATA
figures for the whole aviation industry. Although there are some signs of
improvement, the global market for air transport is still in the depths of a
recession. According to IATA figures published on August 4 this year,
passenger transport for the whole world during the first half of 2003 was 7%
down on the equivalent period last year. The largest declines were in the
American market (11%) and the Far East (15.6%). In Europe, passenger
numbers were down by 1.1%. The only growth areas were South America (+ 9.3%)
and the Middle East (+5%).
STOCZNIA GDYNIA: Reaches Settlement with Creditors
--------------------------------------------------
Stocznia Gdynia shipyard successfully reached a restructuring settlement for
PLN423 million of debts, according to The Warsaw Voice.
Under the plan, Gdynia promised to repay creditors all liabilities without
interest, and to pay them in installments spread out over one to four years.
The agreement is still subject to further approval by creditors holding over
50% of the total amount of liabilities.
The settlement enables the shipyard to obtain a State Treasury guarantee for
loans for the construction of ships worth a combined PLN810 million. The
present portfolio of orders for 34 ships is worth US$1.4 billion.
Gdynia Shipyard lost its prestigious role in Poland's transition to a market
economy due to depressed shipping market and unfavorable currency rates.
For the past year, it has been unable to pay its employees' wages on time.
In May, TCR-Europe said the shipyard's commercial liabilities amounted to
almost PLN 400 million.
CONTACT: GDYNIA SHIPYARD GROUP
C/o. Polservice Sp. z o.o.
Poland-Warsaw
Embassy of the Republic of Poland Camp
50M, Shantipath, Chanakyapuri
New Delhi - 110 021, India
Phone/Fax: 91-11-6889181
STOCZNIA GDYNIA: Debt Restructuring Has No Merit, Suppliers Say
---------------------------------------------------------------
Suppliers of Stocznia Gdynia were not entirely pleased that the shipyard was
able to reach agreement with creditors regarding its liabilities, according
to Warsaw Business Journal.
The restructuring of its debts, which would enable it to pay all liabilities
below PLN10,000 by the end of the year, also means the suppliers are likely
to receive monies owed in three year's time.
But Marek Kaminski from Gdynia-based Klimor, producer of air conditioning
equipment for the shipping sector, said: "The financial situation of
Stocznia Gdynia's creditors has not changed despite the agreement between
the shipyard and creditors. We are in a difficult situation and we are
continuing to run our business thanks to our other clients."
The news only keyed up its other supplier, Elmor. Stocznia Gdynia has
launched the transfer of financial resources for equipment for one of the
ships ordered last year and work has already restarted.
===========
S W E D E N
===========
OM AB: To List Shares on Helsinki Exchanges Prior to HEX Merger
---------------------------------------------------------------
OM Aktiebolag has decided to apply for listing of the OM shares on the main
list of the Helsinki Exchanges and has submitted a listing application to
the Helsinki Exchanges. The listing of the OM shares on the Helsinki
Exchanges relates to the combination of the Swedish company OM and the
Finnish company HEX Plc and is subject to the completion of OM's offer to
the shareholders and warrant holders of HEX Plc. The intention is that
trading in the OM shares would commence on or about September 4, 2003.
OM is a world-leading provider of transaction technology to the financial
services and energy industries. Developing and marketing IT solutions that
boost the efficiency of markets worldwide, OM has over 300 customers in 20
countries. OM also owns and operates exchanges and clearing organizations
and has operations in 10 countries. OM is listed on Stockholmsborsen.
For more information please visit http://www.om.com
*****
OM AB revealed in its interim report for January to June 2003 loss after
financial items of SEK521 million, operating loss of SEK513 million, and
loss after tax of SEK457 million.
It is implementing a cost reduction program, which is estimated to lower the
company's costs by SEK578 million and result in lower revenues of SEK105
million on a yearly basis. These measures aim to achieve sound
profitability and create a stronger company in preparation for the merger
with HEX.
CONTACT: OM AB
Jakob Hakanson
Vice President, Investor Relations
Phone: +46 8 405 60 42
SCANDINAVIAN AIRLINES: More Jobs to go in Cost-cutting Drive
------------------------------------------------------------
Scandinavian airline group SAS, which recently announced it expected cash
flow to be positive in the second half of the year, has reportedly required
subsidiaries Braathens and Wideroe to cut nearly a billion Swedish crowns in
costs by the end of 2004. This means hundreds of jobs will be slashed in
addition to the 1,500 jobs that have already been cut, Norway's Aftenposten
reported.
Concurrent to the group's aim of reducing costs by SEK13-14 billion by 2005,
SAS has also called to its subsidiaries to save SEK900 million. To this
effect, Wideroe expects to drop several of its routes and shed about 100
jobs. It is not mentioned how Braathens will go about with the cost-cutting
aim.
Braathens has been losing income since going over to longer routes, with a
corresponding drop in profit per passenger of 19%. It posted a pre-tax loss
of NOK16 million in the first half of the year, compared to a profit of
NOK372 million for the same time period the year before.
In a news conference conducted after the group announced its second quarter
report, SAS Chief Executive Joergen Lindegaard has promised that the ailing
Scandinavian airline would turn a profit in 2004. But to do this it must
axe hundreds of employees.
"The saving programs will involve redundancy for the 6,000 SAS employees
affected by the existing cuts," SAS Deputy Director Gunnar Reitan.
CONTACT: SAS GROUP
Investor Relations
Sture Stoelen
Phone: +46 8 797 14 51
E-mail: investor.relations@sas.se
SKANDIA: Credits Restructuring for Improved First-half Results
--------------------------------------------------------------
On May 1, 2003 it was announced that the agreement with Prudential
Financial, Inc. (USA) concerning its acquisition of American Skandia has now
been completed. For the sake of comparison, all information in this interim
report pertains to operations excluding the USA, unless otherwise indicated.
SECOND QUARTER 2003
A. BUSINESS DEVELOPMENT
(a) Sales amounted to SEK19,449 million (19,513). Sales rose 8% in local
currency. The sales increase contributed to an improvement in the profit
margin, to 13.8%.
(b) Compared with the first quarter of 2003, sales rose 13% in local
currency.
(c) New sales rose 11% in local currency.
B. OPERATING RESULT according to the embedded value method
(a) The group's operating result according to the embedded value method was
SEK1,034 million (1,662), including SEK499 million in financial effects
(-792). The operating result includes -SEK93 million in items affecting
comparability (2,016).
C. RESULT according to Swedish GAAP
(a) The result before tax was -SEK141 million (1,854). The result
includes -SEK93 million in items affecting comparability (2,016).
FIRST HALF 2003
A. BUSINESS DEVELOPMENT
(a) Sales amounted to SEK37,142 million (38,549). Sales rose 3% in local
currency.
(b) New sales of unit linked assurance decreased by 5%.
(c) The net inflow in funds under management was SEK22.1 billion (22.8).
B. OPERATING RESULT according to the embedded value method. The group's
operating result according to the embedded value method was SEK1,157 million
(2,222). The operating result includes
-SEK93 million in items affecting comparability (2,016).
(a) Financial effects were positive, at SEK216 million (-913).
(b) The profit margin for newly written unit linked assurance business for
the year rose to 13.7% (13.0%).
C. RESULT according to Swedish GAAP
(a) The result before tax was SEK23 million (2,328). The result
includes -SEK93 million in items affecting comparability (2,016).
(b) Earnings per share were -SEK0.04 (1.99).
(c) The return on shareholders' equity was 3% (8%). Excluding items
affecting comparability, the return was 6% (10%).
D. CASH FLOW AND BALANCE SHEET
(a) Cash flow from operating activities amounted to -SEK1.1 billion
(-SEK0.4), in part due to the rise in sales.
(b) Borrowings decreased by SEK5.4 billion, to SEK4.2 billion. After
deduction for liquid assets, borrowings amounted to SEK1.9 billion, net.
(c) Net asset value was SEK27,025 million (27,033 at year-end 2002).
(d) Shareholders' equity amounted to SEK14,562 million (15,238 at year-end
2002).
Comments by Leif Victorin, President and CEO:
(a) The first half of 2003 started out in the shadow of dramatic global
events and ended with a second quarter of dawning optimism. Although the
markets are still weak and uncertain on the whole -- with customers bracing
a wait-and-see attitude -- several of Skandia's units were able after a slow
start to the year to report steadily improving sales figures during the
spring and summer. In addition, funds under management have now returned to
their previous, high levels.
(b) Sales in the U.K. picked up during the spring and margins improved.
Bankhall strengthened its leading position as a distribution network. In
other respects, the focus is on achieving lasting cost reductions.
(c) In Sweden, further cost-cutting measures are being taken in addition to
the savings targets that have been previously reported and achieved. Sales
were weak during the first half of the year, although they gained momentum
in June.
(d) On the European continent, Skandia continues to strengthen its sales and
market positions while maintaining profitability. Sales on the continent
rose 20% in local currency during the second quarter of 2003 compared with
the first quarter of 2003, and in Germany Skandia is now the fourth-largest
player in the unit linked market.
(e) On the initiative of Skandia's board, during the spring the company
reviewed existing strategies, plans, policies, markets and products in the
aim of either confirming or changing them. The first phase of this work has
now been concluded and is being incorporated into the ordinary operating
activities.
(f) The review has indicated that Skandia's strategy -- to provide safe,
competitive products to the growing market for long-term savings -- is on
target in all essential respects, even though some adjustment to the current
reality is needed with respect to focuses, products, ambitions and
organization. This adjustment process is now in full swing, and the
watchwords are greater profitability, more efficient use of capital, greater
customer orientation and continued cost-cutting.
(g) The review has also covered the group's policies and work routines in
most areas -- ranging from ethics and compensation policies to risk
management and profitability assessment. In many cases this has resulted in
tightened policies, stronger follow-up routines and improved clarity.
(h) The previously announced cost-cutting program of SEK1 billion has now
been carried out. A new, extensive savings program has been started and is
scheduled for completion in 2004.
(i) On the whole this work will lead to a better balance in the group's
products and markets -- between risk and price and between profitability and
capital requirement. We are strengthening our control and monitoring
systems and we have a strategy that is geared to sustained, profitable
growth through our own strength. In my view we are thus well poised for
2004.
=====================
S W I T Z E R L A N D
=====================
SWISS INTERNATIONAL: To Entertain OneWorld Invitation
-----------------------------------------------------
Andre Dose, Swiss chief executive, and Rod Eddington, his counterpart in
British Airways are expected to hold talks in London today regarding a
potential cooperation leading to the Swiss carrier's membership in OneWorld
global airline alliance. The meeting follows negotiations started last
week.
The parties are discussing a possible bilateral deal that would concern
code-sharing, selling seats on each other's flights, as well as
collaboration on frequent flyer programs and the sharing of facilities such
as airport lounges, according to the Financial Times.
Swiss, which is seeking to draw up a rescue plan in the wake of continuing
heavy losses, is also understood to have held talks with Lufthansa on
joining rival Star Alliance. The German airline had since then insisted it
has no plans of taking an equity stake in Swiss as part of a rescue package.
British Airways also ruled the same, although they might embark on operating
joint venture routes between the U.K. and Switzerland later, the report
said.
===========================
U N I T E D K I N G D O M
===========================
BRITISH AIRWAYS: Suspends Saudi Flights on Security Concerns
------------------------------------------------------------
British Airways has suspended until further notice its flights to Saudi
Arabia due to heightened security concerns in the region.
This decision follows discussions earlier between the airline and the
British government's Department for Transport.
Geoff Want, the airline's director of safety and security, said, "As a
matter of precaution we have decided to suspend all flights to Saudi Arabia
for the time being and we will continue to liaise closely with the British
government."
British Airways cancelled its flights from London Heathrow to both Riyadh
and Jeddah on Wednesday.
*****
British Airways recently reported pre-tax loss of GBP45 million and
operating profit of GBP40 million. Revenues were down 10.7% versus GBP1.8
billion last year.
CORUS GROUP: Plans to Offload North American Distribution Biz
-------------------------------------------------------------
Corus plans to sell a significant portion of its North American distribution
business, and has appointed Lehman Brothers to advise it on the disposals,
according to the Financial Times.
The troubled Anglo-Dutch steelmaker intends to offload the underperforming
operation by the first quarter of next year, the report said. The move is
aimed at reducing debt the company's debt and finance the group's U.K.
restructuring.
Corus could raise between US$50 million and US$100 million from the sale of
the business, analysts said, according to the report. The amount could ease
a bit the GBP250 million costs of the first wave of restructuring.
An analyst at JP Morgan, however, said Corus, which entered the North
American market at the top of the economic cycle, could end up losing about
half of its original investment.
The North American division comprises two service center companies, Corus
Coil Products and Corus Metals, as well as Corus Metals Profiles, a maker of
light framing products for the construction sector. The business had
turnover of about GBP74 million (US$124 million) last year, and employs 340
people at 17 locations across Canada and the U.S.
The disposal will leave Corus with only its sales and marketing team, Corus
America Inc., and interests in some steel and aluminum product manufacturing
plants in the region.
The disposal could pave the way for further non-core disposals, according to
the report.
Corus is also selling its share in the Tuscaloosa steel mill in Alabama.
GOLDEN WONDER: To Close One Factory, Lay off 375 Employees
----------------------------------------------------------
Savory snacks company Golden Wonder is set to close one of its three UK
production sites with the loss of 375 jobs as sales of own-brand crisps
fall.
The Financial Times said the company is running at a loss and is planning to
close the site in Skelmersdale, Lancashire, which produces 33% of Golden
Wonder's total annual crisps production. The report cited the group saying
demand has fallen by 40% over the past five years as consumers switched to
independent crisp brands and alternative snacks.
Golden Wonder chief executive Ed Jackson said: "The planned closure of the
Skelmersdale site comes after long and detailed consideration of Golden
Wonder's manufacturing operation in which every possible option has been
explored."
"We will be working closely with employees and the representatives
throughout the consultation process, seeking to explore ways in which we can
mitigate the impact of the planned closure," he added.
Golden Wonder is U.K.'s third largest supplier of crisps and snacks and the
largest supplier of supermarket-branded crisps and snacks.
CONTACT: Golden Wonder Ltd
Edinburgh House
1 Abbey Street
Market Harborough
Leicestershire, LE16 9AA
Phone: 01858 410410
JOHNSON SERVICE: Disposes Loss-making Johnsons Washroom Services
----------------------------------------------------------------
Johnson Service Group PLC announces that it has disposed of the business and
specified assets of Johnsons Washroom Services Limited to PHS Group plc for
a consideration of GBP13.7 million in cash, less a retention of GBP0.5
million to reflect the anticipated level of working capital and other
adjustments at completion. The proceeds from this disposal will be used to
reduce borrowings.
JWS, which operates Johnson's washroom services business in Great Britain,
has grown organically and by acquisition from its inception.
Turnover and loss before tax of JWS in 2002 were GBP5.2 million and GBP0.8
million respectively and net assets including goodwill at December 2002,
which are the subject of the transaction, were GBP8.7 million.
The Board concluded that, although growth is achievable in this business, it
will take considerable time and investment to reach the critical mass
required to maximize profitability. The disposal of JWS enables the Group
to concentrate its resources on its present and primary activities, which
have been comprehensively reviewed by the new Chief Executive, Stuart
Graham, and on the future development of the Group.
On August 11, 2003 the Group disposed of Connacht Court Group Limited. The
total proceeds from the disposal of Connacht Court Group and JWS amount to
over GBP27 million.
Johnson's results for the first half of 2003 are due to be announced on
Friday September 19, 2003.
Commenting on the disposal, Stuart Graham, CEO of Johnson said: "Washroom
Services is a high growth area for companies who have pure focus, a strong
existing market share and resources. We were late entrants to this market
and though well managed latterly the business only reached operational
breakeven in August 2002. The double-digit margin expectation for December
2003 would have required disproportionate effort with significant cash to
sustain. Washroom Services would have continued to be small in size
relative to the Group's main activities.
"My comprehensive review of the business completed during the Spring allowed
for close analysis of all our companies. This in turn led to these disposal
decisions that will benefit our Group in the medium and long term which are
the natural extension of the short term actions already seen and taken this
year."
Notes to Editors:
Johnson is the U.K.'s market leader in workwear textile rental and the
nation's leading retail drycleaner. Other principal activities include the
manufacture and sourcing of garments.
Johnsons Cleaners, the dry-cleaning business, has approximately 500 units
throughout Britain with a relatively small presence in Greater London and
the South East of England.
The acquisition by Johnson of Jeeves of Belgravia 'London's Finest Dry
Cleaners' was announced on May 12, 2003.
On August 11, 2003 the Group disposed of Connacht Court Group Limited, its
textile rental business in the Republic of Ireland.
CONTACT: JOHNSON SERVICE GROUP PLC
Stuart Graham, CEO
Phone: 0151 933 6161
Mike Sutton CFO
HUDSON SANDLER
Wendy Baker
Phone: 020 7796 4133
LONDON FORFAITING: FIMBank Obtains Acceptances for 64% of Shares
----------------------------------------------------------------
The Board of the company notes the announcement by FIMBank, that as at 3.00
p.m. on August 12, 2003 valid acceptances of the Offer had been received
from the holders of, in aggregate, 67,040,410 London Forfaiting Shares
representing approximately 64.0% of the London Forfaiting Shares to which
the Offer relates.
The Board continues to recommend acceptance of the Offer made by FIMBank on
July 22, 2003. The revised closing date for the Offer from FIMBank is 3.00
p.m. on August 19, 2003.
In the event that Resurge PLC indicates a firm intention to make an offer
for the company, the Board will re-assess its recommendation in the
prevailing circumstances.
Shareholders who are in any doubt about the action they should take should
consult immediately their stockbroker, bank manager, solicitor, accountant
or other independent financial advisor authorized under the Financial
Services and Markets Act 2000.
CONTACT: LONDON FORFAITING
Phone: 020 7481 3410
Jack Wilson / Stathis Papoutes
KINMONT
Phone: 020 7493 8488
Gavin Kelly / Fraser Shand
HOGARTH PARTNERSHIP
Phone: 020 7357 9477
Nick Denton / Andrew Jaques
*********
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.
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