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/raid1/www/Hosts/bankrupt/TCREUR_Public/030819.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 Tuesday, August 19, 2003, Vol. 4, No. 163 Headlines I T A L Y ELAN CORPORATION: EPIL Note Holders Extend Waivers to Friday L U X E M B O U R G MILLICOM INTERNATIONAL: Buys Back US$57 Mln of 11% Senior Notes N E T H E R L A N D S BUHRMANN N.V.: PaperlinX Pursues Bid for Paper Merchanting Arm N O R W A Y PETROLEUM-GEO: Has Until Sept. 27 to File Schedules & Statements R U S S I A METROMEDIA INTERNATIONAL: Announces Delay in Filing Form 10-Q OJSC VOLGATELECOM: Assigned Corporate Governance Score of 5.8 S W I T Z E R L A N D ABB LTD.: Inks US$21 Million Contract with Chinese Steelmaker JULIUS BAER: First-half Operating Profit Down 40% Year-on-year SWISS LIFE: Sells U.K. Unit for Undisclosed Amount U N I T E D K I N G D O M AILSA DRYDOCK: In Liquidation for Second Time in Three Years BRITISH AIRWAYS: Engineers to be Balloted on Latest Pay Offer AORTECH INTERNATIONAL: Italian Distributor Threatens Lawsuit BV GROUP: To be Delisted from AIM Effective September 15 EDINBURGH FUND: Cuts Ties with Edinburgh Small Companies Trust EDINBURGH SMALL: Hires Standard Life as New Investment Manager LONDON FORFAITING: Resurge Not Offering Cash, Only Share Swap LONDON FORFAITING: FIMBank Says Offer is Better than Resurge's NORWOOD INTERIOR: Joint Administrators Offer Business for Sale SHOPFITTERS: For Sale on Continuity of Trading Basis TELEWEST COMMUNICATIONS: Finance Director Mark Luiz to Resign * Large Companies with Insolvent Balance Sheets ********* ========= I T A L Y ========= ELAN CORPORATION: EPIL Note Holders Extend Waivers to Friday ------------------------------------------------------------ Elan Corporation, plc (ELN) announced that it has sought and received additional agreements from a majority of the holders of the guaranteed notes issued by Elan's qualifying special purpose entities, Elan Pharmaceutical Investments II, Ltd. (EPIL II) and Elan Pharmaceutical Investments III, Ltd. (EPIL III). The agreements extend to August 22, 2003, the EPIL II and EPIL III note holders' waivers of compliance by Elan with certain provisions of the documents governing the EPIL II and EPIL III notes that required Elan to provide the note holders with Elan's 2002 audited consolidated financial statements by June 29, 2003. The waivers had previously been set to expire August 15, 2003. Elan paid an aggregate fee of approximately US$2.1 million to all EPIL II and EPIL III note holders in connection with the waivers. In accordance with the agreements governing the EPIL II and EPIL III notes, the fee was paid on a pro-rata basis to each holder of EPIL II and EPIL III notes, regardless of whether any such holder consented to the waivers. Elan and its auditor, KPMG, are currently working to conclude all audit related issues and matters in order to complete Elan's 2002 Form 20-F as soon as practicable. However, Elan cannot provide any assurances as to the timing of the completion and filing of the 2002 Form 20-F. Elan is focused on the discovery, development, manufacturing, sale and marketing of novel therapeutic products in neurology, pain management and autoimmune diseases. Elan shares trade on the New York, London and Dublin Stock Exchanges. CONTACT: ELAN CORPORATION, PLC Investors: Jack Howarth (U.S.) Phone: 212-407-5740 917-518-9933 Emer Reynolds ((Europe) Phone: 353-1-709-4000 00800 28352600 =================== L U X E M B O U R G =================== MILLICOM INTERNATIONAL: Buys Back US$57 Mln of 11% Senior Notes --------------------------------------------------------------- Millicom International Cellular S.A. (Nasdaq Stock Market: MICC), the global telecommunications investor, announces that it has repurchased US$57 million of its 11% Senior Notes due 2006 and will submit these notes to the Trustee for the 11% Notes for cancellation. The notes were offered to and purchased by Millicom in private transactions. Millicom now plans to request the Trustee to select an additional US$110 million of the 11% Notes for redemption. The Trustee will then notify the holders of the 11% Notes accordingly. Marc Beuls, President and CEO of Millicom International Cellular S.A. commented: "Millicom completed a Mandatory Exchangeable Bond offering on August 7, 2003 and Millicom has used part of the proceeds to retire high yield debt, following the repayment of its debt facility with Toronto Dominion Bank and the prepayment of interest for the Exchangeable Bond. These transactions are part of the ongoing process to reduce the cost of Millicom's debt." ===================== N E T H E R L A N D S ===================== BUHRMANN N.V.: PaperlinX Pursues Bid for Paper Merchanting Arm -------------------------------------------------------------- PaperlinX, Australia's biggest paper maker is pursuing its proposed takeover of the Paper Merchanting arm of Buhrmann, the world's leading provider of office products. "The process has taken longer than originally anticipated but considering Buhrmann's business size and its many operating units in different countries that's not hard to understand," said PaperlinX Managing Director Ian Wightwick, according to the Financial Times. The Melbourne-based company revealed that the due diligence for the planned acquisition, announced in June, was still to be completed. It expects the move to be earnings positive in the first year, despite the Dutch office equipment company's recent weak performance and general market malaise, according to the report. Full-year net profits of Paperlinx increased 7% from AU$123 million to AU$132 million (US$81 million to US$87 million), but the company said profit growth is constrained by cheaper imported copy paper, low international demand and the appreciating Australian dollar. "The final price paid for any acquisition must meet our criteria of achieving a 15% return by the end of year three and must be [earnings per share] positive in the first year," Mr. Wightwick said. PaperlinX was asking EUR746 million (US$840 million), which was too high, according to analysts. The parties have yet to agree on the final price. Burhrmann will use the net proceeds of the transaction, currently estimated at EUR650 million, to repay debt. =========== N O R W A Y =========== PETROLEUM-GEO: Has Until Sept. 27 to File Schedules & Statements ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave Petroleum Geo-Services ASA an extension of the deadline to file its schedules of assets and liabilities, statements of financial affairs and lists of executory contracts and unexpired leases required under 11 U.S.C. Sec. 521(1). The Debtor has until September 27, 2003 to file the required documents with the Court. 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. =========== R U S S I A =========== METROMEDIA INTERNATIONAL: Announces Delay in Filing Form 10-Q ------------------------------------------------------------- Metromedia International Group, Inc. (OTCBB:MTRM - Common Stock and OTCBB:MTRMP - Preferred Stock), the owner of interests in various communications and media businesses in Russia, Eastern Europe and Georgia, announced Friday that it has finalized the post-closing audit process associated with the sale of Snapper, Inc. and has reached agreements by which the company will receive an additional US$6.0 million in sale proceeds. The company expects receipt of this final cash payment within the next few business days. As announced on November 27, 2002, the day of the preliminary close and funding of the Snapper sale, the company received US$15.6 million from the purchaser, Simplicity Manufacturing, Inc. With the receipt of the additional US$6.0 million post-closing payment, the aggregate and final sale proceeds from the sale of Snapper will be US$21.6 million. Snapper manufactures premium-priced power lawnmowers, garden tillers, snow throwers, utility vehicles and related parts and accessories. The company also announced today that it has not filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2003 with the United States Securities and Exchange Commission at this time, but anticipates that the filing of the Form 10-Q will be made by no later than mid-September 2003. In making these announcements, Ernie Pyle, Senior Vice President and Chief Financial Officer of the Company, commented: "With the receipt of US$6.0 million in final Snapper sale proceeds, the company will have unrestricted cash reserves in excess of US$30.0 million at the headquarters level. We expect that these cash reserves will enable the company to fund operations and service its 10 1/2% $152.0 million senior discount notes for at least the next twelve months. Further, as stated in our recent SEC filings, we believe that future dividend flows from our core telephony businesses in Russia and Georgia will comfortably cover our operating overheads and debt service obligations next year and beyond." With respect to the delay in filing the company's second quarter Form 10-Q, Mr. Pyle further commented: "As stated in our annual report on Form 10-K, we substantially downsized the company's supporting staff during the first half of 2003 as part of our effort to resolve long-standing liquidity problems. This action and other parallel measures have produced the satisfactory liquidity position the company now enjoys. However, we have not yet fully completed reorganization of the company's internal processes around the now much reduced staff levels and this still limits our speed of response in certain areas. Our delay in filing the second quarter Form 10-Q is an example. We anticipate that we will complete our internal reorganizations over the coming three to four months and when complete, we expect to resume timely filing of future financial reports with the SEC." About Metromedia International Group Through its wholly owned subsidiaries, the company owns communications and media businesses in Russia, Eastern Europe and Georgia. These include mobile and fixed line telephony businesses, wireless and wired cable television networks and radio broadcast stations. The company has focused its principal attentions on continued development of its core telephony businesses in Russia and Georgia, while undertaking a program of gradual divestiture of its non-core media businesses. The company's non-core media businesses are comprised of seven cable television networks, including operations in Russia, Romania, Belarus, Moldova, Lithuania and Georgia. The company also owns interests in seventeen radio businesses operating in Finland, Hungary, Bulgaria, Estonia, Latvia and the Czech Republic. The company's core telephony businesses include Peterstar, the leading competitive local exchange carrier in St. Petersburg, Russia, and Magticom, the leading mobile telephony operator in Georgia. Please visit our website at http://www.metromedia-group.com CONTACT: METROMEDIA INTERNATIONAL GROUP, INC. Ernie Pyle Phone: 212-527-3800 OJSC VOLGATELECOM: Assigned Corporate Governance Score of 5.8 ------------------------------------------------------------- Standard & Poor's Governance Services said it assigned a corporate governance score of 'CGS-5.8' to Russia-based fixed-line telecommunications service provider OJSC VolgaTelecom. Standard & Poor's believes that governance practices at VolgaTelecom are above average for Russian fixed-line telecoms operators. "Although the company is focused on strengthening its governance procedures, there is still considerable room for improvement," said Julia Kochetygova, director of Standard & Poor's Governance Services. "There are substantial governance weaknesses arising from negative aspects of the influence exerted by the majority shareholder and the limited influence of the minority shareholders and independent directors." In 2002, VolgaTelecom merged with 10 other telecoms operators in the Volga region of Russia as part of a consolidation of the telecoms industry's 70-plus operators into seven panregional companies. Although the company's major framework has not changed, its governance structure has undergone certain alterations. The overall CGS on VolgaTelecom is a result of four component scores on a scale of 1 (low) to 10 (high): (a) Ownership structure and influence: 5.8 (b) Financial stakeholder rights and relations 6.5 (c) Financial transparency and information disclosure 5.5 (d) Board structure and process 5.3 The ownership structure and influence component reflects the fact that the beneficial owners of 57.4% of the common shares are identified, but that there are too few details about other holders. In particular, more than 30% of the votes are represented by nominee owners. This component score is further constrained by the company's limited commercial freedom, the high degree of regulatory influence, and the varying influence of the state telecoms holding company Svyazinvest. For example, Svyazinvest imposes transactions on the company often without tender procedures and with limited economic rationale. On the other hand, Standard & Poor's notes the proactive policy of the company's CEO in protecting the interests of the company and its shareholders. In the area of financial stakeholder relations, all major shareholder rights appear to be respected and shareholder meeting procedures are clearly articulated and observed. Svyazinvest's indirect control of the company's share registrar means it cannot be regarded as fully independent, however, and is therefore a negative governance feature. Furthermore, in terms of financial rights, some of the decisions imposed by Svyazinvest cannot be viewed as being in the best interests of all other shareholders. In addition, there is a lengthy dividend payout period, which may lead to the unfair treatment of shareholders. VolgaTelecom's standard of financial transparency and information disclosure is moderate. The score is supported by the company's distribution of International Accounting Standard financial reports since 2001, but constrained by their delayed publication. The absence of English-language disclosure is another negative factor. There is no transparency with regard to auditor fees at VolgaTelecom and intermediate entities affiliated with VolgaTelecom and other Svyazinvest subsidiaries, and there is no audit committee to oversee the auditor's independence. The company does not disclose executive and director remuneration, which is viewed very negatively. VolgaTelecom's board structure and process component score reflects the high level of participation by Svyazinvest, balanced by the involvement of minority shareholders. Three out of 11 board members can be regarded as active independent directors, although, with no dedicated control committees, these minority directors have limited ability to influence company policies. The lack of specified economic rationale for some of Svyazinvest's proposals, often approved over the objections of the independent directors, are a governance weakness. Positive governance features include an increased focus on efficient executive remuneration policies, although there is room for improvement. At the same time, however, remuneration of directors focuses heavily on short-term performance. In addition, senior executive compensation, including that of the CEO, is not disclosed. ***** In February, Standard & Poor's Ratings Services raised its long-term corporate credit ratings on Russian telecommunications services provider JSC VolgaTelecom to 'B' from 'B-' following the merger of VolgaTelecom with 10 other fixed-line incumbents in the Volga region that are controlled by the state-owned holding Svyazinvest. The new company is expected to "benefit from its larger scale by receiving better terms from vendors of telecommunications equipment and other economies of scale," according to Standard & Poor's credit analyst Pavel Kochanov. But weakness in this enlarged service area is expected to offset these benefits, to some extent. The rating agency also warns that the company faces the challenge of consolidating its mobile assets. ABB LTD.: Inks US$21 Million Contract with Chinese Steelmaker ------------------------------------------------------------- ABB, the leading power and automation technology group, said that it has signed two contracts totaling US$21 million with Ningbo Baoxin Stainless Steel Company of China. ABB's technology will support the development of the world's largest stainless steel processing lines, and help Baoxin to more than double production. "We are delighted that Baoxin has turned to ABB for world-class metals processing solutions," said Dinesh Paliwal, head of ABB's Automation Technologies division. "We have enjoyed exceptional success in this area over the past few years, and our strong local expertise should help the Baoxin project to become yet another milestone for the stainless steel industry in China." ABB will provide equipment and systems to help develop the largest hot and cold annealing and pickling lines in the world, as well as state-of-the-art rolling mills at the Ningbo plant, near Shanghai. ABB will supply specialized technologies for rolling, flatness control and metal conditioning, plus process control products, drives and motors. ABB in Germany and China will cooperate on the projects, which are planned for completion within two years. The work will support Baoxin's drive to boost its current annual output of 300,000 tons of finished product to 700,000 tons. ABB has already designed, engineered and commissioned a complete annealing and pickling line for another part of the Ningbo facility, as well as providing other specialized equipment and technologies. ABB is the world leader in supplying rolling mill processing lines for the stainless steel industry. ABB (http://www.abb.com)is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impacts. The ABB Group of companies operates in around 100 countries and employs about 133,000 people worldwide. ***** Standard & Poor's recently said: "ABB's core Automation Technologies and Power Technologies divisions demonstrated a solid performance in a difficult trading environment, with satisfactory order intake, continued earnings improvement as a result of restructuring activities, and a sound generation of cash flows supported by seasonal working capital movements. "At group level, the strong operating cash flows from the core divisions were, however, offset by still high corporate expense, poor performance of the Building Systems unit, restructuring costs, and settlement payments for the group's asbestos Combustion Engineering Settlement Trust." CONTACT: ABB LTD. Investor Relations Switzerland Phone: +41 43 317 3804 Sweden Phone: +46 21 325 719 USA Phone: + 1 203 750 7743 Fax: +41 43 317 7958 E-mail: investor.relations@ch.abb.com ===================== S W I T Z E R L A N D ===================== JULIUS BAER: First-half Operating Profit Down 40% Year-on-year -------------------------------------------------------------- The Julius Baer Group increased its assets under management by 7% to CHF114 billion from the December 2002 level, spurred by the market recovery that began in the second quarter as well as a notable inflow of new money. Operating income fell by 18% owing to the demanding market environment, while operating expenses were reduced by 11% despite one-time special charges. The cost-cutting targets announced in spring will be largely achieved in the second half of the year. The measures to sustainably improve profitability, such as the withdrawal from brokerage and the general capacity adjustments, had a non-recurring negative impact of CHF80 million on the half-year results. Net profit thus declined to CHF16 million. Thanks to the focus on core competencies and the promptly implemented cost-cutting measures, Julius Baer looks confidently to the future. "On a positive note, we were able to boost the operating result from CHF82 million in the second half of 2002 to CHF92 million in the first six months of 2003. We are convinced we will be able to continue this favorable trend in the second half of the year, especially in view of our strict cost management and focus on our strengths," remarks Walter Knabenhans, CEO of the Julius Baer Group, regarding the half-year results. As a result of performance-driven appreciation and a net inflow of CHF1.6 billion of new money in the first half of 2003, assets under management of the Julius Baer Group (excluding Global Custody) were up by 7% to CHF114 billion from the 2002 year-end level of CHF106.5 billion. With CHF59 (55) billion, Private Banking accounted for just over half of the total assets, followed by the investment funds with CHF29 (27) billion and the institutional mandates with CHF24 (23) billion. Lower transaction volume impacts the income side Operating income was down by 18% to CHF502 million compared to the first half of 2002, owing mainly to an approximate 10% drop in average assets under management as well as to particularly weak transaction volumes in the first quarter. Private Banking accounted for CHF205 million or 41% of operating income, while Asset Management (including the investment funds) contributed CHF119 million or 24%. Net interest income, which accounted for a constant 13% of operating income, decreased by 23% to CHF63 million due to the sharply lower interest rate level. Results from commission and service fee activities declined by 21% to CHF354 million, and this trend was mainly attributable to lower income on securities and investment transactions. The drop in asset-value-related commissions from asset management and investment by 16% to CHF295 million reflects the development of average assets under management, which were 10% lower than in the first half of 2002. Transaction-related commissions receded by 25% to CHF133 million, mainly because of lower commissions from institutional brokerage. Results from trading operations were down by 4% to CHF64 million. Whereas income from foreign exchange trading climbed by 10% to CHF55 million, income from securities trading declined by 46% to CHF9 million. The increase in other ordinary results by 18% to CHF21 million was largely attributable to the release of loan-related provisions no longer required. Continuing cost management yields success The ongoing cost cutting measures in the first half of the year showed initial results, trimming operating expenses by 11% to CHF385 million. This figure includes CHF21 million of personnel and other operating expenses for implementation of the latest streamlining measures announced in spring, which were charged completely in the first half of the year as one-time extraordinary expenses. The full cost-saving effect, especially with respect to personnel expenses, will be felt as of next year. Despite the one-time added costs, personnel expenses dropped by just under 10% to CHF263 million in view of the 7% reduction in the number of employees to 2,171 (2,324). Other operating expenses receded by 14% to CHF122 million. Gross profit decreased by 36% to CHF117 million. Whereas depreciation and write-offs of non-current assets sank by 12%, the accruals for valuation adjustments, provisions and losses remained nearly stable at CHF7 million. Operating profit fell by 40% to CHF92 million versus the first half of 2002. Compared to the second half of last year, however, the operating result rose by 12%. This positive development was offset by CHF55 million of restructuring expenses related to the sale of the brokerage business to Lightyear Capital, which were charged in the first half of 2003. Net profit thus came to CHF16 (118) million. In the first half of the year, Julius Baer took various measures to sustainably improve the profitability of the Julius Baer Group. These actions involved one-time expenses to some extent, which severely weighed down the result by approximately CHF80 million. In view of the non-recurring nature of these measures, the distribution of profit and especially the dividend policy should fundamentally continue to be geared to the operating result. By taking this stance, the Julius Baer Group is simultaneously underscoring its confidence that it is well prepared for the challenges of the future. Equity base remains as strong as ever The balance sheet total grew by 35% to CHF16.8 billion in the first half of the year. Shareholders' equity amounted to CHF1.47 billion. The high equity capital ratio according to BIS guidelines (BIS Tier 1 ratio) of approximately 20% continues to highlight the financial strength of the Julius Baer Group. This figure still exceeds the legal requirements for banks in Switzerland as well as the guidelines of the Bank for International Settlements by a wide margin. The 2003/2004 share buyback program, authorizing repurchases up to a maximum of CH 65 million, is proceeding as planned. This underscores the firm's intention to actively manage its equity base over the long term. Up to June 30, 2003, 59,000 bearer shares with a total market value of CHF18 million were repurchased through a second trading line on the SWX Swiss Exchange. Renewed focus on core activities creates room to maneuver in the future Having been issued a banking license for the joint venture with Credito Valtellinese, Julius Baer made important progress toward the goal of establishing and strengthening its presence in selected markets. Hence, asset management services may now be offered in Italy under the name of Julius Baer Creval Private Banking S.p.A. Business operations in Dubai will also be launched after the required license is received from the relevant authorities. In the USA, additional expansion is foreseen for the successful investment fund business. Bearing in mind the future strategic focus, the office network in Switzerland was also reviewed. Based on this appraisal, it was decided to close the office in Berne during the course of the second half of the year and to service the existing client relationships through the offices in Zurich and Basle. The other offices in Switzerland (Zurich, Basle, Geneva, Lausanne, Lugano, Lucerne and Zug) will be maintained and possibly expanded depending on how they develop. Over the medium term, Julius Baer assumes the financial market trend will remain marked by considerable uncertainty, especially since instances of sustained positive macroeconomic signals are sporadic at best at the moment. Julius Baer Julius Baer, one of the leading private banks in Switzerland, specializes in asset management, investment counseling and investment funds for private and institutional investors from around the world. It also offers related services in securities trading. Julius Baer will employ a staff of around 1,700 worldwide. At the end of June 2003, the Group had CHF114 billion worth of assets under management. The half-year report of Julius Baer Holding Ltd. and the corresponding presentation are available electronically at www.juliusbaer.com CONTACT: JULIUS BAER Jan A. Bielinski, Investor Relations Phone: +41 (0) 58 888 5501 SWISS LIFE: Sells U.K. Unit for Undisclosed Amount -------------------------------------------------- The Swiss Life Group is selling Swiss Life (U.K.)'s group income protection business and the renewal rights to the group life and critical illness business to UnumProvident, the U.K. market leader in group risk. The deal has been structured to facilitate a smooth transfer of business over a two-year period. In addition, UnumProvident will be the new partner for the Swiss Life Network in the U.K. The transaction comprises approximately 1800 group income protection policies covering 280,000 people and renewal rights to approximately 6800 group life and critical illness policies covering 1.3 million lives. The first transfer date is January 1, 2004. The deal is subject to regulatory approval. The financial terms of the transaction are to remain confidential. This transaction is a further step towards the Swiss Life Group's strategic realignment to focus on core business and core markets (Switzerland, France, Germany, Netherlands and Belgium/Luxembourg). As announced in September 2002, Swiss Life (U.K.) no longer forms part of the Group's core business because of its special focus on the capital-intensive area of protection. In July 2003, the Swiss Life Group announced that the U.K. operation would close to new individual business. With the transfer of the group risk business to UnumProvident, the Swiss Life Group has now effectively withdrawn from the U.K. market except for the international pooling business, for which UnumProvident will be the new partner in the Swiss Life Network, and the remaining closed book of individual business. In the words of Rolf Dorig, Chief Executive Officer of the Swiss Life Group: "We want to focus all our energies on core business and to restore profitability. By transferring group risk business from Swiss Life (U.K.) to UnumProvident we can take a further step in this direction. Not only have we found a buyer for our group risk business, but we have also found an ideal solution for the Swiss Life Network, in which UnumProvident will service our major international clients in the U.K." This decision affects around 250 staff currently employed in the group risk business at Swiss Life (U.K.) and will lead to a significant number of redundancies over the next two years. To ensure a smooth migration of the business, it is expected that UnumProvident will retain a number of staff at Swiss Life (U.K.)'s Liverpool service center for a certain period of time. Ultimately, UnumProvident plans to manage the business from its own locations. Swiss Life The Swiss Life Group is one of Europe's leading providers of life insurance and long-term savings and protection. The Swiss Life Group offers individuals and companies comprehensive advice and a broad range of products via agents, brokers and banks in its domestic market, Switzerland, where it is market leader, and selected European markets. Multinational companies are serviced with tailor-made solutions by a network of partners in over fifty countries. Swiss Life Holding, registered in Zurich, was founded in 1857 as the Swiss Life Insurance and Pension Company. Shares of Swiss Life Holding are listed on the SWX Swiss Exchange. The enterprise employs around 11 000 people worldwide. CONTACT: SWISS LIFE General-Guisan-Quai 40 P.O. Box, 8022 Zurich Investor Relations Phone: +41 1 284 52 76 E-mail: investor.relations@swisslife.ch Homepage: http://www.swisslife.com =========================== U N I T E D K I N G D O M =========================== AILSA DRYDOCK: In Liquidation for Second Time in Three Years ------------------------------------------------------------ Liquidator Douglas Brown Jackson was called in for Troon-based Ailsa Drydock, operator of the two of the three remaining dry docks on the west coast, according to The Scotsman. The liquidation, which resulted to the loss of 24 jobs, left the dock without an owner for the second time within three years. The port started operating only last October after nearly two years of closure. Ailsa managing director Peter Breslin had plans of investing GBP3.5 million in the dock to transform it into the most efficient port in the U.K. after receiving a 50-year lease from landowner Associated British Ports. It was when shipping off the west coast had revived sufficiently. Until a new owner for the docks can be found, Greenock will be the only facility in the area for ship repairs or regulatory checks. BRITISH AIRWAYS: Engineers to be Balloted on Latest Pay Offer ------------------------------------------------------------- Over 4,000 British Airways' Engineers will receive a consultative ballot on the latest company offer relating to pay and the adoption of a controversial swipe card system. Negotiations between the engineering union Amicus and the company have resulted in a set of proposals, one of which is the balloting of Amicus members. If the majority rejects the company proposals in the consultative ballot the likely next step will be a ballot for strike action. The consultative ballot will be sent to Amicus members next week. The ballot result is due mid-September. Amicus represent 4,250 of the 5,000 British Airway's engineers. ***** Employees at Europe's biggest airline staged protests on July 18 and 19 against the introduction of a new electronic timecard system. The action affected flight of some 90,000 passengers at London's Heathrow airport, and left British Airways with a GBP40 million bill. AORTECH INTERNATIONAL: Italian Distributor Threatens Lawsuit ------------------------------------------------------------ Troubled AorTech International is bound to face a GBP350,000-plus lawsuit for breaching a contract with Milan-based Artech, according to The Herald. The online news agency said Emilio Contini, owner of the Italian medical instrument distributor, has hired Glasgow solicitor Burness and retained Queen's Counsel to pursue the case for him against Aortech. Mr. Contini, who is also an AorTech shareholder, claims that Alternative Investment Market-listed AorTech agreed under contract in 2000 to award his company the exclusive rights to distribute TruCCOMS heart monitors, catheters and tri-leaflet heart valves in Italy and in the principality of San Marino until 2006. He said he has to fulfill his contract to supply the main hospital in Palermo, the largest city in Sicily, with 10 heart monitors and 1,200 catheters at a price of GBP350,000 within the next two months, or face a separate legal action against his company in the Italian courts. He now wants to buy the heart monitors, but AorTech has declined to sell them since it has exited the heart monitor business earlier this year. AorTech ceased manufacturing its TruCCOMS monitors and tri-leaflet heart valves as part of a recent strategic re-alignment, and claims that to distribute the remaining stock would leave the firm open to liability problems as the manufacturer. Frank Maguire, AorTech's chief executive, was quoted saying: "We have attempted to explain to Artech that it is not possible to supply them with the TruCCOMS monitors. We are no longer in this business and cannot support it -- to do so could result in both legal and regulatory issues." "Mr. Contini has simply been building a business that has no product supply," he added. On the other hand, Mr. Contini said AorTech has not given any signal that the TruCCOMS business would stop. He said: "We have been promoting this product in Italy since September. Then in January this year, they told us they would sell their heart valve business and wind down the TruCCOMS operations. But we already signed an important contract for two years' distribution with a hospital in Palermo." "All I want now is to buy some of AorTech's stock of TruCCOMS and the catheters," he explained. Mr. Contini added that he was prepared to take on the liability issue with insurance, and that his lawyers had checked with the European authorities over regulatory concerns and there were none. "I cannot understand why they won't sell. My fear is there is some dark secret why they won't sell," he said. "We are just a little company with 15 people. If this contract with Palermo is not fulfilled my company is finished. I will even lose my own house from this. Everything I have is in my business." CONTACT: AORTECH INTERNATIONAL PLC Phone: 01698 746 699 Bill Strachan, Chief Executive Ian Cameron, Finance Director BV GROUP: To be Delisted from AIM Effective September 15 -------------------------------------------------------- The Board of BV announces that the negotiations in relation to sub-letting its former offices at Mill Street, referred to in the announcement of June 20, 2003 have concluded unsuccessfully and therefore BV retains the ongoing lease liability of those offices, costing some GBP250,000 per annum. Following the sale of the Group's principal trading business, also detailed in the announcement of June 20, 2003, this property liability cannot be borne by the Group. Accordingly, the Board has concluded that, in light of the ongoing costs of maintaining the public quotation on AIM, the only course of action is to now de-list the company from AIM and hereby gives twenty business days notice of the intention to de-list. It is anticipated that the cancellation of the dealing facility will take effect at the close of business on Monday September 15, 2003. The dealing facility in the Group's ordinary shares will continue to be suspended. It is the Board's intention to mitigate the company's liabilities by disposing of or closing the remaining business, being Sonic Marketing, which has continued to make a loss in the first half of 2003, together with all other assets. It will then attempt to settle all of the company's outstanding creditors in an orderly fashion reducing outstanding creditor liabilities wherever possible. The Board will take professional advice at every stage in the process. The Directors consider that it is highly unlikely that shareholders will receive any monies once this process has been concluded. Copies of this announcement will be sent to Shareholders and the Board intends to communicate further with Shareholders, as and when appropriate. CONTACT: BV GROUP Rupert Vereker, Managing Director Phone: 020 7554 9743 Philip Davies CHARLES STANLEY & COMPANY LIMITED Phone: 020 7953 2000 EDINBURGH FUND: Cuts Ties with Edinburgh Small Companies Trust -------------------------------------------------------------- Edinburgh Fund Managers confirms that it will cease to act as investment manager for Edinburgh Small Companies Trust, which has net assets of GBP42 million, with effect from September 1, 2003. Edinburgh Fund Managers will continue to provide administrative and company secretarial services to Edinburgh Small Companies Trust through a separate agreement with Standard Life Investments. The manager had been aware for some time of the Board's concerns over the historical performance of the Trust, and took a number of significant steps to improve performance in February of this year. These included a change of fund manager, a restructuring of the U.K. small companies team and the introduction of a more robust investment process. The benefits of these changes have been demonstrated by the stabilization in performance under the new manager. Edinburgh Fund Managers is disappointed that the Board has chosen to terminate the contract given the improving performance trend in the Trust's performance. However, we will be working closely with the Board of Edinburgh Small Companies Trust and its advisers to ensure a smooth transition for Edinburgh Small Companies Trust's shareholders. We remain firmly committed to our Investment Trust clients, who are a core part of our business. We continue to invest in enhancing our investment process which is demonstrated by the improving performance trend across our range of funds with over 73% of our actively managed funds outperforming their benchmarks year to date. CONTACT: POLHILL COMMUNICATIONS Lucy Copeman/Penny Clarke Phone: 0207 655 0540 EDINBURGH SMALL: Hires Standard Life as New Investment Manager -------------------------------------------------------------- As a result of a sustained period of poor performance, the Board of Edinburgh Small Companies Trust plc has over recent months undertaken a review of the company's investment management arrangements with the objective of enhancing shareholder value by improving the Company's performance and reducing the discount at which the company's shares trade. Appointment of Standard Life Investments Following this review, the Board announces the appointment of Standard Life Investments as the new investment manager of the Company with effect from September 1, 2003. The investment management agreement with Edinburgh Fund Managers plc will be terminated on that date, with no compensation being payable by the company. The appointment of Standard Life Investments will not affect the company's current investment objective, which remains the achievement of long-term capital growth through investment in U.K. quoted smaller companies. The company's benchmark will remain the Extended Hoare Govett Smaller Companies Index (ex Investment Companies). As a part of its review the Board has given consideration to the issues presented by the company's long-dated debenture stock. Standard Life Investments has been instructed to actively manage the company's gearing and shareholders will be notified as soon as practicable of proposals in this regard. Investment Management Arrangements The Standard Life Investments U.K. Smaller Companies Team will manage the Company's portfolio under the leadership of Harry Nimmo. This well-established team has the support of Standard Life Investments' substantial in-house research and investment expertise and has a strong long -term track record in the management of U.K. smaller company funds. The Board has instructed Standard Life Investments to realign the portfolio in line with their investment process over time in a way that minimizes the costs to shareholders as far as practicable. It is anticipated that the realignment will largely be implemented by the end of 2003. Management Fee Standard Life Investments will receive an investment management fee of 0.8% per annum of the value of the company's total assets less current liabilities, except to the extent that the assets are held in cash or non-equity securities which will incur a reduced fee of 0.2% per annum. The investment management agreement will be terminable by either party on 12 months' notice. This fee compares with the previous arrangement whereby the Company paid 1.0% per annum of total assets less current liabilities (after deducting cash and commonly managed funds). In line with the arrangements for the other investment trust managed by Standard Life Investments, the company's secretarial and fund administration functions will continue to be provided by Edinburgh Fund Managers plc on terms similar to the current arrangements. Benefits to Shareholders The change in investment manager will provide shareholders with these benefits: (a) The strong long-term track record of the Standard Life Investments U.K. Smaller Companies Team; (b) The stability and recognized brand name of the Standard Life Group; (c) The support of the Standard Life Investments marketing team and distribution channels; (d) A reduction in the company's ongoing investment management costs. The Board believes that these benefits will lead to an enhancement of shareholder value through an improvement in the Company's performance and a reduction in the discount at which the company's shares trade. CONTACT: EDINBURGH SMALL COMPANIES TRUST PLC Donald MacDonald Phone: 0131 557 5065 STANDARD LIFE INVESTMENTS George Walker Phone: 0131 245 6838 CLOSE BROTHERS SECURITIES Corporate Adviser to Edinburgh Small Companies Trust Tom Durie Phone: 020 7621 5564 LONDON FORFAITING: Resurge Not Offering Cash, Only Share Swap ------------------------------------------------------------- The Board of the company notes the statement by Resurge PLC dated August 15, 2003 announcing an all share offer of 3.43 New Resurge Shares for each London Forfaiting share. On the basis of the closing price of Resurge PLC's shares as at August 14, 2003 (10.75p) the Resurge PLC offer would value each London Forfaiting share at 36.87 pence. As at the present time Resurge PLC are offering no cash alternative to London Forfaiting shareholders. Resurge PLC have also announced Friday a proposed placing of up to GBP20 million of New Resurge Shares. Currently GBP5 million of that placing is committed. Resurge PLC are, at [Fri]day's date a smaller company than London Forfaiting. Resurge PLC disclosed net assets as at April 30, 2003 of approximately GBP5 million. Clearly the Board and shareholders would need to reflect, inter alia, on the financing of the enlarged business and on whether the levels of profitability which Resurge PLC envisage for the enlarged entity would, on a sensible price earnings ratio, be capable of sustaining an equivalent share price in excess of the level of FIMBank's cash Offer of 29.5 pence. The Board will review the terms of the Resurge PLC offer with its advisers and revert to shareholders with a further statement as soon as possible. Shareholders are reminded that the revised closing date for the Offer from FIMBank is 3:00 p.m. on August 19, 2003. 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 LONDON FORFAITING: FIMBank Says Offer is Better than Resurge's -------------------------------------------------------------- Further to the earlier announcement from Resurge Plc, FIMBank (U.K.) believes that London Forfaiting Shareholders should consider that: (a) The Resurge proposal contains no cash. (b) The Resurge proposal consists entirely of shares in a small, thinly traded company, which contains a range of small investments. (c) Shareholders are essentially being invited to retain their investment in London Forfaiting through taking shares in a small company with management who do not appear to be trade finance experts. (d) On September 27, 2002 and in the absence of bid speculation, the Closing Price of a London Forfaiting Share was 13.5 pence. London Forfaiting Shareholders should consider the likely price at which shares in Resurge would trade if its proposal were to complete. (e) As announced on August 13, 2003, a majority of London Forfaiting Shareholders has already indicated their desire for cash by accepting FIMBank (U.K.)'s offer. (f) The cash offer from FIMBank (U.K.) provides London Forfaiting Shareholders with a certain 29.5 pence in cash whereas the proposal from Resurge risks continued uncertainty. (g) The offer from FIMBank (U.K.) will remain open for acceptance until 3.00 p.m. on Tuesday August 19, 2003. London Forfaiting Shareholders who have not yet accepted the Offer are urged to do so as soon as possible. Terms used in this announcement shall have the meaning given to them in the Offer Document, save where the context requires otherwise. Margrith Lutschg-Emmenegger, Executive Vice President of FIMBank commented: "We believe the Resurge proposal lacks credibility and seems to be an attempt by Resurge to get control of London Forfaiting's cash. "London Forfaiting Shareholders are being asked to take shares in a company containing a basket of largely unrelated investments without the certainty that our cash offer provides. "Now that London Forfaiting Shareholders can see how comparatively little Resurge has to offer I hope that they will accept the FIMBank cash offer soon." CONTACT: FIMBANK Margrith Lutschg-Emmenegger Phone: 07739 592016 WESTLB Ian Soanes Phone: 020 7020 4000 BELL POTTINGER Jonathon Brill, David Rydell Phone: 020 7861 3865 NORWOOD INTERIOR: Joint Administrators Offer Business for Sale -------------------------------------------------------------- The Joint Administrators, Paul Appleton and Asher Miller, offer for sale the business and assets of this leading supplier of industrial partitioning, clean room and shield door products. Principal assets include: annual turnover GBP6 million, nationally recognized market leading products and brand, broad blue chip customer base, 90,000 sq. ft. leasehold site close to M42 and M6. For further details please contact Caroline O'Leary or Kimberley Fleming at 26-28 Bedford Row, London, WC1R 4HE on 020 7400 7900 or by fax on 020 7242 3233. E-mail: businessforsale@drpartners.com SHOPFITTERS: For Sale on Continuity of Trading Basis ---------------------------------------------------- By Order of Alan H. Tomlinson Esq., F.C.A. M.A.B.R.P., Administrator of Quinn Shopfittings Limited SHOPFITTERS (Rochdale, Lancashire) For Sale On A Continuity of Trading Basis from Leased fully equipped workshop Approximate annual turnover - GBP1.9 million. CONTACT: IAN DAVIES & CO. Phone: 0161-480 5959 Fax: 0161-480 1433 E-mail: Ian@iandaviesauctions.co.uk TELEWEST COMMUNICATIONS: Finance Director Mark Luiz to Resign ------------------------------------------------------------- Telewest Communications plc announces that Mark Luiz, group finance director, will be leaving the company and resigning as a director of the company with effect from October 31, 2003. Neil Smith, currently deputy group finance director will become group finance director. This will not be a board appointment. Cob Stenham, Chairman said: "We thank Mark Luiz for all he has done since joining Flextech in 1988 and for his contribution to the company since the merger with Flextech in 2000." ***** Telewest is currently in the middle of its negotiation with bankers and bondholders for a GBP3.5 billion debt restructuring that could potentially wipe out but 1.5% of shareholders' investment. Telewest reported net losses of GBP201 million last week. CONTACT: TELEWEST COMMUNICATIONS Jane Hardman, Director of Corporate Communications Phone: 0207 299 5888 * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Shareholders Total Working Equity Assets Capital Ticker (US$MM) (US$MM) (US$MM) ------ ----------- ------ -------- AUSTRIA ------- Libro AG (111) 174 (182) BELGIUM ------- Real Software REAL (35) 244 (1) CZECH REPUBLIC -------------- Ceskomoravska Kolben & Danek Praha Holding (89) 192 (2,186) DENMARK ------- Elite Shipping (28) 101 19 FRANCE ------ Banque Nationale de Paris Guyane (41) 352 N.A. BSN Glasspack (102) 1,151 179 Bull SA BULP (760) 893 (130) Compagnie des Machines Bull (116) 136 (20) Compagnie Francaise de l'Afrique Occidentale (65) 256 21 Cofidur SA (5) 102 19 Dollfus-Mieg & Co. DOLP 0 187 28 European Computer System (110) 682 377 Grande Paroisse SA (845) 383 107 Pneumatiques Kleber SA (34) 480 139 Societe de Developpement Regional Centrest (132) 258 N.A. Societe de Developpement Regional Picardie (135) 413 N.A. Soderag (3) 404 N.A. Sofal SA (305) 6,619 N.A. Spie-Batignolles (16) 5,281 75 St Fiacre (FIN) (1) 111 (33) Trouvay Cauvin TRCN 0 134 10 Usines Chauson (23) 249 35 GERMANY ------- Dortmunder Actien-Brauerei DABG (13) 118 (29) Edel Music AG EDLG (66) 353 (159) Eurobike AG EUBG (32) 158 (31) F.A. Guenther & Sohn AG GUSG (8) 111 N.A. Kaufring AG KAUG (19) 151 (51) Nordsee AG (8) 195 (31) Schaltbau AG SLTG (16) 163 20 Vereinigter Baubeschlag-Handel Holding AG VBHG (24) 307 (63) ITALY ----- Binda SpA BND (11) 129 (20) CIRIO FINANZIARI CBDI (422) 1,583 (396) Credito Fondiario e Industriale SpA CRF (200) 4,218 N.A. NETHERLANDS ----------- Baan Company N.V. BAAN (8) 610 46 NORWAY ------ Pan Fish ASA PAN (117) 806 259 Petroleum-Geo Services PGO (32) 2,963 5,250 POLAND ------ Animex SA (1) 108 (86) Exbud Skanska SA EXBUF (9) 315 (330) SPAIN ----- Altos Hornos de Vizcaya SA (116) 1,283 (278) Santana Motor SA (46) 223 41 Tableros de Fibras SA TFI (43) (2,107) 116 SWITZERLAND ----------- Kaba Holding AG KABZN (64) 515 252 UNITED KINGDOM -------------- Abbot Mead Vickers (2) 168 (16) Alldays Plc ALD (120) 252 (202) Amey Plc AMY (49) 932 (47) Bonded Coach Holiday Group Plc (6) 188 (44) Blenheim Group (153) 198 (34) Booker Plc BKRUY (60) 1,298 (8) Bradstock Group BDK (2) 269 5 Brent Walker Group (1,774) 867 (1,157) British Energy BGY (5,342) 3,438 229 British Nuclear Fuels Plc (2,627) 36,359 1,948 British Sky Broadcasting BSY (459) 3,364 (40) Compass Group CPG (668) 2,972 (298) Costain Group COST (34) 329 (12) Dawson Holdings DWSN (32) 135 (25) Easynet Group Plc ESY (12) 332 53 Electrical and Music EMI Industries Group (885) 3,053 (435) Euromoney Institutional ERM (119) 173 20 Gallaher Group GLH (543) 5,527 68 Gartland Whalley (11) 145 (8) Global Green Tech Group (156) 408 (18) Heath Lambert Fenchurch Group PLC (10) 4,109 (10) HMV Group PLC HMV (211) 762 (66) Imperial Tobacco Group ITY (117) 10,083 (190) Intertek Testing Services ITRK (134) 425 (67) IPC Media Ltd. (685) 254 16 Lambert Fenchurch Group (1) 1,827 (3) Lattice Group (1,290) 12,410 (1,228) Misys PLC MSY (86) 961 (7) Orange PLC ORNGF (594) 2,902 7 Regus PLC RGU (46) 367 (60) Rentokil Initial Plc RTO (1,130) 2,809 (37) Saatchi & Saatchi SSI (119) 705 (41) Seton Healthcare (11) 157 (0) Yell Group PLC (196) 3,964 289 Each Tuesday edition of the TCR-Europe contains a list of companies with insolvent balance sheets based on the latest publicly available balance sheet available to our editors at the time of publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Larri-Nil Veloso, Ma. Cristina Canson, and Laedevee Gonzales, Editors. Copyright 2003. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *