/raid1/www/Hosts/bankrupt/TCREUR_Public/031119.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Wednesday, November 19, 2003, Vol. 4, No. 229
Headlines
B E L G I U M
REAL SOFTWARE: Former ASQ Shareholders Back Debt Restructuring
D E N M A R K
HAFNIA HOLDING: Creditors Finally Getting Compensation
G E R M A N Y
DRESDNER BANK: Mulling Sale of Four Eastern European Units
GRUNDIG AG: U.S. Company Acquires Car InterMedia System
PROSIEBENSAT.1 MEDIA: Names New Supervisory Board Members
H U N G A R Y
FIRST HUNGARY: Wants Closure of Funds Extended
K&H EQUITIES: Clients Threaten to Seek Liquidation
NABI RT: Posts US$13 Million Operating Loss in First Nine Months
PORTOCOM RT: Sheds Laptop Production as Bankruptcy Looms
I T A L Y
RENO DE: EBIT Slightly above Financial Breakeven Point
RENO DE: Weaker-than-expected Performance Triggers S&P Review
L U X E M B O U R G
VTB CAPITAL: Fitch Rates Borrowing Programs 'BB+', 'B'
N E T H E R L A N D S
KONINKLIJKE AHOLD: Binding Deal Over Disco Expected Year-end
N O R W A Y
DNO ASA: To Raise US$240 Million from Asset Disposals
DNO ASA: Rating on CreditWatch Developing; Uncertainty Cited
DNO ASA: Ups Total Oil Production for Last Ten Months
NORWAY SEAFOODS: Pays Part of EUR600 Million Debt to Orkla
R U S S I A
TNK INTERNATIONAL: S&P Ups Rating to 'BB-'; Off CreditWatch
S W I T Z E R L A N D
SWISS INTERNATIONAL: Halves Quarterly Loss in Q3 to -CHF62 Mln
U N I T E D K I N G D O M
BOOSEY & HAWKES: Classic Copyright Bid Declared Unconditional
CANARY WHARF: UBS Investment Back CWG Offer, Says Brascan
EURO DISNEY: Annual Net Loss Balloons to EUR45.4 Million
GOVETT: Appoints Gartmore New Investment Manager
HOLLINGER INC.: CEO Resigns in Wake of Pay-off Scandal
HOLLINGER INC.: Ends Contract with Ravelston Management
HOLLINGER INC.: Mulls Sale of Corporate Aircraft
HOLLINGER INC.: Hopes to File Delayed Quarterly Report Today
INTER-ALLIANCE GROUP: Offers New Share Options to Employees
LE MERIDIEN: Abandons Rescue Efforts; Sells Hotels Overseas
MYTRAVEL GROUP: Shareholders Approve U.S. Disposals
MYTRAVEL GROUP: Sells Lexington Services for US$7.75 Million
ROYAL MAIL: Placates Britons with GBP1 Mln Donation for Olympics
ROYAL & SUNALLIANCE: To Webcast Results Presentation November 30
STEANS PRINTERS: Schedules Creditors Meeting November 25
THPA FINANCE: Fate of Corus' Teeside Factory Could Sway Ratings
WILLINGTON PLC: To Sell Part of German Distribution Division
*********
=============
B E L G I U M
=============
REAL SOFTWARE: Former ASQ Shareholders Back Debt Restructuring
--------------------------------------------------------------
Further to the press release about the support to the Board of Directors of
the shareholders around Anthylis S.A., Real Software Group informs in a
joint press release with the former shareholders of ASQ that the latter will
also approve the debt restructuring plan with the bank consortium at the
extraordinary general shareholders meeting of November 24. The former
shareholders of ASQ will vote in favor of the company's continuity, within
the current guidelines as determined jointly with the bank consortium.
One representative of these shareholders will receive a specific mandate
from the Board of Directors to participate in the forthcoming negotiations
with the banking syndicate. The nomination of this representative as member
of the Board will be proposed to the next extraordinary shareholders'
meeting, to strengthen the existing Board (which composition remains further
unchanged). Henceforth, the Board of Directors will consist of the managing
director, six independent directors and two directors representing the main
shareholders Anthylis and ex-ASQ (representing together 29,82% of the
existing shares).
The Board of Directors is now even more convinced that this development,
mainly inspired by the safeguarding of the interest of the staff, the
customers and providers of the group, will positively influence the
company's activities and the negotiations with the bank consortium.
About Real Software
Real Software was established in 1986. In 2002, a group turnover of
EUR179.6 million was generated, with an operating profit of EUR14 million,
representing an EBIT margin of 7.8%. The Real Software Group currently has
1,547 employees. Since 2002, the group's organization has been based around
four divisions: Banking & Insurance, Industry (formerly Manufacturing &
Maintenance), Business & Government and Retail. It offers a comprehensive
range of software services, from the development and implementation of in
house products, tailor-made projects and outsourcing through to advice,
implementation and sales of products produced by other companies such as
SAP, JD Edwards, Oracle, Microsoft Navision and Microsoft Axapta. The
company exports Belgian technology to a number of countries, including
Luxembourg, the Netherlands, France, Germany and Switzerland. Its customer
portfolio includes companies such as Du Pont de Nemours, Carrefour, Johnson
& Johnson, Merck Sharp & Dohme, Biogen, Renault, the Paris Metro, TF1,
EDF -- Electricite de France, SNCF, PTT Post, NedCar, Philips, Bandag,
Goodyear, KBC Bank and Fortis Bank.
You can find more information at http://www.realsoftwaregroup.com
CONTACT: REAL SOFTWARE
Prins Boudewijnlaan 26, 2550 Kontich
Phone: +32.3.290.23.11
Fax: +32.3.290.23.00
Direct: +32.3.290.25.30 -
E-mail: Dina.Boschmans@realsoftware.be
Home Page: www.realsoftwaregroup.com
Dina Boschmans
Corporate & Marketing Communications Manager
Phone: +32.477.619.682
Theo Dilissen
CEO & Afgevaardigd Bestuurder
Phone: +32.475.48.26.93
=============
D E N M A R K
=============
HAFNIA HOLDING: Creditors Finally Getting Compensation
------------------------------------------------------
The administrators of failed insurance company Hafnia Holding Ltd. are to
pay compensation to creditors 11 years after the company collapsed,
Intesatrade reports, citing Danish newspaper Borsen.
Hafnia Holding Ltd. is one of the largest insurance companies in Denmark
engaged in Danish and international non-life and life insurance, pension
insurance business, reinsurance, portfolio management, merchant banking,
property investment and management and other financial services. It floated
a share issue for the equivalent of several hundred-million U.S. dollars
back in 1992 and later went under.
Creditor Danske Bank, Denmark's biggest bank, which claimed a total of
DKK6.5 following the breakdown, is slated to get DKK400 million of the
DKK2.5 billion that the administrators are poised to pay creditors.
CONTACT: HAFNIA HOLDING LTD.
Holmens Kanal 9
Copenhagen K DK-1010
Denmark
Phone: 33 13 14 15
33 93 03 16
=============
G E R M A N Y
=============
DRESDNER BANK: Mulling Sale of Four Eastern European Units
----------------------------------------------------------
Dresdner Bank is considering selling four subsidiaries in the Czech
Republic, Poland, Hungary and Croatia, spokesman Clas Roehl said, according
to Bloomberg.
The banking unit of Allianz AG is reviewing options for its small business
as it focuses on domestic operations in a bid to return to profit. Dresdner
has already included the four eastern European subsidiaries into its
institutional restructuring unit, where it keeps assets in line for
disposal, Mr. Roehl said.
The profitable units have combined assets of EUR950 million (US$1.1
billion), 3,900 clients and employ 330 people. The Czech business is the
biggest with almost EUR600 million in assets.
An unnamed spokeswoman for Munich-based HVB Group said HVB Group's Bank
Austria Creditanstalt AG unit is interested in buying the assets, according
to the Financial Times Deutschland. UniCredito, which is Italy's
second-largest bank, and GE Capital, the investment unit of General Electric
Co., might also offer a bid, the report further said.
GRUNDIG AG: U.S. Company Acquires Car InterMedia System
-------------------------------------------------------
Grundig AG said it sold its CIS division, Car InterMedia System, to Troy,
Michigan-based car parts supplier, Delphi, on Monday.
Dr. Siegfried Beck, in a statement, commented: "The sale of CIS to the
leading partner worldwide gives this company division and its nearly 1000
employees a promising future. It is also a major step in securing
production facilities at its traditional location in Nuremberg, Langwasser.
In addition, Delphi will not only be taking over all the employees, but has
also indicated it would hire additional engineers who have been employed in
other Grundig departments in Nuremberg."
Another argument that weighs in favor of the Langwasser location is the fact
that Delphi has just signed a new medium-term rental contract for the
grounds used in Beuthener street, the statement said.
Dr. Siegfried Beck sees the sale of CIS as a "very important stepping stone"
in the ongoing insolvency proceedings. With the sale, one of the most
important sectors of the Grundig group will have been successfully sold. A
major step was taken not only in the interest of all the employees affected,
but also for the banks and the creditors' meeting.
CONTACT: GRUNDIG AG I.INS.
Beuthener Strabe 43
D-90471 Nurnberg
Public Relations
Phone: ++49(0)911/703-8629
E-mail: holm.kilbert@grundig.com
PROSIEBENSAT.1 MEDIA: Names New Supervisory Board Members
---------------------------------------------------------
ProSiebenSat.1 Media AG will have three new members on its Supervisory
Board. John Connaughton, Managing Director of Bain Capital Partners,
Patrick Healy, Managing Director of Hellman & Friedman, and Seth Lawry,
Managing Director of Thomas H. Lee Partners, are to sit on the board in the
future. They are to succeed Ron Kenan, Ynon Kreiz, and Arieh Saban, who
have resigned their seats.
Under the chairmanship of Haim Saban, the Supervisory Board of
ProSiebenSat.1 Media AG also comprises Adam Chesnoff (vice-chairman), Dr.
Mathias Dopfner, Wolfgang Hartmann, Dr. Michael Jaffe, and Hubertus
Meyer-Burckhardt.
The new Supervisory Board members are to be appointed by the competent court
and for the period up to the next Annual General Meeting of Shareholders.
*****
The ProSiebenSat.1 Group boosted its operating income significantly in the
third quarter of fiscal 2003. EBITDA at the Group level improved EUR31.8
million from the same quarter last year, from -EUR11.8 million to EUR20
million. Group revenues were up 3% from July to September, to EUR362.7
million. Thus, Germany's largest television corporation showed rising
revenue during the quarter for the first time since fiscal 2000. Group
pre-tax income improved from -EUR53.6 million to -EUR8.8 million, while the
consolidated loss narrowed from -EUR49.3 million to -EUR6.9 million.
CONTACT: PROSIEBENSAT.1 MEDIA
Medienallee 7
D-85774 Unterfohring
Phone: +49 [89] 95 07-11 80
Fax: +49 [89] 95 07-11 84
Dr. Torsten Rossmann
Corporate Spokesman
E-mail: Torsten.Rossmann@ProSiebenSat1.com
=============
H U N G A R Y
=============
FIRST HUNGARY: Wants Closure of Funds Extended
----------------------------------------------
First Hungary Fund Ltd. has called an extraordinary general meeting for
November 24 to discuss the extension of the closure of the fund, and its
delisting from the Irish Stock Exchange. The meeting was originally set to
take place October 24, but was delayed because of PZ Rona Ltd.'s motion to
terminate its appointment as the fund's investment advisor. The
extraordinary general meeting will discuss four resolutions, but will likely
deal mainly on the proposal to extend the close-end fund's life from one
year to December 31, 2004, and to delist its shares in the Irish bourse.
In a circular issued to shareholders through the Irish Stock Exchange, the
board said it feels these resolutions are in the best interests of First
Hungary, and recommends shareholders to vote for both, according to Budapest
Business Journal. The call for an extraordinary general meeting came in the
wake of a deep plunge into red of First Hungary's majority-owned bus
manufacturer, Nabi Rt. Nabi Rt had net losses of US$11.41 million, roughly
double the losses in the same period of 2002, in the first nine months of
the year.
K&H EQUITIES: Clients Threaten to Seek Liquidation
--------------------------------------------------
Several clients of K&H Equities are planning to sue the brokerage company
for allegedly withholding their money illegally, Magyar Hirlap reports,
according to Dow Jones. They intend to file their complaints to the Court
of Arbitration before seeking the unit's liquidation.
K&H Equities suspended operations in July after it discovered that one of
its brokers was involved in fraudulent transactions that police say total
HUF10 billion. Payments to clients were suspended as it investigated
alleged fraud and embezzlement committed by broker Attila Kulcsar. The
brokerage earlier said it will pay clients only after checking all accounts.
Moody's Investors Service downgraded the financial strength rating of K&H
Bank to 'D' from 'D+' after concluding a review it
initiated following the discovery of the fraud. The rating agency expressed
confidence that Kereskedelmi & Hitel Bank would be able to absorb the loss
arising from the case, but it warned that the Budapest-based financial group
would still have to face some long-term negative effects on this.
NABI RT: Posts US$13 Million Operating Loss in First Nine Months
----------------------------------------------------------------
Summary
The NABI Group delivered 818 vehicles during the first nine months of 2003
falling short of the 970 realized during the same period of 2002 by 152, or
15.6%. The double-digit growth in aftermarket sales revenues could not
counterbalance the effect of this shortfall on consolidated total sales
revenue that amounted to US$219 million by the end of the period, US$32
million or 13% less than the US$251 million realized during the first nine
months of 2002.
While deliveries of the new models of buses in the USA, which experienced
difficulties during the earlier half of the year, have all commenced, their
pace was insufficient to make up lost ground.
Continued weakness in the single deck segment of the U.K. market also
resulted in a lower vehicles sales performance for Optare, which is partly
offset by the delivery of 30LFN buses to Miami, USA over the second half of
2003.
Throughout 2003, the initial production runs of the CompoBus resulted in
additional costs caused primarily by the delayed and incomplete transfer of
the know-how for the bus from the original technology developer. Production
of the Alero in the U.K. also encountered some cost overruns and unexpected
warranty costs.
The overall lower sales volume of the Group resulted in a lower gross profit
falling from the US$25.7 million achieved during the first three quarters of
2002 to US$11.2 million in the current reporting period.
The savings in SGA expenses achieved by the Company during the year, and the
improved profit performance of the aftermarket divisions could not offset
the adverse FOREX movements and the increased SGA costs related to the
start-up of volume production in the two new plants the Group opened over
2002. This resulted in a net growth in total SGA expenses up from US$21
million a year earlier to US$24.2 million in the current period.
Consequently the Group realized a US$13 million operating loss by the end of
first nine months of 2003.
The Optare Group reported a year-to-date operating income of US$800
thousand, while its net profit exceeded US$300 thousand. The US GAAP
valuation of USD/HUF forward currency contracts resulting in an unrealized
gain of US$2.1 million which also contributed to reduce the net loss of the
Group for the period to US$ 11.4 million.
The first batches of 45C-LFW type CompoBus-es began to operate in Phoenix,
Arizona during the period. Since then the buses have performed to the
operator's satisfaction and the enthusiastic reception of the traveling
public. A multiple city roadshow to introduce the 45C-LFW CompoBus is
planned for Q4.2003.
The current interim report contains information on the performance of the
NABI Group (the NABI Group is NABI Rt or the Company and its 100% owned
subsidiaries NABI Inc., and Optare Holdings Ltd. or Optare) during the first
three quarters of 2003.
Forecasted future events can be influenced by unforeseeable risks.
November 14, 2003
Andras Racz
Chief Executive Officer
Roger Fossey
Chief Financial Officer
To see financial results: http://bankrupt.com/misc/Nabi_Results.pdf
CONTACT: NABI RT. (Machinery)
Ujszasz utca 45, Budapest 1165
Phone: 401-7100
Fax: 407-2931
E-mail: corporate.office@nabi.hu
Contact: Akos Ersek, Corporate Affairs Director
PORTOCOM RT: Sheds Laptop Production as Bankruptcy Looms
--------------------------------------------------------
Qwerty Kft acquired Portocom Rt's laptop production last month, Qwerty
Managing Director Istvan Galfi said, according to Budapest Business Journal.
"We purchased [Portocom's] leftover parts, got five of its service
representatives, imported our own components, and started selling laptops
[Thursday]," Mr. Galfi said.
Qwerty, one of Portocom's several dozen resellers, is aiming to grab 5% of
the Hungarian laptop market by the end of 2004, according to Mr. Galfi. He
estimated Portocom's share of the market at over 10% prior to the company's
troubles.
Portocom closed its doors for business four weeks ago, a source of Budapest
Business Journal said. The closure supports expectations of its impending
bankruptcy. Portocom's CEO Laszlo Pollo and three other employees were
arrested in February on suspicion of tax fraud over imported components.
Its new managers attempted to sell Portocom for HUF100 million (EUR363,000)
but failed several times, News portal Origo said last week.
=========
I T A L Y
=========
RENO DE: EBIT Slightly above Financial Breakeven Point
------------------------------------------------------
On November 14, 2003, the Board of Reno De Medici S.p.A. approved the Q3
report.
This quarter has been conditioned by a particularly weak market and stagnant
consumption, which affected sales so that they fell from EUR149.6 million in
the third quarter of 2002 to EUR124.4 million in the same quarter this year.
In the first nine months of the year, Reno De Medici has recorded sales of
EUR417 million -- a fall of EUR447.4 million year on year.
Although there has been this downturn in the market and a slowing of
production in some of the Group's plants, there are some important
industrial figures to be noted:
(a) the performance of the S. Giustina works which, despite the critical
period, managed to achieve EBITDA of 20% on revenues (against the 10% of the
previous period) due to the improved products/markets mix
(b) the progressive insertion in the most competitive markets of the
production from the Villa S. Lucia works (thanks to consolidating the
qualitative standards demanded by the market).
The work for industrial and organizational restructuring continued to be
implemented throughout this quarter. The plan concerns substantial actions
involving the entire company. The actions already undertaken, and those to
be adopted in the last quarter of 2003, make it possible to forecast a
lowering of the breakeven point and a recovery of operative profitability.
The first effects of the operating turnaround underway will not be felt
until the first half of 2004.
Figures for the quarter in detail
Sales in the third quarter 2003 amounted to 124.4 against 149.6 million in
the same period a year earlier.
EBITDA in the third quarter was 3.6 million (5.8 million in Q3 2002). EBIT
was a negative 9.3 million (against -- 6.5 million in Q3 2002), after
depreciation and amortization of 12.9 million (12.3 million in Q3 2002).
The Group's net financial borrowing at September 30, 2003 improved and
amounts to 291.7 million (315.7 million at September 30, 2002).
The EBIT achieved is nonetheless slightly above the financial breakeven
point.
III quarter 2003
(EUR/k) Q3 2003 Q3 2002 Change
Net revenues 124.4 149.6 (25.2)
EBITDA 3.6 5.8 (2.2)
EBIT (12.7) (10.5) (2.2)
Net extraordinary charges (1.9) 0.1 (2.0)
EBT (14.5) (10.3) (4.2)
The Reno De Medici Group is Italy's top producer, and Europe's second, of
cartonboard made out of recycled material. The company has been listed on
the Stock Exchange since 1996.
CONTACT: RENO DE MEDICI S.P.A.
Mario Del Cane
Phone: 02/75288.1
E-mail: investor.relations@renodemedici.it
BONAPARTE 48
Alessandro Iozzia
Phone: 02/8800971
Fax: 02/72010530
E-mail: Alessandro.iozzia@bonaparte48.com
Filippo.turchetti@bonaparte48.com
RENO DE: Weaker-than-expected Performance Triggers S&P Review
-------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its 'BB' long-term
corporate credit rating on Italy-based packaging company Reno De Medici SpA
on CreditWatch with negative implications. At the same time, Standard &
Poor's affirmed its 'B' short-term corporate credit rating on Reno De
Medici.
"The CreditWatch placement is as a result of the group's prolonged
weaker-than-expected operating and financial performance," said Standard &
Poor's credit analyst Andreas Kindahl. "The action also reflects
significant debt refinancing in the next 12 months."
Standard & Poor's will meet with the new management and review its future
operating and financial strategies, as well as the group's access to
liquidity before resolving the CreditWatch listing. The review should be
concluded within the next four to six weeks. Reno De Medici had net debt of
about EUR292 million at Sept. 30, 2003.
===================
L U X E M B O U R G
===================
VTB CAPITAL: Fitch Rates Borrowing Programs 'BB+', 'B'
------------------------------------------------------
Fitch Ratings assigned expected ratings to VTB Capital S.A.'s upcoming USD2
billion loan participation note issuance program for the ultimate purpose of
financing loans to Russia's OJSC Vneshtorgbank at Long-term 'BB+' (for
senior notes with maturities in excess of one year) and Short-term 'B' (for
senior notes with maturities of less than one year). The ratings are
contingent upon receipt of final documentation conforming materially to
information already received and the final program ratings will be confirmed
at that time. Issuance under the program will be rated separately. The
program does not allow for the issuance of subordinated or structured (e.g.
index-linked) notes.
The program is structured such that notes under the program will be issued
by VTB Capital SA, a Luxembourg-domiciled orphan special purpose vehicle for
the sole purpose of financing fiduciary deposits with a fiduciary bank
(Deutsche Bank Luxembourg SA). The deposits will in turn be used for the
sole purpose of financing loans to OJSC Vneshtorgbank (under a facility
agreement). The special purpose vehicle will only pay noteholders amounts
(principal and interest), if any, received from the fiduciary bank under a
fiduciary deposit agreement and the fiduciary bank will only pay the special
purpose vehicle amounts received from OJSC Vneshtorgbank under the facility
agreement.
The loan agreement between the fiduciary bank and OJSC Vneshtorgbank
contains a negative pledge clause, a cross default clause and numerous other
covenants, which, among other factors, limit disposals by OJSC Vneshtorgbank
and require that OJSC Vneshtorgbank maintains a minimum consolidated total
capital ratio of 8% (calculated using data from the group's latest
International Accounting Standard financial statements). The negative
pledge clause allows for a degree of securitization by OJSC Vneshtorgbank,
to the extent that the principal amount of the notes issued under any
securitization does not exceed 5% of OJSC Vneshtorgbank's consolidated
assets. Were such a deal to be undertaken, Fitch comments that the nature
and extent of any over-collateralization would be assessed by the agency for
any potential impact on unsecured creditors.
Noteholders also have a put option in the event of a change of control of
OJSC Vneshtorgbank. It was owned by the Central Bank of Russia, before the
Russian government (the Ministry of Property Relations) took over 99.9% in
late 2002. A gradual privatization process is about to start, with the
European Bank for Reconstruction and Development and the International
Finance Corporation being interested parties, although the Russian
government is expected to remain majority shareholder until at least 2008.
OJSC Vneshtorgbank was founded in 1990 and is Russia's second largest bank
by equity and assets (consolidated assets of USD8.8 billion at end-1H03).
OJSC Vneshtorgbank's roots are in foreign trade. While continuing to work
with some of Russia's largest corporates, it has recently adopted a
strategic plan to expand retail, SME and investment banking services in the
next five years.
Fitch Ratings' Support and Individual Ratings for Banks: Fitch's Individual
ratings assess how a bank would be viewed if it were entirely independent
and could not rely on external support. Its Support ratings deal with the
question of whether a bank would receive support from its owners or from the
state if it were to get into difficulty. These ratings are not debt ratings
but rather, respectively, an assessment of the intrinsic strength of a bank
and of any level of outside support that may, or may not, be available to
it.
=====================
N E T H E R L A N D S
=====================
KONINKLIJKE AHOLD: Binding Deal Over Disco Expected Year-end
------------------------------------------------------------
Ahold confirmed Monday it is engaged in negotiations with Chilean retailer
Cencosud S.A. for the sale of its controlling stake in the Argentine
supermarket chain Disco S.A. As of June 30, 2003, Disco S.A. operated 237
stores in Argentina.
Ahold and Cencosud must still finalize the stock purchase agreement and
Cencosud must conclude its confirmatory due diligence. Parties expect
signing of a binding transaction before year-end. Closing of the
transaction is conditional upon obtaining local anti-trust approval, which
may be expected before the end of the second quarter of 2004.
Cencosud has interests in real estate, do-it-yourself (DIY) stores and
hypermarkets in Chile and Argentina. The company operates 12 hypermarkets
and 23 DIY stores in Argentina. It acquired Ahold's stake in the Chilean
supermarket chain Santa Isabel in July 2003.
The intended divestment of Disco S.A. is part of Ahold's strategic plan to
restructure its portfolio, to divest underperforming assets, and to
concentrate on its mature and most stable markets.
CONTACT: AHOLD
Corporate Communications
Phone: +31.75.659.57.20
===========
N O R W A Y
===========
DNO ASA: To Raise US$240 Million from Asset Disposals
-----------------------------------------------------
DNO ASA has decided following the strategic review conducted by Lehman
Brothers to enter into a Sale and Purchase Agreement with Lundin Petroleum
AB of Sweden, for the sale of all of the issued share capital of DNO Britain
Limited and Island Petroleum Developments Limited, and the sale of certain
assets of Det Norske Oljeselskap AS.
The cash consideration for the above transactions as of the effective date
of January 1, 2003 is USD165 million payable at closing. Certain
adjustments, estimated to be approximately USD40 million, will be made for
working capital, cash flow generated, and/or funding requirement from the
effective date to closing.
In addition, Lundin Petroleum AB has agreed to provide an abandonment
security, which will allow for the release of USD35 million in restricted
cash to DNO.
Based on the above, the net cash effect to DNO ASA at closing is estimated
to be approximately USD240 million.
The closing of the transactions will be subject to necessary approvals from
the relevant authorities in the U.K., Ireland and Norway. Closing is
estimated to take place during 1st half of 2004. As a result of this the
consolidated accounts for DNO ASA will not reflect the sales in 2003.
The transaction includes:
(a) DNO Britain Limited which through, wholly owned subsidiaries, includes
these interests: 100% Heather field, 99% Thistle field, and 55% Broom field.
The Heather and Thistle fields are mature producing fields in the U.K. North
Sea whilst the Broom field is a newly designated field adjacent to the
Heather field currently under development. The Broom field will be tied
back to the Heather facilities thereby further extending the economic life
of the Heather field. The Broom field is a sub-sea development expected to
start production by the middle 2004. Lundin Petroleum will, through the
acquisition of DNO Britain, assume operatorship of these fields, subject to
DTI approval and will take responsibility for all DNO's U.K. employees and
its Aberdeen office.
(b) Island Petroleum Developments Limited's, with it's major asset being the
12,5 % working interest in the Seven Heads gas field operated by Ramco which
is expected to begin production towards the end of 2003 using the existing
Kinsale Head facilities.
(c) Norwegian assets including a 7% working interest in the producing Jotun
field operated by ExxonMobil, a 15% interest in PL203, PL088B and PL036C
operated by Marathon which includes existing oil and gas discoveries
expected to be developed as part of the West of Heimdal project, and various
other exploration assets.
Assets to be retained by DNO are:
(a) The 10 % working interest in the producing Glitne field in Norway.
(b) The Yemeni assets including the 38,95 % working interest in Block 32
(Tasour Field), 24,45 % working interest in Block 53 (Sharyoof Field) and 50
% working interest in Block 43.
(c) The 5 % working interest in Block P, Equatorial Guinea and the 80 %
working interest in Inhaminga Block, Mozambique.
DNO believes that this transaction realizes the substantial value created
since DNO's new strategy was launched in 1996.
Following closing, DNO will have the financial strength to aggressively
pursue and create value from new oil & gas opportunities under evaluation.
Some further information about the transactions will be provided during the
presentation of 3rd Quarter interim results on November 19, 2003.
CONTACT: DNO ASA
Helge Eide
Group Managing Director
Phone: (+47) 55 22 47 00/(+47) 23 23 84 80
Homepage: http://www.dno.no
DNO ASA: Rating on CreditWatch Developing; Uncertainty Cited
------------------------------------------------------------
Standard & Poor's Ratings Services said it placed its 'B' corporate credit
rating on Norway-based independent oil and gas exploration and production
company DNO ASA on CreditWatch with developing implications. At the same
time, Standard & Poor's withdrew its senior unsecured rating on DNO's
proposed
$175 million bond due to its cancellation.
The action follows DNO's decision to sell two of its main operating
subsidiaries, DNO Britain Ltd. and Island Petroleum Developments Ltd., as
well as some of its operating assets in Norway.
"The placement on CreditWatch with developing implications reflects current
uncertainties over the company's medium-term business strategy, growth
prospects, and financial policy," said Standard & Poor's credit analyst Eric
Tanguy. "It also reflects our expectation that DNO may redefine its
financial policy toward lower debt leverage than is factored into the
current rating. Failure to conclude the planned disposal before mid-year
2004 may result in refinancing difficulties and would likely result in the
rating being lowered."
A new corporate strategy focusing on less stable geographic areas could also
trigger a downgrade. DNO is expected to present its new business strategy
within a few months.
At the end of June 2003, DNO's lease-adjusted net debt amounted to NOK376
million ($52 million), representing 32% of the company's capital under U.S.
GAAP.
DNO ASA: Ups Total Oil Production for Last Ten Months
-----------------------------------------------------
DNO's total oil production for October was 23,863 fat barrels per day. This
is an increase of approximately 8% compared with the group's oil production
for October 2002, which was 22,072 barrels per day.
DNO's oil production for the first ten months of the year averaged 27,088
barrels per day, an increase of about 23% compared with the corresponding
period in 2002.
Oil production for the individual geographical units for October and for the
period January through October was as follows (barrels per day):
October Jan - Oct
U.K. 8,089 8,751
NORWAY 5,278 5,787
YEMEN 10,496 12,550
IN ALL 23,863 27,088
The decline in production from Yemen from September is in keeping with the
expected development in production from the company's interests in the
Tasour and Sharyoof fields. As announced in a stock exchange notice on
October 30, 2003, a new well in the western extension of the Tasour field
came onstream at the end of the month at an initial rate of approximately
6,000 barrels of oil per day (of which DNO's share is 2,460 barrels per
day -- before tax). Provided that no unforeseen events occur, oil
production from the Tasour field is expected to increase in November. A new
production well has been spudded in Sharyoof, with start of production
anticipated in the course of December.
The increase in the company's oil production from the Norwegian shelf
compared with September is due to production at the Jotun field now being
back to normal after the maintenance shutdown.
Oil production from the U.K. shelf increased marginally compared with
September, because of slightly higher production from the Thistle field.
CONTACT: DNO ASA
Helge Eide, Group Managing Director
Phone: (+47) 55 22 47 00 / (+47) 23 23 84 80
Homepage: http://www.dno.no
NORWAY SEAFOODS: Pays Part of EUR600 Million Debt to Orkla
----------------------------------------------------------
Norway Seafoods, a business controlled by magnate Kjell Inge Roekke, reached
an agreement regarding the refinancing of its NOK600 million debt to Orkla.
In a statement, Norway Seafoods said it repaid NOK150 million of the loan on
Monday. The original deadline for the payment was supposed to be last
month.
Rumors previously circulate that Mr. Roekke might sell most of his assets --
including Norway Seafoods -- to raise the cash needed to pay his debts.
CONTACT: Rune Helland, VP Investor Relations
Phone: +4722544411
Siv Merethe Skorpen, Investor Relations
Phone: +4722544455
===========
R U S S I A
===========
TNK INTERNATIONAL: S&P Ups Rating to 'BB-'; Off CreditWatch
-----------------------------------------------------------
Standard & Poor's Ratings Services said that it had raised its long-term
corporate credit rating on TNK International Ltd. to 'BB-' from 'B+', and
removed the rating from CreditWatch, where it was placed on Feb. 11, 2003.
The outlook is positive.
At the same time, Standard & Poor's assigned a 'BB-' long-term corporate
credit rating to TNK-BP, a newly created legal entity holding 100% of TNK.
The two entities' asset bases are almost identical: TNK generated some 99.4%
of the parent group's operating cash flow in the first six months of 2003.
"The ratings acknowledge TNK-BP's standing as Russia's third largest oil
company in terms of reserves, production, and exports, tempered by its
moderate cost structure and leveraged financial profile," said Standard &
Poor's credit analyst Eric Tanguy.
"No direct financial support from the group's new 50% shareholder, BP PLC
(AA+/Stable/A-1+) has been factored into the ratings. However, the ratings
acknowledge the business support provided by a highly rated shareholder with
strong industry expertise, experienced management teams, and a generally
prudent financial policy," added Mr. Tanguy.
Following the recent integration of Sidanco into TNK, TNK-BP is Russia's
third-largest oil company. In 2002, TNK-BP produced 1,115 thousand barrels
per day (mbpd) from its proved reserves, which totaled 9.4 billion barrels
at year-end. Most of the company's currently producing upstream assets are
located in Russia. For the first six months of 2003, production grew by
10% to 1,229 mbpd and crude and products exports represented over 75% of
total production.
Standard & Poor's expects that TNK-BP's financial profile will improve in
the near future as the company uses a portion of its free operating cash
flow to reduce debt. Its business profile is also expected to benefit from
costs synergies between TNK and Sidanco, flows optimization among the
group's operating subsidiaries, and the gradual integration of 50% of
Slavneft's asset base.
The rating on TNK-BP will continue to be dependent on the group's cash flow
generation capacity, which should show good resilience to any significant
crude price decrease and to ongoing cost inflation. The ratings will also
depend on the group's willingness to adjust capital expenditures and
dividends so that they are funded from self-generated cash flows rather than
from additional debt.
=====================
S W I T Z E R L A N D
=====================
SWISS INTERNATIONAL: Halves Quarterly Loss in Q3 to -CHF62 Mln
--------------------------------------------------------------
Swiss International Air Lines (Group) reported a negative operating result
(EBIT) before restructuring costs of CHF62 million in the third quarter of
2003, but the loss was lower than that for the second quarter of the current
year (-CHF147 million) as well as for the first quarter (-CHF199 million).
On the group level SWISS generated total revenue of CHF3,098 million for the
first nine months of 2003 and posted a year-to-date operating result before
restructuring costs (EBIT) of
-CHF408 million.
The costs anticipated for the current corporate restructuring appear in the
third-quarter results in the form of a CHF205 million provision, broadly in
line with the CHF200 million originally announced. The company s liquidity
(cash and cash equivalents plus fixed-term deposits) totaled CHF654 million
on September 30, 2003.
The company's Foundation for Winning corporate restructuring program is well
on track. SWISS in Europe, the new business model for the company s
European product, was well received by the market, and is already helping to
raise load factors on European flights.
SWISS is working intensely to prepare for entry into the OneWorld alliance,
which will occur at the end of March 2004. SWISS is also enjoying continued
high popularity, as is evidenced by its recent receipt in New York of the
World Travel Award for Europe s Leading Airline.
SWISS carried 2.92 million passengers in the third quarter of 2003,
generating revenue from scheduled services of CHF856 million. The
corresponding revenue figure for the first nine months was CHF2,571 million.
Third-quarter seat load factors averaged 77.6%, a slight improvement on the
77.3% recorded for the same period last year. Net yield average revenue per
revenue passenger-kilometer stood at CHF0.117 for the period, down 10.7%
from CHF0.131 for the same period last year. The decline is due partly to a
further industry-wide deterioration in yields during the third quarter,
although a continuing recovery of the markets following the Iraq war and the
SARS epidemic is noticeable. Unfavorable foreign exchange rates had a
negative yield impact of 3.4%. Revenue from cargo and mail services totaled
CHF120 million for the third quarter, a decline of just under 8% on
second-quarter levels. This result is respectable in light of the parallel
8% drop in cargo capacity in the wake of the SARS epidemic. Charter
operations were encouraging: with revenue from charter and special flights
amounting to CHF51 million for the quarter, total revenue of CHF108 million
was generated from these activities in the first nine months.
A third-quarter operating EBIT of minus CHF62 million
EBIT before restructuring costs for the third quarter improved to -CHF62
million. SWISS thus posted a year-to-date EBIT before restructuring costs
of -CHF408 million. Provisions amounting to CHF205 million were effected for
the costs specifically related to the Foundation for Winning corporate
restructuring program. The provisions are intended to cover the costs
arising from the Sozialplan severance benefits package and early
retirements, and the expenditure incurred through the closure of operations
outside Switzerland, and phase-out costs of redundant aircraft.
The net financial result remained positive, and was buoyed in particular by
the beneficial impact in cost terms of a weak U.S. dollar. After the
financial result, income taxes and minority interests, SWISS posted a net
loss after restructuring costs of CHF609 million for the first nine months
of 2003.
Liquidity trends
The consolidated balance sheet showed liquidity (cash and cash equivalents
plus fixed-term deposits) of CHF654 million at the end of September 2003.
Some CHF614 million of this amount consisted of cash and cash equivalents,
and CHF40 million was held in fixed-term deposits. Liquidity thus declined
CHF157 million from its end-of-June levels. The net cash outflow followed a
reduction from CHF343 million in the first quarter to CHF102 million in the
second. It has to be noted that the company received CHF70 million from
Embraer in the second quarter of 2003. This sum was a payback of deposits
in connection with the reduction of aircraft orders.
The value of the aircraft fleet amounted to CHF2,106 million at the end of
September 2003 a CHF56 million increase on its end-of-June value. The sole
addition in the third quarter was the arrival in September of the second
Airbus A340. The CHF7 million decline in the property, plant and equipment
position compared to the end of June 2003 is broadly in line with normal
depreciation on these items. The ratio of fixed to total assets stood at
some 64% at the end of September.
Irrespective of the liquidity trends deriving from its day-to-day business
operations, SWISS is working on an additional liquidity cushion to protect
it from unforeseen events. To secure this, the company is currently
conducting intensive negotiations with the major Swiss banks and
international financial institutions.
Shareholders equity of CHF1,084 million
Shareholders equity totaled to CHF1,084 million after incorporation of the
loss incurred for the first nine months of 2003.
The balance sheet equity ratio stood at 25.7%.
The world airline market: current state and developments
Having experienced extremely turbulent and downward trends in the first half
of the year, the airline market saw a stabilization in demand around the
world in the third quarter of 2003. Indeed, according to statistics
provided by the Association of European Airlines (AEA), Europe s air
carriers have been reporting higher traffic volumes than in 2002 since June
for most regions of the world, with the notable exception of the Far East.
The Far East market also returned to real growth in mid-October. The
International Air Transport Association (IATA) also shows a recovery of the
global demand for air services in its latest report. Industry prognosis,
however, point to increasing pressure on airline yields.
Sustainable restructuring lays a foundation for the future
In launching its Foundation for Winning program, SWISS Executive
Management resolved to embark on a radical corporate restructuring project
whose implementation has been pursued on all fronts since early summer. The
program, which is designed to secure sustainable profitability, rests on
three cornerstones: (1) eliminating the biggest loss-making routes, (2)
lowering costs on both the operational and the administrative front, and (3)
introducing SWISS in Europe, the new European business model. Foundation
for Winning aims to reduce annual costs by a total of CHF1.6 billion. Some
CHF 600 million of this should be achieved through an actual unit cost
reduction and CHF1 billion through the cost reductions deriving from the
downsizing of operations.
With the adoption of the new winter schedules, the network consolidation is
almost complete. Most of the aircraft now surplus to needs have been placed
with new operators. Of the 25 original Embraer 145s, the eleven now no
longer required have all been leased out on long-term agreements. Eight of
the 16 surplus Saab 2000s have also been leased out, while provisional lease
agreements have been concluded for a further two. New operators are still
being sought for the remaining six aircraft. The successes complete a
further (and difficult) step in SWISS s restructuring endeavors. On the
supplier front, some of the renegotiations intended to lower procurement
costs have already been concluded, and others have seen substantial progress
made. And 2,500 of the 3,000 personnel positions to be eliminated had been
identified by the end of October. Notice has been served on 2 000
employees, while 500 positions have been abolished through early
retirements, part-time employment models and natural attrition. The
remaining positions to be eliminated are currently being identified. The
majority of the dismissed employees will leave the company in the fourth
quarter of this year. SWISS in Europe, the new European business model, was
introduced at the end of August. It was well received, and bookings are
showing promising trends.
SWISS to join the OneWorld alliance
Swiss International Air Lines Ltd. accepted a formal invitation to join the
OneWorld alliance on September 23. The move paves the way for SWISS to
enter this global partnership of leading air carriers.
SWISS will become OneWorld s ninth member, joining reputed partners American
Airlines, British Airways, Qantas, Cathay Pacific, Iberia, LanChile, Finnair
and Aer Lingus. In addition to the OneWorld accord, SWISS and British
Airways have concluded a bilateral agreement, which will lead both carriers
into their own strategic alliance. The strategic alliance between the two
airlines consists of codeshare flights, a joint frequent flyer program and a
guarantee of CHF50 million from British Airways.
Once SWISS is fully integrated into OneWorld, its passengers should benefit
from the new alliance in a number of ways. First and foremost, they will
enjoy the appeal of the alliance s global route network. The OneWorld
partners operate 8 600 flights a day to more than 570 destinations in 136
countries.
Thus, while consolidating its route portfolio, SWISS is determined to retain
its role as Switzerland's home carrier, and will continue to offer services
between Switzerland and the world s most important business and tourist
destinations either directly from Zurich, Basel and Geneva or on a partner
carrier via one of the OneWorld hubs.
Upon membership in OneWorld the SWISS timetable will be coordinated as
closely as possible with those of the alliance partners. Extensive
coordination of gate locations within the airport terminals will ensure
smooth, more relaxing travel for passengers. SWISS customers will be able
to collect and redeem frequent flyer miles on all OneWorld services. The
Swiss TravelClub, SWISS s frequent flyer program, will gradually be
incorporated into the Executive Club, its British Airways equivalent. But
any miles earned with SWISS will retain their validity. In the
not-too-distant future, SWISS travelers should also have access to the 380
lounges, which the OneWorld members maintain on all six continents.
In advance of these changes, which will be fully introduced by mid 2004,
SWISS is now preparing for the close collaboration with its OneWorld
partners. Aside from the numerous contracts regulating the partnership, the
primary focus is on training SWISS employees in products and services
specific to OneWorld.
Award as best European airline
SWISS was named Europe's Leading Airline at the World Travel Awards in New
York on October 13, earning the distinction ahead of reputed rivals such as
British Airways, Lufthansa and Air France. The award is the third of its
kind this year.
SWISS in Europe
SWISS has put efficiency center stage with SWISS in Europe, the new business
model for its European services, producing a concept that is tailored as
closely as possible to every passenger and every pocket.
SWISS in Europe is a direct response to changing customer needs, as more and
more travelers seek an optimum combination of attractive fares, punctual
services, convenient schedules, connection options and rebooking
possibilities, especially for short European flights.
The SWISS in Europe concept, which was introduced on August 28, has been
well received by the market. It is too early for a final assessment of the
profitability impact of the new concept, but the key figures are developing
in line with expectations: the yield, as the average "revenue per revenue
passenger kilometer" (RRPK), for September and October, decreased by roughly
12% compared to the value for the same periods last year. The average seat
load factor (SLF) on the other hand increased by 6.4% for September and by
17.3% for October on the same periods last year. Thanks to a better than
expected SLF, the "revenue per available seat kilometer" (RASK), performed
above expectations. While in September the RASK was down
6.5% on the same period last year, estimates for October indicate an
overcompensation of the yield decrease by the volume increase, which results
in an increase of the RASK on the value reached in October of last year.
This had been expected for 2004 only.
SWISS in Europe offers the customer numerous new benefits:
A new fare system: SWISS in Europe offers attractive fares to every European
destination. The permanently low prices are available for Swiss Economy or
Swiss Business travel. The new concept also offers greater pricing
transparency, as the fare level is directly related to demand: travelers who
book early or are flexible on their travel date or time will tend to obtain
a lower fare. SWISS in Europe offers greater flexibility, too: the outward
and return journeys can now be booked in different classes of travel. The
new concept also features a user-friendly Internet portal that allows the
customer to put together their own travel package, benefiting from the best
prices available as they do so. Needless to say, SWISS tickets can still be
obtained from travel agencies, SWISS call centers or SWISS air travel
offices, too. Inflight service: SWISS continues to offer its premium
Business Class product, including lounge facilities, a wide range of
newspapers and the usual superior inflight cuisine. Swiss Economy
passengers, meanwhile, can decide for themselves what services they wish to
take advantage of, and can purchase drinks and smaller or more extensive
snacks if they wish. Further benefits: All SWISS passengers, whatever class
they are traveling in and whatever fare they have paid, continue to enjoy
all the benefits that a network carrier can offer: timetables that are
carefully coordinated with those of alliance partners, centrally-located
airports, frequent services and attractive frequent-flyer programs, to name
just a few.
SWISS on intercontinental routes
Intercontinental passengers will continue to enjoy SWISS' traditionally
high-quality inflight foodservice in all three seating classes. And, with
the introduction of the new long-haul Air-bus A340, travelers in all classes
can delight in a product that meets the demands of the most discerning
inflight guest. SWISS already has three of its new flagships in service,
and four more should be delivered by the end of the year.
The brand-new interior design provides a general sense of space and well
being on board. In effecting this investment, SWISS is ensuring that it can
continue to offer a state-of-the-art product that is ideally tailored to its
passengers' wishes and needs, even on ultra-long flights. The seat in the
Swiss First compartment on the Airbus A340 has been modified and can now be
reclined to provide a totally flat bed, which is 203 centimeters long. In
Swiss Business, meanwhile, the generous seat pitch (distance between rows)
of 152 centimeters and the new lie-flat seats are a firm guarantee of a
wholly relaxing flight. And the new Swiss Economy cabin offers a quality
product at a reasonable price, including the biggest seat-back screens in
the business (at almost 24 centimeters) and a generous 81-centimetre seat
pitch.
Harmonizing and renewing the aircraft fleet
Harmonizing the SWISS aircraft fleet is a further key element in
SWISS s endeavors to establish a lower cost structure. Operating a family
of aircraft types offers productivity gains on the operational front and
synergic potential in training and maintenance terms. The current
replacement of the company s long-haul Boeing MD-11s by state-of-the-art
Airbus A340s is a major step in this direction: once the renewal is
complete, SWISS will have an entire fleet of long-haul aircraft (A330s and
A340s) whose flight decks are virtually identical. This in turn will enable
SWISS to extend its mixed fleet flying cockpit crew assignment concept to
its long-haul operations.
Under mixed fleet flying, a pilot is qualified to fly multiple aircraft
types, as and when required. The synergies here are of sizeable dimensions,
making the investments involved wholly worthwhile in economic terms.
New organizational structure
At its meeting on November 17, 2003, the Board of Directors approved the new
organizational structure as proposed by Executive Management.
The one-third reduction in SWISS flight operations has resulted in the
elimination of 3,000 positions. As a logical consequence, management
functions and composition will be restructured accordingly.
The new organization retains the existing Executive Management made up of
the President and Chief Executive Officer and three managing directors:
Managing Director Commerce CCO, Managing Director Operations COO, and
Managing Director Finance CFO. The number of management levels is unchanged.
Various divisions will be regrouped or combined and made subordinate to
other divisions. For example, the two pilot corps will now be under the
command of one person, the head of Fleet and Cockpit (Vice President), who
reports directly to the Chief Operations Officer (COO) Manfred Brennwald.
The existing Executive Vice President Flight Operations Thomas Brandt will
be reassigned to new duties within SWISS management.
The new organization will eliminate a total of 330 positions.
Combined with the 2 500 positions identified at the end of October and a
final 170 positions currently under review, the original downsizing figure
of 3 000 positions will be met.
The revised organization will be introduced gradually.
To see financial statements:
http://bankrupt.com/misc/Swiss_International_3Q.htm
The media release (including tables) can be downloaded from this following
link: http://hugin.info/100173/R/925350/125936.pdf
CONTACT: SWISS INTERNATIONAL
Corporate Communications
P.O. Box, CH-4002 Basel
Phone: +41 (0) 848 773 773
Fax: +41 61 582 35 54
E-mail: communications@swiss.com
Home Page: http://www.swiss.com
===========================
U N I T E D K I N G D O M
===========================
BOOSEY & HAWKES: Classic Copyright Bid Declared Unconditional
-------------------------------------------------------------
Classic Copyright Limited announces that, as at 3:00 p.m. on
November 14, 2003, the second closing date of the Offers:
(a) valid acceptances in relation to the Ordinary Share Offer have been
received by Classic Copyright in respect of a total of 18,721,938 Ordinary
Shares, representing approximately 90.94% of the existing issued ordinary
share capital of Boosey & Hawkes. Of these acceptances, a total of
3,438,361 Ordinary Shares, representing approximately 16.7% of the existing
issued ordinary share capital of Boosey & Hawkes, have been received from
Guinness Peat Group PLC, who had irrevocably undertaken to accept the offer;
(b) valid acceptances in relation to the 3.85% Preference Share Offer have
been received by Classic Copyright in respect of a total of 620 3.85%
Preference Shares, representing approximately 28.36% of the existing issued
3.85% preference share capital of Boosey & Hawkes; and
(c) valid acceptances in relation to the 4.9% Preference Share Offer have
been received by Classic Copyright in respect of a total of 5,388 4.9%
Preference Shares, representing approximately 20.16% of the existing issued
4.9% preference share capital of Boosey & Hawkes.
Given the current level of acceptances, the Ordinary Share Offer has now
become unconditional as to acceptances. The Ordinary Share Offer will
remain open for acceptance until further notice and remains subject to
conditions 1 (b) to 1 (h) in Appendix I to the Offer Document.
Subject always to the conditions set out in Appendix I to the Offer
Document, the Preference Share Offers will be extended for a further 14
days, to 3:00 p.m. on November 28, 2003. Classic Copyright reserves the
right (but will not be obliged, other than as required by the Panel) to
further extend the Preference
Share Offers after such time.
Classic Copyright reminds Boosey & Hawkes Shareholders that the recommended
Classic Copyright offers are the only offers available to them.
Boosey & Hawkes Shareholders who hold shares in certificated form (i.e. not
in CREST), and have not accepted the Offer(s) but wish to do so, should
complete and sign the relevant Form(s) of Acceptance and return them, in
accordance with the instructions printed thereon, as soon as possible. If
you had already accepted the Regent Street Music Limited offer(s), which
have now lapsed, you are no longer bound by your acceptance and your
completed form(s) of acceptance, together with your share certificate(s)
and/or other document(s) of title, should now have been returned to you by
post.
To accept the Ordinary Share Offer in respect of Ordinary Shares held in
uncertificated form (i.e. in CREST), Ordinary Shareholders should take (or
procure to be taken) the action set out in paragraph 13.3 of Part 2 of the
Offer Document to transfer the Ordinary Shares in respect of which they wish
to accept the Ordinary Share Offer to an escrow balance, specifying Capita
IRG PLC (in its capacity as a CREST participant under the Escrow Agent
participant ID referred to in paragraph 13.3 of Part 2 of the Offer
Document) as the Escrow Agent, as soon as possible. If you are a CREST
sponsored member, you should contact your CREST sponsor immediately. If you
had already accepted the Regent Street Music ordinary offer, which has now
lapsed, you are no longer bound by your acceptance and Computershare
Investor Services PLC (as agent for Regent Street Music) should have already
given instructions to CRESTCo to transfer back to your original balance all
of the Ordinary Shares which you had validly assented to the Regent Street
Music ordinary offer.
If you are in any doubt as to the procedure for acceptance, please contact
Capita IRG PLC on telephone number 0870 162 3100 (or +44 20 8639 2157 from
outside the United Kingdom).
Neither Classic Copyright nor any person acting in concert or deemed to be
acting in concert with it for the purpose of the Offers held any Boosey &
Hawkes Shares (or rights over Boosey & Hawkes Shares) prior to October 8,
2001, the commencement of the Offer Period.
Save for the Ordinary Shares subject to the irrevocable undertaking and
acceptances referred to above, during the Offer Period neither Classic
Copyright nor any person acting in concert or deemed to be acting in concert
with it for the purpose of the Offers has acquired or agreed to acquire any
Boosey & Hawkes Shares (or rights over Boosey & Hawkes Shares).
Terms defined in this announcement have the same meanings as set out in the
Offer Document.
CONTACT: HGCAPITAL
Nick Martin/Ian Armitage
Phone: 020 7089 7888
DELOITTE & TOUCHE CORPORATE FINANCE
Jonathan Hinton/Byron Griffin
Phone: 020 7936 3000
HOLBORN PUBLIC RELATIONS LIMITED
David Bick/Trevor Phillips
Phone: 020 7929 5599
CANARY WHARF: UBS Investment Back CWG Offer, Says Brascan
---------------------------------------------------------
UBS Investment Bank told CWG Acquisition in a letter it will accept CWG
Acquisition's offer for all of its shares in Canary Wharf should CWG make a
bid, Brascan said. Brascan is acting in behalf of CWG for the acquisition.
UBS Investment Bank business group of UBS AG London Branch presently holds
10,742,170 ordinary shares of Canary Wharf representing approximately 1.8%
of Canary Wharf's issued share capital.
CWG Acquisition Limited is offering an all cash bid of 252 pence
per Canary Wharf share.
Canary Wharf, which fell down during the stock market crash of
1987, is currently suffering from the slowdown in the real property market.
It was bailed out by a group of banks and then sold. It recovered during
the late 1990s but encountered difficulties again after the September 11
attacks discouraged interest in skyscrapers.
CONTACT: BRASCAN CORPORATION
Katherine C. Vyse
Phone: 416-369-8246
E-mail: kvyse@brascancorp.com
EURO DISNEY: Annual Net Loss Balloons to EUR45.4 Million
--------------------------------------------------------
Euro Disney S.C.A., the operating company of Disneyland Resort Paris,
reported its consolidated financial results for the fiscal year ended
September 30, 2003.
Revenues for the year decreased 2.1% to total EUR1,053.1 million. The
reduced revenues reflect a prolonged downturn in European travel and
tourism, strikes and work stoppages throughout France during the year,
combined with challenging general economic conditions in its key markets,
partially offset by the impact of a full year of Walt Disney Studios Park.
Excluding the impact of the Company's fiscal year 2003 change in accounting
principle for major fixed asset renovations discussed below, operating
margin (earnings before lease and financial charges and exceptional items)
for the year declined 18.6% to EUR143.0 million and the net loss increased
from EUR33.1 million to EUR45.4 million.
On an as-reported basis, operating margin decreased 24.6% to EUR132.4
million from EUR175.7 million in the prior year. After lease and net
financial charges and exceptional items, the Group's net loss totaled
EUR56.0 million.
The increased loss reflects disappointing revenues, higher direct operating
costs due to the full year operations of Walt Disney Studios Park, and
higher advertising costs during the first semester, partially offset by
lower royalties and management fees following the waiver of the payment of
these fees by The Walt Disney Company for the last three quarters of fiscal
year 2003.
Operating Indicators:
Year ended September 30, Variation
2003 2002 Amount Percent
Theme Park guests (in millions)
(1) 12.4 13.1 (0.7) (5.3)%
Theme Park spending per guest
(2) (in EUR) 40.7 40.1 0.6 1.5%
Hotel occupancy rate (3) 85.1% 88.2% (3.1)
ppt
Hotel total spending per room
(4) (in EUR) 183.5 175.1 8.4 4.8%
(1) Includes Disneyland Park and, from March 16, 2002, Walt Disney Studios
Park.
(2) Average daily admission price and spending on food, beverage and
merchandise sold in the Theme Parks, excluding VAT.
(3) Average daily rooms sold as a percentage of total room inventory (total
room inventory is approximately 5,800 rooms).
(4) Average daily room price and spending on food, beverage and merchandise
sold in hotels, excluding VAT.
(a) Resort Segment Revenues Decreased from EUR1,048.7 Million to EUR1,029.5
Million, a Decrease of 1.8 %.
Theme park revenues decreased 3.3% to EUR508.5 million from EUR526.0 million
in the prior year as a result of lower admissions revenues driven by a 5.3%
decrease in theme park guests, partially offset by higher park admission
prices. Merchandise and food and beverage revenues in the Theme Parks also
decreased primarily as a result of lower total theme park attendance,
partially offset by higher food and beverage spending per guest.
Hotel and Disney Village revenues increased 1.2% to EUR416.7 million from
EUR411.7 million in the prior year, reflecting a 4.8% increase in daily
average guest spending per room, partially offset by a 3.1 percentage point
decrease in hotel occupancy, which averaged 85.1% during the year. Disney
Village revenues increased 1% from the prior year.
Other Revenues (which primarily include participant sponsorships,
transportation and other travel services sold to guests) decreased EUR6.7
million to EUR104.3 million, reflecting primarily lower participant
sponsorship revenues.
(b) Real Estate Development Segment Revenues Totaled EUR23.6 Million
Compared to EUR27.3 Million in the Prior Year.
As planned, revenues from Real Estate Development activities decreased from
the prior year. Real Estate Development revenues in fiscal year 2003
included primarily commercial and residential land sale transactions. In
addition, revenues included ground lease income and fees earned related to
conceptualization and development assistance services provided to
third-party developers that have signed contracts to either purchase or
lease land on Disneyland Resort Paris site for development.
(c) Operating Margin Decreased Despite Cost Control Focus
Operating margin for the year decreased in both the Resort and Real Estate
operating segments. Resort Segment margin without the Accounting Change was
EUR132.7 million, reflecting a decrease of EUR30.9 million, while the Real
Estate Development Segment decreased EUR1.8 million to EUR10.3 million.
Given the successful completion of most of the additional hotel capacity
projects and other commercial and residential sales to third-party
developers, management expects the real estate development operating- margin
to decrease next year, reflecting reduced sales activity.
Total costs and expenses before the Accounting Change were EUR910.1 million
in fiscal year 2003 compared to EUR900.3 million in the prior year, an
increase of EUR9.8 million. This increase in costs and expenses related to
increased direct operating costs (+ EUR12.5 million), increased marketing,
general and administrative expenses (+ EUR13.8 million), and increased
depreciation and amortization expenses (+ EUR10.9 million), partially offset
by decreased royalties and management fees (-EUR27.4 million).
The direct operating costs increase before the Accounting Change reflected a
full year of additional labor and other expenses of Walt Disney Studios
Park, partially offset by decreased cost of sales.
Marketing and sales expenses increased EUR9.8 million, reflecting an
increase that occurred primarily during the first half of fiscal year 2003.
General and administrative expenses before the Accounting Change increased
EUR4.0 million reflecting increased labor and other expenses.
Depreciation and amortization before the Accounting Change increased EUR10.9
million, primarily reflecting additional depreciation related to Walt Disney
Studios Park.
Royalties and management fees totaled EUR8.1 million, EUR27.4 million lower
than the previous year, reflecting the March 28, 2003 waiver by The Walt
Disney Company of these fees for the last three quarters of fiscal year
2003. In fiscal year 2004, royalties will be reinstated to their full
contractual rates (fiscal year 1999 through 2003 rates were reduced to half
of their original levels as a result of the 1994 financial restructuring);
however, payment for 2004 royalties will not be due until the first quarter
of fiscal year 2005 due to the waiver agreement.
(d) Lease and Net Financial Charges Totaled EUR200.3 million, an Increase of
EUR29.5 Million, Due Primarily to Scheduled Lease Payments.
Lease and net financial charges increased to EUR200.3 million from EUR170.8
million. This increase was primarily attributable to:
(i) Planned increases in lease rental expense related to
principal repayments on the debt of the financing
companies from which the Group leases a significant
portion of its operating assets (EUR18.2 million),
(ii) Increased interest based expenses of EUR9.5 million as
compared to the prior year, during which EUR9.2 million
of interest was capitalized into the cost of Walt Disney
Studios Park.
(e) Exceptional Income Totaled EUR11.9 Million Compared to Exceptional
Expenses of EUR38.0 Million in the Prior Year.
In fiscal year 2003, the Company sold three apartment developments used to
provide housing to employees within close proximity to the site. The
transaction generated EUR34.1 million in net sale proceeds and a gain of
EUR11.0 million. The Company continues to operate the apartment
developments under leases with the buyers.
In fiscal year 2002, the Company incurred EUR37.2 million of pre-opening
expenses related to Walt Disney Studios Park, which opened to the public on
March 16, 2002. These expenses included the costs of hiring and training
employees for Walt Disney Studios Park during the pre-opening period as well
as the costs of the pre-opening advertising campaigns and the media events
that took place throughout February and March 2002.
Cash Flows:
As of September 30, 2003, cash and cash equivalents totaled EUR46.0 million,
an increase of EUR24.7 million from the prior year-end balance.
Specifically, this increase in cash resulted from: Cash Flows from Operating
Activities EUR88.1 million; Cash Flows used in Investing Activities
EUR(28.8) million; Cash Flows used in Financing Activities EUR(34.6)
million.
Cash flows from operating activities increased to EUR88.1 million from
EUR48.7 million in the prior year primarily as a result of changes in
working capital, partially offset by lower net results.
Cash flows used in investing activities totaled EUR28.8 million reflecting
EUR72.9 million of capital investment expenditures, partially offset by
EUR45.4 million of cash proceeds from the sale of fixed assets. Capital
investment expenditures related primarily to construction costs of Walt
Disney Studios Park, the transformation of an existing Disney Village
restaurant into King Ludwig's Castle, featuring authentic German cuisine,
completion of the Fantillusion parade, which had its debut at Disneyland
Park this year, and various improvements to the existing asset base.
Proceeds from the sale of fixed assets reflected the sale of three apartment
developments discussed above, as well as certain of the bungalows at the
Davy Crockett Ranch, which are now under lease by the Company.
Cash flows used in financing activities totaled EUR34.6 million reflecting
increased debt and other security deposits in the amount of EUR59.6 million
and debt repayments of EUR15.0 million, partially offset by EUR40.0 million
of drawings under the EUR167.7 million The Walt Disney Company line of
credit, thereby bringing the outstanding balance of the credit line as of
September 30, 2003 to EUR102.5 million.
Change in Accounting Principle:
Under the Company's new policy, effective October 1, 2002, the costs of
major fixed asset renovations are no longer capitalized and amortized over
five years, but are instead accrued in advance on a straight-line basis as
operating expense during the period between planned renovations.
The Company adopted this change in accounting as a result of a change in
generally accepted accounting principles in France, and the retroactive
impact on prior years of this change was recorded as a charge to equity. As
a result of this change, fiscal year 2003 operating expenses increased by
EUR10.6 million, reflecting a EUR20.0 million increase in the provision for
major fixed asset renovations, offset by EUR9.4 million reduced amortization
expenses related to deferred fixed asset renovation costs.
To enhance comparability between fiscal periods, Exhibit 2 displays the
Consolidated Statement of Income for the year ending September 30, 2003
showing balances without the impact of the Accounting Change and reconciling
those balances to the Consolidated Statements of Income.
Outlook for Fiscal Year 2004 - Financial Negotiations
On November 3, 2003, the Company obtained waivers from its lenders,
effective through March 31, 2004, with respect to certain financial
covenants and other obligations, including a reduction in certain security
deposit requirements.
The purpose of this agreement is to give management, the lenders and The
Walt Disney Company time to find resolution regarding the Company's
financial situation. The Company has prepared its financial reports for
fiscal year 2003 assuming the success of these negotiations. Absent such a
timely resolution, the waivers would expire and management believes the
Company would then be unable to meet all of its debt obligations. The
Company's statutory auditors have included an explanatory paragraph
regarding this issue in their audit report of fiscal year 2003.
In addition, The Walt Disney Company agreed to provide the Company a new
EUR45 million-subordinated credit facility, which can be drawn upon through
March 31, 2004, but only after the existing EUR167.7 million standby
facility provided by The Walt Disney Company is fully drawn. If amounts
were drawn, repayment would be subject to the Company's meeting certain
financial thresholds or to the prior repayment of all of the Company's
existing debt to its lenders.
The Company's management believes that the waivers will allow time for the
parties to develop a mutually acceptable resolution to the Company's future
financing needs.
Andre Lacroix, Chairman and Chief Executive Officer of Euro Disney SA, said:
Fiscal year 2003 was a particularly difficult year for the tourism industry.
As the leader in the destination resort market in Europe, our Company was
not immune to the difficulties that all operators experienced, and our
results reflect this year's unusual circumstances. Disneyland Resort Paris
remains without a doubt the number one tourist destination in Europe, due to
our unique product offer and high guest satisfaction rates. Growth in the
theme park market should continue to provide Disneyland Resort Paris
significant opportunity.
Fiscal year 2004 will be impacted by two major factors: the implementation
of a new European marketing strategy that is innovative and adapted to
changing consumer behavior, and; the negotiations for a new financial
structure designed to meet our long-term objectives.
I believe in our future. Disneyland Resort Paris is and will remain the
only truly magical destination in Europe.
Next Scheduled Release: First Quarter Earnings in mid-January 2004
Additional Financial Information can be found on the Internet at
http://www.eurodisney.com
Euro Disney S.C.A. and its subsidiaries operate the Disneyland Resort Paris
which includes: Disneyland Park, Walt Disney Studios Park, seven themed
hotels with approximately 5,800 rooms, two convention centers, Disney
Village, a dining, shopping and entertainment center, and a 27-hole golf
facility. The Group's operating activities also include the management and
development of the 2,000-hectare site, which currently includes
approximately 1,000 hectares of undeveloped land. Euro Disney trades in
Paris (SRD), London and Brussels.
To view financials: http://bankrupt.com/misc/Euro_Disney_Financials.htm
CONTACT: Investor Relations
Picard-Rame
Phone: +331 64 74 56 28
Fax: +331 64 74 56 36
E-mail: sandra.picard@disney.com
GOVETT: Appoints Gartmore New Investment Manager
------------------------------------------------
Further to their announcement on November 4, 2003, the Board of Govett Asian
Income & Growth Fund Limited; Govett Enhanced Inc; Govett Singapore Growth
Fund; Govett Asian Recovery Trust; Govett Euro Enhanced Investment Trust;
and Govett Safeguard Fund now announce that they have appointed Gartmore
Investment Limited as Investment Manager to the Company. This follows the
announcement by Allied Irish Banks, plc of the intended sale of certain of
the management contracts of Govett Investment Management Limited to Gartmore
Investment Management plc.
Gartmore has been appointed Investment Manager through the novation of the
Investment Management Agreement between your Company and Govett, with no
changes to the terms of the Agreement and no costs or charges to the
Company. The terms of the Agreement required twelve months' notice to be
given to the manager. However, as stated in the last Report & Accounts, the
Board served protective notice on June 13, 2003 on Govett in respect of the
Agreement. This protective notice will remain binding on Gartmore.
HOLLINGER INC.: CEO Resigns in Wake of Pay-off Scandal
------------------------------------------------------
Hollinger International Inc. (NYSE: HLR) announced that its board of
directors has retained Lazard LLC to review and evaluate its strategic
alternatives, including a possible sale of the company, a sale of one or
more of its major properties or other possible transactions (the Strategic
Process).
In addition to commencing the Strategic Process, Hollinger also announced a
series of management changes. Lord Conrad M. Black of Crossharbour has
advised the board that, in light of the Strategic Process, he will retire as
Chief Executive Officer effective November 21, 2003, and that he will devote
his time and attention primarily to pursuing the Strategic Process. Lord
Black will remain as non-executive Chairman of Hollinger, and he will
continue unchanged his role as Chairman of The Telegraph Group, Ltd., a
wholly owned subsidiary of Hollinger.
Lord Black said: "Now is the appropriate time to explore strategic
opportunities to maximize value for all shareholders of Hollinger
International. We are delighted that Bruce Wasserstein and his team at
Lazard will be working with us to ensure the market is well aware of the
substantial value of the Company's assets. Reflecting my full support of
this process, I will be devoting my attention in coming months to achieving
a successful outcome for all Hollinger shareholders. The present structure
of the group clearly must be renovated. As the Strategic Process proceeds
we will continue to cooperate entirely with the Special Committee to resolve
corporate governance concerns."
The board has also accepted the resignations with immediate effect of Mr. F.
David Radler as President and Chief Operating Officer of Hollinger, and also
as Publisher of the Chicago Sun-Times, and Mr. Mark Kipnis, as Vice
President and Corporate Counsel. Mr. Radler has indicated to Lord Black a
desire to work on privately held newspaper interests. Mr. Radler and Mr.
Peter Y. Atkinson have resigned as members of the board of directors of
Hollinger, although Mr. Atkinson remains an Executive Vice President of
Hollinger and will continue in that capacity as well as assisting in the
conduct of the Strategic Process. The executive committee terminated the
employment of Mr. J.A. Boultbee, an Executive Vice President of Hollinger,
after failing to reach agreement with him on several matters. In
recognition of the retirement of Lord Black and the resignation of Mr.
Radler, the board has approved a series of management changes. These
include:
Gordon A. Paris has been elected Interim President and Chief Executive
Officer of Hollinger, with his election as CEO to take effect on the date of
Lord Black's retirement. Mr. Paris is currently a director of Hollinger,
and serves as Chairman of the Special Committee of Hollinger's board that
was formed in June, 2003, to investigate certain allegations regarding
related party transactions. Mr. Paris is a Managing Director of the New
York-based investment-banking firm of Berenson & Company, where he heads its
media, telecommunications and restructuring practices. Mr. Paris will serve
as Hollinger CEO concurrently with remaining active in his current position
with Berenson.
Daniel W. Colson, currently Vice Chairman and a director of Hollinger and
Deputy Chairman and CEO of the Telegraph Group, has been elected to the
additional position of Chief Operating Officer of Hollinger. Mr. Colson
will continue in his current responsibilities with the Telegraph Group along
with assuming his new wider responsibilities for overall operations. Mr.
Colson has been an officer of Hollinger for more than 15 years, and has
managed Hollinger activities in various parts of the world.
The Hon. Raymond G. H. Seitz has been elected chairman of the Executive
Committee of the board of directors. Ambassador Seitz was elected to the
board of Hollinger in July, 2003, where he also serves on the Special
Committee. He is the former U.S. Ambassador to the Court of St. James, and
also is a former Chairman of Lehman Brothers (Europe). Mr. Seitz is a
current or former director of numerous major corporations in the U.S.,
Europe and Asia.
The Hon. James R. Thompson, The Hon. Richard Burt, and Mr. Graham W. Savage
have been elected members of the Executive Committee. Governor Thompson and
Ambassador Burt currently serve as Chairman and a member, respectively, of
the Audit Committee of Hollinger. Mr. Savage was elected to the board of
Hollinger in July, 2003, and also serves as a member of the Special
Committee. Mr. Savage has also been elected to the Audit Committee. Lord
Black will continue as a member of the Executive Committee along with
Messrs. Seitz, Thompson, Burt and Savage.
Mr. Paris commented, "This is a pivotal moment in Hollinger's history, and I
welcome the opportunity to work with all the employees of Hollinger and its
board to ensure a smooth transition. The Company has magnificent assets,
and a superb group of employees who have created tremendous vitality and
quality in our publications."
In the course of its work, the Special Committee has recently been reviewing
certain payments to members of senior management and to Hollinger's parent
company Hollinger, Inc. (HLG) in 1999, 2000 and 2001. These payments were
characterized as "non-competition" payments in connection with sales of U.S.
community newspaper properties. The Audit Committee has joined the Special
Committee in this phase of the investigation, and the two committees have
worked jointly to determine the facts and to make recommendations to the
full board of directors.
The Committees have determined that a total of $32.15 million in payments
styled as "non-competition payments" were made that were not authorized or
approved by either the audit committee or the full board of directors of
Hollinger. The U.S. community newspaper sales related to these payments
involved total proceeds of approximately $760 million.
Of the total unauthorized payments, $16.55 million was paid to HLG in 1999
and 2000, approximately $7.2 million each was paid to Lord Black and Mr.
Radler in 2000 and 2001, and just over $600,000 was paid to each of Mr.
Boultbee and Mr. Atkinson in 2000 and 2001.
Hollinger's prior public disclosure relating to these matters was incomplete
or inaccurate in some respects. The $16.55 million in payments to HLG have
not previously been publicly disclosed in the notes to Hollinger's financial
statements or in filings with the U.S. Securities and Exchange Commission.
The $15.6 million in payments to the four individuals were disclosed in
Hollinger's Form 10-K filed in March, 2002. However, this prior disclosure
stated that the payments in question had been authorized by the independent
directors of the board, which did not occur, and that the payments were made
"to satisfy a closing condition," which was not accurate. In addition, $5.5
million of such payments were reported to have occurred in 2000 rather than
in 2001, when such payments were actually made.
In light of the fact that steps to authorize the payments in question were
not completed as required, each of Lord Black, Mr. Radler and Mr. Atkinson
have agreed to repay Hollinger the full amount of the unauthorized payments
received by them, together with interest dating from the date of receipt of
these funds, not later than June 1, 2004. In addition, Lord Black has
agreed to seek repayment in full by HLG of the amounts received by it, with
interest, by no later than June 1, 2004. Upon receipt of such restitution,
Hollinger's cash position and net worth will be increased compared with
previously reported amounts. Officers of Hollinger, including Lord Black,
have actively cooperated with the Special Committee, which will continue its
work to resolve outstanding issues as expeditiously as possible.
HOLLINGER INC.: Ends Contract with Ravelston Management
-------------------------------------------------------
In addition to the management changes described [above], the board of
directors and Lord [Conrad M.] Black have agreed on additional changes to
the current structure of Hollinger in light of the Strategic Process and
other developments. Hollinger has notified Ravelston Management Inc., a
subsidiary of the Ravelston Corporation Ltd. (collectively, Ravelston), both
of which are controlled by Lord Black, that the management agreement
pursuant to which Ravelston Management Inc. has historically provided
management services to Hollinger will be terminated in accordance with its
terms effective June 1, 2004.
In addition, under the terms of the management agreement with Ravelston
Management Inc., the management fee is to be renegotiated during each
successive calendar year period. Hollinger has notified Ravelston that
beginning January 1, 2004 the management fee for the remaining term of the
agreement, will be reduced to reflect the personnel changes described above
and other factors. Ravelston currently provides Hollinger certain
financial, accounting and operational services through a staff of
approximately 30 individuals. Hollinger expects to bring these services
in-house or otherwise obtain them during the transition period prior to
conclusion of the management agreement.
Lord Black has also agreed that during the pendency of the Strategic
Process, in his capacity as the majority stockholder of HLG, he will not
support a transaction involving ownership interests in HLG if such
transaction would negatively affect Hollinger's ability to consummate a
transaction resulting from the Strategic Process unless any such transaction
involving HLG meets certain limited conditions, and after reasonable prior
notice to Hollinger.
HOLLINGER INC.: Mulls Sale of Corporate Aircraft
------------------------------------------------
Under the restructuring approved by the board, Hollinger expects to review
the possible sale of the corporate aircraft owned by Hollinger. The company
expects to review alternatives for phasing out or eliminating a second
aircraft currently leased by Hollinger.
Hollinger has notified its independent auditors, KPMG LLP, of these matters,
and the Audit Committee has requested the auditors to assist in determining
the appropriate accounting treatment for the matters in issue. KPMG has
advised the Audit Committee and the Special Committee that it is reviewing
the consequences of these matters.
HOLLINGER INC.: Hopes to File Delayed Quarterly Report Today
------------------------------------------------------------
On November 14, 2003, Hollinger notified the SEC pursuant to Rule 12b-25 of
its inability to file its Form 10-Q for the period ended September 30, 2003
in a timely manner. Hollinger expects to file its 10-Q on or before
November 19, 2003. Representatives of the Special Committee have informed
the SEC of the findings of the Special Committee, and Hollinger will
cooperate fully with any inquiries stemming from these matters.
Hollinger International Inc. is a global newspaper publisher with
English-language newspapers in the United States, Great Britain, and Israel.
Its assets include The Daily Telegraph, The Sunday Telegraph and The
Spectator magazine in Great Britain, the Chicago Sun-Times and a large
number of community newspapers in the Chicago area, The Jerusalem Post and
The International Jerusalem Post in Israel, a portfolio of new media
investments and a variety of other assets.
CONTACT: HOLLINGER INTERNATIONAL INC.
Paul B. Healy
Vice President
Corporate Development and Investor Relations
Phone: (212) 586-5666
INTER-ALLIANCE GROUP: Offers New Share Options to Employees
-----------------------------------------------------------
The Board announces the implementation of new proposals for share options to
reward outstanding performance. The revised and new arrangements meet the
Board's objectives of recruiting, retaining and motivating the Company's
independent financial advisers and key staff. Demanding performance
conditions are attached to all new share option arrangements that are
designed to deliver business growth and maximize shareholder value.
Historical Position
In the circular to shareholders dated July 18, 2003 the Board highlighted
its intention to bring forward proposals to ensure the Company's share
option schemes met their objective of retaining and motivating key staff and
IFAs. Having consulted the Company's major institutional shareholders, the
Board has implemented various revisions to existing share option
arrangements and has introduced some new arrangements, the details of which
are set out below.
Prior to the placing announced on July 18, 2003, the Company had in place
share option arrangements that could result in the issue of 31,766,166
Ordinary Shares (representing 21.9% of the issued share capital of the
Company at that time) if all of the performance criteria were met. Full
details of the various share option arrangements were set out in the
Company's circular on March 18, 2003.
Existing Share Option Schemes (see March Circular)
Name of Scheme Options Granted Replacement
Options Granted on
November 14, 2003
CSOP (Approved) 1,193,530 1 new option for
every 10 old options
USOS (Unapproved) 9,690,409 1 new option for
every 10 old options
HST (Unapproved) 947,878 1 new option for
each old option
CSOP & DSOS (Unapproved) 13,126,998 1 new option for each
old option *
* excluding Business Leader's options for former Limited Company
participants that will be surrendered.
The Directors consider that the value of these options has become negligible
and, as such, they do not provide the incentive to IFAs and employees that
is intended for such schemes. The Directors believe that in a service
business, the retention and motivation of its IFAs and key employees is
vital in securing business growth and delivering shareholder value.
However, the Director's remain committed to maintaining the share options
within ABI Guidelines. The arrangements described below will not result in
the issue of options that in total exceed 10% of the Company's issued share
capital.
Revised Arrangements
The Company has written to all eligible participants in each of its share
option schemes (excluding the Company's Save as You Earn Scheme), offering
them the opportunity to surrender voluntarily their options in exchange for
a re-grant of new options. As a result, options over 15,378,803 Ordinary
Shares were surrendered.
New Arrangements
In addition, a new arrangement for IFAs called 'The Business Drivers Scheme'
has been introduced. The Business Drivers Scheme is designed to promote the
highest levels of professionalism and business growth, coupled with
stretching performance conditions to vest options. The performance criteria
attached to options granted to IFAs require in all cases in excess of 10%
cumulative year on year growth in production. At the same time the Board
has launched new arrangements for its key senior managers with validation
criteria linked to business growth. The Sales Management Scheme relates
performance to the performance of IFAs by region, while the Support Center
Management Scheme adopts the Board's Performance Criteria for 70 per cent of
options granted, coupled with personal performance objectives for the
remaining 30%.
Name of Scheme Options Granted
Business Drivers (DSOS) 20,265,000
Senior Management (CSOP) 16,016,155
On November 14, the Company's Remuneration Committee met and recommended the
revised and new arrangements set out above to the Board, who in turn
accepted the recommendation at a Board Meeting convened later that day. The
Board has therefore re-granted or granted options at the mid-market closing
share price reported by the Financial Times on November 14, 2003 (as
required by the rules of the relevant share scheme) to all eligible option
holders who surrendered their options and to new option holders
respectively. The combination of options re-granted and new options granted
(excluding the grant of options to the Board referred to below) results in a
total grant of options over 45,266,762 Ordinary Shares representing 4.99% of
the Company's current issued share capital at a price of 2.875 pence.
Board Share Options
The Board and the Remuneration Committee believe, for the reasons stated
above, that the options currently held by Directors also need to be
replaced. Accordingly, the Directors have surrendered all of their existing
options as set out below. Keith Carby and the Company have agreed to the
cancellation of the Long Term Incentive Plan dated March 7, 2002 under which
the options set out below were granted to Mr. Carby. The Company's
Remuneration Committee has therefore agreed that the Board be granted the
following options, for nil consideration, over the Company's shares at an
exercise price of 2.875 pence:
Surrendered Options New Options
Name Date of Grant Number Grant Price Number
Keith Carby March 7, 2002 4,193,654 55 p 10,000,000
Michael Achilles Sept. 28, 2001 232,558 86 p 3,000,000
Michael Burne Dec. 3, 2002 125,000 109 p 3,000,000
Steven Hartley - - - 4,000,000
Philip Lockyer Sept. 1, 2002 218,009 105.5 p 4,000,000
Gerard Moore Aug. 1, 2002 230,000 107.5 p 3,000,000
Carey Aug. 1, 2002 100,000 107.5 p )
Shakespeare Dec. 31, 2002 50,000 109 p ) 3,000,000
All Board options become exercisable between January 1, 2007 and 10 years
following their grant on November 14, 2003.
The exercise of all Board options is subject to stringent performance
criteria that are based upon the Company becoming cash flow positive,
increasing average IFA productivity and reducing the Company's operating
overheads as a proportion of its net retained turnover (or gross margin).
These performance conditions will be monitored closely by the Remuneration
Committee.
Total of options granted
Following the cancellation of existing options and the issue of the new
options, as set out above, the total number of shares, which could be issued
if all of the performance criteria are met are 75,266,762 Ordinary Shares,
representing 8.29% of the current issued Share Capital of the Company.
Further grants pursuant to the revised and new arrangements
A small number of eligible option holders have not yet had an opportunity to
respond to the Company's offer to surrender their options. Due to the
importance of the option arrangements for all participants in delivering
growth and shareholder value, the Board proposes to allow any such option
holder who wishes to surrender a further opportunity to do so. If any
further eligible option holders elect to surrender their options by noon on
Friday November 21, 2003 the Board proposes to re-grant or grant options as
appropriate. Any such grants will be in accordance with the proposals set
out above and at the mid-market share price reported by the Financial Times
(as required by the relevant share scheme rules). An appropriate
announcement will be made immediately following any such re-grant or grant.
CONTACT: INTER-ALLIANCE GROUP PLC
Financial Dynamics
Keith Carby, Chairman & Chief Executive
Geoffrey Pelham-Lane
Phone: 020 8971 4400
020 7269 7194
Michael Burne, Legal Director
Phone: 01793 441 456
LE MERIDIEN: Abandons Rescue Efforts; Sells Hotels Overseas
-----------------------------------------------------------
Le Meridien's international hotel business, which includes hotels such as
the Forte Village in Sardinia and the Le Royal Meridien Bristol in Warsaw,
are up for sale, according to the Financial Times.
The decision to dispose the assets that analyst say could fetch more than
GBP700 million was reached after the failure of restructuring talks between
Lehman Brothers, one of the group's largest lenders, and Hyatt, the U.S.
hotel chain. Le Meridien is now expected to appoint Morgan Stanley to advise
it on a "range of strategic options." It is expected that stakeholders are
to vote for an outright sale of the properties, the report said.
The assets whose future are at stake excludes the 11 U.K. hotels operated
under the Le Meridien brand. Ownership of those properties, which include
the Grosvenor House on London's Park Lane, has reverted to landlord Royal
Bank of Scotland after Le Meridien failed to pay its rent towards the middle
of the year.
The 11 hotels are now operated by Kroll's corporate advisory and
restructuring group on behalf of the Scottish bank.
Le Meridien's troubles stem from the sharp downturn in tourism after the
September 11 attacks. The crisis is worsened by the outbreak of SARS in
Asia and the war in Iraq.
Le Meridien has about GBP1 billion in debt.
MYTRAVEL GROUP: Shareholders Approve U.S. Disposals
---------------------------------------------------
At the Extraordinary General Meeting of shareholders held Monday the three
resolutions referred to in the notice of meeting dated November 1, 2003 were
put to the meeting and, in each case, were duly passed.
Accordingly, the Cruise Disposal, the Auto Europe Disposal and the WCT
Disposal (all as defined in the notice of meeting dated November 1, 2003)
were approved by the shareholders of MyTravel Group plc.
Earlier and in accordance with the terms of the Letter of Intent announced
on November 5, 2003, contracts were exchanged for the sale of Auto Europe to
entities associated with Soros Private Equity Investors LP for a
consideration of US$85 million on the terms of such transaction as
summarized in the Supplemental Circular to shareholders dated November 5,
2003.
The U.S. competition authorities have granted regulatory approval to the
Cruise Disposal and the WCT Disposal.
Completion of the Cruise Disposal and the WCT Disposal is expected to take
place later this month.
MYTRAVEL GROUP: Sells Lexington Services for US$7.75 Million
------------------------------------------------------------
MyTravel Group plc announces that it has entered into an agreement to sell
the business and assets of Lexington Services, LLC to 4202031 Canada Inc.,
an affiliate of VIP International
Corporation for US$7.75 million (GBP4.6 million) in cash.
The consideration is subject to adjustment for any variance between the
actual working capital at completion, and the amount estimated for the
purposes of the agreement.
Lexington is one of the world's leading providers of electronic connectivity
services between hotels and Global Distribution Systems and Alternative
Distribution Systems. Lexington made a loss in the year to September 30,
2002 of US$0.3 million (GBP0.2 million). It had net assets excluding bank
and inter-group balances at September 30, 2002 of GBP2.2 million. At
completion, all inter-group balances will have been settled.
Subject to the satisfaction of normal conditions, the sale would be expected
to complete in late November 2003.
MyTravel has previously announced the disposals of its U.S. Cruise Business,
SunTrips and Vacation Express, WCT and Auto Europe. The disposal of
Lexington represents the next stage of the continuing program of disposals
of non-core businesses that the Board of MyTravel is pursuing to raise cash
in order to provide working capital for the Group. There is little
inter-relationship between Lexington and the Group's core interests.
The net proceeds of the disposal will be used for working capital purposes.
Exchange rate US1.69 = GBP1
Information on Lexington
Lexington Services, LLC is a leading provider worldwide of electronic
connectivity services between hotels and Global Distribution Systems and
Alternative Distribution Systems. It is also the leading provider for North
American hotel operators. Lexington specializes in independent and small
chain hotels. It also provides them with reservation services, data
management and marketing services.
Information on VIP International
VIP International (http://www.vipintcorp.com)is a privately-held channel
marketing organization that drives revenue for hoteliers, car rental owners
and regional airlines through a multi-channel reservation sales centre, the
adoption of leading-edge technology, and partnerships with clients to
provide ongoing education.
CONTACT: BRUNSWICK
Phone: 0207 404 5959
Fiona Antcliffe
Sophie Fitton
ROYAL MAIL: Placates Britons with GBP1 Mln Donation for Olympics
----------------------------------------------------------------
Royal Mail announced Monday that, at the suggestion of Postwatch, the
consumer body for postal services, it plans to make a donation of GBP1
million towards London's bid to host the 2012 Olympic Games. The donation
is an apology for the recent disruption to postal services.
The money will come from Royal Mail's revenue from the sale of special stamp
books to be issued next year. Details of the books will be announced later.
Royal Mail's Chief Executive Adam Crozier, said: "This is a donation that
benefits the U.K. We let our customers down and this is a straightforward
way to say sorry."
Royal Mail is continuing to clear the backlog of mail delayed by the
strikes. More than 70% of the backlog has been delivered and all new mail
is being delivered with minimal delay.
"The main thing we can do to put things right is to get that mail delivered
and we're working hard on that," said Mr Crozier.
Royal Mail Chairman Allan Leighton is writing personally to apologize to
some 4 million households and businesses in the areas where the unofficial
strikes took place. These letters will go out over the next few weeks.
*****
Under the terms of its voluntary compensation scheme Royal Mail, in common
with rival postal companies, does not pay compensation for delay caused by
significant industrial action. Compensation claims for loss or damage are
being dealt with in the usual way.
CONTACT: ROYAL MAIL
148 Old Street
LONDON
EC1V 9HQ
Home Page: http://www.royalmail.com
ROYAL & SUNALLIANCE: To Webcast Results Presentation November 30
----------------------------------------------------------------
Royal & SunAlliance will be releasing the results for nine months ending
September 30, 2003 on Thursday November 20, 2003.
The announcement will be available on the website from 07:00hrs GMT. There
will also be an audio Webcast of the presentation available from 09:30hrs
GMT.
*****
Moody's Investors Service confirmed the ratings of the Royal &
Sun Alliance Group and its European operations after the
company's successful rights issue, and renegotiation and renewal
of external bank lines.
The insurer launched a GBP960 million rights issue, which
received widespread positive response, at the same time that it
was able to restructure external bank lines due to expire October 2003.
Furthermore, its financial leverage was expected to be at lower level going
forwards.
Moody's believes the measures were able to stabilize the group's
position. The group's decision to adjust and refocus its global
strategy could also lead to a more stable and sustainable level
of profit in future if executed successfully.
On the negative side, Moody's believe that the group will
continue to be exposed to any adverse deterioration in its prior
years exposure to run-off and disposed U.S operations that could necessitate
raising of additional capital for its U.K. Life run-off funds.
STEANS PRINTERS: Schedules Creditors Meeting November 25
--------------------------------------------------------
Notice is hereby given pursuant to Section 48(2) of the Insolvency Act 1986,
that a meeting of the unsecured creditors of Steans Printers Limited (in
administrative receivership) will be held at Cheshunt Marriott Hotel,
Halfhide Lane, Turnford, Broxbourne, Herts EN10 6NG on November 25, 2003 at
10.00 a.m. for the purpose of having laid before it a copy of the report
prepared by the Joint Administrative Receivers under section 48 of the said
Act. The meeting may, if it thinks fit, establish a creditors' committee to
exercise the functions conferred on it, by, or under the Act.
Creditors are only entitled to vote if:
(a) they have delivered to us at the offices of RSM Robson Rhodes, 186 City
Road, London EC1V 2NU, no later than 1200 hours on the business day before
the meeting, written details of the debts they claim to be due, and the
claim has been duly admitted under the provisions of the Insolvency Rules
1986; and
(b) there had been lodged with us any proxy which the creditor intends to
use on his behalf.
Creditors may obtain a copy of the report, free of charge, on application to
the Joint Administrative Receivers at RSM Robson Rhodes, 186 City Road,
London EC1V 2NU.
CONTACT: GEOFFREY PAUL ROWLEY
SIMON PETER BOWER
Joint Administrative Receivers
THPA FINANCE: Fate of Corus' Teeside Factory Could Sway Ratings
---------------------------------------------------------------
Fitch Ratings says the ratings on the junior tranches of the THPA Finance
Limited (THPA) securitization could be adversely affected should Anglo-Dutch
steel maker Corus plc announce the closure of its Redcar plant.
Announcements made last week in relation to the GBP307 million rights
placing by Corus indicate that a two-year timeline has been determined
whereby the Teeside steel plant must become profitable on a stand-alone
basis or be closed. A contingency of GBP40m has been set aside to cover
closure costs for the plant.
Were cash flow derived from THPA's dedicated Redcar Ore Terminal to be lost,
certain triggers in the THPA deal could be breached which, if unremedied,
could lead to senior noteholders taking protective action to the detriment
of junior noteholders, the agency added.
THPA is a whole business securitization of the assets and operations of the
Tees and Hartlepool Port Authority in northeast England. THPA is a wholly
owned subsidiary of PD Portco Limited and has issued debt totaling GBP298.25
million. Corus' Redcar steel processing plant is adjacent to Teesport, where
Corus' dedicated Redcar Ore Terminal contribution is estimated by the
management to total circa. GBP4.6 million to the port group's EBITDA
(currently 13% of its annualized EBITDA of GBP36.5 million).
THPA also earns a further GBP4.5m EBITDA from non-Teeside Corus activities.
The agency believes yesterdays share placing by Corus make the loss of these
earnings less likely, given the sounder financial footing of Corus as a
whole.
THPA's management are focusing efforts on reducing exposure to Corus and are
completing the development of a new "Lo Lo" (Load on-Load off, where
containers are loaded by crane rather than being driven on) container
facility and this should be up and running, before the indicated two year
decision deadline is up. Furthermore, THPA management anticipate that the
Redcar Ore Terminal, currently used by Corus could be switched to serve the
coal importation market. If sufficient additional EBITDA is generated from
these activities, and THPA does not suffer losses in other activities, a
breach could well be avoided.
Fitch has published a report titled THPA Finance Limited Its Dependence on
Corus which runs through various scenarios of reductions in EBITDA should
Corus close Redcar and/or related services, the transaction structure's
trigger mechanisms, and potential remedies for prospective lower debt
service coverage ratios. Currently THPA's debt service coverage ratio
(DSCR) is running at 1.37x, whereas the Loan Event of Default and Note Event
of Default trigger is set at 1.25x.
WILLINGTON PLC: To Sell Part of German Distribution Division
------------------------------------------------------------
Willington plc announces that its wholly owned subsidiary, The White Sea and
Baltic Company Limited, completed an agreement on Friday November 14 with
Taiko Marketing (S) Pte Ltd., a company incorporated in Singapore, to sell
to Taiko the entire share capital of its subsidiary, F Holm Chemie Handels
GmbH.
Holm is based in Hamburg and formed part of the Willington group's
Distribution Division, as a distributor of specialty chemicals in
Continental Europe.
Holm's profit after tax for the year ended December 31, 2002 was GBP39,000.
The consideration for the Disposal is EUR518,000 (approximately GBP350,000)
in cash, which was settled at completion. The net proceeds of approximately
EUR490,000 (EUR335,000) will be utilized to reduce Willington group
borrowings. The net proceeds represent a surplus of some GBP65,000 over the
net tangible assets of Holm as at 31 December 2002 of GBP270,000.
The transaction is subject to the usual warranties, but the liability of WSB
under these warranties shall in no circumstances exceed the consideration
payable pursuant to the Disposal.
*****
Willington Plc Chairman R M Robinow said in June: "The better performance
normally produced by the group in the second half of the year did not
materialize in 2002. The deepening recession in manufacturing industry in
both the UK and Europe affected demand for the group's products and services
and led to greater price competition. The additional impact of market
instability and cost pressures in certain of our businesses combined to
produce a very disappointing outcome for the year.
CONTACT: WILLINGTON PLC
Vincent Troy
Phone: 020 7419 0100
*********
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., Fairless Hills, Pennsylvania, USA, and
Beard Group, Inc., Frederick, Maryland USA. Larri-Nil Veloso, Ma. Cristina
Canson, and Laedevee Gonzales, Editors.
Copyright 2003. All rights reserved. ISSN 1529-2754.
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