/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/031201.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Monday, December 1, 2003, Vol. 4, No. 237 Headlines F I N L A N D SANITEC INTERNATIONAL: Ratings Down to 'B+' on Weak Cash flow G E R M A N Y CONDOMI AG: In Crucial Talks with Creditors Regarding Financing EM.TV & MERCHANDISING: 2004 Liquidity Secured, but Equity Dives EM.TV & MERCHANDISING: Restructures Convertible Bond HEIDELBERGER DRUCKMASCHINEN: Two Management Board Members Resign HEIDELBERGER DRUCKMASCHINEN: Unveils New Alignment Strategy HVB GROUP: Hypo Real Buys U.S. Real Estate Finance Portfolio MG TECHNOLOGIES: Kohlberg May Bid for Dynamit with CSFB PLAUT AKTIENGESELLSCHAFT: Finances Secured as Bank Debt Drops RWE AG: Earnings Unchanged by Heidelberger's Restructuring L U X E M B O U R G STOLT OFFSHORE: Waiver of Covenant Default Extended N E T H E R L A N D S KONINKLIJKE AHOLD: Regulators Probe U.S. Suppliers S W I T Z E R L A N D SWISS INTERNATIONAL: Cargo Unit Receives Quality Certification SWISS INTERNATIONAL: Price cuts in Europe Spur Strong Demand U N I T E D K I N G D O M ARCOLECTRIC HOLDINGS: In Administrative Receivership ARCOLECTRIC HOLDINGS: Company Profile AUSTIN REED: Warns of Lower Pre-tax Profit for Full year AVECIA GROUP: S&P Fears Covenant Breach; Ratings on CreditWatch BOXCLEVER: Executives Under Investigation for Breach of Trust BRITISH ENERGY: Bondholders Meetings Set December 19 BRITISH ENERGY: Obtains GBP75 Million Additional Govt Funding HOLLINGER INC.: Daily Mail Declares Buyout Plans for U.K. Assets INTERNATIONAL POWER: 'BB' Ratings Affirmed after ANP Downgrade NETWORK RAIL: May Reclaim Management of Leased Stations RICHARD ROBERTS: Could be Forced to Close Kirby Plant Next Year ROOM SERVICE: Regulator Probes Short-selling of Shares ROYAL & SUNALLIANCE: AM Best Cuts Financial Strength Rating to B SPICES FINANCES: Class II Notes Affirmed at 'CCC' TELEWEST COMMUNICATIONS: Holding Company Registers with SEC WATERFORD WEDGWOOD: Gets Expected Price for Subordinated Bond ********* ============= F I N L A N D ============= SANITEC INTERNATIONAL: Ratings Down to 'B+' on Weak Cash flow ------------------------------------------------------------- Standard & Poor's Ratings Services lowered to 'B+' from 'BB-' its long-term corporate credit ratings on Sanitec International S.A., the holding company of the Finland-based Sanitec group (Sanitec), and Sanitec Oy, a subsidiary of Sanitec International, reflecting the ceramics group's weak cash flow as of third quarter 2003. The outlook is negative. "The ratings actions reflect Sanitec's weak free cash flow generation during the first nine months of the year, and Standard & Poor's concern that, absent any steady free cash flow increase in 2004-2005, the group's liquidity would come under increased pressure in face of gradually tightening financial covenants and growing debt maturities," said Standard & Poor's credit analyst Xavier Buffon. While its operating performance has demonstrated good resilience to overall soft markets in Europe, Sanitec's free cash flow generation has been weak, and, although better than in 2002, the material pick up previously anticipated has not yet materialized. The weakness mainly stems from the group's persistently increasing working capital, despite softening sales. Compared to 2002, customer and inventories turnover have deteriorated, reflecting longer payment terms and increased work in progress in each first three quarters versus same-period of 2002. The ratings on Sanitec International SA continue to reflect the group's aggressive financial structure and average business profile, supported by its strong market positions in the bathroom ceramics market, good diversification across Europe, and the industry's high barriers to entry and exposure to the renovation market. "Standard & Poor's is concerned about Sanitec's ability to meet its financial covenants over the next few quarters," added Mr. Buffon. "We believe that the group would likely be able to renegotiate its covenants, if necessary, owing to its fair operating performance and decent generation of funds from operations. That said, covenant compliance, and thus liquidity, could remain at risk for the medium to long term." Standard & Poor's will closely monitor Sanitec's ability to meet its quarterly covenants, or obtain waivers if necessary, and increase free cash flow. ============= G E R M A N Y ============= CONDOMI AG: In Crucial Talks with Creditors Regarding Financing --------------------------------------------------------------- The liquidity and the financial power of condomi deteriorated continuously due to a failure of the growth and investment strategies taken in the past. Condomi AG has begun negotiations with its bank pool and presented a financing concept, which shall enable condomi to continue the turnaround measures already started and to ensure the substantial going concern of the company. This concept includes among other things the provision of a short term bridge financing and measures to strengthen the shareholders' equity. The pooling banks have signaled their readiness in principle to take part in a solution. The finalization of the negotiations is expected for December. At the same time the company is looking for other external sources of financing. If these negotiations fail, the going concern of condomi AG and its direct and indirect subsidiaries with the exception of unimil S.A. cannot be ensured. CONTACT: CONDOMI AG Venloer Strasse 231 b 50823 Cologne, Germany Phone: +49 (0) 221 50 04-400 Fax: +49 (0) 221 50 04-499 E-mail: ag@condomi.ag Contact: Jens Waldhof, Chairman of the Management Board EM.TV & MERCHANDISING: 2004 Liquidity Secured, but Equity Dives --------------------------------------------------------------- EM.TV & Merchandising AG reports sales increase for the first nine months of 2003. However, earnings are impacted again by extraordinary effects. During the third quarter, value adjustments on intangible assets and book values of shareholdings were carried out at both the parent company and the group as a result of impairment tests. In parallel, the restructuring of the convertible bond is being initiated in accordance with the agreement reached with a substantial proportion of the institutional bondholders, made public Thursday. Werner E. Klatten, Chairman of the EM.TV Management Board: "The figures for the first nine months already justify our strategy of expanding our core business into the sport sector. Our shareholdings in DSF, Sport1 and PLAZAMEDIA resulted in a noticeable increase in group turnover. The necessary value adjustments made in the third quarter to assets in our classic business for children and young people stand alongside the last major turn around task, that of the restructuring of the convertible bond. The restructuring will secure the strategic reorientation of EM.TV." Sales growth of 12.6% The EM.TV group financial statement, prepared in accordance with IFRS, reports sales of EUR177.4 million for the first nine months of 2003. This represents an increase of 12.6% against the same period the previous year (EUR157.6 million). Sales rose in the third quarter by 15.2% from EUR63.3 million to EUR72.9 million. The positive sales development is due to the consolidation of the shareholdings in the sports sector. DSF and Sport1 (included since July 1) and sports production service provider PLAZAMEDIA (included since June 1) contributed EUR37.1 million to group sales between July and September. T he Jim Henson Company, the sale of which was completed in the third quarter, is included in the profit and loss account until July 31, 2003, with a loss of EUR11.3 million. Due to the purchase price paid, deconsolidation resulted in a profit of EUR19.1 million. EM.TV group earnings before interest, taxes, depreciation and amortization (EBITDA) were impacted by significant extraordinary costs in connection with restructuring measures (e.g. sale of remaining shareholding in Formula 1, sale of The Jim Henson Company), and amount to - EUR8.1 million for the first nine months (same period previous year: plus EUR7.3 million). At EUR69.9 million, depreciation and amortization for the first nine months remained at the same level as last year (EUR69.7 million). Of this amount, EUR43.4 million occurred in the third quarter alone. This figure includes extraordinary write-downs of film assets amounting to EUR29.3 million, as a result of impairment tests. Extraordinary write-downs were necessary largely with regard to the joint venture Junior.TV GmbH & Co. KG, co-production companies and the subsidiary EM.TV & Wavery B.V. The value adjustments were driven by ongoing weakness in the market for programs aimed at children and young people. The revised valuations are backed up by checks undertaken by investment banks and advisors, in connection with negotiations concerning the restructuring of the convertible bond. Consolidated earnings before interest and taxes (EBIT) for the first nine months totaled - EUR78.0 million (same period previous year: - EUR62.5 million). At -EUR31.4 million, the financial result from January to September 2003 showed significant improvement against the same period last year (-EUR53.4 million). One reason for this is lower interest payments resulting from the repayment in full of the Junior loan. The group reports a nine-month net loss after minority interests of EUR100.5 million, against a net loss of EUR115.1 million for January to September 2002. At EUR43.1 million, the third quarter loss is close to that of the same period last year (EUR44.9 million). Group liquidity improves, equity reduced The EM.TV Group reports a positive cash flow totaling EUR91.2 million for the first nine months of 2003, against a negative cash flow of EUR32.3 million for the same period in 2002. This is largely attributable to the sale of The Jim Henson Company. At EUR127.5 million, liquid funds of the group as at September 30, 2003, were above those at December 31, 2002 (EUR90.6 million). Free liquid funds of the parent company stood at EUR76.0 million on September 30, 2003. Thus, the liquidity of both the group and the parent company is secured for 2004. EM.TV requires the available liquid reserves for program production and planned liability reduction, as well as in the context of the restructuring of the convertible bond. The reported nine-month net loss led to a reduction in group's equity to EUR4.6 million as at September 30, 2003 (December 31, 2002: EUR129.9 million). Value adjustments in the parent company of EUR79.6 million The value adjustments of assets carried out in the third quarter as a result of impairment tests totaled EUR79.6 million in the parent company accounts, in accordance with the provisions of the German Commercial Code (HGB). Of this sum, EUR60.0 million was attributable to the 50% share in the Junior.TV joint venture, the value of which was reduced, largely as the result of drastic changes within the international Pay-TV markets. The net loss reported by the parent company for the first nine months led to a reduction of its equity, which stood at EUR95.6 million on September 30, 2003 (December 31, 2002: EUR237.5 million). Outlook for full year 2003 For the full year 2003, the Management Board stands by its group sales forecast of over EUR250 million, thus maintaining the level of the previous year. The sales contribution of the new sports activities will at least compensate for the loss in turnover brought about by the sale of The Jim Henson Company. The EM.TV Group will show a significant net loss for 2003, in excess of that shown in the first nine months. These influencing factors are particularly pertinent to the net loss: (a) The value adjustments made to the intangible assets in the third quarter; (b) The ongoing annual write-down on the investment in the Tele Munchen Gruppe, amounting to approximately EUR23 million; (c) annual interest charges of EUR42 million on the convertible bond. Further group development is dependent upon implementation of the measures announced in the concept for restructuring the convertible bond. Should this restructuring fail, against the current plans of the management, current indicators are that insolvency of EM.TV & Merchandising AG would be unavoidable. To view important financial ratios: http://bankrupt.com/misc/EM_TV_Financials.pdf CONTACT: EM.TV & MERCHANDISING AG Sabine Lais Phone: +49 (0)89 99 500 461 Fax: +49 (0)89 99 500 466 Frank Elsner Kommunikation fur Unternehmen GmbH Phone: +49 (0)5404 91 92 0 Fax: +49 (0)5404 91 92 29 EM.TV MERCHANDISING: Restructures Convertible Bond -------------------------------------------------- EM.TV & Merchandising AG has made significant progress in its last remaining turnaround task. Following months of intensive negotiations (1), the Management Board of the media company has agreed a restructuring concept for the convertible bond issued by EM.TV. The main features of this restructuring involve: (a) Issue of EUR150 million Zero Coupon Notes to the bondholders to be redeemed from the sale of TMG; (b) Creation of a new 8% EUR50 million Secured Note with warrants attached (c) Issue to the bondholders of 60% of new EM.TV equity (d) Creation of a warrant package to enable existing shareholders to claw back 10% equity giving a resulting 50/50 split in the new EM.TV equity (e) Reorganization of EM.TV AG into two new holding company structures to effect the plan of reorganization Commenting on the restructuring Werner E. Klatten, CEO of EM.TV said: "I am delighted to announce the agreement with the bondholders which is a historic milestone in the rehabilitation of the Company. Over the past two years, we have created a solid foundation for the profitable development of EM.TV and this deal allows us to look to the future with confidence." Once the restructuring has been successfully implemented, EM.TV will be a fully reconstructed company, and will be able to move forward with the strategic reorientation achieved in the course of the last two years. Furthermore, EM.TV would no longer be exposed to the risk of insolvency caused by the repayment obligations. The convertible bond, issued in February 2000, has a nominal value of EUR400 million on a 5 year term. As a result of annual growth in repayment value, the sum of EUR469 million falls due in February 2005. Current indications are that EM.TV would be unable to meet this obligation. Implementation requires far-reaching reorganization Before the bond restructuring can be implemented, it will be necessary to carry out far-reaching organizational measures of EM.TV AG: EM.TV will transfer its 45% shareholding in Tele Munchen Gruppe to a new holding company (HoldCo I), a 100% subsidiary of EM.TV AG. In return for this transfer, EM.TV receives a claim against HoldCo I in the form of zero coupon notes. HoldCo I I will be able to repay the zero-coupon notes from the proceeds of the sale of the TMG shareholding. Almost all other EM.TV assets from both business units -- entertainment for children and young people; and sport -- will be sold or hived down into a second holding company (HoldCo II), also a 100% subsidiary of EM.TV AG. In return for the assets sold, EM.TV receives bonds with warrants attached from HoldCo II consisting of (a) A bond of EUR50 million (8% annual coupon, five years maturity) (b) Options on an additional 11.11% of HoldCo II share capital (likely exercise price: EUR1.00 per share). The share capital of HoldCo II will be determined at the time of asset hived down, and confirmed by a certified accountant. As part of the restructuring, the bondholders will wave their rights under the terms of the convertible bond. In return, EM.TV will transfer ownership of four assets to the bondholders: (a) A cash payment of EUR20 million (b) The zero coupon note against HoldCo I (giving the bondholders rights to proceeds from the sale of the TMG shareholding, subject to an upside participation of HoldCoI for proceeds of exceeding EUR150 million) (c) Bond with warrants attached issued by HoldCo II totaling EUR50 million (d) A 60% shareholding in HoldCo II. Down-stream merger of EM.TV an HoldCo II The intention is to merge EM.TV AG with HoldCo II following completion of the restructuring. This has the consequences: (a) HoldCo II becomes the legal successor to EM.TV AG. (b) HoldCo II will be renamed EM.TV AG (new). (c) EM.TV AG (new) will be listed on the stock exchange. (d) EM.TV AG (old) and its shares will cease to exist. (e) Under the merger terms, existing EM.TV AG shareholders receive 40% of the shares in EM.TV AG (new), as well as options. In the event of positive stock performance of EM.TV AG (new), existing shareholders have the right to exercise their share options, and thereby to increase their shareholding in EM.TV AG (new) to 50%. The share options are split into two equally sized tranches, with exercise prices envisaged at EUR2.50 per share and EUR3.50 per share. The proceeds from the exercise of options shall be used to repay the EUR50 million bond. Consequences of restructuring The full waiver of rights under the terms of the convertible bond is accompanied by a significant shift of assets in favor of the bondholders, and out of the hands of the company and its existing shareholders. However, if the company were to enter insolvency, it must be assumed that the shareholders would probably be left with an asset value of nil. On the other hand, following completion of the restructuring they will be shareholders in a fully reconstructed company. The bondholders, too, will as a result of the restructuring achieve a significantly high recovery than would be possible in an insolvency. The restructuring has absolutely no effect on the on the strategic reorientation of the EM.TV Group on the basis of two core elements -- entertainment for children and young people, and sports. Operating business continues unchanged. Further steps are necessary if the agreed restructuring concept is to be realized: (a) The agreement will only be implemented by the company if and when the bondholder negotiating group has achieved the support of further bondholders, to a level equal to 75% of the nominal value of the convertible bond. The final company proposal must then be accepted by at least 97.5% of the bondholders. (b) Additionally, EM.TV shareholders must agree to the restructuring at an EGM planned for the end of January/beginning of February 2004, with at least 75% of votes present. Major shareholder WKB Beteiligungsgesellschaft mbH (owned by EM.TV's CEO Werner E. Klatten) has already given his approval. Major shareholder Thomas Haffa has indicated his intention to approve the deal. EM.TV's CEO Werner E. Klatten: "We have found a route by which we can free the company from its last-remaining substantial old liability, a convertible bond that, under the current situation, is well-known to threaten an insolvency risk for EM.TV its shareholders and bondholders. The concept agreed with the bondholder committee, following difficult and lengthy negotiations, is a fair compromise. It enables EM.TV to carry on its operating business, and to reap the benefits of achievements made so far. In so doing, we had to overcome a series of previously existing liabilities that were not the responsibility of the current management." --------- Footnote: (1) During the negotiations of the restructuring agreement the company has provided to the bondholder committee certain information, which was not publicly available. This information is now in the due course of the implementation of the restructuring being made publicly available on the website of the company. CONTACT: EM.TV & MERCHANDISING AG Sabine Lais Phone: +49 (0)89 99 500 461 Fax: +49 (0)89 99 500 466 Frank Elsner Kommunikation fur Unternehmen GmbH Phone: +49 (0)5404 91 92 0 Fax: +49 (0)5404 91 92 29 HEIDELBERGER DRUCKMASCHINEN: Two Management Board Members Resign ---------------------------------------------------------------- Due to imminent changes and planned restructuring within the Heidelberg Group, Dr. h.c. Holger Reichardt has resigned as Director for Marketing, Sales and Service at Heidelberger Druckmaschinen AG with effect from November 30, 2003. His contract has been cancelled amicably and by mutual agreement. The Supervisory Board and Management Board would like to express their heartfelt gratitude to Mr. Reichardt for his contribution to the company. His duties will be taken over by Bernhard Schreier, Heidelberg's Chief Executive Officer. Holger Reichardt had been a member of the Management Board since 1998. Wolfgang Pfizenmaier has also resigned his seat on the Management Board. This decision was also reached amicably and by mutual agreement and will be effective from November 30, 2003. Mr. Pfizenmaier had been responsible for digital printing operations at Heidelberger Druckmaschinen AG. He will continue to be at the company's disposal for special assignments. The Supervisory Board and Management Board expressed their gratitude and appreciation for the work he had done on the Management Board. Wolfgang Pfizenmaier has been with the company since 1974. During this time he has been responsible for, among other things, the Research & Development and Technology sections. HEIDELBERGER DRUCKMASCHINEN: Unveils New Alignment Strategy ----------------------------------------------------------- The Supervisory Board of Heidelberger Druckmaschinen AG agreed to a proposal by Heidelbergs Management Board to streamline its organization and divest its activities in research, development and production of web offset presses. Heidelbergs Management is in negotiations with potential partners for its Web Systems business, which include close cooperation for the installed base and future customer care. In the Digital division, Heidelberg must adapt capacities and will refocus its activities. The Management Board will present an appropriate solution by the end of the current fiscal year. The Postpress division will become a separate entity, focusing entirely on the requirements of the postpress equipment market. All this allows Heidelberg to concentrate its resources on sheetfed offset printing and all its related value chain, including prepress, press, postpress and workflow management. Heidelbergs worldwide sales and service network will continue to offer competent support and consulting for Heidelberg's own products and products from first class partners to all its customers. "Heidelberg will continue to provide products for premium quality print results. Our target markets will mainly be commercial printers, focusing on short and medium print runs, as well as packaging and label printing", said Bernhard Schreier, CEO of Heidelberg. As a consequence of all these changes, Heidelberg will adapt its organizational structure. The divisional structure will be streamlined to a leaner functional organization, leading to a further reduction of the workforce by up to 1,000 employees worldwide. Within the Board, Bernhard Schreier as CEO will additionally be responsible for the worldwide sales and services network, as well as for R&D and operations. Dr. Klaus Spiegel will assume responsibility for the entire product portfolio and marketing, and Dr. Herbert Meyer will remain CFO. Wolfgang Pfizenmaier (56) and Holger Reichardt (49) will resign from the Management Board in mutual and friendly agreement with the Supervisory Board. The new focus will influence the coming year-end financials. While sales and operating profit targets for the financial year remain unchanged, additional one-time-costs of up to EUR400 million will arise for restructuring and, to a greater part, book losses in connection with the planned divestment of Web Systems and the repositioning of Digital and Postpress. "Overall, the new focus will significantly improve our profitability and cash flow in the short and medium term, and thus enables us to achieve the financial targets we have set for the company", said Herbert Meyer, CFO of Heidelberg. HVB GROUP: Hypo Real Buys U.S. Real Estate Finance Portfolio ------------------------------------------------------------ As announced, Dublin-based Hypo Real Estate Bank International has now bought the commercial real estate finance portfolio of HVB Group in the United States worth a total of around EUR3.5 billion (US $4.2 billion). The committed lending volume, which comprises extended loans, promised facilities, guarantees and so on, amounts to around EUR4.9 billion (US $5.8 billion). The relevant agreement has now been signed in Dublin and New York after the two parties had settled the principles underlying the transaction in a memorandum of understanding back in August 2003. It was agreed not to reveal the purchase price. "By buying HVB Group's U.S. portfolio, we're further strengthening the Hypo Real Estate Group," states Georg Funke, Chairman of the Board of Hypo Real Estate Holding AG and CEO of Hypo Real Estate Bank International. "We're enhancing the geographical diversification of our overall portfolio, which will enable us to better exploit the opportunities opening up on the real estate markets worldwide," Mr. Funke adds. In selling its commercial real estate finance portfolio in the United States, HVB Group is sharpening its clear strategic focus on operations involving retail and corporate customers in Europe. Moreover, the transaction makes a tangible contribution to a further reduction in risk assets by around EUR3 billion, thus helping to bolster the core capital ratio. The U.S. portfolio comprises 75% investment loans, 21% development loans, and 4% corporate loans, extended primarily in New York (56%), California (19%), Washington (9%), Boston (7%), and Chicago (3%). It will be transferred to Hypo Real Estate Bank International in several tranches by mid-December. The transaction takes effect in the banks' income statements when the individual tranches are transferred. The portfolio is now managed by Hypo Real Estate International's 52-strong U.S. team under Andreas Veith. CONTACT: HVB GROUP Dr. Knut Hansen Phone: +49 (0)89 378 24644 Fax: +49 (0)89 378 25699 E-mail: knut.hansen@hvb.de MG TECHNOLOGIES: Kohlberg May Bid for Dynamit with CSFB ------------------------------------------------------- A team-up between Kohlberg Kravis Roberts & Co. and Credit Suisse First Boston could emerge in the auction of MG Technologies' profitable chemicals business. People familiar with the situation said the world's biggest buyout firm and CSFB Private Equity may offer as much as EUR2.5 billion (US$2.98 billion) for Dynamit Nobel, according to Bloomberg. Frankfurt-based MG Technologies is selling the business under Chief Executive Officer Udo Stark's plan to pare about EUR1.2 billion in company debt. Chris Davison, an analyst at AltAssets in London, which tracks private equity firms, expects the potential bidder to improve the business and sell it in the most opportune time. "It's a classic example of private equity firms taking advantage of a company's restructuring," he said. Kohlberg Kravis Roberts & Co. spokesman James Montgomerie, Gavin Sullivan, a spokeswoman for CSFB, Permira spokeswoman Amanda Shaw and Alex Stanton, a spokesman for Bain, all declined to comment, according to the report. Dynamit Nobel, MG Technolgies' most profitable unit, employs about 12,700 people and makes plastic parts used in cars as well as pigment chemicals and ceramics. London-based Permira Advisers Ltd. and Boston's Bain Capital LLC, are also interested in the business, Bloomberg's sources said. The bids are due December 3, according to them. PLAUT AKTIENGESELLSCHAFT: Finances Secured as Bank Debt Drops ------------------------------------------------------------- The Executive and Supervisory Boards of Plaut announced that the international management and IT consulting group has completed its restructuring program and achieved economic turnaround. Under the leadership of interim CEO Eberhard Lind, a series of far-reaching restructuring activities have been successfully realized: (a) Reduction of bank liabilities by 80%. This was achieved on the basis of the liquid funds resulting from the sale of the North American and Central Eastern European companies to IDS Scheer AG, in conjunction with the management buyouts in Italy and Spain. (b) Significant reduction of holding costs by 70%. This is primarily attributable to the significantly lowered interest burden resultant from repayment of bank credits, the reduction of the number of Executive Board members from five to three, the abolition of the Extended Executive Board, as well as to the fact that all executive organs (Executive Board and Supervisory Board) decided to waive one third of their salary payments; and also to considerably reduced back office costs. (c) Positive outlook towards fiscal 2004. With a revenue target of between EUR70 million and EUR75 million, as well as an anticipated EBIT margin (earnings before interest and tax) of more than 5%, Plaut has re-established a stable economic foundation. On the basis of these comprehensive measures, Plaut continues to consistently pursue its objective of maintaining its entrepreneurial independence, with a focus on the company's core competencies. After successful completion of the restructuring plan, which was implemented in close coordination with the Executive Board and the Supervisory Board led by the Chairman, Gotz Huttenlocher, interim CEO Eberhard Lind will step down from his current post and return to the Supervisory Board, resuming his position as Deputy Chairman. The Supervisory Board will now further be composed of Dr. Gotz Huttenlocher (Chairman), Dr. Peter Penzkofer and Thomas Fleischmann. In a meeting on November 26, 2003, this panel appointed a new Executive Board consisting of these three members: Dr. Nico Brunner, acting as spokesman and Co-CEO of the Executive Board, Didier Moscatelli, Co-CEO, and Johann Zwicklhuber, CFO. Dr. Nico Brunner and Didier Moscatelli will retain their current responsibilities for the company's areas. The new executive structure will thus ensure market proximity and shorter decision-making cycles. Eberhard Lind comments upon these changes as follows: "The last few months have no doubt been the most critical period in the company's history. This is why I am all the more pleased that Plaut, having regained its strength in terms of substance and structure, is now optimally prepared for the future. Looking ahead, I am confident that the financial flexibility achieved by Plaut, together with the steadily improving general economic conditions, will help pave the way for Plaut's return to its historic strengths." Dr. Gotz Huttenlocher explains the changes at the helm of the Management Board: "In the past few months, in particular, Dr. Nico Brunner and Didier Moscatelli have demonstrated that they are capable of motivating their teams to deliver outstanding performances even in the most difficult circumstances. With the appointment of Johann Zwicklhuber to the Executive Board, our management team is complete and we are pleased to welcome him on board." In line with these changes, Plaut has adopted a new corporate strategy concentrating on the company's core strengths in business management consulting and efficient IT solution implementations -- particularly by the use of SAP application systems -- with an emphasis on Performance Management, Value Chain Management and IT & Operations. Given Plaut's new strategic direction, both Supervisory and Executive Boards believe that the company is now very well-equipped to profit from an economic recovery in such a way as to best serve the interests of all stakeholders customers and employees, investors, and partners alike. About Plaut AG Customers in numerous countries around the globe benefit from Plaut's comprehensive portfolio in management consulting with business process focus and IT & hosting solutions, based on Plaut's industry knowledge in manufacturing and CPG/retail and services. On the basis of the Plaut Methodology(R) in controlling and decades of success in systems integration, in particular in SAP, Plaut has provided tangible economic value since 1946. Plaut AG, Salzburg, has been listed in the General Standard segment of Frankfurt stock exchange since January 2, 2003 (PUT; SCN 918 703, ISIN AT0000954359). The company, trading on Frankfurt's "Neuer Markt" from 1999 to 2002, generated revenues of approximately EUR216 million with 1,366 employees by the end of 2002. Please find further information about Plaut at http://www.plaut.com CONTACT: PLAUT AG Plaut Aktiengesellschaft Lilli-Lehmann-Gasse 4 A-5020 Salzburg Phone: +43 (662) 4092-58 Fax: +43 (662) 4092-59 E-mail: IR@Plaut.com Contact: Heinz-Peter Schneider Manager, Communications, IR & Marketing RWE AG: Earnings Unchanged by Heidelberger's Restructuring ---------------------------------------------------------- Heidelberger Druckmaschinen AG, a 50% subsidiary of RWE AG, reported that Heidelberger Druckmaschinen would take a EUR400 million realignment charge. The charge consists of restructuring costs and, more important, expenses associated with changes planned for the Web Systems and Digital Divisions. Taking into account RWE's 50% share in Heidelberger Druckmaschinen, RWE will carry 50% of the cost on its books with an effect on net income for the 2003 fiscal year. However, this effect will be offset by several items, including book gains on disposals -- primarily related to the reduction of RWEs stake in the U.S.-based hard coal and gas company Consol Energy. Therefore, RWE reaffirms the Groups earnings forecast for 2003 fiscal year it issued on November 13, 2003. Net income after goodwill amortization is still expected to decline by no more than 20% compared with the previous year (EUR1,050 million). Before goodwill amortization, net income is anticipated to be slightly up year-on-year (EUR1,830 million). =================== L U X E M B O U R G =================== STOLT OFFSHORE: Waiver of Covenant Default Extended --------------------------------------------------- Stolt Offshore S.A. (Nasdaq NM: SOSA; Oslo Stock Exchange: STO) has obtained an extension from November 26, 2003 until December 15, 2003 of the waiver of covenant defaults. Stolt Offshore continues to make progress in negotiations with its lenders towards a longer-term agreement. Stolt Offshore is a leading offshore contractor to the oil and gas industry, specializing in technologically sophisticated deepwater engineering, flowline and pipeline lay, construction, inspection and maintenance services. The Company operates in Europe, the Middle East, West Africa, Asia Pacific, and the Americas ***** In June, Stolt Offshore S.A. said it has identified substantially poorer than anticipated performance and cost overruns on three major EPIC contracts and several smaller projects. In addition, it is anticipated that activity levels will be slightly lower than previously anticipated. In light of this revised forecast, Stolt Offshore S.A. is working closely with its main banks in seeking to amend its two primary bank credit facilities to reflect Stolt Offshore S.A.'s current financial position, including a waiver of certain financial covenant tests until November 30, 2003. Without a waiver of certain financial covenants, Stolt Offshore S.A. would be out of compliance with its bank credit agreements, which, in turn, could result in Stolt-Nielsen S.A. being out of compliance with its financing arrangements. In order to help Stolt Offshore S.A. get such waivers from its banks, Stolt-Nielsen S.A. has offered to provide a $50 million capital infusion in the form of a subordinated loan to SOSA and extend the existing $50 million liquidity line it currently provides to November 30, 2004. ===================== N E T H E R L A N D S ===================== KONINKLIJKE AHOLD: Regulators Probe U.S. Suppliers -------------------------------------------------- Suppliers of Dutch retailer Ahold's U.S. Foodservice subsidiary are under investigation in relation to the US$1 billion accounting scandal at the unit, according to just-food.com. The report cited Ahold Chairman Henny de Ruiter telling shareholders the SEC and Department of Justice are looking into "a number" of suppliers -- emphasizing some are excluded. Late in March The Wall Street Journal reported that U.S. regulators, including the U.S. attorney's office in Manhattan and the Securities and Exchange Commission, have been examining whether some of the supplier rebates booked by U.S. Foodservice were deliberately inflated. Ahold's net loss for the first quarter was EUR62 million (US$73.8 million). This contrasts profits of EUR17 million a year earlier. ===================== S W I T Z E R L A N D ===================== SWISS INTERNATIONAL: Cargo Unit Receives Quality Certification -------------------------------------------------------------- Swiss WorldCargo is successfully carrying out the quality improvement plan based on the Cargo 2000 quality management system standards. Since August 2003, three stations have already acquired the certification for the Phase 1 of the project and another 11 will be compliant by the beginning of 2004. Three stations in the network of Swiss International Air Lines' cargo division, Zurich, Frankfurt and Brussels, have acquired certification for the Phase 1 of Cargo 2000. An IATA Interest Group bringing together 25 major airlines and freight forwarders, Cargo 2000 is aimed at implementing a new quality management system for the worldwide air cargo industry. The Cargo 2000 Board's measurements have ascertained that the operational processes and the quality concept in place at our certified sites are fully compliant with the program's requirements. By adopting the standards and measurements set by Cargo 2000 standards, Swiss WorldCargo gives evidence of a firm commitment to its "quality"-focused vision and strategy. Commenting on the initiative, Markus Vetsch, Vice President Operations Swiss WorldCargo, stated: "The application of a state-of-the-art quality concept and the standardization of processes will lead to an overall improvement of our service, marking a boost in transparency and synergies at all levels." The certification of the first three stations has already marked a step forward in the constant pursue of Swiss WorldCargo's quality objective, bringing along an increase to 97% of the "Flown as Booked" factor in three months time. The Phase 1 implementation plan is currently underway in 11 additional sites, which will bring the total number of certified stations to 14 in the next few months: Zurich, Brussels, Frankfurt, Amsterdam, Paris, Hong Kong, New York, Los Angeles, London, Milan, Tokyo, Chicago, Singapore and Montreal. "This is a challenging plan indeed" says Gianni Mauri, General Manager Process & Claims, Swiss WorldCargo, "but we are confident that the high level of professionalism and commitment to quality of our staff will enable us to achieve this goal by the beginning of next year." Swiss WorldCargo is the cargo division of Swiss International Air Lines Ltd. With its global network of over 150 destinations in more than 80 countries and its broad range of products and services, Swiss WorldCargo creates genuine added value for its customers and makes a substantial contribution to SWISS' earnings results. ***** Swiss International was formed in April 2002 out of the remains of failed Swissair and the regional carrier Crossair with a CHF2.7 billion private-public cash drive. It is going through its biggest restructuring ever and has slashed its fleet and workforce by about a third and cutting route network by over a quarter. For further information visit http://www.swissworldcargo.com For further information about Cargo 2000 please visit: www.iata.org/whip/cargo2000 SWISS INTERNATIONAL: Price cuts in Europe Spur Strong Demand ------------------------------------------------------------ In only the second month since its introduction, the new "SWISS in Europe" product is already delivering figures that confirm the concept's success. The higher booking volumes generated by the new lower fares are offsetting the smaller yields -- a development that had not been expected until next year. Internet bookings are making a major contribution, having more than doubled since SWISS in Europe was launched. SWISS in Europe is faring even better than planned. As early as two months since its launch, the program has lifted revenue per available seat-kilometer to 3.2% higher than the same month last year. A year-on-year improvement had not been expected here until 2004. The lower fares offered prompted yield (revenue per revenue seat-kilometer) to fall 11 percent in October. But the increased traffic volume -- seat load factor was up 16% -- is already sufficient to offset the decline. SWISS' permanently low fares on its European flights are proving highly popular, especially on the Internet: the CHF100 million threshold in revenue earned from online bookings for the year was passed a few days ago. 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 =========================== ARCOLECTRIC HOLDINGS: In Administrative Receivership ---------------------------------------------------- Arcolectric announces that the Company was placed in administrative receivership on November 26, 2003. Mr. Nicholas James Dargan and Mr. Neville Barry Kahn of Deloitte have been appointed joint administrative receivers. ARCOLECTRIC HOLDINGS: Company Profile ------------------------------------- NAME: Arcolectric Holdings Plc PHONE: +44-20 8979 3232 FAX: +44-20 8783 1331 E-MAIL: info@arcoswitch.co.uk WEBSITE: http://www.arcolectric.co.uk/ TYPE OF BUSINESS: Arcolectric Holdings makes electric components such as appliance switches, fuse holders, and indicator lights for products ranging from computers and stereo equipment to ovens and refrigerators. It has two overseas production locations: one in Shenzhen, China, and another in Tunisia. Arcolectric Switches plc is a wholly owned subsidiary of Arcolectric (Holdings) plc, the latter being quoted on AIM (Alternative Investment Market). SIC: Electronic & electrical equipment LOCATION: 61 Central Ave. West Molesey Surrey KT8 2RF United Kingdom EXECUTIVES: R. A. Collier, Chairman H. J. A. Cowley, Managing Director J. Harris, Technical Director M.A. Collier, Director J.L. Collier, Director M. Tite, Company Secretary I.R. Collins, Non Executive Director NUMBER OF EMPLOYEES: 375 (as of 2001) ISSUED AND FULLY PAID SHARE CAPITAL: 7,515,000 Ordinary Shares of 5p each BANKERS: HSBC BANK PLC 56 High Street Esher, Surrey KT10 9RD HSBC BANK PLC P.O. Box 181 27-32 Poultry London, EC2P 2BX HSBC BANK PLC P.O. Box 181 27-32 Poultry London, EC2P 2BX THE HONG KONG AND SHANGHAI BANKING CORPORATION LIMITED, 1 Queen's Road Central, Hong Kong THE TROUBLE: Arcolectric Holdings Plc has been hit by global recession since 2001. Chairman R.A. Collier revealed in a statement published September 18, 2001 that export sales had been falling and competition had been forcing prices down. At that time a transfer of production, wherein products will be assembled overseas, was planned in order to reduce cost. To see latest financial results: http://bankrupt.com/misc/Arcoelectrim_Interim.pdf AUSTIN REED: Warns of Lower Pre-tax Profit for Full year -------------------------------------------------------- At the time of our interim announcement on October 9, 2003, total retail sales in the first 8 weeks of the second half were level with the previous year and down 6% on a like-for-like basis. Since then trading conditions have deteriorated. In the 15 weeks of the second half to November 22, 2003 total retail sales were down 5.5% and down 11.7% on a like-for-like basis. The out turn for the full year will depend on the peak trading weeks in December and January. At this stage however, we consider it unlikely that the recent sales decline will be reversed in the remainder of the financial year, although the performance of our redeveloped Regent Street store continues to show growth. The gross margin for the second half is also expected to be lower as a consequence of additional promotional activity. The Board now expects that pre-tax profit before exceptionals for the year to January 31, 2004 will be significantly lower than market expectations. A further trading statement will be made, as usual, in January 2004. CONTACT: GAVIN ANDERSON & COMPANY Phone: 0207 554 1400 Richard Constant AVECIA GROUP: S&P Fears Covenant Breach; Ratings on CreditWatch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' long-term corporate credit rating on U.K.-based specialty chemicals manufacturer Avecia Group PLC (Avecia) on CreditWatch with negative implications, reflecting concerns that the group may breach its financial covenants at end-December 2003, if they are not renegotiated. At the same time, Standard & Poor's also placed its 'CCC+' senior unsecured debt and 'CCC' preference stock ratings on Avecia on CreditWatch with negative implications. "The CreditWatch placement reflects the group's continued weak credit measures and weak near-term outlook, especially in its fine chemicals division, as well as concerns that it may face a breach of financial covenants at year-end 2003," said Standard & Poor's credit analyst Christine Hoarau. Standard & Poor's will resolve the CreditWatch placement once Avecia has renegotiated its financial covenants and after Standard & Poor's has discussed Avecia's 2004 outlook and strategy with management. The risk of covenant breach stems from potentially weaker than expected EBITDA generation, and consequently financial ratios, for full-year 2003. Avecia has indicated that it is pursuing asset sales, and, if achieved, these would be used to pay back bank debt. A significant reduction in this debt would allow Avecia to negotiate more flexibility under the terms of its secured credit facility. The group has repeatedly sold off assets since 2001, demonstrating an unparalleled financial flexibility for the rating category. However, Avecia was not able to significantly improve its financial ratios following these divestments, and posted a ratio of net debt-to-EBITDA of still more than 6x for the year ending September 2003. "Standard & Poor's is concerned by these disposals, as the group's most cash-generative assets are being sold, thus skewing Avecia's business profile toward riskier and currently less profitable activities," added Ms. Hoarau. BOXCLEVER: Executives Under Investigation for Breach of Trust ------------------------------------------------------------- The public prosecutors office opened a preliminary investigation into people responsible for WestLB's disastrous refinancing of U.K. television rental company BoxClever last week. The probe centers on allegations of breach of trust by current and former management board members of WestLB, people close to the bank said, according to the Financial Times. The transaction at the center of the probe is the GBP748 million-securitization financed in 1999 by the German bank's U.K.-based principal finance unit headed by Robin Saunders. EUR430 million provisions related to the deal helped WestLB report significant losses last year. BaFin, Germany's financial watchdog that criticized the bank for its loose risk management, had the Dusseldorf prosecutor's office in June examine whether documents relating to its BoxClever inquiry contain evidence of breach of trust. The prosecutors did not name the persons being investigated, but it is thought that Chief Executive Johannes Ringel, who was on the executive committee at the time of the transaction, might be on the limelight. Mr. Ringel's predecessors, Jurgen Sengera and Friedel Neuber also sat on the board of the bank, at that time of the BoxClever deal. Other board members included Adolf Franke, currently head of risk management and Gerhard Roggemann, now head of international operations. Hans Henning Offen, Wolf Prautzsch and Rudolf Holdijk have since left the board. BRITISH ENERGY: Bondholders Meetings Set December 19 ---------------------------------------------------- Notice of Meetings of the holders of the outstanding GBP109,861,000 5.949% Guaranteed Bonds due 2003 (ISIN XS0098581647 and XS0180470121) (the '2003 Bondholders' and the '2003 Bonds' respectively) and the holders of the outstanding GBP163,444,000 6.077% Guaranteed Bonds due 2006 (ISIN XS0098580755 and XS0180469461) (the '2006 Bondholders' and the '2006 Bonds' respectively) and the holders of the outstanding GBP134,586,000 6.202% Guaranteed Bonds due 2016 (ISIN XS0098579401 and XS0180470808) (the '2016 Bondholders' and the '2016 Bonds' respectively) of the Issuer NOTICE IS HEREBY GIVEN that a Meeting of the 2003 Bondholders is convened by the Issuer for the purpose of considering and, if thought fit, passing the extraordinary resolutions set out below. This notice is issued pursuant to the provisions of the 2003 Bonds and the trust deed dated March 25, 1999 by which the Bonds are constituted (as amended and/or supplemented from time to time, the Trust Deed). The Meeting of the 2003 Bondholders will be held at the offices of Clifford Chance at 10 Upper Bank Street, Canary Wharf, London E14 5JJ on Friday, December 19, 2003 at 11.00 a.m. If a quorum is not present within 15 minutes from that time, the Meeting will either be dissolved or be adjourned until such date, not less than 14 days nor more than 42 days later, and to such time and place, as the chairman of the Meeting may decide. A notice reconvening such an adjourned meeting will be given. NOTICE IS HEREBY GIVEN that a Meeting of the 2006 Bondholders is convened by the Issuer for the purpose of considering and, if thought fit, passing the extraordinary resolutions set out below. This notice is issued pursuant to the provisions of the 2006 Bonds and the trust deed dated 25 March 1999 by which the Bonds are constituted. The Meeting of the 2006 Bondholders will be held at the offices of Clifford Chance at 10 Upper Bank Street, Canary Wharf, London E14 5JJ on Friday, 19 December 2003 at 11.20 a.m. If a quorum is not present within 15 minutes from that time, the Meeting will either be dissolved or be adjourned until such date, not less than 14 days nor more than 42 days later, and to such time and place, as the chairman of the Meeting may decide. A notice reconvening such an adjourned meeting will be given. NOTICE IS HEREBY GIVEN that a Meeting of the 2016 Bondholders is convened by the Issuer for the purpose of considering and, if thought fit, passing the extraordinary resolutions set out below. This notice is issued pursuant to the provisions of the 2016 Bonds and the trust deed dated 25 March 1999 by which the Bonds are constituted. The Meeting of the 2016 Bondholders will be held at the offices of Clifford Chance at 10 Upper Bank Street, Canary Wharf, London E14 5JJ on Friday, 19 December 2003 at 11.40 a.m. If a quorum is not present within 15 minutes from that time, the Meeting will either be dissolved or be adjourned until such date, not less than 14 days nor more than 42 days later, and to such time and place, as the chairman of the Meeting may decide. A notice reconvening such an adjourned meeting will be given. To see full copy of announcement: http://bankrupt.com/misc/BritishEnergy_Meetings.htm BRITISH ENERGY: Obtains GBP75 Million Additional Govt Funding ------------------------------------------------------------- British Energy has agreed with the Secretary of State for Trade and Industry on a temporary increase in the amount of the credit facility initially provided to the Company on September 9, 2002 (the Government Facility) from the current level of GBP200 million to GBP275 million, subject to formal documentation. As previously announced, the Company is facing short-term pressures on liquidity resulting from the combined effect of seasonality, the recent unplanned outages at Sizewell B (which returned to service on November 15, 2003) and Heysham 1 and the increased levels of collateral and costs of unplanned outages brought about by the increased volatility of electricity prices. Taken together with other initiatives, this temporary increase in the Government Facility will provide the Company with additional financial flexibility. The temporary increase in the Government Facility will only be available until the earlier of the receipt by British Energy of the proceeds from the disposal of its 50% interest in AmerGen Energy Company, LLC and February 22, 2004. A circular to shareholders convening an Extraordinary General Meeting to approve the disposal of the Company's interest in AmerGen will be sent to shareholders shortly. CONTACT: BRITISH ENERGY Paul Heward, Investor Relations Phone: +44 (0)1355 262 201 HOLLINGER INC.: Daily Mail Declares Buyout Plans for U.K. Assets ---------------------------------------------------------------- The Daily Mail and Telegraph Trust made clear its intention to bid for the U.K. flagship newspaper of Hollinger International, The Telegraph Group, at its annual results. Finance director Peter Williams said: "Technically the Telegraph is not up for sale but it's a national newspaper and that is our core business so, of course, we will be having a look." Mr. Williams is confident it could surpass regulatory hurdles likely to come across the possible acquisition. Mr. William said the potential transaction "would give [us] a 26% market share, but News International [owner of The Sun] is already at 32%." As for its refinancing, Mr. Williams believes the company has sufficient funds to make disposals of non-core assets unnecessary. The Daily Mail and Telegraph Trust is the first national newspaper group to publicly declare its interest in The Telegraph Group after the resignation of Hollinger International Chairman Lord Black last month due to mounting criticism of corporate governance. INTERNATIONAL POWER: 'BB' Ratings Affirmed after ANP Downgrade -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' long-term issuer credit and senior unsecured debt ratings on U.K.-based global power developer International Power PLC (IPower) and its subsidiary International Power (Cayman) Ltd. The affirmation follows a review of IPower and takes in news of the downgrade on IPower's U.S. subsidiary, ANP Funding I LLC (ANP), which occurred Wednesday. The outlook is stable. At the same time, Standard & Poor's assigned its 'BB' bank loan rating to IPower's US$450 million revolving credit facility due October 2006. "IPower is unaffected by the downgrade on ANP because debt at ANP is non-recourse to IPower and we expect that IPower will not provide any further equity support to ANP's operations," said Standard & Poor's credit analyst Jan Willem Plantagie. "ANP was downgraded owing to poor financial performance resulting from a weak electricity market in Electric Reliability Council Of Texas and New England Power Pool, its main area of operations, and refinancing risk for the $1.38 billion bank loan due June 2006. "IPower's profitability for the first nine months of financial 2003 was lower than that for the same period last year," continued Mr. Plantagie. "Nevertheless, although performance is under pressure due to weak U.S. and U.K. wholesale electricity markets, IPower's investments in global diversification are expected to continue providing sufficient cash flows to maintain an adequate financial profile for its ratings." A three-year unsecured $450 million working capital facility has been arranged to support IPower's equity commitments to its investments on more or less similar terms and conditions as the previous facility that was due next year. Although there is no rating trigger, pricing ranges from 125 basis points to 300 basis points depending on the rating level. Covenants include a negative pledge, restrictions on disposals and the use of disposal proceeds, as well as limitations on dividends and the provision of guarantees and performance bonds. NETWORK RAIL: May Reclaim Management of Leased Stations ------------------------------------------------------- Network Rail is reviewing the management of many of Britain's railway stations with a view towards possibly taking control of the network, according to The Guardian. The plan was prompted by worries that cash-strapped train operating companies may be neglecting the stations. Network Rail owns all of Britain's 2,508 stations but leases them out to local train operators. It only has 17 major terminuses under direct management. A Network Rail spokesman said the review is aimed at taking a closer look to understand how the company they inherited from Railtrack operates. According to him, the review would consider who should manage stations. He said: "It would be strange to look at stations and not review whether the ones we've got are the right ones. It's certainly been a general view that on the stations we run directly, we've done a reasonably good job." Two weeks ago, Network Rail took back management of an extra station, Liverpool Lime Street, from local train firm First North Western, whose operation has drawn wide criticisms from local politicians. Network Rail also took track maintenance in-house across the country a few weeks ago. In separate development, reports say the not-for-profit company cold be forced to take on a further GBP1.5 billion of debt next year to finance its high rate of spending. RICHARD ROBERTS: Could be Forced to Close Kirby Plant Next Year --------------------------------------------------------------- Marks & Spencer's decision not to renew its contract with textile manufacturer Richard Roberts Knitwear could cut the lifeline on the company's Urban Road plant in Kirby. Richard Roberts might be forced to close the facility which has a staff of 230, sells 95% of its output to the high street giant, next year after the contract runs out, according to just-style.com. The company has already held talks with its workforce and the National Union of Knitwear, Footwear and Apparel Trades to avert job cuts, the report said. Richard Roberts chairman, Andrew Bryars, promised to fight to keep the plant open, by finding new customers while doing an orderly consultation. "Ninety-five per cent of the factory's output went to Marks & Spencer so we are now looking for everything from premium brands right through to high street stores, and I'll keep doing that right up until the day we might close," he said. ROOM SERVICE: Regulator Probes Short-selling of Shares ------------------------------------------------------ The Financial Services Authority and the London Stock Exchange are investigating short-selling of Room Service's shares, chiefly by broker Evolution Beeson Gregory, one of Room Service's market makers. The inquiry jumpstarted after several small shareholders complained about a settlement backlog in Room Service shares after a planned rights issue fell through. The shares were suspended on October 22 at the company's request. A stock exchange spokesman said: "We are taking the matter very seriously and are working closely with the FSA on this one." The Room Service Shareholders' Action Group claims the affair created an imbalance such that there are more shares bought than actually available, and that the disturbance artificially depressed the price. The group is seeking compensation for the scheme. Shorting involves investors selling a share they don't hold in the hope the price falls so they can buy the shares later at a lower price and pocket the difference. A spokeswoman for Evolution said the firm had no comment, according to Sharecast. ROYAL & SUNALLIANCE: AM Best Cuts Financial Strength Rating to B ---------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength ratings of the Royal & SunAlliance USA Insurance Pool (Charlotte, NC) (NYSE: RSA) and the Royal Surplus Lines Insurance Company (Charlotte, NC) to B (Fair) from B+ (Very Good). The surplus lines company is a wholly owned subsidiary of Royal Insurance Company of America, a member of the pool. The ratings have been removed from under review with negative implications, and a negative outlook has been assigned to both entities. The ratings had been placed under review on September 26, 2003, following the September 4 announcement by the U.S. group's U.K. parent, Royal & Sun Alliance Insurance Group plc, of the group's restructuring of its U.S. business. The restructuring will include a substantial third quarter net charge for loss reserves, as well as ongoing disposition of a sizable portion of Royal USA's mid-market commercial business and personal lines business. The restructuring of the U.S. group includes actions taken to make more efficient use of assets, increasing the U.S. admissibility for solvency. While reducing the group's global consolidated risk capital requirements for ongoing business, the negative impact on the business profile of its U.S. operations, as well as the significant erosion to the capital position and financial flexibility of R&SA's U.S. insurance entities, precludes the U.S. operations from a Secure A.M. Best rating. In addition, the companies' ability to sustain additional adverse loss reserve development remains in question as does the outcome of a significant lawsuit with MBIA over fraudulent student loans. The ultimate outcome of this lawsuit is not expected to be known for another year and, if adverse to Royal USA, could further erode the U.S. surplus position. In A.M. Best's opinion, there is potential for additional reserve development in light of the significant and lengthy history of reserve deficiencies experienced by the U.S. entities. As a result of the significant level of uncertainty regarding all of these issues, A.M. Best has assigned a negative outlook to the ratings. For a complete list of Royal & SunAlliance USA Insurance Pool's financial strength ratings, visit http://www.ambest.com/press/112501rsausa.pdf SPICES FINANCES: Class II Notes Affirmed at 'CCC' ------------------------------------------------- Fitch Ratings, the international rating agency, has affirmed the Spices Finance Ltd. Series 1 (PEAS) Class II notes at 'CCC' and removed the ratings from Rating Watch Negative. At the same time, the agency has affirmed the rating of Class I notes at 'A+'. Spices Finance Limited is a special purpose vehicle incorporated with limited liability in Jersey. It currently provides protection to Morgan Stanley on a USD910 million reference portfolio of 91 reference corporate entities through a credit default swap. This rating action follows the determination of final losses on Mirant credit event, which saw the company file for Chapter 11 creditor protection in July. As a result of actual losses on Enron, Teleglobe, Marconi and Mirant credit events, the credit enhancement has decreased to 8.81% from the initial 11.70% on Class I notes and to 1.51% from the initial 4.70% on Class II. The agency will closely monitor any changes to the existing portfolio and will take further action as required. CONTACT: FITCH RATINGS Charles Hand, London Phone: + 44 (0)20 7417 3482 Irina Kissina Phone: +44 (0)20 7417 6307 TELEWEST COMMUNICATIONS: Holding Company Registers with SEC ----------------------------------------------------------- Further to the announcement on September 15, 2003, Telewest announces that it has commenced the formal implementation of its planned financial restructuring by causing Telewest Global, Inc., a newly-formed Delaware company which will become the holding company of the restructured Telewest group, to file a registration statement with the U.S. Securities and Exchange Commission. This filing will be followed in due course by the posting to bondholders of an explanatory statement setting forth the details of proposed schemes of arrangement by Telewest and Telewest's wholly-owned finance subsidiary, Telewest Finance (Jersey) Limited. As also previously announced, pursuant to the agreement in principle among Telewest, certain of its bondholders and the majority of its senior lenders, as a result of the financial restructuring, holders of outstanding notes and debentures of Telewest and its Jersey finance subsidiary will receive 98.5% of the issued share capital of Telewest Global, and holders of Telewest's existing shares will receive 1.5% of the issued share capital. Commenting on the filing, Anthony (Cob) Stenham, Chairman of the board of Telewest, said: 'With the filing of the SEC registration statement, we are all pleased to be entering the last stages of the restructuring, which we now anticipate will be completed during the new year. The company continues to perform well and to meet its financial targets, which is a great tribute to the team.' As set forth in the registration statement, there will be a number of structural, management and board changes attendant to the reorganization. Telewest Global will become the ultimate holding company for the restructured business. Telewest Global will have a new board of directors consisting of William Connors, John Duerden, Marnie Gordon, Donald LaVigne, Michael McGuiness, Rene Schuster, Steven Skinner, Barry R. Elson, as Chairman, and Charles Burdick, as Chief Executive Officer. As a U.S. holding company, it is expected that the common stock of Telewest Global will be quoted for trading on the Nasdaq National Market. To facilitate the restructuring and the orderly transition to new ownership and the new capital structure: (i) Charles Burdick, Group Managing Director, has agreed to continue in his current position through the completion of the financial restructuring and thereafter will serve as Chief Executive Officer of Telewest Global at the pleasure of the new board of directors; (ii) Mr. Stenham (as Chairman Emeritus) has agreed to serve as consultant and senior advisor to Telewest Global; and (iii) Mr. Stephen Cook will continue to serve as General Counsel and Group Strategy Director. These arrangements, further details of which are set out in the registration statement, are to be effected by Telewest Global and have not been approved by the existing board of Telewest. Mr. Stenham commented, 'We welcome the new directors and the Chairman to Telewest and are confident that this new board of directors will deliver great things for the company going forward.' Mr. Burdick commented, 'I am pleased to continue as Managing Director through the effective date of the restructuring and thereafter will work with the board of Telewest Global as Chief Executive Officer to ensure that the restructured company continues to provide leadership in the entertainment, telephony, and broadband markets to the residential and business consumer.' In addition, in connection with the restructuring, certain members of the Telewest board have agreed to step down from the Telewest board. As announced on November 18, 2003, Stanislas Yassukovich CBE, a former non-executive director of Telewest, resigned from the Telewest board. Anthony Rice and Denise Kingsmill CBE, two non-executive directors, intend to proffer their resignations from the Telewest board upon the posting of the explanatory statement relating to the schemes of arrangement and the shareholders' circular and prospectus to Telewest shareholders. As a result, the Telewest board during the remaining stages of the restructuring will be comprised of Stephen Cook, Charles Burdick and Anthony (Cob) Stenham, the non-executive Chairman. Mr. Cook has agreed to tender his resignation from the Telewest board upon the completion of the financial restructuring but, as indicated above, will continue as General Counsel and Group Strategy Director. Mr. Burdick's service as a member of the boards of Telewest and Telewest Global will be at the pleasure of the new board. The registration statement filed includes a prospectus in relation to common stock of Telewest Global to be issued to Telewest's shareholders in connection with the financial restructuring and a shareholders' circular of Telewest in relation to a proposed extraordinary general meeting of Telewest for the purpose of approving certain steps related to the financial restructuring. Telewest intends to set the meeting date and post the prospectus/shareholders' circular to Telewest shareholders after the SEC has declared the registration statement effective. For these reasons and because details of the financial restructuring are still being confirmed, the information in the registration statement remains subject to completion or amendment. The financial restructuring is subject to a number of consents and conditions, including the consent of Telewest's senior lenders. CONTACT: TELEWEST Phone: 020 7299 5888 Jane Hardman, Director of Corporate Communications Citigate Dewe Rogerson Phone: 020 7638 9571 Anthony Carlisle Phone: 07973 611888 WATERFORD WEDGWOOD: Gets Expected Price for Subordinated Bond ------------------------------------------------------------- Waterford Wedgwood announces that its offering of subordinated bonds in the principal amount of EUR166.0 million due 2010 has been successfully priced at a coupon of 9 7/8%, in line with expectations. The offering of the subordinated bonds (issued at 99.381%), which was oversubscribed, is currently expected to close on December 1, 2003. Waterford Wedgwood has also completed agreements amending and restating its revolving credit facilities, certain of its other senior debt facilities, and its Private Placement Notes. These arrangements, together with the previously announced conditional Rights Issue, add to the Group's liquidity, extend the maturity of its indebtedness, and further solidify its long-term capital structure. Redmond O'Donoghue, Waterford Wedgwood Chief Executive Officer, commented: "We are pleased at the completion of our bond, which was over-subscribed. The successful completion of this offering, combined with our fully underwritten rights issue and our new, reduced senior debt structure, sets a solid foundation for Waterford Wedgwood's future growth." Rights Issue Conditions and Timetable Waterford Wedgwood's entrance into the various refinancing arrangements, the closing of the offering of its subordinated bonds, and the admission of its nil-paid rights to the Official Lists of the Irish Stock Exchange and of the U.K. Listing Authority and to trading on the respective main markets of the Irish Stock Exchange and of the London Stock Exchange, will satisfy the conditions of the 3 for 11 Rights Issue announced on November 14, 2003. The Rights Issue is fully underwritten by Davy Stockbrokers. The expected timetable in relation to the Rights Issue is as set out below: The expected timetable in relation to the Rights Issue is as set out below: Record Date for the Rights Issue: 6.00 p.m. on November 25, 2003 Dispatch of the Rights Issue document and of the Provisional Allotment Letter (to Qualifying Non-CREST Stockholders only): December 1, 2003 Ex-Rights date (i.e. being the date from which the Existing Stock Units will trade excluding the entitlement to participate in the Rights Issue): 8.00 a.m. on December 2, 2003 Dealings in the Rights Issue Units commence, nil paid: 8.00 a.m. on December 2, 2003 Nil Paid Rights and Fully Paid Rights enabled in CREST 8.00 a.m. on December 2, 2003 * Stock accounts in CREST credited with Nil Paid Rights December 2, 2003 Recommended latest time for requesting withdrawal of Nil Paid Rights from CREST (i.e. if your Nil Paid Rights are in CREST and you wish to convert them to certificated form): 4.30 p.m. on December 16, 2003 Latest time for depositing renounced Provisional Allotment Letters nil paid, in CREST or for dematerializing Nil Paid Rights into a CREST stock account: 3.00 p.m. on December 19, 2003 Latest time and date for splitting Provisional Allotment Letters, nil paid: 3.00 p.m. on December 22, 2003 Latest time and date for acceptance and payment in full: 9.30 a.m. on December 24, 2003 Dealings in the Rights Issue Units commence, fully paid December 29, 2003 Recommended latest time for requesting withdrawal of Fully Paid 4.30 p.m. on January 5, 2004 Rights from CREST Latest time for depositing renounced Provisional Allotment Letters, fully paid, in CREST or for dematerializing Fully Paid Rights into a CREST stock account: 3.00 p.m. on January 9, 2004 Latest time and date for splitting, fully paid: 3.00 p.m. on January 12, 2004 Latest time and date for registration of renunciation, fully paid: 3.00 p.m. on January 14, 2004 Expected date for crediting Rights Issue Units to CREST stock accounts: January 15, 2004 Expected date of dispatch of definitive stock certificates in respect of Rights Issue Units: on or before January 21, 2004 *or as soon as practicable after Admission has become effective Terms defined in the Rights Issue Documentation have the same meaning in this announcement. ********* 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. 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