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/raid1/www/Hosts/bankrupt/TCREUR_Public/031217.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, December 17, 2003, Vol. 4, No. 249 Headlines B E L G I U M ASSURANCES GENERALES: Finalizes Sale of AGF Belgium Bank F R A N C E BULL SA: Cut on ADEF Rating Likely Upon Bond Restructuring METALEUROP SA: Appoints New Chief Executive, Chairman SUEZ SA: Raises Direct Stake in Electrabel to 50.01% G E R M A N Y BAYER AG: Impairment Charges to Result to Full-Year Loss DBA: Could Turn in First Ever Profit Earlier than Expected GERLING GROUP: Might Abandon Losses Next Year, Breuer Says WESTLB AG: Unit Makes Progress in Efforts to Sell Cinema Chain H U N G A R Y DUNAFERR DANUBE: Severstal to Participate in Privatization K&H EQUITIES: K&H Bank to Assume Full Control MALEV HUNGARIAN: To Receive Fresh Funds from Majority Owner I T A L Y PARMALAT SPA: Chairman, Chief Executive Officer Step Down PARMALAT SPA: Ratings Still on Watch Dev Despite Bond Repayment L U X E M B O U R G MILLICOM INTERNATIONAL: Kinnevik Participates in Notes Offering N E T H E R L A N D S GETRONICS N.V.: Wins EUR40 MM Infrastructure Contract from Abbey GETRONICS N.V.: Sells Caridata to Banca Intesa for EUR3.8 MM S W I T Z E R L A N D FANTASTIC CORPORATION: Board to Propose Closure of Company U N I T E D K I N G D O M AMP LTD.: Rights Offer Significantly Under Subscribed AMP LIMITED: Announces Board Changes After Demerger Approval ATLANTIC CASPIAN: Creditors, Investors to Vote on Rescue Plan BIRMINGHAM PLASTICS: In Receivership; Business Up for Sale BLACK SEA: Sec. 304 Injunction Hearing Tomorrow in New York CORUS GROUP: Asks Help from Dutch Unit to Pay Borrowings HIBERNIA FOODS: Rescue for Bridlington Plant Underway KWELM COMPANIES: Scheme of Arrangement Documents Now Available MEPC LTD.: Rating Cut to 'B+'; Removed from CreditWatch ROYAL & SUNALLIANCE: Reviews Option for Close Life Insurance Biz SAFEWAY PLC: Wm Morrison's New Bid Values Company at GBP3 BB SAFEWAY PLC: Ratings Still on Watch Dev, Despite New Offer ********* ============= B E L G I U M ============= ASSURANCES GENERALES: Finalizes Sale of AGF Belgium Bank -------------------------------------------------------- AGF Belgium on Monday sold all of its shares in AGF Belgium Bank to ING Belgium. Announced several months ago, the transaction was contingent on finalization of due diligence and on approvals from the Belgian Banking and Finance Commission, the Dutch Finance Ministry and the Belgian Council for Competition. All of these conditions have now been met. (a) Concentration on brokerage as distribution channel This transaction is part of AGF Belgium's strategy to concentrate on brokerage as its sole distribution channel. The sale is also in line with the AGF Group's strategy to refocus on its core business, the protection of individuals, companies, and their property. The amount of the transaction is EUR59.4 million. The activities of AGF Belgium Bank will be merged with Record, a subsidiary of ING Belgium. A savings bank, Record, neither distributes nor promotes insurance products. =========== F R A N C E =========== BULL SA: Cut on ADEF Rating Likely Upon Bond Restructuring ---------------------------------------------------------- Standard & Poor's Ratings Services said it is highly likely that it will lower the 'T3' short-term ADEF rating on French IT company Groupe Bull SA to 'T4', indicating default, upon completion of Bull's proposed convertible bond restructuring. The restructuring was approved by bondholders on December 11, 2003. "Standard & Poor's views the restructuring as coercive, as it entails an approximate 90% loss of value (as calculated by the company), on the EUR204 million convertible debt," said Standard & Poor's credit analyst Patrice Cochelin. The loss is due to: (a) A maturity date that would be rescheduled to 2033 (from the current date of 2005); (b) A lower cash coupon of 0.1% (from 2.25%); (c) A redemption price reduced to 100% (from 116.5%); and (d) The foregoing by bondholders of the conversion parity adjustment mechanism. Bull has also committed to launch a convertible bond-to-equity exchange offer following the restructuring of the bond. Bull's restructuring plans are part of its efforts to restore positive equity, and to dramatically reduce its large debt burden. The plan still remains to be approved by Bull's board and shareholders, and is dependent upon the approval of a separate transaction concerning Bull's EUR490 million debt to the French state. The latter is in turn subject to approval by the European Commission and the French state, and entails the foregoing of the state's loan to Bull in exchange for partial repayment in the form of a tax on any future profits above EUR10 million generated during the next eight years. The resulting liability ("clause de retour a meilleure fortune") would be recorded off balance sheet. The tax rate remains to be agreed upon, but would likely result in a 90% loss on the French state's loan. "Standard & Poor's will continue to monitor Bull's restructuring efforts," added Mr. Cochelin. "The approval by the convertible bondholders of the coercive exchange offer increases the likelihood of the rating being lowered to 'T4'. Beyond that point, the company's new operating prospects and improved balance sheet structure will determine the future direction of the rating." METALEUROP SA: Appoints New Chief Executive, Chairman ----------------------------------------------------- During the board of directors meeting on December 2, 2003, Mr. Jean-Dominique Sorel was appointed as Chief Executive Officer of Metaleurop SA. Mr. Bernd Kreikmann has been appointed as a member of the board and elected as the Chairman of the board. Mr. Kreikmann and Mr. Sorel succeed M. Russ Robinson who tendered his resignation at the meeting from all of his Metaleurop SA responsibilities. Mr. Bernd Kreikmann has been with the Metaleurop Group since 1998 and is Chief Executive Officer and chairman of the board of Metaleurop GmbH, which includes the operating German companies of the group. This company is a 100% owned affiliate of Metaleurop SA. M. Jean-Dominique Sorel has been with the Metaleurop Group since 1995 and was appointed Directeur Generale Delegue (Assistant Chief Executive Officer) of Metaleurop SA in July 2003. ***** Trouble for Metaleurop started brewing when its German shareholder, TUI, opposed plans to continue sustaining Metaleurop Nord's operation through injection of additional funds. Metaleurop said accumulative losses at Metaleurop Nord amounted to EUR97 million in 2001 and 2002. The Noyelles Godault-based business fell into receivership in January, leaving parent company Metaleurop to deal with a liquidation impact of EUR100 million gap on its 2002 consolidated statements. Metaleurop was given a EUR12 million- bridge loan by its shareholder, Glencore International, but the funding expired at the end of August. Creditors are now seeking to recover EUR40 million from the company. SUEZ SA: Raises Direct Stake in Electrabel to 50.01% ---------------------------------------------------- SUEZ recently made opportunistic purchases of Electrabel shares on the stock market, raising the Group's direct shareholding to 50.01%, or 54.68% inclusive of the joint action with the pure inter-municipal finance companies (4.67%). On May 8, 2003, SUEZ had reported that on its own it held 45.34% of Electrabel's shares, or 50.01% inclusive of the joint action with the pure intermunicipal finance companies (4.67%). SUEZ, (http://www.suez.com)a worldwide industrial and services Group, active in sustainable development, provides companies, municipalities, and individuals innovative solutions in Energy - electricity and gas - and the Environment - water and waste services. In 2002, SUEZ generated revenues of EUR 40.218 billion (excluding energy trading). SUEZ is listed on the Euronext Paris, Euronext Brussels, Luxembourg, Zurich and New York Stock Exchanges. ***** Standard & Poor's says Suez's operating performance during first- half 2003 has been satisfactory, with cost-cutting measures and organic growth of 5% for its core utility businesses stabilizing EBITDA levels on a constant group basis and on constant exchange rates. But it warned that despite these improvements, the company's free cashflow generation after dividends may remain negative until at least 2005. This will remain a credit concern. ============= G E R M A N Y ============= BAYER AG: Impairment Charges to Result to Full-Year Loss -------------------------------------------------------- The Bayer Group plans to take a total of about EUR2.2 billion in asset impairment charges in the fourth quarter of 2003. The charges are related to the decision to strategically realign the portfolio, the planned stock-exchange listing of "NewCo" and changes in the operating conditions for the future Bayer MaterialScience subgroup. The impact of these special items on EBIT is expected to be about EUR2 billion, while the non- operating result should be diminished by some EUR200 million. In the polymers and chemicals businesses these charges should amount to EUR1.7 billion, the major part of which relates to the activities to be transferred to the future "NewCo." The figure also includes expenses for facilities consolidation as part of the ongoing efficiency programs. The Bayer HealthCare subgroup plans to report charges of about EUR500 million, related partly to the consolidation of pharmaceutical research facilities. The expected charges to the non-operating result arise from write-downs of the financial interests in DyStar and the research company Curagen. Bayer emphasizes that the impairment charges are non-cash items. They therefore affect neither cash flows nor Bayer AG's dividend potential. In light of the planned impairment charges, the Bayer Group expects to post negative EBIT and a net loss for the full year 2003. Bayer continues to predict that EBIT before these special items will increase by a double-digit percentage as previously forecast. DBA: Could Turn in First Ever Profit Earlier than Expected ---------------------------------------------------------- Loss-making German airline Dba could make a profit as early as the summer of 2004, Intesatrade reported, citing German daily Die Welt. The forecast is ahead of the 2005 target it announced earlier. According to owner Hans Rudolf Woehrl, Dba's share of business travelers is "constantly increasing and lies on average of 60%." He said: "In the summer of 2004, we could report black numbers for the first time." In November, Dba lost EUR3 million from warning strikes among pilots and cabin crews. Mr. Woerhl recently warned that another warning strike before Christmas could mean closing the airline. The carrier, which Mr. Woehrl bought Deutsche BA from British Airway's earlier this year and later renamed it Dba, is currently trying to survive strong completion with a growing number of no- frills airlines in Germany and Europe. GERLING GROUP: Might Abandon Losses Next Year, Breuer Says ---------------------------------------------------------- Wolfgang Breuer, Executive Board Member of the Gerling Group, expects the company to post a small profit for 2003, Intesatrade reported, citing Frankfurter Allgemeine Zeitung. Breuer said Gerling's publicly listed property and casualty unit Gerling-Konzerm Allgemeine Versicherungs-AG has lost around one- sixth of its premium income this year. The unit had premium income of around EUR2.5 billion, but also had a combined ratio of 100% in 2003. A combined ration of 100% indicates that premium income matched damage payments, making the insurer profitable, the executive deduced. The Gerling Group lost EUR150 million in 2002, mainly as a result of a capital injection into its troubled reinsurance unit Gerling Global Re. WESTLB AG: Unit Makes Progress in Efforts to Sell Cinema Chain -------------------------------------------------------------- WestLB's Principal Finance Group agreed to provide Odeon cinema a new 18-month loan facility to replace the one that expires until March, the Times said, according to Reuters. The refinancing of the GBP290 million bridging loan is key to the sale of the unit's approximately 43% stake holding in the cinema chain. Property entrepreneur Robert Tchenguiz, which already controls 35% of the chain, is keen to buy the asset early in the New Year. He already raised GBP286 million to fund the acquisition by the end of November. WestLB acquired Odeon Cinema from private equity firm Cinven for GBP431 million in March. The company was not available for comment, Reuters said. ============= H U N G A R Y ============= DUNAFERR DANUBE: Severstal to Participate in Privatization ---------------------------------------------------------- Russian steel producer Severstal Joint-Stock Co. confirmed it is interested in bidding for the state's 79% stake in Dunaferr Danube Steelworks Rt, according to Budapest Business Journal. The firm's Deputy General Director, Thomas M. Veraszto, said the acquisition would give the company gateway to EU markets as it expands internationally. "EU markets are virtually closed for Russian companies," said Veraszto, referring to the protective quotas of the European Union on imported steel. "Dunaferr's acquisition, considering Hungary's imminent EU accession, would grant us access to these markets." Severstal plans to restructure Dunaferr to make it a specialized maker of high value-added steel products should it win the tender offer. It reckons that with its own raw materials production division, Severstal-Resource, it could help Dunaferr overcome the problem of high and fluctuating raw material prices. The municipality of Dunaujvaros, where Dunaferr is based, is also supporting the bid. The regional development and investment plans they forged with other investors would make sure Dunaferr employees made redundant would be able to find jobs in the region. The State Holding and Privatization Rt said it received three bids for Dunaferr. Previous press reports said four contenders visited Dunaferr's data room during the preliminary phase of the privatization. These parties are Severstal British-Indian LNM Holdings N.V., Ukrainian Donbass Industrial Union Co. and Brazilian Companhia Sider�rgica Nacional SA. K&H EQUITIES: K&H Bank to Assume Full Control --------------------------------------------- ABN Amro Bank N.V. is to transfer its 50.1% stake in K&H Equities Rt to K&H Bank Rt, ABN Amro spokesman Jochem van de Laarschot said, according to Budapest Business Journal. The transaction, which will make K&H Bank the sole owner of the troubled broker, already received the blessing of the State Financial Institutions Supervision. 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. K&H Bank has not yet set aside risk provisions to cover K&H Equities' losses, because the magnitude of the losses was still not determined. MALEV HUNGARIAN: To Receive Fresh Funds from Majority Owner ----------------------------------------------------------- The State Privatization and Holding Rt said last week it would inject HUF10 billion (US$46.6 million) in new cash to Malev Hungarian Airlines Rt. Malev's majority owner will deliver the first installment of the cash injection -- amounting to HUF7 billion -- this year on condition that the airline puts in place a strategy that would improve its results. It would complete the second part of the funding in 2004. The airline, which accumulated HUF8.7 billion net losses in the first nine months of 2003, will cut cost, reorganize its fleet, and simplify price structures and distribution activities, according to CEO Laszlo Sandor. Mr. Sandor expects Malev to post a modest profit by the second half of 2004 after saving between HUF7 billion to HUF8 billion per year through the strategy. The cash injection is a last chance for Malev to receive state aid ahead of Hungary's European Union entry in May. ========= I T A L Y ========= PARMALAT SPA: Chairman, Chief Executive Officer Step Down --------------------------------------------------------- The Board of Directors of Parmalat Finanziaria Spa met Monday, and noted these undertakings: (a) the completed repayment of the EUR150 million bond issued by its subsidiary Parmalat Finance Corporation, falling due on the December 8, 2003; (b) the resignation of the Chairman of the Board of Statutory Auditors of Parmalat Finanziaria Spa, Dott. Mario Brughera who has been replaced by Statutory Auditors Board member Dott. Antonio Bevilacqua; the role of Chairman of the Board of Statutory Auditors has been taken, consistent with Article 2401 of the Civil Code, by Dott. Oreste Ferretti. Cav. Lav. Calisto Tanzi communicated to the meeting his intention to resign his roles as Chairman, Chief Executive Officer and Board member and informed the meeting of the resignations of Board members Fausto Tonna, Luciano Silingardi and Giovanni Tanzi. The Board of Directors appointed through co-optation three new Board members: (a) Dott. Enrico Bondi (b) Dott. Guido Angiolini (c) Avv. Umberto Tracanella All three new Board members accepted their nominations. The Board of Directors is now composed as follows: Enrico Bondi, Guido Angiolini, Enrico Barachini, Domenico Barili, Francesco Giuffredi, Pietro Mistrangelo, Paolo Sciume', Stefano Tanzi, Umberto Tracanello and Paola Visconti. The Board nominated Dott. Enrico Bondi as Chairman of the Board of Directors and Chief Executive Officer. Dott. Bondi thus assumed the powers granted to the outgoing Chairman and Chief Executive Officer. The Board noted the resignations of all members of the Executive Committee and agreed to the reconstitution of a three member Executive Committee, composed as: (a) Dott. Enrico Bondi (b) Dott. Guido Angiolini (c) Avv. Umberto Tracanella Dott. Guido Angiolini was given responsibility for the Corporate, Administration and Control functions. The Board of Directors empowered the Chairman to mandate Lazard & Co. Ltd. and Mediobanca to provide assistance to review the Group's economic and financial situation on the basis of information to be provided to them, and also in support of the Group's eventual financial restructuring plan. The two banks have already confirmed their availability in this regard. To this end, the Board also gave the Chairman the necessary powers to nominate other advisers, including those for legal matters. PARMALAT SPA: Ratings Still on Watch Dev Despite Bond Repayment --------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'CC' long-term and 'C' short-term corporate credit ratings on Italy-based leading global fluid-milk processor Parmalat Finanziaria SpA and main operating subsidiary, Parmalat SpA, would remain on CreditWatch with developing implications despite the group's announcement that it had repaid on December 12, 2003, the EUR150 million ($184 million) bond that matured on December 8, 2003. "The continuing CreditWatch status reflects Standard & Poor's continuing efforts to determine why a group with reported liquidity of EUR3.7 billion excluding the Epicurum Fund had to delay the repayment of a EUR150 million bond," said Standard & Poor's credit analyst Hugues de La Presle. "The CreditWatch placement also factors in Parmalat's very tight liquidity position, which is converse to information repeatedly provided to Standard & Poor's in writing up to the week ending Dec. 5, 2003, by Parmalat and its advisers. This information confirmed that the group had at least cash balances of EUR1,066 million and a EUR1,517 million portfolio of highly liquid bonds, with a minimum rating of 'A', available at the end of September 2003." The ratings on Parmalat were initially placed on CreditWatch on Nov. 11, 2003, due to concerns about the quality of the group's accounts and how the group invests its liquidity. At the end of September 2003, the group reported gross debt of EUR6 billion. Parmalat's liquidity remains extremely tight. The group faces maturities by the end of the year that could total about EUR1.55 billion, depending on the attitude of the banks. Maturities include: The $400 million option to be exercised by December 17, 2003, pertaining to minorities in the group's Brazilian operations; and about EUR1.2 billion of bank debt, which is exclusively uncommitted and short term in nature. This bank debt is essentially provided by major Italian banks. In addition, the group faces maturities of EUR439 million in 2004 (essentially in the second half) on bonds and private placements. =================== L U X E M B O U R G =================== MILLICOM INTERNATIONAL: Kinnevik Participates in Notes Offering --------------------------------------------------------------- Industriforvaltnings AB Kinnevik announced that it has bought 10,863,000 Millicom International Cellular SA 2% Senior Convertible PIK Notes for US$68,007,453. The convertible notes are equivalent to 1,010,512 shares in Millicom International Cellular SA [long-term corporate credit rated 'B+' by Standard & Poor's] after conversion. Kinnevik in total holds 13,205,000 PIK Notes in Millicom, equivalent to 1,228,372 shares in Millicom after conversion. Industriforvaltnings AB Kinnevik was established in 1936 as an investment holding company. The Company's objective is to increase shareholder value, primarily through net asset value growth. The business consists of operating companies such as farming company MSLA and cartonboard and paper producer Korsnas AB, and a portfolio of long-term investments in a select number of listed companies such as Tele2 AB, Modern Times Group MTG AB, Millicom International Cellular SA, Metro International SA, Transcom WorldWide SA and Invik & Co. AB. Kinnevik plays an active role on the Boards of its subsidiaries and associated companies. Kinnevik's `A' and `B' shares are traded on the Stockholmsborsen `A-list'. CONTACT: INDUSTRIFORVALTNINGS AB KINNEVIK Vigo Carlund, CEO, Phone: +46 8 5620 0000 Henrik Persson, Investor & Press Relations Phone: +44 20 7321 5010 ===================== N E T H E R L A N D S ===================== GETRONICS N.V.: Wins EUR40 MM Infrastructure Contract from Abbey ---------------------------------------------------------------- Getronics (Moody's, 'B2' senior implied; 'Caa1' senior subordinated bond debts), a leading international Information and Communications Technology Company, has won a EUR40 million contract to completely refit the entire U.K. branch infrastructure of Abbey National Plc. The contract calls for Getronics to source and deploy hardware and infrastructure to Abbey's entire network of 741 branches and also to its large office buildings, thereby assisting the company to deliver on its strategy of focusing entirely on U.K.'s personal financial services. Pilots took place during December 2003 with the full implementation, which is expected to take approximately four months to complete, commencing in early 2004. It will entail the procurement of approximately 40,000 desktop devices including personal computers, flat screens, laser and network printers, as well as 9,000 Getronics PR2e passbook printers. Getronics will install a new Windows XP platform designed to run Abbey's own software, replacing the existing Windows 98 platform. Getronics' staff have also assisted in the software development part of the project working with Abbey-led development teams. Bill Gibbons, Director Technology Services and Support for Abbey said: "We needed an experienced supplier who understood the Abbey environment and who had experience of helping us to deliver similar scale changes to help us meet the challenges of a major systems upgrade so that we are able to offer customers the best possible service. "It is essential in the world of financial services to deploy technology that gives you a competitive edge, and we believe that these new systems will enable us to deliver that." Roger Whitehead, Managing Director, Getronics U.K. and Ireland said: "This is the latest project to come out of the twenty year relationship with Abbey. Such a long-standing relationship enables us to have an unprecedented understanding of the company's infrastructure requirements. "The challenge of deploying new platforms to such a large number of locations with minimal disruption is one which we are looking forward to and which Abbey and its customers will benefit from." About Getronics With 23,000 employees in over 30 countries and forecast revenues of circa EUR2.7 billion in 2003, Getronics is one of the world's leading providers of vendor independent Information and Communication Technology solutions and services. Getronics today combines the capabilities of the original Dutch company with those of Wang Global, acquired in 1999, and of the systems and services division of Olivetti. Getronics is ranked second worldwide in network and desktop outsourcing and fourth worldwide in network consulting and integration (Source: IDC 2002-2003). Getronics designs, integrates and manages ICT infrastructures and business solutions for many of the world's largest global and local companies and organizations, helping them maximize the value of their information technology investments. Getronics headquarters are in Amsterdam, with regional offices in Boston and Singapore. Getronics' shares are traded on Euronext Amsterdam. For further information about Getronics, visit http://www.getronics.com GETRONICS N.V.: Sells Caridata to Banca Intesa for EUR3.8 MM ------------------------------------------------------------ Getronics, a leading international Information and Communications Technology Company, announced that as part of the Italian restructuring plan it has reached agreement with Banca Intesa to sell its minority shareholding (40%) in Caridata to the bank for approximately EUR3.8 million cash proceeds, based on the net equity value of the company. Caridata provides information services (application management, outsourcing and facility management) to the Italian financial services market. This disposal will lead to further portfolio focus in the Italian financial services sector and growing capabilities in delivering advanced financial services to the Italian banking system, starting with Banca Intesa. About Getronics With 23,000 employees in over 30 countries and forecast revenues of circa EUR2.7 billion in 2003, Getronics is one of the world's leading providers of vendor independent Information and Communication Technology solutions and services. Getronics today combines the capabilities of the original Dutch company with those of Wang Global, acquired in 1999, and of the systems and services division of Olivetti. Getronics is ranked second worldwide in network and desktop outsourcing and fourth worldwide in network consulting and integration (Source: IDC 2002-2003). Getronics designs, integrates and manages ICT infrastructures and business solutions for many of the world's largest global and local companies and organizations, helping them maximize the value of their information technology investments. Getronics headquarters are in Amsterdam, with regional offices in Boston and Singapore. Getronics' shares are traded on Euronext Amsterdam. For further information about Getronics, visit http://www.getronics.com ===================== S W I T Z E R L A N D ===================== FANTASTIC CORPORATION: Board to Propose Closure of Company ---------------------------------------------------------- The board of The Fantastic Corporation (Prime Standard Frankfurt: FAN), a provider of software products that optimize data distribution within corporate networks, decided an orderly dissolution and liquidation of the company. Management and board will present this proposal to the shareholders at an extraordinary general meeting on January 20, 2004 (at 9:00 hours in Burgbachsaal) in Zug. When the company was formed in 1996, Fantastic first developed Software which permitted to transfer video, text, sound and pictures through broadband media to personal computer and television screens. Peter Ohnemus, co-founder, chairman of the board and since October 2003 ad interim CEO of Fantastic, says: "The high payments for the UMTS-licenses removed a large portion of the investment potential of the European telecommunications industry -- and thus threw our industry back by many years. This development could neither be expected when Fantastic was founded nor at the time of the IPO in 1999." Subsequently, Fantastic adjusted its strategy to aim for the market of enterprise Content Delivery Networks (eCDN) in the United States. Fantastic's software optimizes existing corporate networks and thus helps reducing network operating costs. The disappointing order intake of the telecommunication industry and declining IT-budgets of large corporations for the past three years, however, prevented any success of the niche player. Low revenues during the last quarters in a continuously unfavorable environment for investments in IT-infrastructures depleted the company's capital reserves. In the framework of its long-term strategic planning the board of Fantastic decided already last year that the company would avoid a bankruptcy. Instead it sought to find a satisfying solution for the shareholders as long as sufficient resources were available -- as communicated by the company at various occasions this year. Since the beginning of 2003, the board, together with the management and external consultants, explored all options for the future course of Fantastic. Among others, a re-launch, a takeover by third parties and a reverse takeover were examined. During the extraordinary general meeting on October 27, 2003 the management presented a plan to seek additional investors in order to bridge the next two years - until the demand for broadband software was expected to noticeably increase. In today's fierce IT- and telecommunications market, however, Fantastic's management was unable to find potential investors or buyers. An orderly dissolution and liquidation of the debt free company will make it possible to sell off existing assets including products, licenses, patents and the business in the United States in order to maximize the proceeds for the shareholders, if possible. Nevertheless, it must be assumed that after liquidation no significant proceeds will be available for distribution to the shareholders. Peter Ohnemus summarizes: "After the sharp down-turn in the telecommunication industry the market for broadband software collapsed. We are expecting an increased demand for broadband products and eCDN-solutions in one or two years. Unfortunately, we were unable to find investors who would be willing to bridge this period." The Fantastic Corporation (www.fantastic.com) produced software for rich data distribution in corporate networks. Its product suite for enterprise Content Delivery Networks (eCDN) allowed corporations to boost the performance of their existing IT- networks. Fantastic was founded in 1996 in Zug, Switzerland and is quoted on the Prime Standard of the Frankfurt Stock Exchange (Symbol: FAN). CONTACT: FANTASTIC CORPORATION Bahnhofstrasse 2 P.O.Box 1350, 6301 Zug Meliza Louw Phone: +41 41 728 88 88 Fax: +41 41 728 88 80 E-Mail: M.Louw@fantastic.com RUSTIN COMMUNICATIONS Mountain View, USA Joanna Rustin Phone: +1 160-333-3140 E-mail: jrustin@rustincommunications.com ZANGGER.ORG, SCIENCE COMMUNICATIONS Eberhard Zangger Phone: +41 1 390-2936 E-Mail: mail@zangger.org =========================== U N I T E D K I N G D O M =========================== AMP LTD.: Rights Offer Significantly Under Subscribed ----------------------------------------------------- AMP Limited announced that it had received acceptances under its Rights Offer of AU$600 million from almost 140,000 eligible shareholders. AMP Chief Executive Officer Andrew Mohl said the company was delighted with the high number of shareholders who took up their rights. This follows unprecedented high voting rates and an overwhelming endorsement from shareholders for the demerger proposal last week. The AU$585 million shortfall from the Rights Offer will now be sold into an institutional bookbuild to be held over the next two days (December 16-17). As contemplated in the offer structure, the total size of the bookbuild will be AU$650 million, with the increment over the shortfall amount used to make cash payments to non-participating shareholders. AMP shares will be placed in a trading halt for this period to allow the bookbuild to proceed. The institutional bookbuild will also determine the price that AMP shareholders will pay for their rights entitlements. Rights Offer participants will receive a 10% discount to the bookbuild price. Mr. Mohl said the shortfall in the Rights Offer had been anticipated for three reasons: (a) about 80% of AMP's retail shareholders received their shares at demutualization and have traditionally not been active investors; (b) a number of overseas shareholders, including institutional investors, were not eligible to participate in the Rights Offer because of regulatory requirements in their own markets; and (c) rights trading was not possible because the Offer was conditional on the demerger proceeding. The Rights Offer attracted the highest retail shareholder participation of any offer made to AMP shareholders since demutualization. For example, a Share Purchase Plan (SPP) in May 2003 saw around 29,000 retail participants. "This has been the most successful offer we have ever undertaken with our retail shareholders and indicates to us the level of support that exists for a revitalized AMP," Mr. Mohl said. "Overall, given the events of the past year, we are extremely heartened by the level of support we have received from our shareholders, both in the demerger vote and in the Rights Offer. "With the demerger now effective and AMP shares soon to trade independently of the U.K. operations, we are totally focused on driving our local business hard to improve shareholder returns." The institutional bookbuild will open at 10 a.m. on Tuesday December 16 and close at 12 noon December 17. The bookbuild price and outcome of the Rights Offer will be announced late on the afternoon of December 17. AMP shares are expected to resume trading on the Australian and New Zealand stock exchanges on 18 December, when they will trade for the first time without an entitlement to HHG. At that time, AMP's share price is likely to be lower than it was on December 15, because HHG will have been effectively separated from the Group. Mr. Mohl said shareholders who did not participate in the Rights Offer or were ineligible would still benefit, through a cash payment of A8.2 cents per right. Checks are expected to be sent to shareholders in early January. The proceeds of the fully underwritten Rights Offer will be used to redeem AMP's Reset Preferred Securities. AMP intends to redeem the RPS for cash because not all of the Reset Preferred Securities will be treated as Tier One regulatory capital in the post-demerger AMP. The underwriters and joint lead managers for the Rights Offer are UBS Advisory and Capital Markets Australia Limited and Macquarie Equity Capital Markets Limited. Caliburn is the principal adviser to AMP on the Rights Offer. CONTACT: AMP LIMITED Level 24, 33 Alfred Street Sydney NSW 2000 Australia ABN 49 079 354 519 Investor Inquiries Mark O'Brien Phone: 61 2 9257 7053 AMP LIMITED: Announces Board Changes After Demerger Approval ------------------------------------------------------------ Roger Yates and Lord Killearn advised the AMP Board of Directors that they were retiring from the Board as a consequence of the demerger, as foreshadowed in AMP's Explanatory Memorandum. AMP's Board will now comprise the Chairman, Peter Willcox, Managing Director and CEO Andrew Mohl and five other Non- Executive Directors: Richard Grellman, Pat Handley, Meredith Hellicar, Peter Mason and Nora Scheinkestel. ***** AMP Limited has received Federal Court approval for its demerger, following overwhelming shareholder endorsement of the proposal earlier this week. AMP lodged the Court Order with ASIC, clearing the way for the demerger to proceed irrevocably. This means two independent entities -- AMP in Australasia and HHG in the United Kingdom -- are expected to be listed separately within two weeks. ATLANTIC CASPIAN: Creditors, Investors to Vote on Rescue Plan ------------------------------------------------------------- Atlantic Caspian creditors and shareholders are being offered a rescue plan that could hand over control of the oil and gas exploration company to Denby Holdings, a business set up to buy the firm's debt, according to the Telegraph. Under the proposal creditors will be able to subscribe for 11,111 new shares for every GBP1 that they are owed, or take 10p in cash. Shareholders of the company chaired by former British Gas chief executive Cedric Brown stand to receive only 9% of Atlantic Caspian Resources' equity should they approve the plan today. Atlantic, which is now in a "company voluntary arrangement," posted a retained loss of GBP41.8 million for the 18 months to June 30, the report said. The company had 12-month losses of GBP21.3 million and GBP834,000 in 2001 and 2000, respectively. Atlantic fell deeply into trouble after it failed to renew its license to look for oil in the Akkul and Kyzyloy fields in Kasakhstan in September. This was about five months after its shares were suspended on the Alternative Investment market following its failure to find a replacement for its nominated adviser. The company owes GBP8.15 million to unsecured creditors, including GBP7.9 million to Denby Holdings. Unfortunately, it only has GBP300 in the bank. BIRMINGHAM PLASTICS: In Receivership; Business Up for Sale ---------------------------------------------------------- Insolvency experts from PKF were appointed as receivers of plastic injection moulder, Birmingham Plastics, according to Birmingham Post. Ian Gould and Brian Hamblin were called in after pressures from cheap imports, minimum wage demands, and red tape, became insurmountable for the company. Mr. Gould said: "Notwithstanding a busy order book the company has found it very difficult to make profits." The receivers are now trying to sell Birmingham Plastics as a going concern. They have been encouraged by a strong interest in the business, whose trading they said has been secured by the immediate appointment of the receivers. The company is approved to BS EN ISO 9002 for injection and compression moldings and specializes in security, lighting and electrical product moldings. It is currently manned by 9 of the company's 49 staff, after the rest was made redundant. BLACK SEA: Sec. 304 Injunction Hearing Tomorrow in New York ----------------------------------------------------------- By Order of the U.S. Bankruptcy Court for the Southern District of New York, a hearing before the Honorable Cornelius Blackshear will convene tomorrow at 2:00 p.m. to consider a request by Dan Yoram Schwarzmann and Douglas Nigel Rackham, as joint provisional liquidators of Black Sea and Baltic General Insurance Company Limited, for a permanent injunction and order pursuant to Sec. 304 of the Bankruptcy Code. Among others, the Provisional Liquidators want the Scheme of Arrangement filed in the U.K. to be given full force and be declared binding to all scheme creditors in the U.S. The Provisional Liquidators also seek to enjoin creditors from seizing, repossessing, or transferring company property in the U.S. or commencing or continuing legal action against Black Sea. A copy of the Scheme of Arrangement is available at no charge at http://www.blacksea.co.uk/or on written request to the Counsel for the Provisional Liquidators: Chadbourne & Parke LLP 30 Rockefeller Plaza New York, NY 10112 Tel: 212-408-5100 Attn: Howard Seife, Esq. Francisco Vazquez, Esq. Incorporated in England and Wales, Black Sea and Baltic General Insurance Company Limited wrote general insurance and reinsurance business covering marine, aviation, non-marine and personal lines. Black Sea wrote business through its head office in London, its branch in Paris and through a number of agencies principally in the U.K. but also overseas until just before the appointment of the Provisional Liquidators. The U.K. Provisional Liquidators filed a Sec. 304 petition on September 22, 1998 (Bankr. S.D.N.Y. Case No. 98-46759). At June 2003, the Company was estimated to have gross liabilities in excess of $100 million. CORUS GROUP: Asks Help from Dutch Unit to Pay Borrowings -------------------------------------------------------- A spokesman for Corus Netherlands confirmed a report from financial daily Financieele Dagblad that Corus Group Plc had asked a loan from its Dutch counterpart, according to Dow Jones. The report on Monday said parent Corus Group was asking a loan of EUR100 million to partly repay EUR1.2 billion in borrowings. The profitable Dutch unit will decide before the end of this year if it will provide the loan, the spokesman said, according to the report. Corus, Europe's largest steel maker, formed through the merger of British Steel and Dutch Hoogovens in 1999, has been struggling with severe losses at its U.K. operations. HIBERNIA FOODS: Rescue for Bridlington Plant Underway ----------------------------------------------------- Administrators of troubled Hibernia Foods, which manufactures Sara Lee products, are in talks with an unnamed U.K. food manufacturer interested in buying the company's Bridlington plant, Evening Gazette reported citing Sara Lee. The U.S.-based food firm said it already reached an agreement with the prospective buyer that it would continue to order the products being manufactured by Hibernia on a license in the Bridlington factory. The firm's Hartlepool and Stockton sites are believed excluded from the possible rescue, dashing hopes that the whole business could be sold as a going concern. The transaction also puts in limbo the future of more than 1,000 Teesside production workers. KWELM COMPANIES: Scheme of Arrangement Documents Now Available -------------------------------------------------------------- At Court hearings on November 28, 2003 in London and December 2, 2003 in Bermuda, the Courts gave permission for meetings of Scheme Creditors to be convened on January 29, 2004 in London. Copies of the Court Orders have been posted on the documents tab at http://www.kwelm.com/ The final version of the Scheme Document, dated December 5, 2003, has been posted at http://www.kwelm.com/and replaces the previous draft dated November 4, 2003. A letter dated December 12, 2003 providing information about the meetings and attaching the relevant documents has been sent to Scheme Creditors, Policyholders, Retrocessionaires and Brokers. The Scheme Administrators will be visiting various cities in the USA in the week commencing January 12, 2004 to deal with queries from creditors. Details of their itinerary will be posted on this website later this month. If you would like details of the itinerary sent to you, once it is finalized, please request a copy at the Creditor Helpdesk: Scheme Administrators Mr. C J Hughes Mr. I D B Bond The Scheme Administrators can be contacted through Mr. C G Reynolds at scheme.administrator@kwelm.com Creditor Helpdesk To enquire as to why you have been sent a notice, or for any other query, please contact the creditor helpdesk on: Email: creditor.helpdesk@kwelm.com Phone: +44 (0) 20 7645 4991 Fax: +44 (0) 870 600 7588 Address for Correspondence: U.K. Office US Office John Stow House 599 Lexington Avenue Phone: +44 (0) 20 7645 4700 Fax: +44 (0) 20 7645 4777 Email: kmsl@kmsl.co.uk 18 Bevis Marks Suite 1803 London New York EC3A 7JB NY 10022, USA Phone: 001 212 838 0099 Fax: 001 212 838 5999 Email: kmsl@kwelm.com Queries Specific queries regarding claims should be directed to Paul Corver, Head of Claims, at the U.K. office or paul.corver@kmsl.co.uk Queries regarding the companies' accounts should be referred to Tony Holdsworth, Head of Finance, at the U.K. office or tony.holdsworth@kmsl.co.uk MEPC LTD.: Rating Cut to 'B+'; Removed from CreditWatch ------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit and senior unsecured debt ratings on U.K.-based property investment company MEPC Ltd. to 'B+' from 'BB-', as a result of the company's weakened financials. At the same time, Standard & Poor's also lowered its preferred stock rating on MEPC International Capital L.P., which is guaranteed on a subordinated basis by MEPC, to 'CCC+' from 'B-'. All ratings are removed from CreditWatch, where they were placed on June 5, 2003. The outlook is negative. "The downgrade on MEPC reflects the company's weakened financial profile, fewer income-producing assets in the portfolio, and an untested management," said Standard & Poor's credit analyst Kenneth Mak. MEPC benefits, however, from being controlled by a less aggressive owner, British Telecommunications PLC (A-/Positive/A- 2) pension scheme, and the creditors benefit from liquidity provided by a GBP350 million (US$610 million) four-year committed unsecured credit facility from British Telecommunications pension scheme. At Sept. 30, 2003, MEPC had total debt of GBP786 million (including preference shares). "There is the possibility of a further weakening in the financial profile in case of cash from asset disposals being upstreamed, a more aggressive development policy, and a higher cost of finance for future additional financing," said Mr. Mak. "The 'B+' ratings are based on the assumption that excess cash will not be upstreamed to the owners, but will be used to either repay debt or develop the existing portfolio and land bank, and that a more aggressive development policy will not be pursued." ROYAL & SUNALLIANCE: Reviews Option for Close Life Insurance Biz ---------------------------------------------------------------- Royal & SunAlliance is reviving plans to sell its closed life insurance business in order to free up needed cash, according to the Telegraph. The insurer hired Goldman Sachs and Lehman Brothers to review options for the operation, including a sale or securitization, the report said. The move came about two years after talks to sell the business to Dutch insurer Aegon or GE Capital fell through because of the collapse of life insurance valuations in the wake of the September 11 terror attacks. The original transaction would have been worth GBP1.8 billion, but industry sources of the report said it is unlikely Royal & Sun could raise GBP600 million if it sells the closed life insurance business now. The sources also do not expect strong interest for the life business, as it has a number of legacy issues and any buyer would be likely to demand guarantees from RSA. Royal & Sun plans to invest the money it would generate from the transaction into its core general insurance business. The company was able to strengthen its balance sheet through a GBP900 million rights issue this year and a series of disposals. SAFEWAY PLC: Wm Morrison's New Bid Values Company at GBP3 BB ------------------------------------------------------------ Offer highlights The boards of Morrisons and Safeway have reached agreement on the terms of a new GBP3 billion recommended offer for Safeway. The Offer values each Safeway Share at 283 pence, comprising 1 new Morrisons Share plus 60 pence in cash (calculated based on the closing mid-market price of a Morrisons Share of 223 pence on December 12, 2003). The Offer represents a premium of 33% over the closing mid-market price of a Safeway Share of 213 pence on January 8, 2003, the day prior to Morrisons Original Offer announcement. Assuming full acceptance of the Offer, existing Morrisons Shareholders will own approximately 60% and existing Safeway Shareholders will own approximately 40% of the Enlarged Group. The Offer will include a mix and match facility, which will allow Safeway Shareholders to elect to receive additional new Morrisons Shares to the extent that other shareholders elect to receive more cash. The merger of the two companies is expected to generate powerful synergies, comprising operating cost savings and trading benefits of no less than GBP215 million per annum in the financial year to January 2008, achieved at a total estimated revenue cost of GBP165 million.* The impact of the transaction on earnings per share (excluding restructuring costs) is expected to be broadly neutral in the year ending January 2005 and enhancing for earnings per share (excluding restructuring costs) thereafter despite the application of Morrisons depreciation rates and practices. Based on the projected synergies, the Enlarged Group is expected to achieve its cost of capital by the year ending January 2008. Strong cash generation is an important feature of the Enlarged Group.** Creating a major new force in UK food retailing Morrisons continues to believe in the strong commercial rationale behind the Merger with Safeway. Combining Morrisons brand strength with Safeways national portfolio and infrastructure provides a unique opportunity to create a strong fourth national competitor in UK food retailing, with: (a) current combined sales of c.GBP13 billion; (b) 552 stores with an aggregate selling area of approximately 13 million square feet, after the 52 store disposals agreed with the regulatory authorities; and (c) complementary geographic coverage with strong national and regional positions of the combined store portfolio. Morrisons strong trading performance recorded over the first half of the current financial year has continued into the second half, with like-for-like sales up 9.6% for the seventeen weeks ended December 7, 2003. Morrisons format and prices will be extended into the larger Safeway stores to provide Safeway customers with the benefits of the Morrisons offer and to improve their operating performance. Commenting on the Merger, Sir Kenneth Morrison, Executive Chairman of Morrisons, said: The logic of combining Morrisons with Safeway is every bit as powerful today as it was a year ago. This merger will be a transforming step for Morrisons, enabling us to take the distinct Morrisons formula and our passion and flair for food retailing to customers everywhere in the U.K. Over the past 11 months we have both grown Morrisons existing business and gone through a complex regulatory process. I am confident that the team will be able to integrate Safeway swiftly and effectively. The creation of a strong, vibrant and highly competitive fourth force will, we believe, be a defining event for the U.K. grocery industry. Its benefits will be felt week in, week out, by customers at the checkout." David Webster, Chairman of Safeway said: In January we chose to merge with Morrisons because we believed it was the only deal that was both in the interests of shareholders and likely to win regulatory approval. I am delighted we have now secured the merger that has always been our preferred outcome. Our shareholders will benefit from the synergies from combining the two businesses and key Safeway people will help ensure successful integration. The Board is grateful for the patience and commitment of Safeway colleagues throughout the period of prolonged uncertainty and we are confident a great future lies ahead for Safeway as part of a strengthened Morrisons." CONTACT: WM MORRISONS Press Office (Gillian Hall) Phone: +44 (0)1924 875 308 ABN AMRO Nigel Turner Phone: +44 (0)20 7678 7788 Jitesh Gadhia Phone: +44 (0)20 7678 7678 HOARE GOVETT Nigel Mills Phone: +44 (0)20 7678 1830 CITIGATE DEWE ROGERSON Phone: +44 (0)20 7638 9571 Jonathan Clare Simon Rigby SAFEWAY Phone: +44 (0)20 7493 1040 David Webster Simon Laffin Steve Webb HSBC Phone: +44(0) 20 7991 8888 Rupert Faure Walker Aidan Wallis CITIGROUP Phone: +44 (0)20 7986 4000 Robert Swannell David Wormsley Ian Hart BRUNSWICK GROUP LIMITED Phone: +44 (0)20 7404 5959 Susan Gilchrist Timothy Grey SAFEWAY PLC: Ratings Still on Watch Dev, Despite New Offer ---------------------------------------------------------- Standard & Poor's Ratings Services kept its 'BBB+' long-term and 'A-2' short-term ratings on the fourth-largest U.K. food retailer Safeway PLC on CreditWatch with developing implications, despite a new recommended and agreed GBP3 billion (US$5.2 billion) offer for the supermarket announced by U.K.-based food retailer Wm Morrison Supermarkets PLC. The offer is subject to shareholder approval. "The CreditWatch placement continues to reflect the uncertainty over Safeway's future ownership as counter offers could still emerge over the next six weeks," said Standard & Poor's credit analyst Omar Saeed. It also reflects the potential for the ratings to be raised, lowered, or maintained, depending on the prospective capitalization of Safeway or the enlarged group's financial profile. At Oct. 11, 2003, Safeway had estimated net debt (capitalized for operating leases and pension deficits) of about GBP1.7 billion. "Morrison envisages funding its new GBP3 billion offer with about GBP635 million of debt and the remainder with shares. The cash component within the offer is likely to be offset entirely by the expected proceeds from the divestiture of 52 Safeway stores, necessary to satisfy the U.K. competition authorities if the merger with Safeway were to materialize," added Mr. Saeed. In the absence of a merger with Morrison's, Standard & Poor's expects Safeway's ratios to remain broadly at their current levels during the remainder of financial 2004. This reflects relatively weak trading being offset by the group's decision to significantly cut back its budgeted capital expenditures to GBP200 million to GBP230 million from GBP340 million for the financial year ended March 29, 2003. Standard & Poor's will continue to closely monitor developments and provide the market with updates on the likely implications for the ratings on Safeway as they become clearer. 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. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *