/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/031226.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, December 26, 2003, Vol. 4, No. 254 Headlines F R A N C E ALSTOM SA: E.U. Regulator Clears Sale of Alstom T&D to Areva FRANCE TELECOM: Gets US$121 Mln for Telecom Argentina Stake RHODIA SA: Nicolas Nerot Is New VP for Investor Relations TARSUS GROUP: Action Commerciale Buys Losing Labels for EUR1 G E R M A N Y BANKGESELLSCHAFT BERLIN: To Sell Retail, Real Estate Units DRESDNER BANK: Loses Battle to Retain Saudi Govt Deposits HVB GROUP: Westbank Chairman Resigns, Raps Integration Plan I R E L A N D JEFFERSON SMURFIT: Fitch Assigns 'B' Rating to 2012 Senior Notes I T A L Y CIRIO FINANZIARIA: Unicredito to Repay Bondholders FINMATICA SPA: Fitch Rates Senior Unsecured Debts 'B+' PARMALAT SPA: Promises to Explain Controversial Ghost Account N E T H E R L A N D S AHOLD LEASE: Ratings on Trust Certificates Raised to 'BB' HEIJMANS N.V.: Fined for 'Irregularities' in Four Projects KONINKLIJKE AHOLD: Improving Liquidity Triggers 'BB' Upgrade N O R W A Y AKER KVAERNER: Sells Rosenberg Stake for Undisclosed Sum R U S S I A WIMM-BILL-DANN: Recent Performance Dive 'Intentional' S L O V A K R E P U B L I C EUROTEL BRATISLAVA: Govt Plan to Up Stake Won't Affect Ratings S W I T Z E R L A N D SKANDIA INSURANCE: Unearths Another Anomalous Bonus Scheme U N I T E D K I N G D O M ABBEY NATIONAL: Sells Royal Saint Georges Banque for GBP39 Mln ANITE GROUP: Subsidiary Sells Dutch IT Consultancy Business BIG FOOD: Takeover Offer for Londis Not Yet Definite BIG FOOD: Urges Londis Shareholders to Reject Musgrave Bid BRITISH ENERGY: Resolutions to Modify Terms of Trust Deed Passed GOVETT STRATEGIC: In Members' Voluntary Liquidation HAYMES FARM: Business for Sale as 'Going Concern' NORTHERN FOODS: Appoints New Group Chief Executive ROOM SERVICE: Short-selling Victims Reject LSE's Offer SAFEWAY PLC: Wm Morrison Faces Difficult Task of Boosting Sales SEYMOUR PIERCE: MGM Terminates Asset Management Contract ********* =========== F R A N C E =========== ALSTOM SA: E.U. Regulator Clears Sale of Alstom T&D to Areva ------------------------------------------------------------ The European Commission approved the acquisition of Alstom's electricity transmission and distribution business (Alstom T&D) by Areva S.A., a producer of components for nuclear power plants and supplier of related services. The operation does not pose any competition concerns since the two companies are present in different product markets whose integration is equally unproblematic given their limited market shares. The Societe de Participations du Commissariat a l'Energie Atomique, Areva, is active in the construction of the sections surrounding the nuclear reactor of a power plant (the nuclear island) and related services, but not in the supply of electricity-generating components, such as turbines (the conventional island). It also makes electrical power connectors used in particular in the energy sector through its subsidiary Framatome Connectors International. Alstom T&D makes products, systems and services for the high- and medium-voltage electricity sector and also supplies equipment for the transformation of electrical energy from one voltage level to another, including the switching and branching systems. The acquisition of Alstom T&D by Areva does not include the Alstom Power Conversion business. The Commission's market investigation confirmed the parties' assertion that they are active in separate, distinct product markets that do not directly compete with each other. Whereas Areva supplies mainly equipment used in and around the nuclear reactor of power plants, Alstom T&D's products are predominantly used in the transmission and distribution of electricity. The only link is vertical and regards electrical power connectors since such connectors are used to transmit electricity from one component of a power plant or a T&D system to a neighboring component. But, given the parties' limited market position in their respective market, both upstream and downstream, the transaction does not give rise to competitive concerns. The acquisition of Alstom T&D was notified to the Commission on November 19 under the European Union's Merger Regulation and was reviewed purely from the point of view of merger control rules, to assess whether or not it creates a dominant position. [The] decision does not prejudge the outcome of an ongoing but separate investigation into restructuring state aid to Alstom itself, the parent of the divested business. FRANCE TELECOM: Gets US$121 Mln for Telecom Argentina Stake ----------------------------------------------------------- France Telecom sold its indirect stake in Argentine fixed-line giant, Telecom Argentina-Stet France Telecom, to local investment group W de Argentina for US$121 million last week. The transaction had received backing from Argentine regulators, analysts said, according to Dow Jones. W de Argentina announced in a filing to the Buenos Stock Exchange it had acquired France Telecom's 48% stake in Sofora Telecomunicaciones S.A., a newly created holding company set up by Telecom Italia S.A. and France Telecom. Sofora holds a 51% stake in Nortel Inversoa S.A., whose main asset is its 55% holding in Telecom Argentina. The remaining 45% of Telecom Argentina's equity is held by minority shareholders and company employees. The sale is part of the company's efforts to focus more on its core assets, especially in France and the United Kingdom, France Telecom said during the announcement of the sale in September. Following the transaction, France Telecom will continue to hold a 2% stake in Sofora, but Telecom Argentina-Stet France Telecom will reduce its name to Telecom Argentina S.A. RHODIA SA: Nicolas Nerot Is New VP for Investor Relations --------------------------------------------------------- Chemicals company Rhodia S.A. [Moody's, senior implied rating 'B1'] said last week it appointed Nicolas Nerot Vice President for Investor Relations. He previously held the position of group Finance Director for Consumer Care Division. He succeeds Marie-Christine Aulagnon, who has left the Group. Mr. Nerot, who has been with the company since 1999, will guide the Group's financial communications strategy worldwide, with responsibility for relations with financial analysts and investors, as well as shareholder communications. The Group is increasing its communications activities with individual shareholders through the creation of a shareholders association and the establishment of a shareholders' hotline. Moody's Investors Service last month lowered its Senior Implied rating for Rhodia from 'Ba2' to 'B1', and its senior unsecured and senior subordinated debt ratings to 'B2' from 'Ba2', and 'B3' from 'Ba3', respectively. The outlook for the ratings is negative. According to the rating agency, the action reflects the very weak financial profile of the group, the challenges involved in its disposal program, the need to address an upcoming covenant breach at year-end and secure medium-term funding, and the growing severity of loss expectations for bondholders (senior and subordinated) vs. bank lenders. CONTACT: RHODIA SA Investor Relations Nicolas Nerot Phone: +33 1 55 38 43 08 TARSUS GROUP: Action Commerciale Buys Losing Labels for EUR1 ------------------------------------------------------------ Tarsus Group plc agreed to sell its loss-making French magazine division to Action Commerciale SAS. Through its subsidiary Groupe MM S.A. and its associate MMStar S.A., (35% owned by Groupe MM S.A.) the Company will sell the goodwill and intellectual property related to these magazines: Marketing, Marketing Direct and Centre d'Appels together with their related Web sites and awards events. As a result of this transaction, 29 staff will leave the Company, representing 42% of the total headcount of the French operation. The Company will receive EUR1 and enter into a 5-year agreement whereby Action Commerciale will provide advertising and editorial support for Tarsus' exhibitions in France. Tarsus and MMStar have also agreed to pay Action Commerciale up to EUR450,000 to meet future obligations of the magazine division. In the year ended December 31, 2002, the French magazine division of Groupe MM (including its share of its associate) generated revenues of EUR3,351,000, and made a loss before tax of EUR410,000. The value of the net assets being transferred is EUR450,000 (being the cash to fund the future obligations). The directors believe that the disposal will be earnings enhancing in the first full year after the disposal. Commenting on the disposal, Douglas Emslie, Group Managing Director of Tarsus, said: "This is a watershed event for our French operation, transforming its profitability and allowing our new management team to focus on growing our core exhibition and directory business, while retaining our integrated media approach." CONTACT: TARSUS GROUP Douglas Emslie Group Managing Director Phone: 020 8846 2700 ============= G E R M A N Y ============= BANKGESELLSCHAFT BERLIN: To Sell Retail, Real Estate Units ---------------------------------------------------------- Berlin's regional and state authorities agreed to sell some assets of government-controlled Bankgesellschaft Berlin, as concession to the European Union, which has approved the state aid to the bank, Dow Jones said. The deal, reached last week by European Union antitrust head, Mario Monti, Berlin city authorities, and Deputy Finance Minister Caio Koch-Weser; will see the sale of its retail unit, Berliner Bank, by October 2006, and subsequently the real estate unit by February 2007. Bankgesellschaft Berlin barely avoided collapse in the summer of 2001 after the government injected EUR1.8 billion into its coffers. The European Union at the time gave its preliminary approval to the bailout, but in December of the same year, the city again came to its rescue by setting up a "risk shield" to guarantee the bank's debts for up to 30 years. In April, the Commission, evaluating the risk to come as high as EUR35 billion, opened an investigation into the aid and other government guarantees provided to the bank. The probe determined that the bailout could safely pass competition concerns if Bankgesellschaft Berlin divests some of its assets. According to the European Union Commission: "The agreed divestment of Berliner Bank will reduce the strong position in the Berlin regional retail market, which the state aid allowed the bank to maintain." DRESDNER BANK: Loses Battle to Retain Saudi Govt Deposits --------------------------------------------------------- The High Court in London ruled against Dresdner Bank AG in its dispute with the Saudi central bank over money transfers, according to Bloomberg News. The court ruled it was wrong for the banking unit of Allianz AG to block the London account of the Arab bank when it requested to transfer EUR49.1 million in deposits to its account with Deutsche Bank AG in Frankfurt last October. Aside from the London account, the Saudi central bank had requested the transfer of a total of EUR291.2 million from other accounts, which would have left Dresdner with only EUR1.4 million. According to the Saudi Arabian Monetary Agency, Dresdner, in turning down its request, said it could not move the amount because it represented the Saudi Ministries of Finance and Defense's loan to Dresdner's Luxembourg branch. But the central bank argued it is separate from the two ministries and petitioned the court to release the cash. According to Bloomberg, Dresdner tried to appeal the ruling, but Justice David Neuberger junked the motion. An unnamed Dresdner spokeswoman declined to comment. HVB GROUP: Westbank Chairman Resigns, Raps Integration Plan ----------------------------------------------------------- Veriens- und Westbank Chairman Stephan Schueller will resign from his post at the end of this year due to a disagreement over corporate strategy with parent company, HVB Group, Manager Magazine reported, according to AFX News. Mr. Schueller is critical of the company's plan to fully integrate the northern German unit as part of the group's effort to open up synergies and cut costs. According to him, the subsidiary's employees and customers were not concretely advised of any integration proposals. He also said that much of the synergies available had already been harnessed. He added that the move could reduce the firm's 3,500 workforce by 1,000. But by virtue of its more than 90% holdings, HVB could decide on the incorporation of the business into the group without a general meeting of shareholders to decide the matter, according to the report. Earlier, HVB bought shares previously held by life insurer Volksfuersorge, subsequently increasing its stake in Vereins- und Westbank to 91%. HVB also acquired a further 2% held by institutional investors. HVB had planned to sell Vereins- und Westbank in order to help strengthen its own funds, but decided against it, opting instead to integrate the unit into the HVB group in order to strengthen its presence in northern Germany. ============= I R E L A N D ============= JEFFERSON SMURFIT: Fitch Assigns 'B' Rating to 2012 Senior Notes ---------------------------------------------------------------- Fitch Ratings assigned JSG Funding Plc's EUR350 million 10.125% Senior Notes due 2012 and US$750 million 9.625% Senior Notes due 2012 a 'B' rating and assigned a 'B-' rating to its EUR107.9 million Subordinated Notes due 2013 and US$161.8 million Subordinated Notes due 2013 (together the Junior Notes). The agency also assigned JSG Acquisitions, a subsidiary of JSG Funding Plc, a Senior Unsecured rating of 'B+' and a Senior Secured rating of 'BB'. The Outlook is Stable. The three and four-notch differential between the 'B' and 'B-' ratings assigned to the Senior and Junior Notes respectively and the 'BB' rating assigned to the Senior Secured facilities reflect Fitch's view of the significant difference in potential recovery prospects between the different classes of debt in the event of any forced restructuring or distressed sale. The one-notch differential between the Senior and Junior Notes reflects the contractual subordination of the Junior Notes to the Senior Notes. JSG also has EUR637 million of existing debt outstanding that ranks pari passu with the Senior Secured facilities. As a consequence, the Senior Notes are rated one notch below the Senior Unsecured rating to reflect their subordination to the Senior Secured facilities, the existing Yankee Bonds, the existing foreign subsidiary debt and the unsecured creditors of JSG Acquisitions. "In JSG's structure we still see bondholders' recourse limited to an unsecured claim against the senior borrower's holding company, albeit directly through a subordinated guarantee, rather than solely through an indirect claim via an inter-company loan, which is more commonplace in traditional European high yield structures," said Marianela Gutierrez-Portillo of Fitch's Leveraged Finance Group. The net proceeds from the EUR350 million and original US$545 million Senior Notes and the EUR252.7 million equivalent Junior Notes were used to partly finance the EUR3.8 billion leveraged buyout of Jefferson Smurfit Group by Madison Dearborn Partners in September 2002. The US$205 million Senior Notes issued by the group in February 2003 were used to fund the cash consideration of EUR185 million, in addition to the exchange of the Group's 50% interest in Smurfit MBI Canada, for the acquisition of Smurfit Stone Container's European operations. The Senior Notes represent JSG Funding Plc's only senior unsecured obligations and the Junior Notes represent its only general unsecured obligations. The proceeds were down-streamed to an intermediate holding company JSG Acquisitions (the Subsidiary Guarantor) through a subordinated inter-company loan. This is contractually subordinated in right of payment to the Senior Secured credit facilities issued at the JSG Acquisition level. The Senior and Junior Notes benefit from second ranking upstream guarantees provided by the Subsidiary Guarantor. Within the group's capital structure, the Senior Secured credit facilities lent to JSG Acquisitions rank ahead of the Senior Notes in terms of priority. JSG Funding's status as a holding company with no tangible assets of its own means that it is entirely reliant on upstream payments from its subsidiaries in the form of dividends and distributions to make coupon payments on the Notes. Additionally, the claims of holders of the Senior Notes will be effectively subordinated to all existing and future third-party indebtedness and liabilities, including trade payables, of JSG Funding's subsidiaries. Additionally, given the potential release of the second ranking guarantees in the event of enforcement by senior lenders and sale of the business during the 179 days standstill period, Fitch believes that potential recoveries for the noteholders would be likely to be severely restricted. This view is further supported by the absence of a requirement that the senior secured lenders obtain a "Fair Value" opinion for any sale of the business or individual subsidiaries in the event that they enforce their security. JSG Funding Plc is the holding company of Jefferson Smurfit Group, which is currently the largest European based integrated manufacturer of containerboard, corrugated containers and other paper-based packaging products, with operations in Europe, Latin America, the United States and Canada. During the first half of the fiscal year to June 30 2003, the Jefferson Smurfit generated EBITDA of EUR331 million on net sales of EUR2,396 million, compared with EBITDA and net sales of EUR288 million and EUR2,363 million during the same period the previous year. ========= I T A L Y ========= CIRIO FINANZIARIA: Unicredito to Repay Bondholders -------------------------------------------------- Unicredito Italiano S.p.A. is reimbursing clients the money they lost through their investment in unrated bonds of Cirio, the Italian food group now in liquidation, according to The Wall Street Journal. Thousands of small investors were left high and dry after purchasing Cirio bonds months before the company defaulted on EUR1.12 (US$1.39 billion) in bonds last year. The suspicious run of events prompted prosecutors to investigate allegations that Italian banks sold to some 30,000 individual investors unrated Cirio bonds without properly warning them about the risks. Prosecutors suspect that some banks, excluding Unicredito, aggressively sold the bonds to cover their own exposure to Cirio, whom they knew would not be able to meet obligation. Considering that the corporate bonds at issue were not rated and quoted in Italy, and that it is possible some clients indeed did not understand the risk, Unicredito is reviewing reimbursements on a case-by-case basis. According to the report, one person familiar with the matter said, the plan could benefit "some 4,000 clients, and could cost the bank at most "tens of millions of euros." The move could also pressure other banks to do the same. FINMATICA SPA: Fitch Rates Senior Unsecured Debts 'B+' ------------------------------------------------------ Fitch Ratings assigned Finmatica S.p.A. a Senior Unsecured rating of 'B+' and Short-term of 'B'. The Outlook is Stable. The ratings are supported by Finmatica's established business position in application software for the finance sector in Italy, which provides a solid underlying business base and a stable source of revenues and cash flow. However, ongoing consolidation of the Italian banking industry will limit growth potential for this segment and put pressure on current profit margins. Management has hence identified important growth areas such as security, supply chain management and transportation management services, which would allow for revenue diversification. In order to increase market presence in these segments Finmatica has undertaken numerous acquisitions in the past three years, which have yet to add materially to EBITDA. Margin improvement in the acquired businesses relies on a combination of business growth (increasing the number of business consultants and marketing resources) and cost controls. The latter may be difficult to achieve, given the company's continued aggressive acquisition strategy and its relatively high degree of execution risk. The principal shareholder has announced that it is targeting acquisitions in both Europe and the U.S. It is likely that Finmatica will seek possibly two or three sizeable M&A transactions, increasing what is already considered a relatively high level of performance/execution risk. Elisabetta Zorzi, a director in Fitch's corporates group, warns, "Any major acquisition would represent an event risk, with the implications for the rating to be considered based on specific transaction conditions." She adds, "The Stable Outlook reflects Fitch's view that management will be able to weather the challenges presented by the integration of acquisitions to date. The medium-size scale of Finmatica's business is another limiting factor, leaving little room for any unexpected variation in revenue and cash flow, which may affect debt protection measures." Value of production for the nine months ended September 30, 2003 totaled EUR84 million (EUR85 million, September 2002). EBITDA margin improved to 24% from 19% a year ago. FY02 value of production and EBITDA totaled EUR126 million and EUR29 million, respectively. The company has been net income positive since 1996, with the business growing significantly during the past five years. Over this period, value of production has grown by a multiple of 4.5x with quantum step, changes largely reflecting acquisitions. While EBITDA margin has come under pressure, falling to the current 23-24% from c. 39% in 1999, it is in line with the average of European peers. Net debt, according to Fitch's calculation, stood at EUR149 million at September 2003, up from EUR73 million at FYE02. The company has been drawing its bank lines to build up the cash reserve necessary to front acquisition opportunities when they arise. Fitch's net debt calculation differs from Finmatica's (EUR77 million at September 2003) as the agency has not considered EUR72 million that is classified by the company as short-term investments. This amount includes a EUR41 million short-term credit guaranteed by tangible assets and EUR8.3 million in shares of quoted companies, which Finmatica considers to be liquid. Based on EBITDA in the year ended September 2003, net debt/EBITDA ratio stood at 4.5x, which is on the high side. However, the ratio drops to 3.1x, more in line with the rating category, after including the short-term credit and the shares. The agency believes that management's strategy in short-term investments is presently not conservative and that any increase in the risk profile of these investments is likely to lead to a rating review. Finmatica is a quoted Italian independent software vendor. Share float currently stands at 44%, with the key shareholder being Pierluigi Crudele, the company's founder, which directly and indirectly holds 56%. Revenues stem from the finance (53% of FY02 revenues), B2B/ supply chain management (27%), security (15%) and others (5%) sectors. PARMALAT SPA: Promises to Explain Controversial Ghost Account ------------------------------------------------------------- The Board of Directors of Parmalat Finanziaria S.p.A. met last week. The Chairman informed the Directors that he had learned from Consob that on December 17, Bank of America N.A. (New York Branch) informed Grant Thornton that it does not have "an account" in the name of Bonlat. Further, the Bank of America denied the authenticity of a document dated March 6, 2003 that certified the existence of securities and liquidity amounting to approximately EUR3,950 million as at December 31, 2002. This document was taken as the basis for the certification of Bonlat's 2002 accounts. Grant Thornton is the auditor of Bonlat Financing Corporation, a company based in the Cayman Islands and part of the Parmalat Group. Further to the above information, the Board mandated the Chairman to inform the judicial authorities, including those responsible for criminal matters, of these occurrences, making clear to the same authorities the Board's commitment to draw up, as soon as possible, the plan of action most suited to the current situation, while in the meantime assuring the continuity of Parmalat's ongoing business. The company also provided updates on these matters: (a) Negotiations with the objective of delaying the execution of the acquisition of 18.18% of Parmalat Empreendimentos e Administracao Ltda are still in progress; (b) PricewaterhouseCoopers' investigations on the actual composition of the Group's financial assets and liabilities are still in progress; (c) The Board of Directors which met on December 19 mandated the Chairman to inform the judicial authorities of the occurrences, making clear to the same authorities the Board's commitment to draw up, as soon as possible, the plan of action most suited to the current situation, while in the meantime assuring the continuity of Parmalat's ongoing business. The Board of Directors of Parmalat Finanziaria S.p.A. and Parmalat S.p.A. were called to meet in the late afternoon of December 23, 2003; (d) The Board of Directors of the controlled company Eurolat S.p.A. has been called to meet on December 27, 2003 to discuss the appointment of Enrico Bondi as Chairman of the company. Milan, December 22, 2003 Parmalat Finanziaria S.p.A. ===================== N E T H E R L A N D S ===================== AHOLD LEASE: Ratings on Trust Certificates Raised to 'BB' --------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on the class A-1 and A-2 pass through certificates issued by Ahold Lease 2001-A Pass Through Trusts to 'BB' from 'BB-'. Concurrently, the ratings are removed from CreditWatch with positive implications, where they were placed November 10, 2003. The outlook is positive. The rating actions follow the raised corporate credit rating on Ahold Koninklijke N.V. to 'BB' from 'BB-' on December 19, 2003, at which time all of the ratings on Ahold were removed from CreditWatch positive. The outlook on Ahold is positive. The ratings on Ahold Lease 2001-A Pass Through Trusts are dependent on the corporate credit rating on Ahold, which guarantees the leases that serve as the source of payment on the rated securities. The leases, which are "bondable" triple-net, are on 46 properties including supermarkets and other retail stores, office buildings, warehouses, and distribution centers in 13 states. Ratings Raised and Off CreditWatch; Outlook Positive Ahold Lease 2001-A Pass Through Trusts Pass-thru trust certificates Rating Class To From A-1 BB/Positive BB-/Watch Pos A-2 BB/Positive BB-/Watch Pos HEIJMANS N.V.: Fined for 'Irregularities' in Four Projects ---------------------------------------------------------- Heijmans N.V. announces that within the scope of investigations by the Dutch Competition Authority (NMa) into irregularities in the construction sector, it has received penalty rulings in four matters. The penalty totals EUR14,823,000. Heijmans is examining the individual rulings. In 2002 and 2003, Heijmans examined six investigations by the NMa into possible irregularities in projects Heijmans was involved. The penalty rulings released by the NMa (EUR50,000 for the cooperation with Soletanche, EUR610,000 for the construction of athletics tracks, EUR289,000 for the execution of asphalting work in Noord Nederland and EUR13,874,000 for the execution of asphalting work at and around Schiphol) concerns four of the six investigations. Heijmans will first carefully examine these penalties. Heijmans will continue along the path it has already decisively taken. This included taking various measures to prevent a repeat. For example, a code of conduct was introduced, a code of conduct committee was installed and in each offer, statements are signed stating that no agreements were made and there was no conduct that could restrict competition. It goes without saying that Heijmans wholeheartedly supports a code of conduct for the entire sector. CONTACT: Heijmans N.V. Corporate Communications A.H.M. van Lith Phone: (073) 528 9232 E-mail: flith@heijmans.nl KONINKLIJKE AHOLD: Improving Liquidity Triggers 'BB' Upgrade ------------------------------------------------------------ Standard & Poor's Ratings Services raised its long-term corporate credit rating on Netherlands-based food retailer and food service distributor, Ahold Koninklijke N.V., to 'BB' from 'BB-'. The outlook is positive. At the same time, all long-term ratings on Ahold were removed from CreditWatch, where they were placed on February 24, 2003, following the announcement of substantial accounting irregularities. In addition, Standard & Poor's affirmed its short-term 'B' corporate credit rating on the group. "The upgrade reflects Ahold's commitment to reduce debt -- as demonstrated by its recent EUR3 billion rights issue and stated objective of generating EUR2.5 billion of proceeds from divestments by the end of 2005 -- and its much improved liquidity position," said Standard & Poor's credit analyst Hugues de la Presle. The proceeds from Ahold's recent rights issue will enable Ahold to improve its debt measures. In light of the decline in the group's profitability, these are, however, expected to remain weak for the ratings at the end of 2003, with projected debt (adjusted for operating leases, receivable securitizations, and unfunded postretirement liabilities) to EBITDAR in excess of 4x. Debt measures should benefit in 2004 from the expected recovery in the group's profitability, along with proceeds from disposals and free cash flow generation. The ratings on Ahold continue to be underpinned by the solid positions of its core operations, in particular Stop & Shop in the North Eastern U.S. Ahold's Dutch flagship chain Albert Heijn has, however, come under severe pressure this year and in response significantly lowered its prices in October 2003. The group is likely to have to reposition its pricing in the U.S. given soft consumer spending, the growth of discounters, and the high margins of Ahold's key U.S. operations in an industry in which it is crucial to strike the right balance between margin maximization and sales growth. The impact of any pricing repositioning on earnings should, however, be offset by cost cutting. In addition, Standard & Poor's expects that Ahold's new management, despite operating in a tougher competitive environment, will lift the group's operational performance and deliver on its disposal program, thus improving Ahold's debt measures. =========== N O R W A Y =========== AKER KVAERNER: Sells Rosenberg Stake for Undisclosed Sum -------------------------------------------------------- A group of local investors has signed an agreement to acquire Kvaerner Rosenberg AS from Aker Kvaerner. The transaction will be concluded March 1, 2004. The new group of owners comprises Melberg Partners, Technor ASA, Mento AS, SAR AS and IKM. Aker Kvaerner will retain a minority part of 18%. Neither the buyer nor the seller wants to disclose the commercial terms for the transaction. Through its subsidiaries and affiliates, Aker Kvaerner ASA is a leading global provider of engineering and construction services, technology products and integrated solutions. The business within Aker Kvaerner spans a number of industries, including Oil & Gas production, Refining & Chemicals, Pharmaceuticals & Biotechnology, Mining & Metals, Power, Pulping and Shipbuilding. Aker Kvaerner has aggregated annual revenues of approximately US$6 billion and employs around 29,000 employees in more than 30 countries. ***** The company last month reported third quarter net loss of NOK48 million, including NOK174 million in non-cash goodwill and pension amortization and NOK87 million net financial items including interest costs. Recently, Chief Financial Officer Trond Westlie said he will resign from the company effective the New Year. Citing personal reasons, Mr. Westlie will be leaving the company barely two years after his appointment in February 2002. CONTACT: SVP Group Communications Media: Geir Arne Drangeid Aker Kvaerner ASA Phone: +47 67 51 30 36 AKER KVAERNER ASA Investor relations: Tore Langballe, Vice President Investor Relations Phone: +47 67 51 31 06 MELBERG PARTNERS AS Ole Melberg Phone: +47952 26 030 =========== R U S S I A =========== WIMM-BILL-DANN: Recent Performance Dive 'Intentional' ----------------------------------------------------- Russia's largest food and drink group, OAO Wimm-Bill-Dann Foods, admitted it intentionally slackened production while negotiations with Group Danone were ongoing. Unfortunately, the talks failed. Last month, Wimm-Bill-Dann said the talks ended "amicably." It did not provide further explanations, but a report from the Financial Times said both sides could not agree on the structure, price, strategy and the future of existing management. Earlier this month, the company reported net income and EBITDA which were 36% and 4.7% lower than the figures last year. It also announced it may have to post a loss in the fourth quarter due to lower than anticipated sales volumes in Dairy and Juice segments, and higher raw milk prices. The development prompted Standard & Poor's to revise its outlook on the company from stable to negative. The company's corporate credit and senior unsecured debt ratings were affirmed at 'B+'. ============================= S L O V A K R E P U B L I C ============================= EUROTEL BRATISLAVA: Govt Plan to Up Stake Won't Affect Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings and outlook on Slovak Republic-based mobile operator EuroTel Bratislava a.s. (BB-/Positive/--) are not affected by the recent announcement by the Slovak Minister of Transport, Postal Services, and Telecommunications that the Slovak incumbent telecoms operator, Slovak Telecom a.s., may seek to increase its stake in EuroTel. No formal negotiations have taken place and no timetable for such a transaction has been set to date, according to the Minister. If the transaction were to happen at some point, however, Standard & Poor's believes it would be, at worst, neutral for EuroTel's credit quality, assuming no material change in Slovak Telecom and EuroTel's current business and financial profile. The positive outlook on EuroTel is not related to any shareholder support, but instead reflects Standard & Poor's expectation that the company will steadily improve its credit quality, driven by a strong market position and high level of operating efficiency coupled with rational competition. ===================== S W I T Z E R L A N D ===================== SKANDIA INSURANCE: Unearths Another Anomalous Bonus Scheme ---------------------------------------------------------- A SEK200 million bonus program for one of Skandia Forsakring AB's subsidiaries, Skandia Link, has been discovered, Dagens Industri recently reported, according to Dow Jones. The bonus program, which earned the ire of officials from parent Skandia, was run for 25 employees between 1997 and 2000. The incentive scheme is the latest to be uncovered, and is separate from those taken up by a recent independent report. The report, which came out early this month, lashed out on a small group of former Skandia Insurance executives, who received generous bonuses after making deceiving reports. The report condemned the design, execution and outcome of Skandia's incentive programs between 1997 and 2000. The discovery of the anomalies prompted the board to seek damages against former executives Lars-Eric Petersson, Ulf Spang and Ola Ramstedt. =========================== U N I T E D K I N G D O M =========================== ABBEY NATIONAL: Sells Royal Saint Georges Banque for GBP39 Mln -------------------------------------------------------------- Abbey National France, part of Abbey National Plc (LSE: ANL.L), entered into an agreement to sell its subsidiary Royal Saint Georges Banque to GE Capital Bank France, part of the General Electrical Company. General Electric will pay GBP39 million (EUR56 million) including a cash premium upon completion of GBP19 million (EUR27 million) for total mortgage assets of GBP375 million (EUR535 million)1. The deal is subject to regulatory and Banque de France approval and is expected to complete in early 2004. Abbey will make a small profit upon completion of the sale. Royal Saint Georges Banque is principally a provider of secured debt consolidation sold through intermediaries. Royal Saint Georges Banque was acquired from CGU France, part of Aviva plc, by Abbey National France in May 2002. Royal Saint Georges Banque employs 66 people and is based in Nantes. Charles Alexander, President, General Electric Capital Europe, said: "The acquisition of Royal Saint Georges Banque represents another significant step in the expansion of our consumer finance business in Europe, which is at the core of General Electric's growth strategy in the region." Xavier Durand, President and CEO of General Electri Capital Bank France, said. "The acquisition of Royal Saint Georges Banque is a significant development for our French debt consolidation business. Royal Saint Georges Banque brings product expertise which, together with its strong brand and distribution network, will complement Royal Saint Georges Banque's presence in this growing sector in France." The sale of Royal Saint Georges Banque represents a further step in Abbey's strategy of focusing solely on providing personal financial services in the U.K., announced at its annual results in February 2003. Abbey National France does not have a natural position within the new strategy and Abbey will continue to explore options for the remainder of the Abbey National France businesses. ANITE GROUP: Subsidiary Sells Dutch IT Consultancy Business ----------------------------------------------------------- Anite Group plc, the international IT solutions and services company, announces that one of its subsidiary companies has agreed to sell Anite Benelux B.V., its Dutch based IT consultancy, to a local software company for a total consideration of GBP1.05 million (EUR1.5 million), of which GBP840,000 (EUR1.2 million) is payable in cash on completion and GBP210,000 (EUR300,000) in twelve months' time. Prior to completion, Anite Benelux will pay a dividend of GBP1.2 million (EUR1.7 million) to its immediate parent company. The consideration proceeds will be used to reduce the Group's indebtedness. This reflects Anite's intention to dispose of certain small peripheral businesses. Anite Benelux's recent performance, together with a highly competitive market, has resulted in the risk of considerable margin erosion on future trading. Anite Benelux achieved operating profits of GBP0.1 million (2002: GBP0.2 million) on turnover of GBP5.1 million (2002: GBP5.2 million) in the six months ended October 31, 2003, which were included in Anite's interim results for that period, announced on December 12, 2003. For the year ended April 30, 2003, it achieved operating profits of GBP0.4 million on turnover of GBP10.2 million. Net assets on disposal, after payment of a pre-completion dividend, will be approx GBP1.5 million (EUR2.1 million). These numbers will be shown as a discontinued activity in Anite's future results. Anite Benelux employs 164 staff out of a total of 725 in Anite's International division. Completion is expected to take effect on December 31, 2003. Commenting on the disposal, Steve Rowley, Anite's Chief Executive, stated: "We are pleased to have agreed this disposal which is in line with our stated strategy of selling small peripheral businesses." ***** The group was able to reduce pre-tax loss by 67% to GBP14.2 million from GBP43.4 million for the six months to October 31. CONTACT: ANITE GROUP PLC Steve Rowley, Chief Executive Phone: 01753 804495 Christopher Humphrey, Group Finance Director WEBER SHANDWICK SQUARE MILE Sara Musgrave/Helen Thomas Phone: 020 7076 0700 Homepage: http://www.anite.com BIG FOOD: Takeover Offer for Londis Not Yet Definite ---------------------------------------------------- Since the announcement of the proposed acquisition by Musgrave the Board of Londis has received a number of approaches from potential bidders. The Board has also noted the announcement last week by Big Food Group PLC stating that it intends to make an offer for Londis. The Independent Directors of Londis note that there is currently no certainty that Big Food Group will actually make a firm offer or what conditions would be attached to such an offer. Subject to receiving suitable confidentiality undertakings the Board proposes to allow interested parties access to information regarding the Company's business to allow them to decide whether or not they wish to make an offer for the Company. The Board intends to conduct an orderly process with a view so far as practical of obtaining proposals that are directly comparable, recognizing that it is in the Company's interests to resolve its future ownership without undue delay. The Board wishes to obtain the best offer available and will, after giving access to the potential bidders, take advice from its advisers and make an appropriate recommendation to shareholders. In the circumstances the Board will propose that the extraordinary general meeting scheduled to be held on December 30, 2003 be adjourned in order to allow time for the above process to take place. ***** Following the announcement, Londis withdrew its recommendation of the current offer from Musgrave Investments PLC, the Company has agreed with Musgrave to terminate the agreement relating to the proposed acquisition of the Company by Musgrave pursuant to a Scheme of Arrangement, and withdraw the Scheme which will now not be capable of acceptance. The Court Meeting and the Extraordinary General Meeting convened to be held on December 30, 2003 will therefore be held but immediately adjourned. The Board will write to all Londis retailers in due course to inform them of the outcome of their discussions with parties interested in acquiring the Company. BIG FOOD: Urges Londis Shareholders to Reject Musgrave Bid ---------------------------------------------------------- The Big Food Group plc [Standard & Poor's, BB/Stable/--) notes the press announcement made by the Board of Londis (Holdings) Limited and their statement that they propose to adjourn the extraordinary general meeting scheduled for December 30, 2003 and intend instead to conduct an orderly process for considering proposed offers for the Company. However, Big Food Group notes that the Board of Londis has not yet cancelled or adjourned the extraordinary general meeting or withdrawn its recommendation of the Musgrave offer for the Company. Furthermore, Big Food Group has not yet received an invitation from Londis to participate in the sale process or any timetable explaining how this is to be conducted. In the absence of any clarification of the above issues, Big Food Group continues to urge Londis shareholders to reject the Musgrave offer. Commenting Bill Grimsey, Chief Executive of The Big Food Group, said: "The Board of Londis have not yet clarified a number of important issues. The Musgrave offer is still on the table and still recommended by the Board of Londis. In these circumstances Londis shareholders should ensure that the offer is defeated by rejecting it immediately." Under Big Food Group's alternative proposal announced last week, Londis shareholders would receive GBP20,300 per share against GBP10,139 under the Musgrave offer. Management would receive GBP0.6 million against GBP20.2 million under the Musgrave offer. The Company paid GBP7.0 million in November to management just for changing their contracts. CONTACT: BIG FOOD GROUP Andrew Hayes/Noemie de Andia Hudson Sandler Limited Phone: 020 7796 4133 BRITISH ENERGY: Resolutions to Modify Terms of Trust Deed Passed ---------------------------------------------------------------- Notice is hereby given to the holders of: GBP134,586,000 6.202% Guaranteed Bonds due 2016 GBP163,444,000 6.077% Guaranteed Bonds due 2006 GBP109,861,000 5.949% Guaranteed Bonds due 2003 issued by British Energy plc Bonds that, at the Meetings of such holders held on December 19, 2003, the Extraordinary Resolutions set out in the Notice of Meetings previously notified to Bondholders in accordance with the terms of the Trust Deed for such Bonds were duly passed at each Meeting. ***** British Energy convened the Meetings for the purpose of enabling the holders of each series of Bonds to resolve, if they so wish, to authorize and direct the trustee of those Bonds, The Law Debenture Trust Corporation plc (the 'Trustee', which expression includes any replacement or additional trustee(s) appointed from time to time in relation to the Bonds), to enter into a third supplemental trust deed modifying the provisions of the Trust Deed in order (i) to permit the exchange of the global bonds representing the Bonds into definitive Bonds at the option and expense of the Issuer (if the applicable resolution is passed by holders of the relevant series of Bonds), (ii) to approve the appointment of The Law Debenture Intermediary Corporation plc and Law Debenture Trustees Limited as replacement trustees for the 2006 Bonds and the 2016 Bonds, respectively, in place of The Law Debenture Trust Corporation plc (if the applicable resolution is passed by holders of the relevant series of Bonds); (iii) to authorize the Trustee to deal with new securities made available to Bondholders pursuant to any scheme of arrangement, compromise or exchange proposed by the Issuer, any Guarantor or the Trustee, including a scheme of arrangement (as described below) currently expected to be proposed by the Issuer (pursuant to which the Bondholders and others will agree to release their existing claims against the Issuer, the Guarantors and its/their affiliates under the Bonds in exchange for new securities) (a 'Compromise Proposal'), (iv) to authorize the Trustee to comply with any obligations which may be imposed upon it under any Compromise Proposal, including entering into such agreements, deeds and other documents as are required to be entered into by the Trustee in connection with such Compromise Proposal, (v) to amend the provisions of the Trust Deed to provide for payment of accrued interest on the Bonds (if any) on the date that any Compromise Proposal becomes effective, (vi) to amend the definition of 'Permitted Security Interest' and to make certain other amendments to the provisions of the Trust Deed, to make such provisions consistent with the corresponding provisions of the Creditor Restructuring Agreement (as defined below); (vi) to extend the 'backstop' termination date for the existing standstill arrangements from September 30, 2004 to 12 noon on the earlier of January 31, 2005 and the date falling 120 days after the date on which the last of the initial conditions precedent set out in the Creditor Restructuring Agreement is satisfied; (vii) to permit certain amendments to the TPL PPA (as defined in the Trust Deed); and (viii) to insert a written resolution procedure into the Trust Deed to enable a majority of bondholders to direct the Trustee by written resolution to waive or modify the British Energy undertakings contained within the First Supplemental Trust Deed (as amended by the Third Supplemental Trust Deed, if executed) and to further extend the 'backstop' termination date referred to in (vi). To see full copy of announcement: http://bankrupt.com/misc/BritishEnergy_Meetings.htm GOVETT STRATEGIC: In Members' Voluntary Liquidation --------------------------------------------------- The Board of Govett Strategic Trust plc announces that at the Second Extraordinary General Meeting of the Company last week, the resolutions before the meeting were approved by Shareholders. Accordingly, the Company has been placed in members' voluntary liquidation and Simon Peter Bower and Michael John Hore of 186 City Road, London EC1V 2NU have been appointed joint liquidators to the Company. Entitlements under the Scheme In accordance with the reconstruction proposals for every share held in the Company, shareholders will receive 0.36995880 shares in Fidelity Special Values PLC, or 1.154306 units in the Gartmore Govett Money Market Fund or 116.0193p cash or such combination for which shareholders elected or are deemed to have elected. The issue price of shares in Fidelity Special Values PLC was 315.1805p, being a 3.25% premium to the fully diluted NAV as at close of business on December 19, 2003, for shares issued under the Scheme. The issue price of units in Gartmore Govett Money Market Fund was 100.51p. Dealings in respect of new shares in Fidelity Special Values PLC issued under the Scheme commenced at 08.00 December 22 and certificates are expected to be issued on December 30, 2003. Confirmation notes in respect of new units issued in Gartmore Govett Money Market Fund issued under the Scheme was due for distribution December 23, 2003. In respect of elections for cash, checks were dispatched December 24, 2003. Shareholders are reminded that the register of holders of Reclassified Shares has closed and that dealings in the Shares have been suspended. CONTACT: GOVETT STRATEGIC Sir John Riddell, Chairman Phone: 0191 279 4222 CAZENOVE & CO. LTD. Angus Gordon Lennox Phone: 020 7588 2828 HAYMES FARM: Business for Sale as 'Going Concern' ------------------------------------------------- The joint administrative receivers, Ken Chalk and Ian Gould, offer for sale as a going concern the business and assets of this long-established organic mushroom producer including: (a) Fully equipped buildings on 20-acre freehold site close to Cheltenham with planning permission for further expansion (b) Integrated growing and packing facilities and experienced workforce (c) Annual turnover of cGBP2 million (d) Established customer base including high street retailers (e) Soil Association certification to November 2004 Potential purchases (principals only) should contact Shaun Hyland or Ken Chalk at: PKF Pannel House 6/7 Litfield Place Clifton Bristol BS8 3LX Phone: 0117 906 4000 Fax: 0117 974 1238 Homepage: http://www.pkf.co.uk NORTHERN FOODS: Appoints New Group Chief Executive -------------------------------------------------- The board of Northern Foods plc is pleased to announce the appointment of Patricia O'Driscoll as Group Chief Executive with effect from the beginning of the company's new financial year in April 2004. Ms. O'Driscoll, 44, is Retail Vice President of Shell Europe, where she has been responsible for refocusing and reinvigorating the European forecourt business serving six million daily customers and generating US$35bn of sales across 13,500 sites in over 20 markets. Prior to joining Shell in 1997, she held positions with leading U.K. retailers including Safeway, Tesco and Marks & Spencer, gaining extensive experience of the food sector including buying and trading in chilled convenience foods and biscuits. Ms. O'Driscoll was appointed an Independent Director of Stockholm-based Assa Abloy AB, the world's leading manufacturer of locks and security products, earlier this year. Northern Foods Chairman Peter Blackburn said: "We are delighted to announce the appointment of Pat O'Driscoll and look forward to her joining the company next year. We have undertaken a very thorough external selection process since September, and have been impressed by the quality of the candidates interested in the position. It is very gratifying that we have been able to attract someone of Pat's calibre to Northern Foods. Her blend of broad retail experience and extensive operational management responsibility gives her an excellent understanding of the key drivers of our business, and she has the proven leadership ability to build a winning culture and team. I am sure that she will be able to contribute the fresh strategic vision we are seeking." ***** Group Chief Executive Jo Steward resigned in September after the company warned that group pre-tax profit for the first half before goodwill amortization and exceptional items is expected to be significantly lower than in the comparable period last year. Northern Foods said performance in Convenience Foods has reflected very challenging trading conditions, including business transfers to competitors, the negative effects of the extremely hot summer and margin pressures caused by raw material cost inflation. In November, the company reported pre-tax profit, before goodwill amortization and exceptional items of GBP6.7 million, down 16.2% at GBP32.5 million. CONTACT: NORTHERN FOODS Hudson Sandler Peter Blackburn, Chairman Phone: 020 7796 4133 Keith Hann Phone: 020 7796 4133 ROOM SERVICE: Short-selling Victims Reject LSE's Offer ------------------------------------------------------ Shareholders who were left without shares due to short-selling in Room Service Group's stocks refused the London Stock Exchange's 11.2p offer for the shares they were supposed to hold, according to The Telegraph. The offer is one of the two options made by the London Stock Exchange, the other being that investors accept a full refund from the market makers for their investment. The controversy stems from the fundraising of Room Service's new owner, Azure Holdings, through a placing and open offer that excluded investors without certificates -- the short-selling victims. The offer was made available only to shareholders who bought stock between September 25 and October 22. Under the plan, ten shares were offered for every Room Service share. The London Stock Exchange's offer for short-selling victims is nearly twice as much as the closing price when shares in Room Service were suspended. But Room Service Shareholder Action Group spokesman Nigel Smith said shareholders were "absolutely furious." "If this is the best the London Stock Exchange can come up with, they are not comatose -- they are pushing up the daisies. This offer is derisory -- the offer should be more like 30p," according to the Telegraph. Mr. Smith said the investors were considering taking legal action against the exchange for a breach of its duty. An exchange spokesman countered that it is the investor's choice to accept or reject the offer, which will be paid out by the market makers. According to him, the 11.2p valuation -- which includes the beneficial effect of the 10-for-one offer -- was arrived at by an independent valuation. SAFEWAY PLC: Wm Morrison Faces Difficult Task of Boosting Sales --------------------------------------------------------------- Supermarket group Wm Morrison, which offered a new GBP3 billion bid for rival Safeway plc, would have to face the main task of reviving the retailer's sales figures once it takes the helm of the company. Food Navigator, citing the latest supermarket sales data from TNS said Safeway's sales fell by 4% in the 12 weeks to December 7, pushing its market share down from 10.1% to 9.2%. The decline is the fastest among rival supermarket groups. Safeway has some of the highest prices, making it less attractive to a market, which is becoming increasingly price-conscious. In contrast, WM Morrison is considered one of the cheapest grocery retailers in the U.K. Its takeover is seen likely to result to the reduction in Safeway prices to up to 6%. WM Morrison's sales data show a 14% increase in sales in the same 12-week period. Tesco and Asda both showed a 10% increase. Wm Morrison's market share increased to 26.9% from 25.8%, while Asda's increased by 0.7% to 16.8%. SEYMOUR PIERCE: MGM Terminates Asset Management Contract -------------------------------------------------------- Seymour Pierce Group Plc announces that certain agreements have been reached in relation to Pavilion Asset Management, its institutional asset management business. This business manages approximately GBP3 billion of funds, divided approximately equally between two clients, MGM Assurance and Family Assurance Friendly Society. As previously noted, during the course of its strategic review, the Company has been evaluating the future of its investment in Pavilion. The Company and Pavilion have agreed with MGM to terminate Pavilion's mandate with MGM with effect from December 19, 2003 on terms whereby MGM will pay Pavilion compensation for the loss of the mandate. Pavilion commenced managing MGM's funds and unit trusts in April 2002 and the arrangement had until April 2007 to run. Separately, the Company and Pavilion have agreed with New Star Asset Management Limited and Family for Pavilion's mandate with Family to be taken over by New Star with effect from January 30, 2004. Pavilion commenced managing Family's funds in September 2000 and the arrangement on its present terms had until September 2005 to run. The aggregate amount receivable by Pavilion in cash under these agreements will be GBP6.75 million, net of an amount to be paid to Family on January 30, 2004. The Board is actively formulating proposals for a return of surplus cash to shareholders and will be communicating with shareholders in that regard early in the New Year. ***** Seymour Pierce sold and closed this year businesses that were operating at a loss after conducting a strategic review of the group's operations. In July, Executive Chairman Keith Harris said the group's asset management platform has been scaled back to its core business, Pavilion Asset Management. This follows a withdrawal from the hedge fund arena. Mr. Harris said for the size of the group the costs of participation were unacceptably high given the difficulty in attracting funds under management. He added: "Pavilion is operated as a discrete entity within the Group. It remains the focus of the Board to ensure that this business continues to be fully resourced. Our review of the alternative options for maximizing shareholder value within this division continues, naturally affected by the recent return of positive sentiments within equity markets." CONTACT: SEYMOUR PIERCE GROUP PLC Keith Harris, Executive Chairman Patrick Ingram, Finance Director Phone: 020 7107 8000 David Bick/Chris Steele Holborn Phone: 020 7929 5599 ********* 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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