/raid1/www/Hosts/bankrupt/TCREUR_Public/040213.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, February 13, 2004, Vol. 5, No. 31
Headlines
F R A N C E
ALSTOM SA: Wins EUR489 Mln Order from French National Railway
G E R M A N Y
HVB GROUP: Mulls EUR2 Billion Rights Issue
I R E L A N D
CLONDALKIN INDUSTRIES: Rating on CreditWatch Negative
JSG FUNDING: Reports Minimal Fourth Quarter Pretax Loss
I T A L Y
PARMALAT SPA: Citigroup Absorbs $351 Mln Parmalat-related Costs
L U X E M B O U R G
GEMPLUS INTERNATIONAL: Pre-restructuring Operating Loss Down 62%
N E T H E R L A N D S
KLM ROYAL: E.U. Commission Clears Merger with Air France
KONINKLIJKE AHOLD: Mulls Divestment of Two U.S. Subsidiaries
PETROPLUS N.V.: Completes EUR72 Million Sale of Tango
VENDEX KBB: Ratings Under Review for Possible Downgrade
N O R W A Y
STOLT NIELSEN: Results Conference Call Set February 19
P O L A N D
KOMPANIA WEGLOWA: Full-year 2003 Losses Below Expectations
R U S S I A
BOLOGOVSKY FACTORY: Seeks Buyers for RUB15 Million- Properties
FAETON: Largest Management Company in Saint-Petersburg Splits
GORNOMARYSKY: Court Prescribes Bankruptcy Procedure
KORUND: Duma Probes Order Mandating Return of Divested Assets
RENAISSANCE CAPITAL: Standard & Poor's Affirms 'B-/C' Ratings
SCIENCE AND TECHNIQUES: In Bankruptcy Monitoring Procedure
SEA TRADE: Under Bankruptcy Proceedings
S W E D E N
SAS GROUP: Harmonizes Business, Legal Structure
SAS GROUP: Full-year 2003 Losses Balloon to SEK1.4 Billion
SKANDIA LIV: Sells If Stake to Sampo for SEK2.4 Billion
U N I T E D K I N G D O M
3D MICRO: In Voluntary Liquidation
BOOKHAM TECHNOLOGY: FY2003 Net Loss Down to GBP79.4 Million
BURLEIGH PROPERTIES: Appoints Liquidator from Slater Maidment
CANARY WHARF: Qatar Ups Contribution in Morgan Stanley's Bid
CARL AUG: Appoints Liquidator from DS Insolvency Services
CATALOGUE SHOP: PricewaterhouseCoopers Appointed Liquidator
CROUCH MINING: Creditors Meeting Set February 25
DAWSON INTERNATIONAL: Warns of Deterioration in Operating Profit
DIAMOND MULTIMEDIA: John Kirkpatrick Appointed Liquidator
EINSTEIN GROUP: Annual General Meeting Set March 4
GEMPLUS ASSOCIATES: Appoints Liquidators
GUINNESS MAHON: Susan Roscoe Appointed Liquidator
LITTLEWOODS: Hires PricewaterhouseCoopers to Liquidate Units
MARCONI CORPORATION: To Redeem Junior Notes February 24
MILLER CORPORATION: Appoints Liquidators
NETWORK RAIL: Accepts Regulator's Ruling on Five-year Budget
NEWMANS (SOUTHAMPTON): In Voluntary Liquidation
PEAK POTATO: National Westminster Bank Calls in Administrators
PPL THERAPEUTICS: Sells Intellectual Property Rights to recBSSL
SAFEWAY PLC: Shareholders Okay Merger with Wm Morrisons
WALT DISNEY: Comcast Dangles US$66 Billion Offer
WFS HOLDINGS: Susan Roscoe Appointed Liquidator
YELL GROUP: Confident of Meeting Full-year Expectations
*********
===========
F R A N C E
===========
ALSTOM SA: Wins EUR489 Mln Order from French National Railway
-------------------------------------------------------------
The French national railway company, SNCF (Societe Nationale des
Chemins de Fer), has awarded Alstom and Siemens a contract worth
EUR836 million for the supply of 400 diesel locomotives.
Alstom's share of the order is EUR489 million. The contract
includes an option for an additional 100 locomotives. If the
option is exercised, the total value for the 500 locomotives
would exceed EUR1 billion. Alstom and Siemens will execute this
contract in consortium, with Alstom as leader.
The order is part of an SNCF program for the renewal of its
freight fleet. Delivery is scheduled to begin in mid-2006, with
service beginning the same year on the French and German
networks. Alstom will assemble the locomotives at its site in
Belfort, France. Alstom will supply the mechanical equipment
for the locomotives and Siemens will supply the electrical
equipment and part of the chassis.
"This very significant order will serve to enhance Alstom's
expertise and capacity for locomotive production in France,"
said Philippe Mellier, President of ALSTOM Transport. "We are
honored to lead another significant rolling-stock project for
SNCF. We trust that these locomotives will play a major part in
the renaissance of freight by rail in France and throughout
Europe."
=============
G E R M A N Y
=============
HVB GROUP: Mulls EUR2 Billion Rights Issue
------------------------------------------
HVB is considering raising an estimated EUR2 billion (US$2
billion) of fresh capital through a rights issue, according to
the Financial Times. An issuance of up to EUR500 million of
debt is also being prepared, one HVB executive said.
The plan could be launched along with the announcement of HVB's
preliminary results on February 26, according to bankers.
Proceeds from the equity issue will be used to cover the
writedown of stakes in Munich Re and Allianz, maximize the
efficiency of the group's capital structure, and finance
business growth.
The release of the financial results is expected to give way to
discussions regarding HVB's merger with Commerzbank. One senior
Commerzbank executive said fresh merger talks were due to begin
next month "as soon as the results are out," according to the
report.
HVB Chief Executive Dieter Rampl last year slashed risk-weighted
assets; floated a 25% stake in subsidiary, Ban of Australia; and
divested non-core assets to repair balance sheet hit by bad
debts writedown and stock market losses in 2002.
=============
I R E L A N D
=============
CLONDALKIN INDUSTRIES: Rating on CreditWatch Negative
-----------------------------------------------------
Standard & Poor's Ratings Services placed its 'B+' long-term
corporate credit rating on Republic of Ireland-based packaging
group, Clondalkin Industries PLC, on CreditWatch with negative
implications. The rating action follows the groups proposed
refinancing following the sale of the majority stake in
Clondalkin to private equity firm Warburg Pincus. Standard &
Poor's also affirmed its 'B-' long-term debt rating on the
group's senior unsecured notes, which have not been placed on
CreditWatch.
"The acquisition will be financed with a fully underwritten
debt-financing package, which is expected to produce a capital
structure with similar leverage to the current group structure,"
said Standard & Poor's credit analyst Vanessa Brathwaite.
"Nevertheless, the final ratings will depend on the business and
financial strategy of the new majority shareholders, the overall
leverage of the group following the refinancing, and the group's
financial flexibility under the financial covenant package
proposed."
Clondalkin has launched a tender offer to repurchase EUR125
million ($159 million) of 10.625% senior unsecured notes as a
result of this change of control. This is positive for the
existing note holders, who will receive a settlement that
reflects a premium over the yield on the notes to the earliest
redemption date, which is January 2005.
In order to resolve the CreditWatch, Standard & Poor's will meet
with management to discuss the debt refinancing proposals and
issues relating to the new ownership structure.
JSG FUNDING: Reports Minimal Fourth Quarter Pretax Loss
-------------------------------------------------------
JSG Funding plc (Pink Sheets: JSMFY) recently published these
results for the 3 months and 12 months ended December 31, 2003:
4Q'03 4Q'02 Change Full Year'03 Full Year'02 Change
EURm EURm % EURm EURm %
Net sales 1,174 1,165 1% 4,746 4,710 1%
EBITDA(a) 151 171 12%) 627 605 4%
Free cash
flow 35 30 17% 178 146 22%
Pre-tax
profit/(loss)
(19) 20 - 12 236 (95%)
(a) Pre-exceptional EBITDA of subsidiaries only
2003 fourth quarter results represent the first full reported
quarter in which the Group's capital structure is broadly
comparable with the corresponding period in 2002. Jefferson
Smurfit Group (JSG) was acquired by Madison Dearborn during the
third quarter of 2002. 2003 full year results, however, reflect
the material changes to the Group's capital structure year on
year, which distorts comparisons.
During 2003, the Group addressed each significant minority
position within the structure to improve cash flow generation
capability. The results include the acquisition and integration
of SSCC's former European packaging assets, the disposal of
Smurfit MBI and, the acquisition of the majority of former
Spanish associate, Papelera Navarra.
At the time of the Madison Dearborn acquisition of JSG the
ownership of certain non-cash generative and non-strategic
assets was transferred to the 'newcos' (fellow subsidiaries of
Jefferson Smurfit Group Limited). During 2003 substantial
progress was made on the disposal of these assets. The disposal
program is ahead of schedule and the EUR125 million debt
associated with the newcos was fully paid down prior to the
year-end.
The Group also completed the acquisition of a sack plant in
Poland and benefited from one-off gains principally related to
property development at the K Club during 2003.
Fourth quarter financial performance reflected a weak macro-
economic environment, continuing price pressure in European
paper markets and the continuing relative strength of the euro.
Volumes in recycled containerboard and corrugated, excluding
acquisitions, were marginally ahead of last year. Kraftliner
volumes increased year-on-year helped by soft comparisons in
2002. Latin American performance during the quarter was
positive across all countries, except in our largest country of
operation, Mexico, which continued to be adversely affected by
the US economy, the migration of manufacturing businesses to
Asia and high raw material and other input costs.
Fourth Quarter, 2003: Year-on-year performance
Fourth quarter net sales of EUR1,174 million increased 1%
against EUR1,165 million in the fourth quarter of 2002.
Excluding the effect of acquisitions, disposals and currency
movements, sales decreased EUR12 million or 1% on the comparable
period in 2002.
Fourth quarter EBITDA, before exceptional items, of EUR151
million decreased 12% against EUR171 million in the fourth
quarter of 2002. Excluding the effect of acquisitions,
disposals and currency movements, EBITDA, before exceptional
items, decreased EUR25 million or 15% on the comparable period
in 2002. EBITDA, before exceptional items, of EUR151 million
represents a margin of 12.8% on net sales against 14.6% in the
fourth quarter of 2002.
Fourth Quarter, 2003: Quarter-on-quarter performance
Fourth quarter net sales were unchanged on the third quarter of
2003. Excluding the effect of currency movements, fourth
quarter sales increased EUR4 million or less than 1% on the
third quarter of 2003.
Fourth quarter EBITDA, before exceptional items, of EUR151
million increased 4% against EUR145 million in the third quarter
of 2003. Excluding the effect of currency movements, EBITDA,
before exceptional items, increased EUR7 million or 5% on the
third quarter of 2003. EBITDA, before exceptional items, of
EUR151 million represents a margin of 12.8% on net sales against
12.4% in the third quarter of 2003.
Full year, 2003: Year-on-year performance
Full year net sales of EUR4,746 million increased 1% against
EUR4,710 million in 2002. Excluding the effect of acquisitions,
disposals and currency movements, sales decreased EUR42 million
or approximately 1% compared with 2002.
EBITDA, before exceptional items, of EUR627 million increased 4%
against EUR605 million in 2002. Excluding the effect of
acquisitions, disposals and currency movements, EBITDA, before
exceptional items, decreased EUR11 million or 2% on 2002.
EBITDA, before exceptional items, for 2003 represents a margin
of 13.3% on net sales against 12.8% in 2002. Adjusting 2003 for
the K Club property development gain gives an EBITDA margin of
12.9%.
Product Market Overview
European fourth quarter volumes, in kraftliner, recycled
containerboard and corrugated, show double-digit growth on the
fourth quarter of 2002. Kraftliner volumes, which increased 19%
year-on-year, in the fourth quarter, benefit from soft
comparisons in 2002. Growth in recycled containerboard and
corrugated reflects the acquisition of SSCC's European packaging
assets in March, 2003 and former Spanish associate, Papelera
Navarra, in June, 2003. Excluding acquisitions, recycled
containerboard and corrugated volumes, increased by 4% and 2%,
respectively, on the comparable period in 2002. Kraftliner
prices declined during the fourth quarter while recycled
containerboard and corrugated prices remained relatively stable.
Full year 2003 European volumes of kraftliner, recycled
containerboard and corrugated also increased on 2002 levels.
Kraftliner volumes increased 5% year-on-year. Recycled
containerboard and corrugated volumes increased 28% and 26%
year-on-year reflecting the acquisitions outlined above and the
acquisition of Munksjo in March, 2002 which benefited volume
comparisons in the first quarter of 2003. Excluding the impact
of acquisitions, recycled containerboard and corrugated volumes
were in line with 2002. Average prices in 2003, for kraftliner
and recycled containerboard were 5% lower than 2002 while
corrugated prices declined 2% on 2002 levels.
Latin American fourth quarter volumes, in containerboard and
corrugated, also show double digit growth on the fourth quarter
of 2002 supported by the impact of acquisitions and the gradual
recovery of the economy in Argentina. Excluding acquisitions,
fourth quarter volumes, in both containerboard and corrugated,
increased 14% and 10% respectively on 2002, principally driven
by recovery in Argentina.
Full year 2003 Latin American volumes of containerboard and
corrugated, increased 14% and 11% respectively, a significant
element of this being due to acquisitions and consolidations.
Excluding acquisitions, containerboard and corrugated volumes
increased 8% and 1% year-on-year. In U.S. dollar terms, 2003
average prices for containerboard were flat year-on-year while
2003 average corrugated prices were generally 1% higher than
average prices in 2002.
Profit before tax
The Group reported a small loss before tax in the fourth quarter
of EUR19 million compared to a profit of EUR20 million in 2002.
Subsidiaries accounted for a loss of EUR21 million while
associates contributed a profit of EUR2 million, against profits
of EUR15 million and EUR5 million in 2002 respectively. The
fourth quarter 2003 loss is adversely impacted by EUR26 million
of exceptional charges during the quarter. Exceptional charges
relate to restructuring costs in our European operations, mainly
reflecting the closure of the Lestrem Mill and Noveant sack
plant, both in France, and other restructuring activities.
Fourth quarter 2002 exceptional charges were EUR9 million.
Full year 2003 profit before tax of EUR12 million declined from
EUR236 million in 2002. This decline mainly reflects the net
interest charges associated with the Group's leveraged capital
structure. Profit before tax also includes net exceptional
charges of EUR29 million. Exceptional charges include
restructuring costs in our European operations of EUR35 million
offset by gains on asset sales of EUR6 million. In 2002,
exceptional charges at subsidiary level of EUR4 million include
EUR24 million for restructuring charges mainly in Europe offset
by gains of EUR20 million on the sale of the U.S. voting
equipment and commercial printing businesses.
To see summary cash flows:
http://bankrupt.com/misc/JSG_Cashflow.htm
(a) For comparison purposes, the financial results of Jefferson
Smurfit Group plc and subsidiary companies (JSG) for the periods
prior to its acquisition on September 3, 2002 have been combined
with those of JSG Funding plc for periods following such
acquisition.
Fourth Quarter, 2003: Cash Flows
Free cash flow in the fourth quarter of EUR35 million compares
to EUR30 million in 2002. Cash flows, in the fourth quarter
reflect a subsidiary loss before tax of EUR21 million, a
decrease in working capital of EUR29 million, exceptional items
of EUR17 million and a non-cash interest expense of EUR15
million. Depreciation and amortization at EUR72 million was
broadly unchanged from the fourth quarter of 2002. Capital
expenditure, excluding capital creditors, in the fourth quarter
represents over 100% of depreciation compared to over 90% in
2002. Capital expenditure levels are normally higher in the
fourth quarter of each financial year.
Full Year, 2003: Cash Flows
Free cash flow for the full year of EUR178 million compares to
EUR146 million in 2002. This increase reflects reduced tax
payments; a working capital inflow of EUR63 million and
continuing disciplined capital expenditure.
Full year depreciation and amortization increased from EUR262
million in 2002 to EUR295 million reflecting additional goodwill
amortization following the changed capital structure of the
Group. Capital expenditure for the full year at EUR207 million
represented 82% of depreciation compared to 85% in 2002. This
level of expenditure is in line with our targets and is adequate
for our current business needs.
Investments in 2003 of EUR181 million include the acquisition of
SSCC's European packaging assets and the majority of former
Spanish associate, Papelera Navarra. In addition, the Group
paid the final deferred amount of EUR55 million in connection
with the acquisition of Nettingsdorfer, completed in December
2000.
Net borrowing at December 2003, was EUR3,101 million (including
EUR28 million of capital leases) compared to EUR3,135 million at
December 2002 (including EUR23 million of capital leases). The
relative strengthening of the euro year-on-year decreased the
value of non-euro debt and resulted in a currency translation
gain of EUR53 million and EUR152 million in the quarter and
twelve months to December 2003 respectively. Net debt to
capitalization of 77% at December 2003 compared to 78% at
December 2002.
Total tax payments in 2003 amounted to EUR59 million, compared
to EUR130 million in 2002. The decrease is primarily
attributable to tax deductions for higher interest payments
associated with the Group's leveraged capital structure.
Performance Review and Outlook
Gary McGann, Chief Executive Officer, commented "Economic
weakness together with a significant strengthening of the euro
against the dollar adversely impacted demand growth in 2003.
The introduction of expected containerboard capacity additions
also impacted paper pricing. Difficult operating conditions
were offset by improved productivity and cost efficiencies
across our operations and strong performances from our Latin
American businesses (excluding Mexico). Our Mexican operations
were affected by reduced export demand from the U.S., increased
domestic competition and the continued migration of
manufacturing to Asia.
Managing each of the factors within our control has served to
deliver acceptable profitability and strong cash flow in 2003.
We continue to make progress towards the objective of increased
sustainable performance and to improve operating margins at each
point of the industry cycle. We are delivering improved cash
flow in a difficult operating environment. This reflects a
continued focus on a market-led, fully integrated packaging
system.
While there are initial indications of economic recovery, 2004
is also expected to be challenging. Our reported results for
2003, together with an improving product price environment,
contribute to a belief that we can produce a solid financial
performance in 2004."
To see other financial statements:
http://bankrupt.com/misc/JSG_Financials.htm
CONTACT: JSG FUNDING PLC
Gary McGann, Chief Executive Officer
Tony Smurfit, Chief Operating Officer
Ian Curley, Chief Financial Officer
Phone: +353 1 202 7000
K CAPITAL SOURCE
Mark Kenny
Phone: +353 1 631 5500
E-mail: smurfit@kcapitalsource.com
=========
I T A L Y
=========
PARMALAT SPA: Citigroup Absorbs $351 Mln Parmalat-related Costs
---------------------------------------------------------------
Citigroup Inc. recorded $351,000,000 in credit costs associated
with Parmalat, reflecting the writedown of the majority of
Citigroup's unsecured exposure as well as significant reserves
taken against secured exposure, William P. Hannon, Citigroup
Controller and Chief Accounting Officer, reports in a recent
filing with the Securities and Exchange Commission. According
to Mr. Hannon, Citigroup's remaining credit exposure to Parmalat
is $302,000,000, the majority of which is secured by third party
receivables. Citigroup also experienced $21,000,000 in trading
losses related to Parmalat in the fourth quarter, and has
$15,000,000 of marked-to-market trading exposure remaining.
Mr. Hannon also notes that the income for Europe, Middle East
and Africa fell 42% to $352,000,000, largely resulting from
$236,000,000 of the credit losses related to Parmalat as well as
the absence of prior year asset sale gains. Revenues for the
corporate and investment bank increased 10% to a record
$1,600,000,000, led by continued strong results in fixed income,
although income fell sharply in the fourth quarter to
$140,000,000, reflecting higher credit losses as well as higher
expenses. Consumer income declined 10%, reflecting higher
expense growth, driven by restructuring initiatives, which
outpaced 15% revenue growth. (Parmalat Bankruptcy News, Issue
No. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000)
===================
L U X E M B O U R G
===================
GEMPLUS INTERNATIONAL: Pre-restructuring Operating Loss Down 62%
----------------------------------------------------------------
Commenting on the performance for the fourth quarter 2003, Alex
Mandl, President and Chief Executive Officer, said: "Reporting
an operating profit before restructuring for the fourth quarter
is the best measure of delivery against the turnaround plan we
announced in December 2002. Our decisive action on costs, along
with a greater emphasis on customer focus and revenue growth,
enabled the company to make further progress toward our
strategic objectives. Our continuous effort to increase
customer recognition of the strategic value of the SIM card is
reflected in our higher-value product mix. The staff of Gemplus
worked hard during 2003 to lay the foundations for long-term
growth and profitability. We look forward to reporting further
improvements in performance as the year progresses, taking into
account usual seasonality."
Fourth quarter 2003 financial review
Income statement
Highlights:
(a) Revenue up 22.4% quarter-on-quarter and 19.0% year-on-year,
mainly driven by wireless.
(b) Improved operating profit before restructuring at EUR5.2
million.
In EURm Q4 2003 Q3 2003 Quarter Q4 2002 Year
-on- -on-
quarter year
change change
Group revenue 232.6 190.0 +22.4% 195.5 +19.0%
Adjusted for
currency fluctuations,
discontinued
operations and
acquisitions +24.0% +29.0%
Gross profit 67.4 54.4 +24.0% 54.7 +23.3%
Gross margin as a
% of revenue 29.0% 28.6% NM 28.0% NM
Operating income
(loss) before
restructuring 5.2 0.0 NM -16.6 NM
Net loss -24.4 -13.1 NM -96.8 NM
Loss per share
(fully diluted) in
euros -0.04 -0.02 NM -0.16 NM
On a currency-adjusted basis, the Company's fourth quarter
revenue shows year-on-year growth in the Americas of 54.7%,
20.6% in EMEA and 22.0% in Asia.
Gross margin increased by 0.4 percentage point compared with the
third quarter 2003, despite adverse currency fluctuations. This
was led by overall growth in Telecom and an improved mix in
wireless, which fully offset selling price decline.
The execution of the restructuring plan announced in December
2002 is progressing well. The Company implemented 139
redundancies during the fourth quarter 2003, leading to a
headcount reduction of 777 at the end of the year. Annualized
savings from restructuring and cost cutting initiatives are
currently estimated to be close to EUR100 million by the end of
2004.
The restructuring plan and cost cutting measures helped further
reduce the operating expense run rate to EUR55 million at the
end of the fourth quarter 2003, which contributed to further
lowering the breakeven point. In the context of streamlining
the Company's offerings and organization, however, Gemplus has
taken a number of one-time charges in order to fully capitalize
on the emerging recovery. They include asset writedown and
information system rationalization, legal and advisory fees and
other various items. As a result, operating expenses, excluding
restructuring, increased 14.5% quarter-on-quarter to EUR62.2
million.
Correspondingly, operating profit before restructuring, improved
by EUR5.2 million compared to the third quarter 2003. Net
income for the fourth quarter was affected by EUR9.3 million of
restructuring expenses, EUR5.2 million of foreign exchange
losses and the writedown of EUR8.6 million of deferred-tax
assets.
(Balance sheet and cash flow statement)
Highlights:
(a) Free cash flow before restructuring of EUR47.2 million.
(b) Strong cash position: up EUR34.1 million to EUR390.7
million.
Improvement in the Company's underlying profitability during the
fourth quarter is best seen in the gross cash flow [1] for the
quarter, which was EUR28.6 million, before restructuring,
compared with EUR11.5 million for the third quarter.
The increase in net cash of EUR34.1 million during the fourth
quarter also reflects an improvement in working capital
requirements of EUR23.1 million, which was partly offset by a
restructuring cash outlay of EUR11.2 million.
Segment analysis
Telecom
Highlights:
(a) Wireless card revenue up 59.9% year-on-year, currency
adjusted.
(b) Wireless average selling price up 14.6% quarter-on-quarter,
currency adjusted, led by improved sales mix.
In EURm Q4 Q3 Quarter-on- Q4 Year- on-
2003 2003 quarter 2002 year
change change
Telecom revenue 176.3 132.3 +33.2% 141.5 +24.6%
Adjusted for currency
fluctuations, discontinued
operations & acquisitions +34.8% +34.4%
Gross profit 57.6 39.7 +45.1% 43.0 +34.1%
Gross margin as a
% of revenue 32.7% 30.0% NM 30.4% NM
Revenue reflects the strong performance of wireless:
(a) Wireless card revenue was up 39.4% quarter-on-quarter and
59.9% year-on-year, currency adjusted.
(b) Wireless shipments were up 23.0% quarter-on-quarter and
59.6% year-on-year, both driven mainly by EMEA and the
Americas:
(c) The U.S. region was the most dynamic market fuelled by rapid
SIM adoption. Gemplus provides SIM cards and services to
the four nationwide U.S. wireless carriers that utilize
smart card technology.
(d) The European market gained momentum, as carriers resumed
investments to improve cost efficiency and increase ARPU
[2]. Gemplus shipments rose 46.1% quarter-on-quarter and
55.4% year-on-year. Revenue growth was particularly strong
with the leading European carriers, helped by a new sales
organization with emphasis on key accounts.
(e) Wireless average selling price (ASP) was up 14.6%
sequentially, currency adjusted, led by a strong mix
improvement. Despite continued price pressure, Gemplus was
able to convincingly demonstrate the Company's SIM-based
solutions could generate new revenue streams, reduce our
customers' operating costs and help in their migration to
higher-value cards and new technologies.
(f) Shipments of high-end cards (including 64 KB and 3G) doubled
quarter-on-quarter, sustained by strong demand for 3G cards
from European carriers. High-end cards accounted for 22.3%
of total shipments in the fourth quarter compared with
13.5% in the third quarter.
Financial and Security Services
Highlights:
(a) EMV [3] migration ramping-up, mainly in the U.K. market.
(b) Top line quarter-on-quarter growth hampered by GeldKarte [4]
market seasonality.
In EURm Q4 Q3 Quarter-on- Q4 Year- on-
2003 2003 quarter 2002 year
change change
Financial and Security
Services revenue
56.3 57.7 -2.4% 54.0 +4.2%
Adjusted for currency
fluctuations, discontinued
operations & acquisitions
-0.8% +14.6%
Gross profit 9.8 14.7 -33.4% 11.7 -16.4%
Gross margin as a % of
revenue 17.4% 25.4% NM 21.7% NM
Payment microprocessor card shipments rose 42% year-on-year, but
declined 29% quarter-on-quarter, due to the GeldKarte market
seasonality. EMV shipments increased 50% quarter-on-quarter.
Sales were mainly driven by the U.K. market, but were also
supported by South America and Malaysia. Government ID &
Corporate Security solutions revenue increased 30% quarter-on-
quarter led by successful acceptance tests and shipping of the
first batch of ID cards to the Royal Oman Police.
Full Year 2003 financial review
Highlights:
(a) Revenue up 4.0%, currency adjusted [5], gained momentum
throughout the year.
(b) Improved profitability: operating loss before restructuring
cut by 62%.
(c) Gross margin up 2.3 percentage points.
(d) Operating expenses, excluding restructuring, down 17.3%.
(e) Free cash flow before restructuring of EUR31.0 million.
In EURm FY 2003 FY 2002 Year-on-year Adjusted
change change (*)
Group revenue 749.2 787.4 -4.9% +4.0%
Of which Telecom542.5 544.5 -0.4% +9.2%
Of which Financial and
Security Services
206.7 242.9 -14.9% -7.7%
Gross profit 207.3 199.7 +3.8% NA
Gross margin as a % of
revenue 27.7% 25.4% NM NM
Operating expenses
excluding restructuring
243.3 294.4 -17.3% NM
Operating loss before
restructuring -36.1 -94.7 NM NM
Net loss -157. -320.9 NM NM
Loss per share
(fully diluted)
in euros -0.26 -0.53 NM NM
Net cash flow [6]
-26.5 -73.4 NM NM
Note: After adjusting for currency fluctuations, discontinued
operations and acquisitions.
On a currency-adjusted basis, the Company's full year revenue
shows the following:
(a) Telecom revenue was driven by wireless cards (up 22.3%),
partly offset by a decline in phonecards (down 19.5%).
Wireless card shipments rose 35.3% to 183.7 million units,
but average selling price dropped 8.8%, currency adjusted.
Wireless card shipments were driven by the rapid adoption of
SIM cards in the U.S., strong growth in South America and
solid demand in Europe in the fourth quarter. Shipments
of high-end cards (including 64 Kb and 3G) increased
almost tenfold, of which about half were sold during the
fourth quarter.
(b) The decline in Financial Services and Security revenue
reflected the GeldKarte market replacement cycle and
lackluster demand in pay-TV and retail. Despite the lower
demand from GeldKarte, payment microprocessor cards
shipments were up 10.0%, driven by the ramp-up of EMV
migration in the U.K., which started in the third quarter.
(c) On a geographical basis, revenue from Americas was up 17.8%,
driven by the wireless segment. Asia was up only 1.2%, due
to selling price pressure in Telecom and the declining
phonecard market. The EMEA region was stable at -0.2%,
despite healthy growth in Telecom, reflecting the slower
GeldKarte market replacement cycle and weakness in the pay-
TV market.
Despite adverse currency fluctuations, gross margin increased by
2.3 percentage points, mainly driven by a favorable business and
wireless mix and the benefit of the restructuring and cost
cutting initiatives, fully offsetting selling price decline.
Operating expenses, excluding restructuring, declined 17.3%,
driven by restructuring and cost cutting measures.
Reflecting this, the operating loss before restructuring in 2003
was 62% below its level of 2002.
Net income was reduced by EUR90.5 million of non-recurring
items, of which EUR35.5 million are non-cash. They include
restructuring expenses (EUR62.0 million), and write-downs of
goodwill (EUR19.9 million) and of deferred-tax assets (EUR8.6
million).
The outflow of net cash was contained at EUR26.5 million,
despite a cash outflow of EUR57.0 million related to
restructuring.
Outlook for 2004
The turnaround plan implemented in 2003 is starting to deliver
the strategic objectives outlined in December 2002. Having
successfully executed the transition, Gemplus has begun 2004 in
a much improved condition:
(a) The Company is in good position to capture market
opportunities and to continue to enhance its competitive
position around the globe.
(b) Gemplus intends to keep focusing on cost control.
(c) While the wireless market is gaining momentum, the Telecom
business unit should benefit from the evolving strategic
role of the SIM card for the telecom operators. This, in
turn, should result in an improved wireless mix and help
offset selling price pressure. Gemplus expects the U.S.
market to enjoy steady growth in SIM adoption, while 3G
should play an increasingly important role for the Company
throughout the year.
(d) The Financial Services business unit should be well
positioned to take advantage of the positive momentum
generated by the EMV migration, in particular in the U.K.,
South America and Asia.
(e) As far as the Government ID and Corporate Security segments
are concerned, they could register significant gains when
emerging markets and the major economies gather pace.
For FY2004, Gemplus expects to continue to improve its operating
profit before restructuring going forward, taking into account
certain seasonality factors during the first half of the year.
This also assumes an average exchange rate of approximately 1.20
U.S.$ per EUR.
First quarter 2004 results are scheduled to be reported on April
26, 2004, before the opening of Euronext Paris.
Business Highlights:
Telecom
To date, Gemplus has been involved in the launch of every 3G
network worldwide. This makes Gemplus clearly the world leader
in providing 3G technologies to mobile network operators and in
helping them migrate their subscriber base towards 3G services.
In Europe and Japan, demand for 3G cards and associated
solutions grew with Gemplus delivering over $2 million IM cards
to its 3G customers, including Vodafone D2, in the fourth
quarter 2003 alone. Vodafone D2 has also deployed Gemplus Point
of Sale solutions for copying and backing-up SIM data, both for
2G and 3G, in Vodafone shops and at partners.
Demand for Dynamic SIM ToolKit services and Over The Air
platforms was underpinned by the industry's interest in
maximizing revenue in GSM. In the fourth quarter 2003, Gemplus
saw increased demand for Telecom services through the deployment
of over the air platforms, with seventy six active platforms
installed world-wide, including four out of Hutchison 3G's five
installed platforms. Gemplus is recognizably the leader for OTA
platform deployment.
Making the most of this connection between the operator and the
end-user, and in order to address operator challenges for next
generation wireless services, Gemplus launched GemConnect Device
Manager. This is a new solution to ease set-up of advanced
services such as WAP, MMS and GPRS. This reduces the cost of
customer care for operators, encourages adoption for advanced
mobile services and helps operators manage the growing
complexity of the handset platform in order to offer better
returns on investment.
Financial and Security Services
As EMV migration gathers pace in the banking sector, Gemplus won
an important U.K. contract in November to provide Halifax Bank
of Scotland (HBOS) with 15 million EMV smart cards over three
years to replace the magnetic stripe system on the bank's debit
cards. HBOS, one of the U.K.'s biggest cards issuers, is among
the first U.K. banks to accomplish the EMV migration, which all
banks are required to do.
Outside the U.K., we are well-placed to benefit from a faster
pace of EMV migration. We have been chosen by JCB, Japan's
largest card issuer, to supply multi-application microprocessors
equipped with JCB's EMV application, J-Smart. Japan currently
issues more EMV cards than any other country worldwide except
the U.K. JCB's new cards should be rolled out starting this
year.
Also in November, we began a strategic partnership with
Plastkart, the leading smartcards manufacturer in Turkey. This
is aimed at delivering Gemplus technology to the Turkish
banking, government and retail markets using our partner's
flexible local production. Our partner's capacity also gives us
more flexibility in our manufacturing activities overall.
In Brazil, Gemplus was chosen to supply Sao Paulo Transporte
with GemEasy 8000 cards for its smart card-based fare system.
Production of the 2.5 million contactless cards has begun and
the system will go live this year. Sao Paulo's public bus
system serves over five million commuters every day.
Worldwide, there is a profound interest from companies in using
smart cards in both ID and security systems. Our recent survey
indicates that 39% of Fortune 500 companies plan to use smart
cards in this way by 2006.
To see financial statements:
http://bankrupt.com/misc/Gemplus_2003.htm
---------
Footnotes
[1] Gross cash flow is defined as net cash flow from operating
activities excluding changes in operating assets and
liabilities.
[2] Average Revenue Per User.
[3] EMV is a jointly defined set of specifications adopted by
Europay, MasterCard and Visa at the end of 1997 for
migration of bank cards to smart card technology.
[4] GeldKarte is an electronic purse system available on most
German banking cards.
[5] Adjusted for currency fluctuations, discontinued operations
& acquisitions.
[6] Net cash flow is the sum of net cash flow from operating
activities, net cash flow from investing activities, net
cash flow from financing activities and the effect of
exchange rates on cash.
=====================
N E T H E R L A N D S
=====================
KLM ROYAL: E.U. Commission Clears Merger with Air France
--------------------------------------------------------
The European Commission has authorized the consolidation of Air
France and KLM after the companies successfully resolved
concerns about reduced competition, mainly between Paris and
Amsterdam and between Europe and the United States.
The review of the first significant merger in the European
airline industry has led the Commission to seek the surrender of
94 single take-off and landing slots per day. This will enable
rival airlines to start a service where competition would have
been eliminated or significantly reduced therefore preserving
choice of carriers and competitive prices for European
travelers.
The Commission also obtained assurances from the Dutch and the
French governments that they would give traffic rights to other
carriers wishing to stop over in Amsterdam or Paris en route to
the United States or other non-E.U. destinations. They also
assured they would refrain from regulating prices on long haul
routes where other carriers offer indirect services competing
with Air France and KLM.
"The outcome of this case shows that the long-awaited
consolidation of the European airline sector can be done in full
respect of competition rules. The merger between KLM and Air
France will provide air passengers with a greater choice of
destinations and services without having to pay a higher price
on those routes where their presence is the strongest,"
Competition Commissioner Mario Monti said.
Consolidation welcome
On December 18, 2003, Air France and KLM notified a framework
agreement according to which Air France will acquire control of
KLM.
Although the deal will create the largest airline group in
Europe, the companies' networks are largely complementary, the
Commission's investigation showed. Air France is more present
than KLM in Southern Europe and Africa, for example, whereas KLM
operates a higher number of routes to Northern Europe and the
Far East.
From a consumer point of view, the combination will allow KLM
customers to have access to more than 90 new destinations while
Air France customers will be offered 40 new routes. The
combination of the two airlines is also expected to bring
benefits to consumers and the economy as a whole from costs
savings as well as from service improvements resulting from
combined networks.
But problems needed to be solved
The Commission has always looked favorably on the consolidation
on the airline sector, but has also insisted that consolidation
would not be done at the detriment of consumers. This is true
for the alliances that have taken place in the last decade. It
is even truer for mergers that are cleared once and for all, as
opposed to the six-year antitrust immunity usually granted to
alliances.
Despite it being largely complementary, the Air France/KLM deal
-- the first real merger in the European airline industry --
will eliminate or significantly reduce competition on 14 routes
where they currently compete actively or potentially. These
are:
(1) Intra-European routes (Amsterdam-Paris, Amsterdam-Lyon,
Amsterdam-Marseille, Amsterdam-Toulouse, Amsterdam-Bordeaux,
Amsterdam-Rome, Amsterdam-Milan, Amsterdam-Venice and Amsterdam-
Bologna).
(2) Intercontinental or long haul routes (Amsterdam-New York,
Paris-Detroit, Amsterdam-Atlanta, Paris-Lagos (Nigeria) and
Amsterdam-Lagos).
The Commission's experience in this field shows that the main
barrier to market entry lies in the scarcity of take-off and
landing rights at the highly congested European airports and
Paris and Amsterdam are no exception. Remaining national
regulatory restrictions may also prevent free competition
especially with regard to indirect flights on long haul routes.
Commitments
In order to overcome the Commission's concerns, the parties have
committed themselves to surrender 47 pair of slots (i.e. 94
single take-off and landing slots) per day [1]. This creates
the conditions for a total of up to 31 [2] new return flights a
day to emerge on the affected routes. This means, for example,
that a competitor could start six new daily return flights
between Paris and Amsterdam and the same or another competitor
would also offer one daily return flight between Amsterdam and
New York guaranteeing that passengers on these routes have a
choice of services and competitive prices.
For the first time, the surrender of slots is for an unlimited
duration, compared with six years for the alliances, and the
slots must be returned to the slot coordinator if they are
misused or underused by the new entrant, not to the airline
partners. In order to encourage market entry, a new operator
might also acquire so-called grandfather rights over the slots
obtained for the Paris-Amsterdam route after a confidential
period, provided that the new entrant stays on the route for at
least three years. This means he will be able to use them for
other destinations once the high-speed railway link will be
completed between the two capitals or when other competitors
will have emerged. The impact of such a provision is to
increase the value of the slots released, and, thereby, to
significantly reduce the risk of lack of new entry.
As usual, the undertaking on slots is accompanied by measures
requiring the airline partners to refrain from increasing their
offer of flights ("frequency freeze") on the affected routes to
give the new entrant(s) a fair chance to establish
itself/themselves as (a) credible competitor(s). Among the
other undertakings given, KLM and Air France also agreed to
enter into so-called inter-modal agreements with land transport
companies, for example to increase the attractiveness of the
Thalys railway link between Paris and Amsterdam (e.g. a business
passenger would make the outward trip by train and the return by
plane to take advantage of higher air frequencies).
Finally, the Dutch and French national authorities have assured
the Commission they would give traffic rights to other carriers
wishing to stop over in Amsterdam or Paris en route to the
United States or other non-EU destinations. They also assured
they would refrain from regulating prices on long haul routes.
This is important because the Commission took into account the
existence of indirect, or network, competition on long-haul
routes as a factor moderating the finding of dominance.
Background
Consolidation in the airline industry has until now taken the
form of alliances which do not involve a change in ownership.
Examples of alliances to which the Commission granted a six-year
antitrust immunity, according to Regulation 3975/87 on the
application of competition rules to agreements relating to air
transport between E.U. airports, include Lufthansa/Austrian
Airlines, British Airways/SN Brussels Airlines and BA/Iberia.
The Commission is currently finalizing its review of another
such alliance between Air France and Alitalia.
The Commission is also still reviewing the impact on competition
of the Skyteam alliance between Air France, Alitalia and Delta
among others.
---------
Footnotes
[1] To be able to operate a return flight a day a company needs
four slots: one to take off at airport A + one to land at
airport B plus another 2 to make the return trip in the
evening, for example.
[2] Not all airports are congested (e.g. Lagos) and therefore
slots may not need to be surrendered at both ends of a given
route.
KONINKLIJKE AHOLD: Mulls Divestment of Two U.S. Subsidiaries
------------------------------------------------------------
Ahold announced its intention to divest its BI-LO and Bruno's
subsidiaries, two of the leading supermarket chains in the
Southeast region of the United States.
The intended divestment of BI-LO and Bruno's is part of Ahold's
strategy to optimize its portfolio and to strengthen its
financial position by reducing debt. Ahold has made a strategic
decision to focus its efforts on its remaining U.S. food retail
operations, including Stop & Shop, Giant-Landover, Giant-
Carlisle, Tops, and Peapod, positioning those companies for
growth. Ahold has retained William Blair & Company, LLC to
assist in the sale process. Ahold intends to complete the BI-LO
and Bruno's divestment process in 2004.
Commenting on the announcement, Anders Moberg, Ahold President &
CEO said, "We believe that BI-LO and Bruno's are both powerful
brands and will have a bright future under new ownership. We
hope to identify buyers whose strategic priorities include
further strengthening these businesses to succeed in a
competitive but fast-growing marketplace."
Ahold USA President and CEO, Bill Grize commented: "We are
confident that this decision will position BI-LO and Bruno's for
long-term growth in their respective markets, with the intent of
creating more value for associates and customers."
Dean Cohagan, President and CEO of BI-LO and Bruno's said, "With
decades-long heritages of outstanding customer service, deep
roots in the communities we serve, experienced management teams
and strategically attractive store locations in one of the
fastest-growing regions of the United States, BI-LO and Bruno's
are strong businesses well-positioned to thrive in the years
ahead. We are confident that the BI-LO and Bruno's tradition of
excellence will be continued under new ownership."
BI-LO, headquartered in Mauldin, South Carolina, was acquired by
Ahold in 1977. The company operates 292 stores in South
Carolina, North Carolina, Georgia and Tennessee, with unaudited
net sales in 2003 of $3,197 million. BI-LO employs
approximately 27,000 associates.
Bruno's, based in Birmingham, Alabama, was acquired by Ahold in
2001. The company operates 178 stores in Alabama, Florida,
Georgia and Mississippi, with unaudited net sales in 2003 of
US$1,775 million. Bruno's employs approximately 14,500
associates.
CONTACT: AHOLD
Corporate Communications
Phone: +31.75.659.57.20
PETROPLUS N.V.: Completes EUR72 Million Sale of Tango
-----------------------------------------------------
Petroplus International N.V. (corporate credit rating rated 'B+'
by Standard & Poor's) and Kuwait Petroleum Nederland B.V., a
subsidiary of Kuwait Petroleum Corporation, are pleased to
announce that they have signed a binding sale and purchase
agreement for Tango, the successful unmanned service station
chain.
Under the terms of the agreement, Kuwait Petroleum will acquire
the Tango activities and legal companies in The Netherlands,
Belgium and Spain. Formal completion of the transaction remains
subject to obtaining regulatory approval from the Dutch anti-
trust authority (Nederlandse Mededingingsautoriteit). The
German anti-trust authority (Bundeskartellamt) has responded
that it has no objections to the planned transaction.
Under the terms of the sale and purchase agreement, Petroplus
will receive a total cash consideration of approximately EUR72
million for its 95% shareholding, net of working capital and all
transaction fees. Provided that regulatory approval is obtained,
Petroplus will realize a book profit of approximately EUR52
million from the sale of Tango in the first quarter of 2004. It
is anticipated that the Tango activities will be transferred
with effect from March 1, 2004.
LNG project Milford Haven
Petroplus also issues an update on the developments with regard
to its LNG project in Milford Haven (U.K.). Negotiations with
the potential partners (BG Energy Holdings Ltd. and Petronas)
are progressing in line with expectations.
The expectation is now justified that the LNG project will go
ahead as planned. Provided that over the coming months the
project continues to develop in line with expectations,
construction will start in the second half of 2004. Completion
of the transactions with both partners is also expected to take
place in the second half of 2004 at which point Petroplus
anticipates to realize a book profit which is significantly [1]
higher than the Tango book profit of EUR52 million.
2003 fourth quarter and full year results
Petroplus further announces that its fourth quarter results will
be negative due to the disappointing performance of the Antwerp
refinery, of the Dubai supply & trading office and the
wholesaling activities. Furthermore the weak U.S. dollar had a
negative influence on the overall performance of the group. The
cumulative effect of these negative influences is such that the
consolidated net income [2] of the Petroplus group over the full
year 2003 will be negative and will not show a material
improvement compared to the full year results of 2002.
The Antwerp refinery was in reorganization mode during the
fourth quarter and the crude unit was closed over the entire
period. Late December 2003, a social plan was agreed with the
workers council and labor unions. A total of 55 permanent and
10 temporary positions will become redundant as a consequence of
the reorganization. The sub-optimal operational circumstances
for the plant during the fourth quarter had considerable
negative consequences for its performance. Furthermore, due to
lower then expected ULSD margins, the new desulphurisation unit
did not yield the anticipated results.
Wholesaling activities have been difficult due to mild weather
conditions and plentiful product supply having a negative effect
on margins. In Germany, Petroplus is considering various
options regarding the future of its wholesale activities.
Further announcements will be made in due course.
The Dubai office showed continuing negative results in the
fourth quarter. Furthermore, due to non-performance of an
important counter party, a provision had to be taken into the
2003 accounts. As a result of these events Petroplus has
decided to transfer the management of the Dubai supply & trading
activities to its European supply & trading head office in Zug.
As of January 1, 2004 the Dubai office is a representative and
originating office only. Petroplus will vigorously pursue its
claim against the non-performing counter party.
Petroplus realizes its refining margins in U.S. dollars.
Although there is a mitigating effect through the other
activities of the group, the further weakening of the U.S.
dollar in the fourth quarter had an overall negative effect on
Petroplus' gross margin.
In line with the financial calendar, Petroplus will publish its
2003 full year results in the morning of March 9, 2004.
--------
Footnote
[1] "Strong" according to the Dutch "scale of Mock"
[2] Net income before EUR40 million extraordinary cost for
Antwerp reorganization and special write-down.)
CONTACT: PETROPLUS N.V.
P.O. Box 85002 3009
MA Rotterdam
The Netherlands
Phone: +31 (0)10 242 5900
Fax: +31 (0)10 242 6052
E-mail: IR@petroplus.nl Website:
Home Page: http://www.petroplusinternational.com
Investor Relations
Martijn Schuttevaer
Phone: + 31 10 242 5900
ING
Financial Advisor
James Lawrie
Phone: + 31 20 563 8537
Kuwait Petroleum:
Business Communications
Guy Gogne
Phone: + 32 32 413 300
VENDEX KBB: Ratings Under Review for Possible Downgrade
-------------------------------------------------------
Moody's Investors Service placed the Ba1 senior implied rating,
Ba1 issuer, and Ba3 EUR200 million senior subordinated notes due
2010 of Koninklijke Vendex KBB on review for possible downgrade.
The rating action was triggered by the company's warning that
2004 full year earnings from its second largest generator of
income, its Fashion division, will be lower than last year's.
Moody's said it will review the operating environment in Holland
and Belgium and an assessment by the agency of the outlook for
Vendex's business segments over intermediate term, Vendex's
working capital management, financial flexibility, and the
company's capacity to improve its financial profile.
Amsterdam-based Vendex reported turnover of EUR4.7 billion in
the year to January 2003.
===========
N O R W A Y
===========
STOLT NIELSEN: Results Conference Call Set February 19
------------------------------------------------------
Stolt-Nielsen S.A. (NasdaqNM: SNSA; Oslo Stock Exchange: SNI)
will hold a conference call to discuss the fourth quarter and
year-end 2003 results on Thursday, February 19, 2004 at 10:00
a.m. EST (3:00 p.m. GMT).
Participating in the call will be:
Mr. Niels G. Stolt-Nielsen - Chief Executive Officer,
Stolt-Nielsen S.A.
Mr. Jan Chr. Engelhardtsen - Chief Financial Officer,
Stolt-Nielsen S.A.
Mr. James B. Hurlock - Interim Chief Executive Officer,
Stolt-Nielsen Transportation Group
Mr. Hans Feringa - Managing Director of Tanker Chartering,
Stolt-Nielsen Transportation Group
Mr. James Stove Lorentzen - Chief Executive Officer,
Stolt Sea Farm
Anyone wishing to participate in the call should dial
Phone: +1 866-389-9773 (in U.S) or
Phone: +44 (0) 1452 569 113 (outside U.S.) at that time. Phone
lines will open 10 minutes before the call.
If you cannot participate in this call there is a Postview
facility (a taped recording of the conference call) available
directly after the conference call until 5:00 p.m. EST on
Friday, February 20, 2004.
Phone: +1 800-642-1687 (in U.S.) or
Phone: +44 (0) 1452 550 000 (outside U.S.) and quote the call
reservation number: 119988.
Alternatively, a Live Web cast conference call is available via
the company's Internet site http://www.stolt-nielsen.com
commencing on Thursday, February 19, 2004 at 10:00 a.m. EST
(3:00 p.m. GMT). A playback of the conference call commences on
Thursday, February 19, 2004 after 12:00 noon EST (5:00 p.m.
GMT).
*****
Stolt-Nielsen in December said its primary lenders have agreed
to extend the waivers of covenant defaults until May 21, 2004.
It also reported it will pay down its $160 million revolving
credit facility by US$20 million on February 29, 2004, and that
the Company has received an extension on repayment of the
remaining US$140 million until May 21, 2004.
CONTACT: STOLT-NIELSEN
Richard M. Lemanski
8 Sound Shore Drive
Greenwich, CT 06830
U.S.A.
Phone: +1 203 625 3604
Fax: +1 203 625 3525
Email: rlemanski@stolt.com
===========
P O L A N D
===========
KOMPANIA WEGLOWA: Full-year 2003 Losses Below Expectations
----------------------------------------------------------
Kompania Weglowa posted lower-than-expected loss of PLN687.9
million in 2003, according to Warsaw Business Journal. The
largest European coal company was expecting losses of more than
PLN700 million for the year.
The results were boosted by higher demand and prices for coal,
the company's president, Maksymilian Klank, said. Tighter cost
controls also helped, as well as the payment of PLN376.3 million
in debts.
The company is expecting to post a net profit of PLN60 million
in 2004, according to Mr. Klank. This is in line with
expectations for coal level extraction reaching 50 million ton.
Kompania Weglowa is expecting to receive shares worth PLN400
million from the state within a month.
===========
R U S S I A
===========
BOLOGOVSKY FACTORY: Seeks Buyers for RUB15 Million- Properties
--------------------------------------------------------------
The bankruptcy commissioner of Bologovsky factory Strommashina
will hold an auction involving various properties of the company
on March 9, 2004 at Tver', 5 Yeropheiev street, office 26.
The proceedings will begin with a competitive bidding at 11
a.m., during which the bidder with the highest offer will be
made to sign an agreement with the Municipal Formation
Bologovsky region. The agreement will lay down, among others,
the duties of the buyer with regard to the maintenance and use
of the properties acquired.
The auction will begin at 1 a.m. and involve properties not
taken up during the competitive bidding. During this
proceeding, the properties will be sold as a single lot.
These are the properties up for bidding/auction:
(1) Share 736/1000 in the ownership of the production building
occupying 40,902.5 square meters;
(2) Administrative building occupying 1,033.1 square meters;
(3) Administrative and on-site facilities building occupying
4,376.7 square meters;
(4) Warehouses for raw materials and finished products,
occupying 423.6 square meters;
(5) Transportation department occupying 1,624.8 square meters;
(6) Building housing a power-generation plant occupying 1,679.7
square meters;
(7) Building housing a carbon-dioxide plant occupying 401.5
square meters;
(8) Construction site occupying 238 square meters; and
(9) Other buildings, constructions and equipment.
The total value of these properties is RUB15,000,000
(US$522,648.84). Bids shall be raised by increments of
RUB200,000 (US$6,968.64); the highest bidder shall be declared
winner.
Interested buyers have until March 1, 2004 to signify their
participation in the bidding/auction. Applications are accepted
everyday, except on Sundays, from 9 a.m. until 6 p.m.
Applications should be mailed to this address: Tver', 5
Yeropheiev street, office 26.
To take part in the competitive bidding, an applicant must
transfer caution deposit equal to RUB130,000; and in the
auction, RUB1,500,000; before March 1, 2004 to this current
account -- Nø 40702810507000000155 -- of Bologovsky factory
Strommashina with the branch Tverskoy Public Company Joint Stock
Commercial Bank Avangard in the city of Tver'.
FAETON: Largest Management Company in Saint-Petersburg Splits
-------------------------------------------------------------
Faeton holding company will be separated into two parts in equal
shares between the two owners, Sergei Snopko and Vladimir
Khilchenko, who have developed different views on business
development and different professional priorities.
The company was established on December 12, 1991. The holding
company ranks No.2 in terms of value network of gas stations in
Saint-Petersburg. Faeton has 44 gas stations (part of them is
leased). Other than its fuel business, the holding company is
engaged in real estate, agriculture, innovation technologies,
peat processing and transport. The holding company has a
controlling interest in Novgorod Planet production plant.
Today, the Faeton holding company is one of the largest
management companies in Saint-Petersburg and Leningradskaya
Oblast including more than 10 business trends, more than 25
companies in Saint-Petersburg, Leningradskaya Oblast and other
regions of Russia and more than 4,000 employees.
Economic indices of the company as of FY2002:
Revenues: US$7,829,000
Investments in fixed assets: US$10,556,000
Turnover of the company: US$109 million
Number of motor vehicles: 767
Number of gas stations: 39
Number of employees: 480
Last year the company announced plans to list on the stock
exchange before 2005. The capitalization of the company is
estimated at US$500 million.
In explaining the split, board chairman, Sergei Snopko, said the
assets of the holding company -- worth about US$90 million --
will be divided in equal shares. This "equalization" of assets
will be achieved via the distribution of debentures on bank
credits between shareholders.
The holding company has debts of US$10 million, of which US$2
million was incurred by entities controlled by Vladimir
Khilchenko, Mr. Snopko says.
After the separation, Mr. Snopko will remain chairman of the
board and the sole owner of Faeton holding company, which shall
be composed of:
(1) A network of 44 gas stations in Saint-Petersburg (7 gas
stations are scheduled for construction in 2004. The cost
of construction for one gas station is US$800,000);
(2) A network of 27 stores in Saint-Petersburg and
Leningradskaya Oblast;
(3) Faeton-Aero trading company (wholesale deliveries of
agricultural products);
(4) Peat processing companies in Leningradskaya Oblast (new
equipment was acquired for the company in Gladkoye
settlement, Tosnensky district for EUR300,000).
Mr. Khilchenko, on the other hand, will be the owner and general
director of Sozvezdiye (limited liability company), and will
take with him:
(1) Faeton ADS (slabs for takeoff/landing runways);
(2) All transport companies (1,000 units of motor vehicles);
(3) Companies engaged in stock purchases;
(4) Development direction of business and construction business
(commercially attractive area of Leto company);
(5) Planeta production plant; and
(6) Innovation projects.
Sozvezdiye plans to join the stock market independently.
Completion of the separation is expected in March.
GORNOMARYSKY: Court Prescribes Bankruptcy Procedure
---------------------------------------------------
The regional arbitration court based in Republic Mary El has
commenced bankruptcy proceedings against Gornomarysky, a
publicly owned brick factory. The case is docketed as Case
#A38-2228-9/103-03. Averianova I.P. has been appointed
temporary administrator of the firm. Creditors have until April
7, 2004 to file proofs of claim.
For additional information, contact the liquidator:
424011, Republic of Mary El,
Ioshkar Ola, 26 Geroev Stalingradskoy
Bytvy street 23
OR
The company:
425350, Republic Mary El,
Kozmodemyansk, 28 Promyshlennaya street.
KORUND: Duma Probes Order Mandating Return of Divested Assets
-------------------------------------------------------------
The chairman of the State Duma of the Russian Federation, Boris
Gryzlov, ordered an investigation into the return of the
factories -- Korund and Zarya -- in the city of Dzerzhinsk of
the Nizhny Novgorod region to their parent, Korund, a public
company.
The return of the assets was ordered in November 2003 by the
Nizhny Novgorod regional court of arbitration. The decision
says Enterprise Korund, Chernorechenskoye, and Chernorechensky
chemical factory must return to Korund the properties that were
transferred as payment for their cash injection.
Korund commenced bankruptcy proceedings in early 2002 with
RUB1.479 billion in debts that included approximately RUB380
million owed to public company Nizhnovenergo. In May 2003, then
bankruptcy commissioner Mikhail Gorchakov auctioned shares of
the company in Chernorechensky chemistry factory, Enterprise
Korund, Cherrnorechenskoye, raising RUB51 million. Proceeds of
the sale were used to pay employees wages amounting to RUB50
million.
Mr. Gorchakov ceased being bankruptcy commissioner of Korund in
June 2003 after the Nizhny Novgorod regional court replaced him
with O. Vdovin.
RENAISSANCE CAPITAL: Standard & Poor's Affirms 'B-/C' Ratings
-------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on
Russian investment bank Renaissance Capital Holdings Ltd. (RCHL)
to positive from stable. At the same time, the 'B-/C' long- and
short-term counter party credit ratings were affirmed.
"The outlook revision reflects the company's strengthening
financial profile, driven by the continued expansion of the
Russian securities markets and the positive development of the
Russian economy," said Standard & Poor's credit analyst Irina
Penkina.
The ratings on RCHL are supported by the company's good
commercial prospects, stemming from its leading position in
equity brokerage and investment advisory services. This is
offset by the high concentration of RCHL's financial flows on a
limited number of Russian issuers, and its vulnerability to any
substantial drop in market activity.
RCHL is the Bermuda-domiciled, ultimate holding company of
Renaissance Capital group (RenCap), a leading Russian equity
brokerage and advisory house. RenCap has a diversified product
range, which includes dealing with Russian equities, ADRs,
fixed-income instruments, investment banking, and merchant
banking.
The positive outlook on RCHL reflects Standard & Poor's
expectation that RenCap will increase and diversify its business
flows, and grow its equity base as the Russian economy and
capital markets continue to expand.
"Future ratings will be sensitive to the changes in the
company's risk profile with respect to single concentrations as
well as general risk management. The future development and
risks of the Russian securities markets will also affect the
ratings on the group," said Ms. Penkina.
ANALYST: Irina Penkina
Moscow
Phone: (7) 095-783-4070
Email: irina_penkina@standardandpoors.com
Ekaterina Trofimova
Paris
Phone: (33) 1-4420-6786
Email: ekaterina_trofimova@standardandpoors.com
Standard & Poor's Ratings Desks
London: (44) 20-7176-7400
Paris: (33) 1-4420-6705
Stockholm: (46) 8-440-5916
Email: FIG_Europe@standardandpoors.com
Press Office Hotline
Phone: (44) 20-7176-3605
Email: media_europe@standardandpoors.com
SCIENCE AND TECHNIQUES: In Bankruptcy Monitoring Procedure
----------------------------------------------------------
The Orlov regional court of arbitration ordered a bankruptcy
monitoring procedure for Limited Company Science and Techniques
Center of torsional equipment and non-profile devices. The
decision is in relation to an arbitration case docketed as A48-
4093/03-176 dated November 26, 2003.
I. Kolesnikov has been appointed temporary administrator.
CONTACT: SCIENCE AND TECHNIQUES CENTER
302000, Orel'
Mashinostroitelnaya str.,6
I.KOLESNIKOV
302023, Orel'
Keramicheskiy alley 5 of.17
SEA TRADE: Under Bankruptcy Proceedings
---------------------------------------
The Sakhalin regional court of arbitration adjudged Federal
State Unitary Enterprise Sea Trade Port Shahtersk bankrupt. The
decision is in relation to an arbitration case docketed as A59-
399/03-C22 dated January 1, 2004.
Filatov V.N., a member in the Not For Profit Partnership MRSO
TOGO, was appointed bankruptcy commissioner. Creditors wanting
to submit claims are required to send demands directly to the
obligator.
===========
S W E D E N
===========
SAS GROUP: Harmonizes Business, Legal Structure
-----------------------------------------------
In 2001 a single listed share was introduced through the
establishment of SAS AB, the new holding company of the SAS
Group. In 2002, the SAS Group introduced a clearer business
structure with five individual business areas. The structure is
based on the concept of decentralization, responsibility for
earnings and transparency. The SAS Group's experience from the
creation of SAS AB and the business structure has been clearly
positive from most perspectives.
However, the SAS Group legal structure has so far not fully
reflected the business structure. To improve conditions for
profitable and competitive growth the SAS Group has initiated a
process to harmonize the legal structure with the business
structure through various steps, beginning with the transfer of
employees in Corporate Functions from the SAS Consortium to SAS
AB in November 2003, and continuing by the transfer of a number
of subsidiaries of the SAS Consortium to SAS AB, on market
terms, in December 2003, which is described in the Year End
Report.
As a natural step in this process, SAS AB has issued an
irrevocable undertaking to guarantee the interest bearing
liabilities, leasing obligations and other financial obligations
of the SAS Consortium, as of December 31, 2003.
Furthermore, the SAS AB board of directors has mandated the
Group Management to initiate a process for the transfer of the
SAS Ground Services, SAS Technical Services and SAS Trading
business units of the SAS Consortium into separate subsidiaries
of SAS AB, and also to further evaluate the future structure of
Scandinavian Airlines.
The SAS legal structure as of December 2003, as well as the
executed "Irrevocable Undertaking" of SAS AB, can be downloaded
from the SAS Group's homepage http://www.sasgroup.netunder
Financial reports/ Presentation slides.
SAS GROUP: Full-year 2003 Losses Balloon to SEK1.4 Billion
----------------------------------------------------------
The year in brief
(a) Operating revenue for the full year amounted to MSEK
57,754 (SEK64,944), a decrease of 11.1%. Operating revenue
for the fourth quarter amounted to MSEK 13,824 (SEK16,709).
For comparable units and adjusted for currency effects,
operating revenue for the period decreased by 8.7% or
MSEK 5,639 and by 11.7% in the fourth quarter.
(b) Income before depreciation and leasing costs for aircraft
(EBITDAR) amounted to MSEK3,761 (SEK7,294) for the year.
EBITDAR in the fourth quarter was MSEK814 (SEK1,332).
Adjusted for restructuring costs and non-recurring costs,
EBITDAR was MSEK4,269 (SEK7,261) for the full year and
MSEK1,167 (SEK1,243) for the fourth quarter.
(c) Income before capital gains and nonrecurring items amounted
to -MSEK2,221 (-736) for the period. This negative result
is mainly attributable to the first quarter. Income for
the fourth quarter was -MSEK415 (-SEK647).
(d) Income before tax amounted to -MSEK1,470 (-SEK450) and
-MSEK245 (-SEK683) for the fourth quarter.
(e) Income after tax amounted to -MSEK1,415 (-SEK132) and
-MSEK581 (-SEK284) for the fourth quarter.
(f) CFROI for 2003 was 7% (13%).
(g) Earnings per share for the SAS Group amounted to SEK-8.60
(-SEK0.81) for the full year and -SEK3.53 (-SEK1.73) for the
fourth quarter. Equity per share was SEK79.84 (SEK92.33).
(h) Currency-adjusted unit cost for Scandinavian Airlines
decreased by 19% in the fourth quarter.
(i) The SAS Group's restructuring costs for 2003 amounted to
MSEK496 and mainly relate to a provision for payroll
expenses for 2004 for employees with non-working
notice. Write-downs of MSEK82 were made during the year.
(j) The Board of Directors proposes to the Annual General
Meeting that no dividend be paid to SAS AB's shareholders
for the 2003 fiscal year.
(k) The SAS Group's board and management's primary aim is to
ensure that the SAS Group attains positive earnings before
tax, capital gains and nonrecurring items for the full-year
2004.
SKANDIA LIV: Sells If Stake to Sampo for SEK2.4 Billion
-------------------------------------------------------
An agreement has been reached with Sampo over its purchase of
Skandia Liv's 10.06% stake in If at a price of SEK2,414 million.
As part of the transaction, Sampo will also acquire Skandia's
19.36% stake and Storebrand's 22.47% stake in If. The agreed
price values 100% of If at SEK24 billion.
The transaction has been approved by the boards of Skandia Liv,
Skandia, Storebrand and Sampo. The deal is only subject to
customary regulatory approvals and is expected to be completed
during the second quarter of 2004. Payment will be made in
cash.
Skandia Liv purchased 10.06% of If from Skandia in January 2002.
The acquisition value of Skandia Liv's holding in If is SEK1,744
million. The realized capital gain will thus be SEK670 million,
corresponding to 0.3% of Skandia Liv's total portfolio value.
The return on Skandia Liv's investment in If was 38.4%. By
comparison, it can be noted that an investment that had matched
the index for the Stockholm Stock Exchange (SIXRX) during the
same period would have generated a negative return of 5.6%.
Carnegie and Morgan Stanley served as financial advisors to
Skandia Liv.
"All investments made by Skandia Liv aim to generate a favorable
long-term return to our policyholders," comments Urban
Backstrom, president of Skandia Liv. "The investment in If has
been included in Skandia Liv's portfolio of unlisted companies.
It is very gratifying that the investment in If was so
profitable."
"We are very satisfied with the transaction," says Malin
Bjorkmo, head of Asset Management at Skandia Liv. "In our
judgment the price is well in line with or in excess of what we
could have received in connection with a stock market
introduction."
CONTACT: SKANDIA LIV
SE-103 50 Stockholm
Phone: +46-8-788 10 00
Fax: +46-8788 10 40
Malin Bjorkmo, Head of Asset Management
Phone: +46-8-788 43 96
Gunilla Svensson, Press Manager, Skandia
Phone: +46-8-788 42 97
===========================
U N I T E D K I N G D O M
===========================
3D MICRO: In Voluntary Liquidation
----------------------------------
At an Extraordinary General Meeting of the Members of 3D Micro
Limited, duly convened and held at Meridian House, 62 Station
Road, North Chingford, London E4 7BA, on January 27, 2004, at
3.50 pm, the following Resolution was duly passed:
"That the Company be wound up voluntarily."
J. Hoad, Director/Chairman
BOOKHAM TECHNOLOGY: FY2003 Net Loss Down to GBP79.4 Million
-----------------------------------------------------------
Bookham Technology plc (LSE:BHM, NASDAQ: BKHM), a leading
provider of optical and RF components, modules and subsystems,
used in various applications and industries, including
telecommunications, announced results for the fourth quarter and
full year ended December 31, 2003.
Highlights for the fourth quarter ended December 31, 2003
Revenues in the fourth quarter (in U.S. Dollars, the principal
currency in which the company receives orders) were $40.5
million, up 9.2% sequentially from $37.1 million in the third
quarter 2003, and up 75.3% on the comparable quarter in 2002.
In Sterling, the revenues were GBP24.0 million, up 3.9% on the
third quarter 2003, from GBP23.1 million, and up 67.8% from
GBP14.3 million in the fourth quarter 2002. The lower
sequential increase in Sterling terms reflects the relative
strength of Sterling against the U.S. Dollar in recent months.
Nortel Networks and Marconi Communications continued to remain
strong customers, representing 58% and 9% of sales respectively.
Revenues from other customers (exclusive of Nortel and Marconi)
represented 33% of revenues in the fourth quarter, up 18%
sequentially over the third quarter of 2003 and up 40% from the
first quarter 2003, continuing the progress made throughout 2003
in expanding the customer base.
Gross margin, excluding exceptional, was positive, reaching 6.3%
of revenues, representing a gross profit of GBP1.5 million, in
line with management expectations. This was up from negative
1.5% of revenue in the third quarter of 2003 and negative 38.5%
in the fourth quarter of 2002. Under U.S. GAAP, gross margin
reached 10.7% in the quarter.
Total cash burn for the fourth quarter of 2003 was reduced by
61.1% sequentially going from GBP22.9 million in the third
quarter 2003 to GBP8.9 million ($15.0 million) in the fourth
quarter 2003, as a result of the completion of the restructuring
actions undertaken in 2003.
The net loss under U.K. GAAP, including exceptional, was
GBP7.1 million ($11.9 million); a reduction of 75.7% from
GBP29.2 million in the third quarter. The net loss for the
fourth quarter 2003 includes exceptional income of GBP4.3
million. This compares with charges of GBP14.6 million in the
third quarter 2003. Under U.S. GAAP, the net loss was GBP5.5
million ($9.3 million).
Meetings to approve the proposed acquisition of New Focus,
Inc. will take place on Friday March 5, 2004.
Commenting on the results, Giorgio Anania, President and Chief
Executive Officer, said: "During the third quarter of 2003, we
essentially completed the restructuring that we embarked upon
following the acquisition of Nortel Networks Optical Components
("NNOC") in November 2002. As a result, the fourth quarter saw
a substantial improvement in the financials of the company, with
significantly reduced cash burn, reduced net loss and positive
gross margins.
"At the same time, we continued to increase revenues, a trend
which has now been positive for eight successive quarters. Most
importantly for our future development, sales to customers other
than Nortel and Marconi have been growing significantly,
reflecting the expanding customer base of the company and the
effect of design wins achieved over the last several quarters,
which are now beginning to move to the volume manufacturing
stage. We also made substantial progress in the quarter with a
number of key integration activities, including the integration
of Ignis Optics and Cierra, and continuing planning for the
integration of the proposed acquisition of New Focus.
"Looking back over 2003, we have fully met our objectives of
integrating and restructuring NNOC, significantly reduced the
cost base and improved the overall company financials, developed
revenue stability through our relationships with Nortel Networks
and Marconi, and in addition we are securing revenue growth
through developing traction with new customers. Throughout this
period we have also continued to invest heavily in new products
to generate the future growth that we require and to position
ourselves for a future rebound in the optical components market.
2004 presents a continuing set of challenges, but one which we
feel we shall be addressing from a position that is
significantly strengthened."
Operating review - A review of 2003
2003 was a significant year for the company as it worked towards
its three point strategy: continuing to implement the most
competitive cost structure; continuing to gain market share in
telecommunications, even in a flat telecoms market; and
investing to develop financially attractive product
opportunities outside of telecom.
Acquisitions
Bookham has been a key player in the consolidation of the
telecoms optical components market, driven by customers' demands
for fewer larger component and subsystem suppliers that can
deliver cost competitive pricing through economies of scale.
This active consolidation commenced in 2002 with the
acquisitions of Marconi's and Nortel Networks' optical
components businesses (respectively "MOC" and "NNOC").
In the third quarter of 2003, the company completed its
successful integration of NNOC and commenced the consolidation
of its Ottawa wafer fabrication facility into the Caswell (U.K.)
facility.
In addition, during 2003, the company announced two completed
acquisitions and one proposed acquisition, all of which the
company believes will serve to consolidate its position as the
number two component supplier to the telecom equipment market
worldwide.
In July 2003, the company completed the acquisition of Cierra
Photonics Inc. who design and manufacture thin film filters and
other components for the fiber optics telecommunications
industry. This acquisition gave the company access to a new,
large market area, allowed cost reduction by internal sourcing
of some of the company's components used in its amplifiers and
also improved the company's competitive position in optical
subsystems. This acquisition helps growth in this area and also
underscores the company's commitment to expand its position in
the marketplace.
In early October 2003, the company acquired Ignis Optics Inc.
a provider of optical modules for communications networks,
based in San Jose, California. Ignis designs and manufactures
small form-factor pluggable (SFP and XFP) single-mode optical
transceivers for current and next-generation optical datacom and
telecom networks. This acquisition allows the company to enter
the datacom market, and presents a significant market
opportunity for the company's know-how and manufacturing
capabilities.
In addition, on September 22, 2003 the company announced that it
had signed an agreement under which it would acquire New Focus,
Inc.
New Focus is a leading provider of photonics and microwave
solutions to non-telecom diversified markets, including the
semiconductor, defense research, industrial, biotech/medical and
telecom test and measurement industries. Important product
solutions include tunable lasers, microwave radio-frequency
amplifiers, opto-electronics, photonics subsystems and photonic
tools. This proposed acquisition is expected to increase the
critical mass of the company's non-telecom business, enabling
the company to diversify its customer base, as well as provide
significant additional cash resources. New Focus's operations
are located in San Jose, California, where the company employs
approximately 200 people. New Focus also has a wholly owned,
large manufacturing facility in Shenzhen, China.
The shareholder meetings to vote for the proposed acquisition,
for both companies, have been scheduled for Friday March 5,
2004. Assuming approval, the company would expect closure of
the transaction a few days after the shareholder vote.
Restructuring
As part of the company's strategy, to implement the most
competitive cost structure whilst improving its financials,
Bookham announced a number of significant cost reduction plans.
In September 2003, the company announced the completion of a
major cost reduction initiative: the consolidation of its two
main wafer fabrication facilities. The consolidation of the
Ottawa wafer fabrication facility into the company's Caswell,
U.K. facility was a large element of the company's cost
reduction plans, with the benefits being seen in the fourth
quarter 2003, a full quarter ahead of the company's original
estimate of the first quarter 2004. As part of the fabrication
consolidation, the required inventory was built to plan.
Initial runs of chips for product qualifications have been built
at the Caswell site and the products built using these chips are
performing well and are being qualified by our customers,
several of these re-qualifications having already been
completed.
Throughout the year, the company reallocated and reduced its R&D
spending in recognition of the slower market growth, and as part
of this the company decided to discontinue its investment in the
ASOC, R&D platform and closed the wafer fabrication facility in
Milton, U.K.
In addition, during the year the company consolidated the
optical amplifier manufacturing, assembly and test operations
and chip-on-carrier operations into the Paignton (U.K.) site and
closed the fiber operations in Harlow (U.K.).
These cost reduction initiatives impacted headcount within
manufacturing, R&D and support functions globally and as a
result, the company now has approximately 1,675 employees
worldwide.
Products and customers
The company's relationships with Nortel Networks and Marconi
Communications remained strong, and in addition, the company
announced that Huawei, the leading Chinese telecom equipment
company, accounted for a significant percentage of revenues
throughout the year. The company also gained significant
traction with other customers outside of Nortel and Marconi, as
evidenced by the continuing growth of sales to these other
customers throughout the year, and is continuing to develop key
design-in opportunities.
Additionally, the company continued to develop applications of
its non-telecom opportunities. It believes it has strong growth
prospects in this area, particularly in the industrial, military
and aerospace areas, and continues to support its MMICs
(monolithic microwave integrated circuits) business. Assuming
current progress continues, the company believes this non-
telecom business could represent between 10% and 20% of total
revenues in 2004.
Other developments
Winston Fu and Peter Bordui, who are two of the directors of New
Focus, are expected to join the Board on completion of the
proposed acquisition of New Focus as non-executive Directors.
As previously announced, Jack Kilby, a non-executive Director,
will retire from the Board on completion of the proposed
acquisition.
Financial commentary
All U.S. dollar numbers have been translated at GBP1 = $1.69 for
the fourth quarter of 2003 and at GBP1 = $1.61 for third quarter
of 2003 (as reported).
Fourth quarter ended December 31, 2003
Revenues
Revenues in the fourth quarter of 2003 were GBP24.0 million
($40.5 million), up 9.2% in U.S. Dollars and 3.9% in Sterling
over third quarter 2003 revenues of GBP23.1 million ($37.1
million), and up 67.8% from GBP14.3 million in the fourth
quarter 2002. Revenue in the fourth quarter of 2002 included
NNOC from November 8, 2002, the date of the closure of the
acquisition. Revenues at other customers outside of Nortel and
Marconi grew 18% between the third and fourth quarter, and
represented 33% of fourth quarter revenue.
Operating loss (excluding exceptional items) under U.K. GAAP and
U.S. GAAP: The gross profit (profit at the gross margin level)
under U.K. GAAP was GBP1.5 million ($2.5 million), improved from
a loss of GBP0.4 million ($0.6 million) in the third quarter and
improved from a loss of GBP5.5 million in the fourth quarter
2002. The gross margin profit has improved to 6.3% in the
fourth quarter of 2003, from a loss of (1.5%) in the third
quarter 2003 and a loss of (38.5%) in the fourth quarter of
2002. This improvement was mainly the result of restructuring
actions including the closure of the Ottawa manufacturing
facility, which reduced the company's fixed manufacturing
overheads. These actions were initiated by the company after
completing the acquisition of NNOC and were substantially
completed in the third quarter of 2003.
Under U.S. GAAP, gross margin improved to 10.7%, and gross
profit was GBP2.6 million ($4.3 million). The primary
difference between U.S. and U.K. GAAP was a one-time credit
reducing depreciation in the quarter, resulting from the
reallocation of the purchase price among the various assets of
NNOC.
Operating expenses, under U.K. GAAP, in the fourth quarter 2003
were GBP14.7 million ($25.0 million), an increase of GBP0.6
million ($1.0 million) from the third quarter. This was
principally due to higher Selling, General and Administrative
expenses, as a result of the acquisition of Ignis Optics in the
fourth quarter and a full quarter of costs from the acquisition
of Cierra Photonics in the third quarter 2003. Under US GAAP,
the operating expenses were GBP12.4 million ($21.0 million).
The difference to the U.K. GAAP based costs relates principally
to the impact of foreign exchange transactions being recognized
in General and Administrative expenses under U.K. GAAP and
included in other expenses below operating loss under U.S. GAAP.
Restructuring and other charges (exceptional for U.K. GAAP and
charges for U.S. GAAP): In the fourth quarter, net exceptional
income was GBP4.3 million ($7.3 million) under U.K. GAAP. This
primarily related to lower than estimated costs for the closure
of the Ottawa manufacturing facility, gains through the sale of
fixed assets from closed facilities and recognition of an income
tax credit for Research and Development. In the fourth quarter
under US GAAP, net income was GBP4.2 million ($7.1 million). The
U.S. GAAP amount was a result of the same factors as under U.K.
GAAP offset by a GBP1.1 million ($1.9 million) write-off of In
Process Research and Development costs (IPR&D) relating to the
acquisition of Ignis Optics during the quarter, and a credit of
GBP1.0 million to IPR&D following the re-evaluation of the
allocation of purchase price among the assets purchased as part
of NNOC, as discussed in the company's third quarter 2003
announcement.
This reclassification was the result of the company selling more
inventory than anticipated in December 2002, when the
acquisition was originally recorded. As a result the company
reclassified GBP12.8million ($21.6 million) from goodwill to
inventory. Further details are given in the attached notes to
the financial information.
Net loss (including exceptional for U.K. GAAP and charges for
U.S. GAAP): Net interest for the fourth quarter was GBP1.9
million (income) compared with GBP0.1 million expense in the
third quarter 2003. Net interest includes a translation gain of
GBP2.0 million ($3.4 million) on the company's US$ denominated
loan notes offset by foreign currency transaction losses and to
a lesser extent interest expense.
The net loss under U.K. GAAP for the fourth quarter was GBP7.1
million ($11.9 million) and the loss per share was GBP0.03
($0.06). Under U.S. GAAP, the net loss for the period was
GBP5.5 million ($9.3 million) and the loss per share was GBP0.03
($0.05).
Cash and cash equivalents: Cash and cash equivalents as of
December 31, 2003 were GBP39.0 million ($65.9 million) compared
with GBP47.9 million as at September 28, 2003.
Cash flow
Cash burn for the fourth quarter 2003 was GBP8.9 million
($15.0 million), down 61.1% from the third quarter cash burn of
GBP22.9 million ($36.9 million) and GBP31.6 million ($50.1
million) in the fourth quarter of 2002. In the fourth quarter of
2003, the company substantially completed the restructuring
activities begun after the closure of the acquisition of NNOC.
This restructuring has resulted in a significant reduction to
the company's cost structure and is the principle factor leading
to its reduced cash burn between periods.
Year ended December 31, 2003
The results for the full-year 2002 were prior to the acquisition
of NNOC and it is therefore difficult to draw meaningful
comparisons with the full year 2003. All U.S. dollar numbers
have been translated at GBP1 = $1.63 for the full year 2003 and
as reported for the full year 2002.
Revenues
Revenues for 2003 were GBP89.1 million ($145.2 million), up
157% compared with GBP34.6 million for the same period in 2002.
This increase was largely a result of Bookham's acquisition of
NNOC, which occurred on November 8, 2002.
Nortel Networks and Marconi Communications represented 59% and
12% of sales respectively for the year. Sales to customers,
other than Nortel and Marconi, increased by GBP15.1 million in
2003 over 2002, a 141% increase.
Operating loss (before exceptional items) under U.K. GAAP and
U.S. GAAP:
The gross loss (loss at the gross margin level) was GBP7.1
million ($11.6 million) under U.K. GAAP for 2003, down 60.8%
from the same period in 2002. The gross margin loss under U.K.
GAAP improved to 7.9% in 2003 from 52.2% in 2002, primarily as a
result of restructuring actions including the closure of
facilities and headcount reductions which reduced the company's
fixed manufacturing overhead costs throughout 2003. Under U.S.
GAAP, gross loss was GBP6.0 million ($9.8 million), and gross
margin loss was 6.8%. The gross loss and margin difference
between U.S. and U.K. GAAP is primarily lower depreciation
relating to the difference in the basis and allocation of the
purchase price of the NNOC business.
Operating expenses, under U.K. GAAP increased 17.8% in 2003
compared with 2002, with Selling General and Administrative
expenses up 65% due to the acquisition of NNOC in November 2002.
Research and development were down 8.4% due to restructuring
actions, including the discontinuation of the company's ASOC
product line in 2003. As a percentage of revenues, however,
operating expenses declined to 69% in 2003, compared with 150.8%
in 2002. Under U.S. GAAP, operating expenses were GBP56.5
million, an increase of 11.0% over 2002.
Restructuring charges (exceptionals for U.K. GAAP and charges
for U.S. GAAP): For the full year 2003, net exceptional charges
were GBP15.1 million ($24.6 million) under U.K. GAAP. These
primarily related to restructuring actions including the closure
of the Ottawa manufacturing facility and the ASOC product line
in Milton, U.K., as well as a recognition of an income tax
credit for Research and Development. For the full year 2003,
net charges under U.S. GAAP were GBP15.1 million ($24.6 million)
The U.S. GAAP charges were a result of the same factors as under
U.K. GAAP offset by a GBP1.1 million ($1.9 million) write-off of
In Process Research and Development costs (IPR&D) relating to
the acquisition of Ignis Optics, and a credit of GBP1.0 million
to IPR&D following the re-evaluation of the allocation of
purchase price among the assets purchased as part of NNOC, as
discussed in the company's third quarter 2003 announcement.
Net loss (including exceptionals for U.K. GAAP and charges for
U.S. GAAP): Net interest for 2003 was GBP4.1 million ($6.7
million), down 23.4% from 2002, due to the interest expense on
the loan notes and lower average cash balances in 2002,
partially offset by favorable translation gains on the US$
denominated loan notes.
The net loss under U.K. GAAP for 2003 was GBP79.4 million
($129.4 million) and the loss per share was GBP0.38 ($0.62).
Under U.S. GAAP, the net loss for the same period was GBP76.5
million ($124.7 million) and the loss per share was GBP0.35
($0.56).
Cash and cash equivalents: Cash and cash equivalents as of
December 31, 2003 were GBP39.0 million ($63.6 million) compared
with GBP105.4 million as at December 31, 2002.
Cash flow: Cash burn for the full year 2003 was GBP66.5 million
($108.4 million), down 16.2% for the same period in 2002.
Outlook
The following outlook excludes any impact of the proposed
acquisition of New Focus, Inc.
In the first quarter of 2004, traditionally a seasonally lower
revenue quarter in the telecom business than the fourth quarter,
the company anticipates US Dollar revenues to be down between 3%
and 7%, from the fourth quarter of 2003. In Sterling terms, the
decline will be greater given the appreciation Sterling to the
U.S. Dollar, from the fourth quarter 2003 to its present
position. The company therefore anticipates the exchange rate
will impact revenues between 7% to 10% and be in the range of
GBP20.5 million to GBP22.0 million for the first quarter 2004.
The company estimates that gross margin will decline as a result
of lower revenues and particularly the foreign exchange impact,
and will be in the range of negative 3% to negative 8%, for the
first quarter 2004.
With the company's restructuring plans complete, we anticipate
cash burn to be between GBP10 million and GBP12 million for the
first quarter 2004. This excludes the impact of the proposed
New Focus transaction, including associated transaction costs,
but includes the cash impact of previous restructuring actions
and the impact of foreign exchange.
Finally the shareholder meetings to vote for the proposed
acquisition of New Focus, for both companies, have been
scheduled for Friday March 5, 2004. Assuming approval, the
company would expect closure of the transaction a few days after
the shareholder vote.
CONTACT: BOOKHAM TECHNOLOGY
Giorgio Anania, President and CEO
Steve Abely, Chief Financial Officer
Sharon Ostaszewska, Director Communications
Phone: +44 (0) 1235 837000
For media:
Emma Deegan
Phone: +44 (0) 1235 837573
GBCS PR
Brian Dolby
Helen Lyman-Smith
Phone: +44 115 950 8399
BURLEIGH PROPERTIES: Appoints Liquidator from Slater Maidment
-------------------------------------------------------------
At an Extraordinary General Meeting of Burleigh Properties
Limited, duly convened, and held at 9 Devonshire Square, London
EC2M 4WX, on January 27, 2004, the following Special Resolution
was duly passed:
"That the Company be wound up voluntarily, and that Christopher
Wray Sudlow, of Slater Maidment, 7 St James's Square, London
SW1Y 4JU, be and he is hereby appointed Liquidator for the
purpose of such winding-up."
A. C. Addington, Chairman
CANARY WHARF: Qatar Ups Contribution in Morgan Stanley's Bid
------------------------------------------------------------
The government of Qatar will give GBP102 million (US$190
million) of funding for Morgan Stanley's bid for Canary Wharf
Group, according to Bloomberg.
The contribution is up from the GBP60 million earlier proposed.
It will increase the stake the Qatar government would have when
the transaction is completed from 9% to 14%, said Katie
Macdonald-Smith, a spokeswoman for the Morgan Stanley group.
Morgan Stanley is offering GBP1.6 billion for the London-based
developer. Its offer rivals that of Canada's Brascan
Corporation, which is supported by Canary Wharf founder Paul
Reichmann.
CARL AUG: Appoints Liquidator from DS Insolvency Services
---------------------------------------------------------
At an Extraordinary General Meeting of Carl Aug Picard Limited,
duly convened, and held at 29 King Street, Newcastle,
Staffordshire ST5 1ER, on February 2, 2004, these Resolutions
were duly passed, as a Special Resolution, as an Ordinary
Resolution and as an Extraordinary Resolution respectively:
"That the Company be wound up voluntarily, that Martin
Williamson, of DS Insolvency Services Limited, 29 King Street,
Newcastle-under-Lyme, Staffordshire ST5, be and is hereby
appointed Liquidator of the Company for the purpose of its
voluntary winding-up, and that, in accordance with the
provisions of the Company's articles of association, the
Liquidator be authorized to distribute cash reserves and capital
to the Company's Members; to divide among the Company's Members
in specie the whole or any part of the Company's assets; to
value any such assets and determine how the division shall be
carried out as among the Members or different classes of
Members; and to vest the whole or any part of the assets in
Trustees upon such trust for the benefit of the Company's
Members as the Liquidator shall determine; but no Members shall
be compelled to accept any assets upon which there is a
liability."
A. J. Charlesworth, Chairman
CATALOGUE SHOP: PricewaterhouseCoopers Appointed Liquidator
-----------------------------------------------------------
At an Extraordinary General Meeting of The Catalogue Shop
Limited held on January 26, 2004, the following Resolutions were
duly passed, as a Special Resolution and as an Ordinary
Resolution respectively:
"That the Company be wound up voluntarily and that Tim Walsh and
Richard Setchim of PricewaterhouseCoopers, LLP, 9 Bond Court,
Leeds LS1 2SN, be and are hereby appointed Joint Liquidators of
the Company for the purposes of such winding-up, and any act
required or authorized under any enactment to be done by the
Joint Liquidators is to be done by all or any one or more of the
persons for the time being holding office."
A McGeorge, Chairman
CROUCH MINING: Creditors Meeting Set February 25
------------------------------------------------
Notice is hereby given, pursuant to paragraph 51 of Schedule B1
to the Insolvency Act 1986, that a Meeting of the Creditors of
the Crouch Mining Limited will be held at The Park Plaza Hotel,
Boar Lane, City Square, Leeds LS1 5NS, on February 25, 2004, at
11:00 a.m., to receive the report of the Joint Administrators,
to decide whether to approve their proposals, and to decide if a
Committee of Creditors should be appointed. A secured Creditor
is entitled to vote only in respect of the balance (if any) of
his debt after deducting the value of his security as estimated
by him. Creditors who intend to vote at the Meeting should note
these:
A written statement of claim must be lodged with the
Administrators by 12:00 noon on the business day before the
Meeting at Ernst & Young LLP, P.O. Box 61, Cloth Hall Court, 14
King Street, Leeds LS1 2JN, proxies for use at the Meeting must
be completed and lodged with the Administrators before the
Meeting, and copies of the report may be obtained by writing to
the undersigned, at P.O. Box 61, Cloth Hall Court, 14 King
Street, Leeds LS1 2JN.
G Wilson, Joint Administrator
DAWSON INTERNATIONAL: Warns of Deterioration in Operating Profit
----------------------------------------------------------------
Trading Statement
Dawson International PLC issues this trading update for the year
ended January 3, 2004:
In a trading statement issued on December 4, 2003 Dawson
International PLC stated that the operating result for the
second half will again be around, or slightly worse than
breakeven before interest, exceptional charges and goodwill and
before additional pension costs of GBP1 million.
The Company is in the course of finalizing the Group's annual
results for the year ended January 3, 2004. Turnover for the
year was approximately GBP4 million lower than the directors had
previously estimated with the majority of that shortfall
occurring in December and as a result there will be a
deterioration in operating profit. However the directors
believe, based on actuarial advice, that this will largely be
offset by a reduction in pension costs, which are lower than
forecast due to the improvement in equity markets during 2003.
It was also stated on December 4 that a number of measures,
including a capital raising exercise, were required to restore
the financial position of the Group.
Discussions continue with advisors and the Group's three largest
shareholders with a view to completing the capital raising
exercise early in 2004. Details of this, and further
initiatives, will be released at the appropriate time.
CONTACT: DAWSON INTERNATIONAL
Mike Hartley, Chairman
Phone: 01629 55098
David Cooper, Finance Director
Phone: 01577 867000
Media Inquiries:
Gordon Beattie
Phone: 07768 588163
DIAMOND MULTIMEDIA: John Kirkpatrick Appointed Liquidator
---------------------------------------------------------
At an Extraordinary General Meeting of the Members of Diamond
Multimedia Systems Service Company Limited, duly convened, and
held at 47 London Street, Reading, Berkshire, on January 29,
2004, these Resolutions were duly passed, as a Special
Resolution, as an Ordinary Resolution and as an Extraordinary
Resolution respectively:
"That the Company be wound up voluntarily, that John Arthur
Kirkpatrick, be and is hereby appointed Liquidator for the
purposes of such winding-up, and that, in accordance with the
provisions of the Company's articles of association, the
Liquidator be and is hereby authorized to divide among the
Members in specie all or any part of the Company's assets."
D B M Fletcher, Director
EINSTEIN GROUP: Annual General Meeting Set March 4
--------------------------------------------------
Einstein on Thursday announced that it will hold its third
Annual General Meeting at 10:00 a.m. on March 4, 2004 at the
offices of its Nominated Adviser, Grant Thornton, located at
Grant Thornton House, Melton Street, Euston Square, London NW1
2EP.
Copies of the full notice of the Annual General Meeting together
with explanatory notes have been posted to shareholders and are
available on the Company's web site: http://www.einstein-
group.tv
Further announcements relating to the Company's future will be
made in due course.
*****
The Company entered Voluntary Arrangement in January.
GEMPLUS ASSOCIATES: Appoints Liquidators
----------------------------------------
At an Extraordinary General Meeting of Gemplus Associates
International Limited, duly convened, and held at New Lane,
Havant, Hampshire, on 30 January 2004, the subjoined Special
Resolution was duly passed:
"That the Company be wound up voluntarily, and that James
Richard Tickell and Carl Derek Faulds, of Portland Business &
Financial Solutions, 1640 Parkway, Solent Business Park,
Whiteley, Fareham, Hampshire, be and they are hereby appointed
Joint Liquidators of the Company and that any act required or
authorized to be done by the Liquidators, is to be done by both
or either of them for the time being holding office.
The Liquidators are hereby authorized under the provision of
section 165 of the Insolvency Act 1986, to exercise the powers
set out in Schedule 4, Part 1 of the said Act, and that in
accordance with the provisions of the Company's articles of
association, the Liquidators are authorized to divide amongst
the Company's Members in specie, the whole or any part of the
Company's assets, and to value such assets and determine how the
division shall be carried out as amongst the Members or
different classes of Members."
L S Smith, Director
GUINNESS MAHON: Susan Roscoe Appointed Liquidator
-------------------------------------------------
At Extraordinary General Meetings of:
Guinness Mahon Leasing No.1 Limited
Guinness Mahon Leasing No.2 Limited
Guinness Mahon Property Managers Limited
duly convened, and held at 2 Gresham Street, London EC2V 7QP, on
January 28, 2004, the following Resolutions were duly passed as
a Special Resolution as Ordinary Resolutions, and as an
Extraordinary Resolution respectively:
"That the Company be wound up voluntarily, and that Susan
Margaret Roscoe, of Critchleys, Greyfriars Court, Paradise
Square, Oxford OX1 1BB, be and is hereby appointed Liquidator of
the Company for the purpose of the voluntary winding-up, that
the Liquidator be authorized to draw remuneration on the basis
of time costs and that the Liquidator be authorized to
distribute the assets of the Company in specie to the Members."
S. M. Roscoe, Chairman
LITTLEWOODS: Hires PricewaterhouseCoopers to Liquidate Units
------------------------------------------------------------
At the Extraordinary General Meetings of:
Littlewoods10 Limited
Littlewoods of England Limited
Littlewoods 2000 Limited
Littlewoods4 Limited
held on January 26, 2004, the following Resolutions were duly
passed, as a Special Resolution and as an Ordinary Resolution
respectively:
"That the Company be wound up voluntarily and that Tim Walsh and
Richard Setchim of PricewaterhouseCoopers, LLP, 9 Bond Court,
Leeds LS1 2SN, be and are hereby appointed Joint Liquidators of
the Company for the purposes of such winding-up, and any act
required or authorized under any enactment to be done by the
Joint Liquidators is to be done by all or any one or more of the
persons for the time being holding office."
A McGeorge, Chairman
MARCONI CORPORATION: To Redeem Junior Notes February 24
-------------------------------------------------------
Marconi Corporation plc (LSE: MONI; NASDAQ: MRCIY) announced on
Thursday that it has given notice to the owners of its Junior
Notes pursuant to Section 3.02 of the Indenture dated as of May
19, 2003 made between the Company, the guarantors named therein
and JP Morgan Chase Bank (the Trustee) that pursuant to Section
3.08 of the Indenture $34.0 million (approximately GBP18.2
million) aggregate principal amount of Securities (the
Redemption Securities) will be redeemed on February 24, 2004.
The redemption price shall be 110.0% of the principal amount of
the Redemption Securities redeemed plus 24 days accrued interest
to the Redemption Date. In line with the mechanism used for the
previous partial redemptions of the Junior Notes, a pool factor
will be applied to every holding. Further details of the pool
factor to be applied from the Redemption Date will be announced
once the pool factor has been confirmed by the Registrar. This
mandatory partial redemption has primarily resulted from a
reduction in the amount of cash collateral held against certain
bonding facilities following agreement with a second of the
Group's major performance bonding providers, a release of
collateral relating to a portion of the performance bonds in
respect of supply contracts transferred to Finmeccanica SpA upon
disposal of the Group's strategic communications businesses in
August 2002 and the expiry of certain other performance bonds
and letters of credit. The paying agent with respect to the
Redemption Securities is: The Bank of New York, One Canada
Square, London E14 5AL England
Attention: Corporate Trust Office.
Any queries in respect of payment, pool factor or related
matters should be directed to Emma Wilkes at Bank of New York on
(+44) 20 7964 7662, who are the Registrar, the Depositary and
the Paying Agent. On the Redemption Date, the Redemption Price,
together with accrued interest and any Additional Amounts (as
described in the Indenture), will become due and payable.
Unless the Company defaults in making the redemption payment,
the Redemption Securities shall cease to bear interest from and
after the Redemption Date. The Redemption Securities will be
cancelled following redemption by the Company. As previously
announced on February 2, 2004, Marconi has now cancelled the
Notes that it had repurchased and as a result of this the
original issue amount has reduced from $486.9 million to $444.8
million. Accordingly, the amount to be redeemed per each US
Dollar holding will be calculated on the basis of the $444.8
million total. In aggregate, Marconi has now repurchased or
redeemed $295.8 million principal amount of Junior Notes
reducing the principal amount outstanding to $191.1million
(approximately GBP102.5 million) as at February 10, 2004. After
the sixth partial redemption scheduled on February 24, 2004, the
principal amount will be further reduced to $157.2 million
(approximately GBP84.3 million). (Exchange rate, 1euro = USD
1.8650).
MILLER CORPORATION: Appoints Liquidators
----------------------------------------
At an Extraordinary General Meeting of Miller Corporation
Limited, duly convened, and held at Lewis Alexander & Collins,
103 Portland Street, Manchester M1 6DF, on January 28, 2004,
this Special Resolution was duly passed:
"That the Company be wound up voluntarily, and that Michael
David Alexander and Stephen Hoffman, of Lewis Alexander &
Collins, 103 Portland Street, Manchester M1 6DF, be and they are
hereby appointed Liquidators for the purpose of such winding-
up."
M. Miller, Director
NETWORK RAIL: Accepts Regulator's Ruling on Five-year Budget
------------------------------------------------------------
Network Rail formally accepted the Office of the Rail
Regulator's final conclusions of the Interim Review of track
access charges. The Rail Regulator has determined that Network
Rail's expenditure on operations; maintenance and renewals over
the next five years (Control Period 3) should be GBP22.2
billion. The settlement will provide Network Rail with secure,
predictable revenues and put railway finances on a stable long-
term footing.
The final conclusions are based on extremely challenging targets
for improvements in efficiency and performance.
Network Rail recently announced the best quarterly performance
for four years -- a 26% reduction in delay minutes in the final
three months of 2003. Total delay minutes for October -
December 2003 were 3.3 million compared to 4.4 million in the
same period the previous year. The future performance
trajectory implies significant additional improvements in order
to meet the overall targets in the next control period.
In terms of cost savings, the ORR has assumed efficiencies of
more than 30% by 2008/09, and savings of 37% and 43% for 2007/08
and 2008/09 in respect of the West Coast Route Modernization
project. Network Rail is determined to deliver these targeted
efficiency savings and is working to identify all the actions
necessary to deliver the full savings.
The company is continuing its discussions with the SRA and ORR
on the balance between grant and track access charges that make
up its income. Network Rail's accountability to its customers
and the Regulator, which have been clarified and reinforced
through the review, would not be changed as a result of any
proposed unconditional grant.
Network Rail is also discussing proposals to re-profile an
element of its revenue over the next two years. The company
will submit its proposals to the Regulator around the end of
February.
Commenting on the Board's decision to accept the final
conclusions, Ian McAllister, Chairman, said: "By accepting the
Regulator's final conclusions, Network Rail has committed itself
to unparalleled improvements in performance and efficiency. In
return we have gained certainty, stability and visibility
regarding our future income.
"We face a significant challenge to deliver the scale of
efficiencies demanded by this settlement. This will require
change in every aspect of our activities. We have already begun
this process and there can be no turning back.
"Network Rail's performance is already showing welcome signs of
improvement. We must now build on these visible signs of
improvement and achieve sustained high levels of punctuality."
NEWMANS (SOUTHAMPTON): In Voluntary Liquidation
-----------------------------------------------
At an Extraordinary General Meeting of the Members of Newmans
(Southampton) Limited, duly convened, and held at Number 1
London Road, Southampton, Hampshire, on February 3, 2004, the
subjoined Special Resolution was duly passed:
"That the Company be wound up voluntarily, and that James
Richard Tickell and Carl Derek Faulds, of Portland Business &
Financial Solutions Ltd, 1640 Parkway, Solent Business Park,
Whiteley, Fareham, Hampshire, be and they are hereby appointed
Joint Liquidators of the Company and that any act required or
authorized to be done by the Liquidators, is to be done by both
or either of them for the time being holding office.
The Liquidators are hereby authorized under the provision of
section 165 of the Insolvency Act 1986, to exercise the powers
set out in Schedule 4, Part 1 of the said Act, and that in
accordance with the provisions of the Company's articles of
association, the Liquidators are authorized to divide amongst
the Company's Members in specie, the whole or any part of the
Company's assets, and to value such assets, and determine how
the division shall be carried out as amongst the Members or
different classes of Members."
R. J. Newman, Director
PEAK POTATO: National Westminster Bank Calls in Administrators
--------------------------------------------------------------
Name of Company: Peak Potato Services Limited
Reg No 1014556
Nature of Business: Potato Processors
Radical changes have transformed this small country potato
merchant into a thriving business, which is active in all
aspects of the potato industry. The company has heavily
reinvested into machinery, grading facilities, IT and more
recently quality control to stay ahead of the competition.
Trade Classification: 12-Wholesale of Food and Drink
Date of Appointment of Joint Administrative Receivers:
January 30, 2004
Name of Person Appointing the Joint Administrative Receivers:
National Westminster Bank plc
Joint Administrative Receivers: Grant Thornton
Byron House, Cambridge Business
Park, Cowley Road,
Cambridge CB4 1WZ
Receivers:
Ian Stewart Carr
Duncan Swift
(Office Holder Nos: 8741, 8093)
Company Address: Peak Potato Services Ltd.
Boughton Farm Stoke Ferry
Kings Lynn Norfolk
PE33 9ST
Phone: 01366 500970
Fax : 01366 501196
E-mail :
qualityassured@peakpots.co.uk
PPL THERAPEUTICS: Sells Intellectual Property Rights to recBSSL
---------------------------------------------------------------
PPL announced that it's subsidiary, PPL Therapeutics (Scotland)
Limited, has entered into unconditional agreements to dispose of
data, results and other information generated during the recBSSL
development program to Arexis A.B. The consideration of
GBP140,000, which is payable in cash, is expected to be received
from Arexis in two tranches, the first on Thursday and the
second at the end of the know-how transfer which is expected
to be completed within 30 days.
PPL had fully expensed the recBSSL development program and as
such the net book value of the recBSSL Know-how at June 30, 2003
was GBPnil. Therefore the sale of the recBSSL Know-how gives
rise to an estimated gain on disposal of GBP0.14 million.
The proceeds receivable of GBP0.14 million less tax and selling
expenses will be used to supplement PPL's existing cash
resources with a view to maximizing short-term value for
shareholders.
In advance of this disposal to Arexis, the recBSSL Collaboration
Agreement that had existed between PPL and AstraZeneca was
terminated. PPL's development program for recBSSL has therefore
been terminated.
PPL will continue to provide further updates to shareholders at
the appropriate time.
CONTACT: PPL THERAPEUTICS
Chris Greig, Chairman
Adam Christie, Business Development Director
Phone: 0131 440 4777
Alistair Mackinnon-Musson
Philip Dennis
Hudson Sandler
Phone: 020 7796 4133
Email: ppl@hspr.co.uk
SAFEWAY PLC: Shareholders Okay Merger with Wm Morrisons
-------------------------------------------------------
The Board of Safeway is pleased to announce that Safeway
shareholders have voted on Thursday overwhelmingly in favor of
the resolution proposed at each of the Court meeting and the
extraordinary general meeting relating to the merger of Safeway
with Morrisons by means of a scheme of arrangement.
Morrisons has announced that at its extraordinary general
meeting also held earlier on Thursday, Morrisons shareholders
overwhelmingly approved the merger and the resolutions in
connection with it.
The Court hearings of Safeway's petition to sanction the Scheme
and to confirm the reduction of Safeway's share capital are
expected to take place on March 1 and March 4 respectively.
Subject to the Scheme receiving the sanction and confirmation of
the Court on those dates, the effective date of the scheme is
expected to be 8 March 2004.
*****
WM MORRISON said:
The Morrisons Board is pleased to announce that, at the
Extraordinary General Meeting of its shareholders held earlier
in relation to the Merger of Morrisons with Safeway plc, all of
the resolutions proposed, as set out in the Notice of
Extraordinary General Meeting dated January 19, 2004, received
the overwhelming support of Morrisons Shareholders. The results
of the proxy vote can be seen below.
Commenting on the outcome of the Morrisons Extraordinary General
Meeting, Sir Kenneth Morrison CBE, Executive Chairman of
Morrisons, said: "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. We have very clear and detailed plans
for Safeway and I am confident that we will be able to integrate
the two businesses swiftly and effectively. Wednesday's EGM
result endorses our strategy and underlines the benefits for
customers, suppliers, employees and shareholders alike".
The Merger remains subject to the sanction of the Safeway Scheme
of Arrangement and confirmation of the associated reduction of
capital by the Court, following which it is anticipated that the
Merger will become effective and dealings in new Morrisons
Shares will commence on the London Stock Exchange on 8 March
2004.
Copies of the resolutions passed at the Morrisons Extraordinary
General Meeting will be available shortly for inspection by the
public at the U.K. Listing Authority's Document Viewing
Facility which is situated at:
Financial Services Authority
25 The North Colonnade, Canary Wharf, London E14 5HS
Phone: +44 (0) 20 7676 1000 (during normal business hours on any
weekday (Saturdays, Sundays and public holidays excepted) until
completion of the Merger.
Terms used in this announcement shall have the same meaning as
in the Listing Particulars dated January 19, 2004, which were
sent to Morrisons and Safeway Shareholders.
WALT DISNEY: Comcast Dangles US$66 Billion Offer
------------------------------------------------
Comcast Corporation (Nasdaq: CMCSA, CMCSK) on Thursday announced
that it has made a proposal to The Walt Disney Company (NYSE:
DIS) to merge the two companies in a tax-free transaction. The
combination would create one of the world's leading
entertainment and communications companies with an unparalleled
distribution platform and an extraordinary portfolio of content
assets. The new company would have a presence in all of the
nation's top 25 markets, and would propel broadband forward,
expanding current services and inspiring new ones.
Terms of the proposed transaction are:
(1) Comcast would issue 0.78 of a share of Comcast Class A
voting common stock for each Disney share.
(2) Disney shareholders would receive a premium of over $5
billion, based on Tuesday's closing prices, plus full
participation in the combination benefits.
Comcast's proposal values Disney at $66 billion (which includes
assumption of $11.9 billion of Disney's net debt), offering a
multiple of approximately 14x Disney's 2004 estimated EBITDA.
Disney shareholders would own 42% of the combined company.
"This is a unique opportunity for all shareholders of Comcast
and Disney to create a new leader of the entertainment and
communications industry," said Brian L. Roberts, President and
Chief Executive Officer of Comcast. "Not only would this merger
create significant shareholder value, but it would also position
the combined company to compete vigorously with other
entertainment and communications companies, including newly
created integrated distribution/content providers."
"Our management team has a proven track record of successful
integration of our merger partners," said Mr. Roberts. "We are
prepared, ready and excited to greet the opportunities and
challenges the proposed combination presents in order to deliver
substantial value to shareholders of the new combined company."
"I know Disney's businesses very well," said Steve Burke,
President of Comcast Cable. "And I am confident that when we
put those great brands and programming assets together with our
distribution, there will be significant opportunities to produce
compelling returns for shareholders."
The superior track record of Comcast's management is shown by
its success in the acquisition of AT&T Broadband, which was
twice the size of Comcast when acquired fifteen months ago.
Performance of the merged company has far exceeded initial
margin improvement expectations. The combination has resulted
in immediate reversal of basic subscriber loss and acceleration
of system upgrades, as well as significant launches of new
products and services such as video-on-demand and HDTV.
As part of the proposal, Comcast has noted the applicability of
the FCC's current program access and program carriage rules to
the combined company, which should address potential concerns
that could be raised in the regulatory process. Those rules
ensure that the combined company will continue to make all of
its satellite-delivered national and regional cable networks
available on a non-exclusive, non-discriminatory basis and that
there will be no discrimination against unaffiliated programming
services, all comparable to the undertakings made by News Corp.
in its recent acquisition of DirecTV.
Comcast is being advised by Morgan Stanley, JPMorgan, Quadrangle
Group and Rohatyn Associates. Davis Polk & Wardwell is the
legal advisor to Comcast.
The full text of the letter sent to Disney is attached.
Comcast Corporation (http://www.comcast.com)is principally
involved in the development, management and operation of
broadband cable networks and in the provision of programming
content. The Company is the largest cable company in the United
States, serving more than 21 million cable subscribers. The
Company's content businesses include majority ownership of
Comcast Spectacor, Comcast SportsNet, E! Entertainment
Television, Style, The Golf Channel, Outdoor Life Network and
G4. Comcast Class A common stock and Class A Special common
stock trade on The NASDAQ Stock Market under the symbols CMCSA
and CMCSK, respectively.
February 11, 2004
Mr. Michael D. Eisner
The Walt Disney Company
500 South Buena Vista Street
Burbank, California 91521
Dear Michael:
I am writing following our conversation earlier this week in
which I proposed that we enter into discussions to merge Disney
and Comcast to create a premier entertainment and communications
company. It is unfortunate that you are not willing to do so.
Given this, the only way for us to proceed is to make a public
proposal directly to you and your Board.
We have a wonderful opportunity to create a company that
combines distribution and content in a way that is far stronger
and more valuable than either Disney or Comcast can be standing
alone. To this end, we are proposing a tax-free stock for stock
merger in which Comcast would issue 0.78 of a share of its Class
A voting common stock for each share of Disney. This represents
a premium of over $5 billion for your shareholders, based on
Tuesday's closing prices. Under our proposal, your shareholders
would own approximately 42% of the combined company.
The combined company would be uniquely positioned to take
advantage of an extraordinary collection of assets. Together,
we would unite the country's premier cable provider with
Disney's leading filmed entertainment, media networks and theme
park properties. In addition to serving over 21 million cable
subscribers, Comcast is also the country's largest high speed
internet service provider with over 5 million subscribers. As
you have expressed on several occasions, one of Disney's top
priorities involves the aggressive pursuit of technological
innovation that enhances how Disney's content is created and
delivered. We believe this combination helps accelerate the
realization of that goal-whether through existing distribution
channels and technologies such as video-on-demand and broadband
video streaming or through emerging technologies still in
development-to the benefit of all our shareholders, customers
and employees.
We believe that improvements in operating performance, business
creation opportunities and other combination benefits will
generate enormous value for the shareholders of both companies.
Together, as an integrated distribution and content company, we
will be best positioned to meet our respective competitive
challenges.
We have a stable and respected management team with a great
track record for creating shareholder value. In fact, our
shares have consistently outperformed leading stock indices by
significant margins, including the S&P 500 by a margin of more
than 2 to 1 since Comcast went public in 1972.
The Comcast management team greatly appreciates and is highly
respectful of the Disney heritage. We know that there are many
talented executives at Disney who we envision would also play a
key role in managing the combined company. We also would
welcome directors from your Board joining our Board.
We have analyzed the issues associated with regulatory approval
and are confident that all necessary approvals can be obtained
in a timely fashion. Given the landscape that has evolved in
our industry over the past few years, the creation of integrated
content and distribution companies is essential to increasing
the level of competition. The FCC's existing program access and
program carriage rules ensure that the combined company will
continue to make all of its satellite-delivered national and
regional cable networks available on a non-exclusive, non-
discriminatory basis and that there will be no discrimination
against unaffiliated programming services, all consistent with
the undertakings made by News Corporation in its recent
acquisition of DirecTV.
We hope that the Disney Board will pursue the opportunity that
this proposed combination presents to your shareholders.
Very truly yours,
Brian L. Roberts
President and Chief Executive Officer
Cc: Board of Directors,
The Walt Disney Company
D'Arcy Rudnay, Vice President, Corporate Communications
Comcast Corporation
Phone: +1-215-981-8582
The Abernathy MacGregor Group (for Comcast Corporation)
Adam Miller
Brian Faw
Phone: +1-212-371-5999
WFS HOLDINGS: Susan Roscoe Appointed Liquidator
-----------------------------------------------
At an Extraordinary General Meeting of WFS Holdings Limited,
duly convened, and held at Five Ways Cottage, Crawley, Witney,
Oxfordshire OX29 9TR, on January 27, 2004, these Resolutions
were duly passed:
"That the Company be wound up voluntarily, and that Susan
Roscoe, of Boswell House, 1-5 Broad Street, Oxford, be and is
hereby appointed Liquidator of the Company for the purpose of
the voluntary winding-up, that the Liquidator be authorized to
draw remuneration on the basis of time costs, that the
Liquidator be authorized to distribute the assets of the Company
in specie to the Members, that the Liquidator be authorized,
pursuant to section 110 of the Insolvency Act 1986, to sell the
business and to receive in compensation for the sale shares for
distribution amongst the Members of the Company and the
transactions contemplated by Resolution 5 be approved for the
purposes of section 320 of the Companies Act 1985."
D Arthur, Chairman
YELL GROUP: Confident of Meeting Full-year Expectations
-------------------------------------------------------
(a) Group turnover up 6.9% to GBP841.3 million; 10.7% at a
constant exchange rate
(b) Group EBITDA up 10.8% to GBP260.1 million; 13.5% at a
constant exchange rate
(c) Group profit after tax GBP31.1 million (GBP45.9 million loss
last year)
(d) Group operating cash flow less capital expenditure up 6.7%
to GBP237.8 million; 8.9% at a constant exchange rate
(e) Pro forma diluted earnings per share before amortization
17.8 pence
Note: Earnings and cash flow figures stated before exceptional
costs arising on IPO. Including exceptional costs, the
Group made a statutory loss after tax but before interim
dividends (GBP20.8 million) of GBP80.2 million (GBP58.6
million loss last year).
John Condron, Chief Executive Officer, said: "This is another
set of good results demonstrating Yell's continued growth within
its markets. We remain firmly on track to meet full year
expectations. In the U.K., Yellow Pages has continued to
broaden its customer base. Yell.com shows strong growth in
revenue and usage, gaining from further investment. In the US,
Yellow Book is achieving strong organic growth and is also
benefiting from acquisitions, continuously strengthening its
position in the largest directory market in the world."
John Davis, Chief Financial Officer, said: "These good operating
results are accompanied by continuing strong cash flow. We have
also benefited from our new capital structure and have reduced
our pro forma net debt by GBP181 million to GBP1,159 million, a
multiple of 3.3 times EBITDA
for the last 12 months. While the weaker U.S. dollar continues
to affect earnings, we reduce this risk with our U.S. dollar
denominated debt."
To see financial statements:
http://bankrupt.com/misc/Yell_9M.htm
CONTACT: YELL
Investors
Jill Sherratt
Phone: +44 (0) 118 950 6984
Mobile: +44 (0) 7764 879808
Yell
Media
Richard Duggleby
Phone: +44 (0) 118 950 6206
Mobile: +44 (0) 7860 733488
Jon Salmon
Phone: +44 (0) 118 950 6656
Mobile: +44 (0) 7801 977340
CITIGATE
Dewe Rogerson
Anthony Carlisle
Phone: +44 (0) 20 7638 9571
Mobile: +44 (0) 7973 611888
*********
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
Liv Arcipe, Editors.
Copyright 2004. All rights reserved. ISSN 1529-2754.
This material is copyrighted and any commercial use, resale or
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