/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/050512.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 Thursday, May 12, 2005, Vol. 6, No. 93 Headlines C Z E C H R E P U B L I C CESKE DRAHY: Names Chairman Josef Bazala Concurrent CEO HARVARDSKY PRUMYSLOVY: Appeals Court Overturns Bankruptcy D E N M A R K PAN FISH: E.U. Trade Restriction Decimates Danish Operation F I N L A N D SANITEC OYJ: Standard & Poor's Withdraws All Ratings G E R M A N Y ART + MEDIA: Gives Creditors Until Next Week to File Claims DEUTSCHE LUFTHANSA: Narrows Operating Loss to EUR26 Million FLECK & GONZALEZ: Interim Administrator Takes over Operations FRIED STAHL: Wuppertal Court Appoints Administrator HEINZE BUROEINRICHTUNGSGESELLSCHAFT: Declared Insolvent KLOECKNER & CO.: Earns Upgrade for Improved Capital Structure NORCOM INFOSYSTEMS: Creditors Meeting Set July RATSKELLER HERFORD: Creditors Claim Due Next Month SD KAPITAL: Claims Verification Set July 19 UNIMONT STUTTGART: Proofs of Claim Deadline Expires May 31 WALTER BETONSANIERUNG: Applies for Bankruptcy Proceedings WALTER WASSER: Gives Creditors Until Next Month to File Claims WOHNUNGSBAUGESELLSCHAFT AM KLAUSENBERG: Declares Bankruptcy I R E L A N D JSG FUNDING: Blames Poor Trading Conditions for 24% EBITDA Slide I T A L Y PARMALAT FINANZIARIA: Borsa Italiana Okays Relisting PARMALAT U.S.A.: Stremicks Wants Affiliates' Claims Canceled N E T H E R L A N D S ROYAL SHELL: Posts 42% Increase in First-quarter Earnings ROYAL SHELL: Signs Joint Exploration Deal with Naftogaz Ukrainy UNITEDGLOBALCOM INC.: Q1 Results Close to Breakeven N O R W A Y PETROLEUM GEO-SERVICES: Revenues Lower Under U.S. GAAP P O L A N D STOCZNIA GDYNIA: Headed into Bankruptcy R U S S I A AUTOMOBILE COLUMN: Omsk Court Appoints Insolvency Manager BANK OF MOSCOW: Fitch Rates Proposed Eurobond 'BB+' ELECTRIC DRIVE: Bankruptcy Hearing Set July IZENSKIY MEKH-ENERGO-SERVICE: Under Bankruptcy Supervision KALININSKOYE: Declared Insolvent NAZYVAEVSKIY DAIRY: Bankruptcy Proceedings Begin NYANDOMSKOYE: Declared Insolvent PROM-ZHIL-STROY: Tyva Court Names Ch. Ondar Insolvency Manager RYAZAN-STROY 7: Undergoes Bankruptcy Supervision Procedure SARATOVSKIY: Bankruptcy Hearing Resumes June SPETS-STAL-COMPLEKT: Bankruptcy Proceedings Begin S W I T Z E R L A N D ABB LTD.: Closure of French Factory Still On CONVERIUM AG: Full Recovery May Take Time, Moody's Says CONVERIUM HOLDING: Reports US$61.8 Mln Net Loss in Q1 U K R A I N E BERDYANSK: Zaporizhya Court Appoints Insolvency Manager BUDGAZMONTAZH: Succumbs to Bankruptcy DOVIRA: Undergoes Bankruptcy Supervision Procedure HLIBOROB: Creditors Have Until Friday to File Claims LAJT: Chernivtsi Court Declares Firm Insolvent LVIVNASINNYA: Lviv Court Appoints Insolvency Manager UKRTRANSSERVICE: Deadline for Proofs of Claim Saturday VAPNYARSKIJ: Succumbs to Bankruptcy VYAZIVSKE: Agricultural Firm Goes Belly up ZHITLOVIK: Declared Insolvent U N I T E D K I N G D O M ABBEY NATIONAL: Hundreds of Jobs More to Go BLACKFORDS FENCING: Sets Creditors Meeting Next Week CARDIFF 2008: Liquidator to Give Update Next Month CH MANAGEMENT: High Court Appoints Liquidator CHURCHFIELDS SPRING: Members Decide to Wind up Company COOK STREET: Sets Members Meeting June 15 CRAFTSMAN FURNITURE: Creditors Meeting Set Friday DERITEND ADVANCED: Members Pass Winding-up Resolutions DIGITAL UNION: Appoints Tenon Recovery Administrator DONCASTERS YEOVIL: Hires Liquidator from UHY Hacker Young E C & J KEAY: Members Decide on Winding-up ELITE MEDICAL: Hires Administrators from Leonard Curtis & Co. EQUITABLE LIFE: Asked To Call Off Legal Claim FINNFOREST PLYWOOD: Sets Final Meeting Next Month FKI PLC: Buys 52.85% of Chinese Wire Rope Producer GOVETT ENTERPRISE: Members Final Meeting Set June HERMES POOLED: Hires Deloitte & Touche Liquidator IDEAL INSURANCE: Members General Meeting Set July INCO 400: Sets Creditors Meeting Friday IPM INDUSTRIES: Meeting of Creditors Set Next Week JESSOPS PLC: Opens 18 New Stores in First Quarter JESSOPS PLC: Names Robin Whitbread Non-executive Director JEWELLERY STORE: Administrators from Deloitte & Touche Move in KRUGER BRENT: Calls in Liquidator from Butcher Woods LLOYDS THERMALLOY: Members Hire Liquidator from Hacker Young MARGATE FOOTBALL: Names Langley & Partners Administrator MG ROVER: Longbridge Revival Remote as Another Buyer Withdraws MOVTHERM LIMITED: Names Liquidator from UHY Hacker Young MOWLEM PLC: Appoints New Executive Director MOWLEM PLC: Wins GBP175 Mln Barnsley Schools PFI Contract MOWLEM PLC: Suspended from Track Renewals NTL INC.: Returns to Black in Q1 with GBP456.1 Mln Net Income PARAMOUNT FITTINGS: Liquidator from UHY Hacker Young Moves in PILKINGTON CHANNEL: Hires PricewaterhouseCoopers Liquidator PROGRAM MARKETING: Calls in Administrators from Leonard Curtis RICHARDS & ROSS: Calls in Liquidator RICOSS TRADING: Members Pass Winding-up Resolutions STREAMCHASE LIMITED: Hires UHY Hacker Young Liquidator TRIPLEX LIGHT: Members Decide to Wind up Firm TTG EUROPE: Falls into Administration WATERSIDE PRESS: Creditors Meeting Set Next Week WRE SERVICES: Hires Administrators from Tenon Recovery ********* =========================== C Z E C H R E P U B L I C =========================== CESKE DRAHY: Names Chairman Josef Bazala Concurrent CEO ------------------------------------------------------- The board of Cesky Drahy appointed Tuesday a new chief executive who will see the rail operator complete its restructuring. Ceske's directors named deputy CEO and chairman Josef Bazala to replace recently resigned CEO Petr Kousal, spokesman Petr Stahlavsky told Czech Happenings. Mr. Bazala assumes the post after being appointed chairman of the supervisory board Monday. He has been with the company since 1981, initially serving as head of division for trade and operation and later as interim CEO for three months in 1995. The board also appointed director Jiri Kolar as deputy CEO for trade and operation. He replaced Jiri Kloutvor, who resigned Monday. Mr. Kloutvor has been blamed by unions for the firm's poor results. Mr. Kousal, who spent more than two years at the helm, left without showing any improvement in Ceske's freight transport operations. The firm failed to meet volume targets in the first quarter. Ceske Drahy plans to reconstruct 60 railway stations at the cost of billions of crowns and is looking for investors, according to Lidove noviny daily. CONTACT: CZECH RAILWAYS Nabrezi Ludvika Svobody 1222/12 110 15 Praha 1 Phone: +420 972 211 111 (switchboard operator) Web site: http://www.cd.cz/ HARVARDSKY PRUMYSLOVY: Appeals Court Overturns Bankruptcy --------------------------------------------------------- The High Court in Prague has reversed the decision declaring Harvardsky prumyslovy holding (HPH) bankrupt, Czech Happenings says. The assailed decision was handed down by a lower court in December, according to the report. Prior to the decision, the company had filed for liquidation to recover money for distribution to shareholders. HPH Chairman Karel Stanek, who believes bankruptcy will preclude shareholders from getting anything, welcomed the reversal. He said the liquidation process allows the company "to trace down assets that have been stolen from the holding." The company is the successor of the Harvard funds, which were set up by Viktor Kozeny to buy shares in state-owned companies that were privatized in the early 1990s. Presented by an array of investment opportunities, many Czechs turned to companies like HPH to manage their coupon books or privatization vouchers. Unfortunately for HPH's 240,000 shareholders, Mr. Kozeny siphoned their money and fled to the Bahamas. Receiver Josef Cupka and Michal Pacovsky, who filed the bankruptcy petition, could not be reached for comment, the paper says. ============= D E N M A R K ============= PAN FISH: E.U. Trade Restriction Decimates Danish Operation ----------------------------------------------------------- Pan Fish Denmark has decided to send home all 200 employees at its processing plant in Hirtshals in Denmark in the coming weeks. The move is a direct consequence of E.U.'s decision to impose anti-dumping duties on Norwegian farmed salmon. This has made it impossible to continue the operation in its current form, the company said. Pan Fish took over 100% of Pan Fish Denmark (former Vestlax Hirtshals) in autumn. The takeover was a part of the restructuring and revitalization of Pan Fish. The plant had and still has a significant potential to take part in a continuously growing market for consumables. The company was well underway with its extensive operational, product and marketing restructuring when the E.U. decided to impose the trade restrictions. "Almost 4 Danish kroner per kilo salmon in toll directly into the E.U. is more than we are able to carry during this reorganization," says newly hired managing director Thorstein Abrahamsen in Pan Fish Denmark. "We are in the middle of restructuring our operations, and have implemented a number of measures linked to cost savings and optimalization of our operations, hereunder divestment of properties. These processes have already given positive results, however the implementation of anti-dumping duty from E.U. towards Norwegian salmon, which is the primary raw material for our production, has effectively brought the positive operational and financial development to a stop," he said. "This is a very sad and unfortunate situation. The implementation of anti-dumping duty has hit our Danish operations, which is inside the E.U., with full strength. Pan Fish Denmark has struggled with weak margins due to high raw material prices, and with anti-dumping duties on top and thereby increased competitiveness for Chilean farmers, it was absolutely necessary for us to take drastic actions. Unfortunately the only defensible solution was to make all production personnel temporary redundant," says CEO Atle Eide. "Our employees have really worked hard and made a positive contribution to the extensive restructuring which has been started, and it is with great regret we now see ourselves with no other alternative than redundancy. Particularly since the Hirtshals-area already struggles with a high unemployment rate," says Mr. Abrahamsen. On April 27, E.U. introduced anti-dumping duties on Norwegian farmed salmon based on dumping accusations against Norwegian farmed salmon in the E.U. market. The duties were introduced after pressure from a small group of Scottish fish farmers with a total number of employees of no more than 265, barely more than the employees of Pan Fish Denmark. A joint Norwegian fish farming industry with strong support from Norwegian Authorities had argued against E.U.'s measures, and considerable support has been gained from countries within the E.U. However, the political and industrial pressure has so far not lead to any solution on the disagreement with E.U. The financial impact for the Pan Fish Group related to the redundancy situation in Pan Fish Denmark will depend upon if and when an agreement with E.U. to terminate the restrictions can be made. Book values of fixed assets related to the operation in Pan Fish Denmark have been written down significantly in the consolidated group accounts. The financial impact for the Pan Fish Group will thus be limited, provided that the shutdown is of temporary character. The company is positive with respect to the promising development in the marked for processed products and is positive to restart the production if the E.U. Commission, as soon as possible, terminates the restrictions. "The potential upside for the company is significant if only we are given the opportunity to compete on equal terms. The situation in Pan Fish Denmark is not a unique situation for us as a company, but a consequence of the decision made by E.U. I cannot with my greatest desire understand that this serves E.U.'s best interests. I hope that parties from both the E.U. side and Norwegian side is willing to find a solution before even more people are made redundant, and before the anti-dumping duties causes the industry, including farmers within the E.U., permanent damage," says Atle Eide. CONTACT: PAN FISH A.S.A. Atle Eide, Chief Executive Officer Phone: +47 911 52 977 PAN FISH DENMARK Thorstein Abrahamsen, Managing Director Phone: +45 244 94 080 ============= F I N L A N D ============= SANITEC OYJ: Standard & Poor's Withdraws All Ratings ---------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B+' corporate credit rating on Sanitec International S.A., the holding company of the Sanitec group (Sanitec); and Sanitec Oy, a subsidiary of Sanitec International, at the company's request. At the same time, the 'B-' subordinated debt rating on Sanitec International's Sanitec EUR260 million bond and the 'B+' senior secured rating on Sanitec Oy's EUR555 million bank loan were also withdrawn. The rating action follows the completion of Sanitec's acquisition by EQT on April 11, 2005, during which Sanitec successfully tendered for essentially all of its public debt. Following the expiry of the tender offer for EUR260 million of Sanitec's high-yield bonds on April 11, 2005, only a fraction of these bonds is still outstanding, so that Sanitec no longer has any public reporting requirements. Ratings information is available to subscribers of RatingsDirect at http://www.ratingsdirect.com. It can also be found at http://www.standardandpoors.com. Alternatively, call one of the following Standard & Poor's numbers: London Ratings Desk (44) 20-7176-7400; London Press Office Hotline (44) 20-7176-3605; Paris (33) 1-4420-6708; Frankfurt (49) 69-33-999-225; Stockholm (46) 8-440-5916; or Moscow (7) 095-783-4017. Members of the media may also contact the European Press Office via e-mail: media_europe@standardandpoors.com CONTACT: STANDARD AND POOR'S RATING SERVICES Group E-mail Address CorporateFinanceEurope@standardandpoors.com ============= G E R M A N Y ============= ART + MEDIA: Gives Creditors Until Next Week to File Claims ----------------------------------------------------------- The district court of Koln opened bankruptcy proceedings against Art + Media Gesellschaft fur Kulturmanagement mbH on April 21. Consequently, all pending proceedings against the company have been automatically stayed. Creditors have until May 20, 2005 to register their claims with court-appointed provisional administrator Hannelore Kruger-Knief. Creditors and other interested parties are encouraged to attend the meeting on June 22, 2005, 1:45 p.m. at the district court of Koln, Hauptstelle, Luxemburger Strasse 101, 50939 Koln, 1. Etage, Saal 142 at which time the administrator will present his first report of the insolvency proceedings. The court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors committee and or opt to appoint a new insolvency manager. CONTACT: ART + MEDIA GESELLSCHAFT FUR KULTURMANAGEMENT MBH Hansaring 60, 50670 Koln Contact: Markus Gassen, Manager Decksteiner Str. 113, 50354 Hurth Hannelore Kruger-Knief, Administrator Bonner Str. 172-176, 50968 Koln Phone: 9370500 Fax: +4922193705050 DEUTSCHE LUFTHANSA: Narrows Operating Loss to EUR26 Million ----------------------------------------------------------- The Lufthansa Group closed the first quarter of 2005 with an operating loss of EUR26 million. This compares with an operating loss in the first quarter of 2004 of EUR116 million. From January to March 2005 the Group generated EUR3.9 billion in revenue and returned a net loss of EUR116 million. When comparing these figures with the net profit of EUR62 million for the first quarter of 2004, the subsequent sale of parts of the company and book profits of EUR292 million from the sale of a stake in Amadeus must be taken into account. * * * In March, Moody's Investors Service placed the ratings of Deutsche Lufthansa Aktiengesellschaft on review for possible downgrade, following the announcement of Lufthansa's takeover offer for Swiss International. Moody's said that although the combination of the two airlines will mark a further step in the consolidation of the European airline industry, the combined credit profile may not be commensurate with the current Baa2 rating assigned to Lufthansa. Based on preliminary understanding of the transaction and the relative size of Swiss, Moody's does not anticipate that any rating action following the review is likely to be greater than one notch. CONTACT: DEUTSCHE LUFTHANSA AG Investor Relations 60546 Frankfurt Ulrike Schlosser Phone: +49 69 696-90997 Fax: +49 69 696-90990 E-mail: investor.relations@dlh.de FLECK & GONZALEZ: Interim Administrator Takes over Operations ------------------------------------------------------------- The district court of Wuppertal opened bankruptcy proceedings against Fleck & Gonzalez GmbH & Co. KG on April 26. Consequently, all pending proceedings against the company have been automatically stayed. Creditors have until May 31, 2005 to register their claims with court-appointed provisional administrator Johannes Koepsell. Creditors and other interested parties are encouraged to attend the meeting on June 16, 2005, 9:45 a.m. at the district court of Wuppertal, Hauptstelle, Eiland 4, 42103 Wuppertal, 2. Etage, Saal 234 - Altbau Amtsgericht at which time the administrator will present his first report of the insolvency proceedings. The court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors committee and or opt to appoint a new insolvency manager. CONTACT: FLECK & GONZALEZ GMBH & CO. KG Intzestrasse 21, 42859 Remscheid FLECK & GONZALEZ VERWALTUNGS GMBH Intzestrasse 21, 42859 Remscheid Contact: Hans-Walter Fleck, Manager Osminghausen 24, 42929 Wermelskirchen Miguel Gonzalez, Manager Intzestrasse 21, 42859 Remscheid Johannes Koepsell, Administrator Morianstrasse 3, 42103 Wuppertal Phone: 0202/24 56 721 Fax: 0202/2456722 FRIED STAHL: Wuppertal Court Appoints Administrator --------------------------------------------------- The district court of Wuppertal opened bankruptcy proceedings against Fried Stahl - & Metall - Handelsgesellschaft mbH on April 26. Consequently, all pending proceedings against the company have been automatically stayed. Creditors have until May 27, 2005 to register their claims with court-appointed provisional administrator Henner Klein. Creditors and other interested parties are encouraged to attend the meeting on June 21, 2005, 9:40 a.m. at the district court of Wuppertal, Hauptstelle, Eiland 4, 42103 Wuppertal, 2. Etage, Saal 234 - Altbau Amtsgericht at which time the administrator will present his first report of the insolvency proceedings. The court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors committee and or opt to appoint a new insolvency manager. CONTACT: FRIED STAHL - & METALL - HANDELSGESELLSCHAFT MBH Spreestr. 70, 42697 Solingen Contact: Beate Thomas, Manager Spreestr. 70, 42697 Solingen Henner Klein, Administrator Werlestrasse 38, 42289 Wuppertal Phone: 0202/26 26 40 oder 01722061011(Handy) Fax: 0202/6 34 08 HEINZE BUROEINRICHTUNGSGESELLSCHAFT: Declared Insolvent ------------------------------------------------------- The district court of Koln opened bankruptcy proceedings against Heinze B�roeinrichtungsgesellschaft mbH on April 20. Consequently, all pending proceedings against the company have been automatically stayed. Creditors have until June 22, 2005 to register their claims with court-appointed provisional administrator Dr. Norbert Heimann. Creditors and other interested parties are encouraged to attend the meeting on July 13, 2005, 9:20 a.m. at the district court of Koln, Hauptstelle, Luxemburger Strasse 101, 50939 Koln, Erdgeschoss, Saal 14 at which time the administrator will present his first report of the insolvency proceedings. The court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors committee and or opt to appoint a new insolvency manager. CONTACT: HEINZE BUROEINRICHTUNGSGESELLSCHAFT MBH Longericher Strasse 29, 50767 Koln Contact: Stefan Maubach, Manager Longericher Strasse 29, 50767 Koln Dr. Norbert Heimann, Administrator Spichernstr. 55, 50672 Koln Phone: 9595925 Fax: +49221514437 KLOECKNER & CO.: Earns Upgrade for Improved Capital Structure ------------------------------------------------------------- Moody's Investors Service upgraded Kloeckner & Co. International GmbH's senior implied rating to Ba3. Moody's has also upgraded the rating of the subordinated bond at Kloeckner Investment S.C.A. to B2 and the issuer rating of Kloeckner & Co. International GmbH to B3. Kloeckner & Co. International GmbH is a holding company established for the acquisition of Kloeckner & Co. AG and its businesses, herein referred to as "Kloeckner" or "the group". The outlook for the rating is stable. This rating action follows the announcement by the company of certain improvements to its capital structure. Ratings Rationale With the rating upgrade, Moody's acknowledges (i) the noticeable improvement in the capital structure of Kloeckner following the announcement of a EUR40 million increased equity contribution from the shareholders and (ii) the elimination of the contemplated special dividend payout of EUR50 million as a consideration under certain conditions resulting in the subsequent reduction of anticipated indebtedness. The changes in the capital structure have resulted in an improvement in the ratio of pro forma adjusted net debt/EBITDAR to 4.3x from 4.7x. The stable outlook reflects Moody's expectation that (i) the litigation risk resulting from the Balli cases for Kloeckner is low and there is sufficient protection from the seller to cover potential damage claims with an indemnification of EUR320 million from WestLB and (ii) that the company operates in a relatively stable environment given the wide-spread structure of its customer base, both by sector diversification and low dependency on single customers. Company Summary Headquartered in Duisburg, Germany, Kloeckner is one of the world's leading multi-metal distributors with an emphasis on steel and metal products for customized specifications requiring value-added processing to more than 200,000 active customers in Western Europe and Northern America. The company generated consolidated sales of EUR4.8 billion in 2004. CONTACT: MOODY'S DEUTSCHLAND GMBH Frankfurt Matthias Hellstern Vice President - Senior Analyst Corporate Finance Group MOODY'S INVESTORS SERVICE LTD. London David G. Staples Managing Director Corporate Finance Group For Journalists Phone: 44 20 7772 5456 NORCOM INFOSYSTEMS: Creditors Meeting Set July ---------------------------------------------- The district court of Hamburg opened bankruptcy proceedings against NORCOM Infosystems Gesellschaft fur EDV Beratung mbH on April 18. Consequently, all pending proceedings against the company have been automatically stayed. Creditors have until June 16, 2005 to register their claims with court-appointed provisional administrator Stephan Munzel. Creditors and other interested parties are encouraged to attend the meeting on July 18, 2005, 9:00 a.m. at the district court of Hamburg, Insolvenzgericht, Weidestrasse 122d, 22083 Hamburg, Saal 1, 2. Ebene (Zi. 2.18), at which time the administrator will present his first report of the insolvency proceedings. The court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors committee and or opt to appoint a new insolvency manager. CONTACT: NORCOM INFOSYSTEMS GESELLSCHAFT FUR EDV BERATUNG MBH Uhlandstrasse 26, 22087 Hamburg Contact: Ingeborg Nitz, Manager Dorotheenstrasse 111, 22301 Hamburg Reiner Voss, Manager Loher Strasse 27, 22149 Hamburg Stephan Munzel, Administrator Bachstrasse 85a, 22083 Hamburg Phone: 040/3208360 Fax: 040/320836-36 RATSKELLER HERFORD: Creditors Claim Due Next Month -------------------------------------------------- The district court of Bielefeld opened bankruptcy proceedings against Ratskeller Herford GmbH on April 21. Consequently, all pending proceedings against the company have been automatically stayed. Creditors have until June 16, 2005 to register their claims with court-appointed provisional administrator Hans-Peter Burghardt. Creditors and other interested parties are encouraged to attend the meeting on July 7, 2005, 11:00 a.m. at the district court of Bielefeld, Gerichtstrasse 6, 33602 Bielefeld, 4. Ebene, Saal 4065, at which time the administrator will present his first report of the insolvency proceedings. The court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors committee and or opt to appoint a new insolvency manager. CONTACT: RATSKELLER HERFORD GMBH Rathausplatz 1, 32052 Herford Contact: Bettina Meyer, Manager Bauvereinstr. 25, 32049 Herford Norbert Kardell, Manager Waldstr. 23 a, 32105 Bad Salzuflen Hans-Peter Burghardt, Administrator Bunsenstr. 3, 32052 Herford SD KAPITAL: Claims Verification Set July 19 ------------------------------------------- The district court of Hannover opened bankruptcy proceedings against SD Kapital Portfolio AG on April 18. Consequently, all pending proceedings against the company have been automatically stayed. Creditors have until June 14, 2005 to register their claims with court-appointed provisional administrator Dr. Jur. Rainer Eckert. Creditors and other interested parties are encouraged to attend the meeting on July 19, 2005, 8:30 a.m. at the district court of Hannover, Saal 226, 2. Obergeschoss, Dienstgebaude, Hamburger Allee 26, 30161 Hannover, at which time the administrator will present his first report of the insolvency proceedings. The court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors committee and or opt to appoint a new insolvency manager. CONTACT: SD KAPITAL PORTFOLIO AG Calenberger Esplanade 6, 30169 Hannover Contact: Peter Reimer Dr. Jur. Rainer Eckert, Administrator Lister Strasse 18, 30163 Hannover Phone: 0511/626287-0 Fax: 0511/626287-10 UNIMONT STUTTGART: Proofs of Claim Deadline Expires May 31 ---------------------------------------------------------- The district court of Stuttgart opened bankruptcy proceedings against Unimont Stuttgart, Zeitarbeit GmbH on April 19. Consequently, all pending proceedings against the company have been automatically stayed. Creditors have until May 31, 2005 to register their claims with court-appointed provisional administrator Steffen Beck. Creditors and other interested parties are encouraged to attend the meeting on June 30, 2005, 10:00 a.m. at Saal 4, Hauffstr. 5, 70190 Stuttgart, AG Stuttgart, Hauffstr. 5, EG at which time the administrator will present his first report of the insolvency proceedings. The court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors committee and or opt to appoint a new insolvency manager. CONTACT: UNIMONT STUTTGART, ZEITARBEIT GMBH U. CO KG Contact: Friedrich Hackmaier, Manager Silberburgstr. 144, 70176 Stuttgart Steffen Beck, Administrator Danneckerstr. 52, 70182 Stuttgart Phone: 0711/238890 Fax: 0711/2388930 WALTER BETONSANIERUNG: Applies for Bankruptcy Proceedings --------------------------------------------------------- The district court of Augsburg opened bankruptcy proceedings against WALTER Betonsanierung und Erhaltung GmbH on April 16. Consequently, all pending proceedings against the company have been automatically stayed. Creditors have until May 31, 2005 to register their claims with court-appointed provisional administrator Dipl. Kfm. Werner Schneider. Creditors and other interested parties are encouraged to attend the meeting on July 1, 2005, 8:45 a.m. at the district court of Augsburg, Justizgebaude, Sitzungssaal 162, Am Alten Einlass 1, 86150, at which time the administrator will present his first report of the insolvency proceedings. The court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors committee and or opt to appoint a new insolvency manager. CONTACT: WALTER BETONSANIERUNG UND ERHALTUNG GMBH Muhlmahdweg 25a, 86167 Augsburg Contact: Schuster Rainer, Manager Dipl. Kfm. Werner Schneider, Administrator Eserwallstr. 1-3, 86150 Augsburg WALTER WASSER: Gives Creditors Until Next Month to File Claims -------------------------------------------------------------- The district court of Augsburg opened bankruptcy proceedings against WALTER Wasser und Abwassertechnik GmbH on April 16. Consequently, all pending proceedings against the company have been automatically stayed. Creditors have until June 3, 2005 to register their claims with court-appointed provisional administrator Dipl. Kfm. Werner Schneider. Creditors and other interested parties are encouraged to attend the meeting on July 1, 2005, 11:15 a.m. at the district court of Augsburg, Justizgebaude, Sitzungssaal 162, Am Alten Einlass 1, 86150, at which time the administrator will present his first report of the insolvency proceedings. The court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors committee and or opt to appoint a new insolvency manager. CONTACT: WALTER WASSER UND ABWASSERTECHNIK GMBH Boheimstr. 8, 86153 Augsburg Contact: Jan Ludwig Beckmann, Manager Dipl. Kfm. Werner Schneider, Administrator Eserwallstr. 1-3, 86150 Augsburg WOHNUNGSBAUGESELLSCHAFT AM KLAUSENBERG: Declares Bankruptcy ----------------------------------------------------------- The district court of Augsburg opened bankruptcy proceedings against Wohnungsbaugesellschaft am Klausenberg mit beschrankter Haftung on April 16. Consequently, all pending proceedings against the company have been automatically stayed. Creditors have until June 3, 2005 to register their claims with court-appointed provisional administrator Dipl. Kfm. Werner Schneider. Creditors and other interested parties are encouraged to attend the meeting on July 1, 2005, 11:30 a.m. at the district court of Augsburg, Justizgebaude, Sitzungssaal 162, Am Alten Einlass 1, 86150, at which time the administrator will present his first report of the insolvency proceedings. The court will also verify the claims set out in the administrator's report during this meeting, while creditors may constitute a creditors committee and or opt to appoint a new insolvency manager. CONTACT: WOHNUNGSBAUGESELLSCHAFT AM KLAUSENBERG MIT BESCHRANKTER HAFTUNG Boheimstr. 8, 86153 Augsburg Contact: Christian Bohm and Jochen Raasch, Managers ============= I R E L A N D ============= JSG FUNDING: Blames Poor Trading Conditions for 24% EBITDA Slide ---------------------------------------------------------------- First Quarter, 2005: Year-on-year Performance JSG Funding's first quarter continuing net sales of EUR1,040 million decreased 3% against EUR1,068 million in the first quarter of 2004. First quarter continuing EBITDA, before exceptional items, of EUR108 million decreased 11% against EUR121 million in the first quarter of 2004. Continuing EBITDA, before exceptional items, of EUR108 million represents a margin of 10.4% on net sales against 11.4% in the first quarter of 2004. Quarter-on-quarter Performance First quarter continuing net sales decreased EUR32 million or 3% on the fourth quarter of 2004. First quarter continuing EBITDA, before exceptional items, of EUR108 million decreased 24% against EUR142 million in the fourth quarter of 2004. Continuing EBITDA, before exceptional items, of EUR108 million represents a margin of 10.4% on net sales against 13.2% in the fourth quarter of 2004. Summary Cash flows & Capital Structure A cash outflow in the first quarter of EUR33 million compares to an inflow of EUR13 million in the same quarter of 2004. This operating deficit primarily reflects adverse market conditions and lower operating profit year-on-year. Net borrowing at March 31, 2005, was EUR2,605 million (excluding EUR16 million of capital leases). This represents a 16% decrease in debt levels from EUR3,091 million at March 31, 2004 and a 10% decrease from EUR2,895 million at December 31, 2004. Net proceeds from the disposal of Munksjo's specialty paper and pulp operations were EUR425 million. Net debt to capitalization was 76.8% at March 31, 2005. Corporate Activity New Offerings On January 13, 2005, JSG Funding commenced a tender offer to purchase for cash all outstanding existing 15.5% subordinated notes. All of the euro 15.5% subordinated notes and 99.99% of the dollar 15.5% subordinated notes were tendered. The tender offer was completed on February 14, 2005. In January 2005, JSG Funding completed an offering of EUR217.5 million and US$200 million of 7.75% subordinated cash-pay notes due 2015. JSG Funding applied the proceeds from this offering to fund the purchase of the 15.5% subordinated notes tendered. This new issue lowers JSG Funding's cost of debt. Concurrent with the completion of this offering of notes, JSG Holdings plc, the indirect parent of JSG Funding, completed an offering of EUR325 million of 11.5% senior PIK notes due 2015, substantially all of the net proceeds of which were loaned to JSG Packaging Limited, its parent, which in turn, returned the net proceeds to its shareholders by means of a share capital reduction under Irish law. No separate financial information for JSG Holdings plc is included in this release. JSG Holdings plc is a holding company with no business operations. Product Market Overview Europe European market conditions remained very challenging in the first quarter of 2005. The European recycled containerboard industry is experiencing significant capacity additions against a backdrop of poor demand growth which continues to impact upon overall industry performance. While the industry is experiencing the shut down of certain inefficient capacity, JSG, in addition, continues to focus on reducing costs and further integrating its containerboard and corrugated operations. An integrated system provides support for JSG's operating margins and the cash flow generation of the business in difficult market conditions. Kraftliner volumes declined 11% on the first quarter of 2004. This decline partially reflects a relatively strong first quarter in 2004, when there was an element of customer purchasing ahead of announced price increases. The opposite is prevailing in 2005. Market conditions remain very difficult and there is evidence of increased imports of kraftliner into the European market in the first quarter. Kraftliner pricing is under pressure with prices in the first quarter of 2005, EUR50 per ton or 11% higher than the comparable period in 2004. Recycled containerboard volumes declined 6% on the first quarter of 2004. This decline reflects, in part, the closure of the Dublin and Cordoba mills, the build up of inventory for these markets by Mengibar and Townsend Hook and lower shipments in the U.K. due to the closure of the Tamworth corrugated plant. JSG's focus on increased levels of integration resulted in an increase in volumes in Germany and France of 1% and 2% respectively. Recycled containerboard prices declined 3% on 2004 first quarter levels. OCC price increases during the first quarter of 2005, also resulted in some margin squeeze in recycled containerboard. European corrugated volumes, reflecting weak market conditions, declined 4% on first quarter 2004 levels. France and Italy were weaker than expected with volume declines of 5% and 6% respectively. However, JSG's corrugated operations in Spain, Holland, Portugal and Poland reported positive growth in volumes in the first quarter on 2004 levels. On average, European corrugated prices declined EUR7 per ton or 1% on 2004 levels. Latin America JSG's Latin American operations continued to report positive results following record operating results for the full year 2004. Sales continued to grow in double digits in the first quarter of 2005 in their reporting currency, the U.S. dollar. EBITDA, however, declined over 3% on first quarter 2004 levels in US dollar terms. The impact of the weaker dollar translated this decline to over 7% in reported euro results. This decline primarily reflects predicted changes to market conditions in Venezuela where product prices declined and currency devaluation occurred in March, 2005. All of JSG's other countries of operation reported growth in EBITDA (in US dollar terms) on 2004 levels. Latin American containerboard and corrugated volumes increased 3% and 6% respectively year-on-year. Both average containerboard prices and average corrugated prices increased on 2004 levels. The Colombian economy continues to grow following 4% GDP growth in the full year 2004. Volume improvements and price increases continued in the first quarter. Containerboard and corrugated volumes increased 10% and 13% respectively year-on year. Mexican volumes declined 4% in containerboard and 8% in corrugated on first quarter 2004 levels in a softening Mexican economy. These declines reflect an inventory reduction across the country's customer base. Containerboard prices increased 14%, which resulted in an increase in corrugated prices of 10%. Despite the improved corrugated prices year-on-year, however, the increase was more than offset by increases in other input costs. Containerboard volumes in Venezuela were unchanged while corrugated volumes increased 19%. The de-coupling of containerboard and corrugated volume growth reflects the fact that JSG's containerboard operations are operating at effectively full capacity in Venezuela. Despite the strong increase in corrugated volumes, however, corrugated prices declined 8% year-on-year, due to significantly increased external competition, resulting in Venezuela's reported performance being weaker than the first quarter of 2004. Argentina had a strong first quarter in volume terms. Corrugated and containerboard volumes both increased 11% on 2004 levels. Rising paper and other input costs impacted the performance of the corrugated operations in the first quarter. In Chile, JSG's converting operation started production in 2004 while the corrugator started in the first quarter of 2005 and had higher than expected volumes. The competitive environment and rising input costs, however, resulted in a modest loss for the corrugated operations for the first quarter. It is expected to turn profitable in the near term. Cash flows First quarter 2005 free cash flow was a deficit of EUR33 million compared to a surplus of EUR13 million in the comparable period in 2004 principally due to lower operating profits year-on-year. First quarter capital expenditure of EUR38 million represented 69% of depreciation compared to 59% in the first quarter of 2004. The relative year-on-year increase in capital expenditure, as a percentage of depreciation, reflects the absence of Munksjo's specialty paper and pulp operations in the first quarter of 2005 with a corresponding impact on the depreciation charge. Consistent with the Group's focus on controlled capital expenditure, the target for 2005 remains at or close to 80% of deprecation. Working capital increased by EUR13 million in the first quarter reflecting higher debtors, stocks and creditors. As a percentage of annualized net sales, however, working capital of EUR324 million at March 2005 was 7.7% compared to 7.6% at December, 2004 and 9.5% at March 2004. JSG's operating deficit for the first quarter was more than offset by the proceeds from the sale of Munksjo's specialty paper and pulp operations in the period. This resulted in a total surplus of approximately EUR180 million for the first quarter of 2005. JSG received net proceeds of EUR425 million from the sale of the Munksjo operations - EUR273 million of which is recorded within "sale of operations", EUR157 million within the movement on net borrowing as the repayment of inter-company loans, partly offset by cash disposed of EUR5 million. In addition, JSG sold the Voghera mill in Italy for EUR10 million. It received EUR3 million in cash and the balance is payable over a three year period. Financing and investment outflows in the first quarter of 2005 relate primarily to costs arising in respect of the refinancing completed in February 2005. Refinancing costs of EUR53 million comprise the EUR51 million premium paid for the early redemption of the PIK together with waiver fees of approximately EUR2 million. The debt issuance costs of EUR8 million relate to the new senior notes. The net surplus of EUR213 million from financing and investment activity less the free cash flow deficit of EUR33 million, resulted in a total surplus of approximately EUR180 million for the first quarter compared to EUR21 million in 2004. The surplus for the quarter was increased by the EUR157 million of Munksjo inter-company debt repaid offset by the add-back of non-cash interest, currency and net cash of approximately EUR5 million in the Munksjo operations. These movements resulted in a decrease in net borrowing of approximately EUR291 million. Currency movements, primarily the strengthening of the U.S. dollar relative to the euro, resulted in an increase in the value of non-euro debt and a currency translation loss of EUR30 million in the first quarter of 2005. This compares to EUR28 million in the first quarter of 2004. In total, net borrowing at the JSG Funding level was EUR2,605 million (EUR2,621 million including capital leases of EUR16 million) at March 2005 compared to EUR2,895 million (EUR2,913 million including leases) at December 2004 and EUR3,091 million (EUR3,118 million including leases) at March 2004. Summary cash flows for the first quarter are set out in these tables: 3 months 3 months to March to March 31, 2005 31, 2004 EUR EUR Million Million - ------------------------------------- --------- - -------- Loss before tax - subsidiaries (68) (6) Exceptional items (33) - Depreciation and depletion 55 66 Goodwill amortization 10 12 Non cash interest expense 32 15 Refinancing costs 53 - Working capital change (13) (13) Capital expenditure (38) (39) Change in capital creditors (14) (7) Sales of fixed assets 1 4 Tax paid (14) (19) Other (4) - - -------------------------------------- -------- - -------- Free cash flow (33) 13 Investments (1) (1) Sale of businesses and investments 276 - Dividends paid to minorities (1) (1) Transaction fees - (1) Deferred debt issue costs (8) - Amounts transferred from affiliates - 11 Refinancing costs (53) - - -------------------------------------- -------- - -------- Net cash inflow 180 21 Net cash disposed (5) - Munksjo inter-company debt repaid 157 - Non-cash interest accrued (11) (10) Currency translation adjustments (30) (28) - -------------------------------------- -------- - -------- Decrease/(increase) in net borrowing EUR 291 (17) - -------------------------------------- -------- - -------- Performance Review and Outlook Gary McGann, Chief Executive Officer, said: "Our reduced financial performance reflects extremely challenging business conditions in Europe today. A combination of excess new capacity, below trend line demand growth and a strong currency impact is reflected in a significant reduction to EBITDA. Despite that, the Group continues to deliver against its underlying objective of 'controlling the controllables'. "For Latin America, a strong financial performance within this quarter follows record operating results for 2004. While we are pleased to report double-digit revenue growth for the region as a whole, there are some indications of weakening demand in Mexico. However, we have confidence in our progress in the region." A copy of these results is available free of charge at http://bankrupt.com/misc/JSGFunding(Q12005).mht CONTACT: JSG FUNDING PLC Beech Hill, Clonskeagh Dublin, 4, Ireland Phone: +353-1-202-7000 Fax: +353-1-269-4481 Web site: http://www.smurfit-group.com Gary McGann Phone: +353 1 202 7000 Ian Curley Phone: +353 1 202 7000 ========= I T A L Y ========= PARMALAT FINANZIARIA: Borsa Italiana Okays Relisting ---------------------------------------------------- Parmalat Finanziaria's plan to relist now awaits the market regulator's clearance after the stock exchange approved it Monday. Consob could give the go-ahead within days, Daily Il Sole 24 Ore reported without citing sources. The dairy group was kicked out of the exchange on Dec. 29, 2003 when it collapsed under the weight of its EUR14 billion debt. It is applying for relisting in conjunction with its revival as Parmalat S.p.A. On Monday the Italian bourse agreed to admit its shares and warrants on condition that its proposed debt-for-equity swap is approved by creditors and its sponsor Mediobanca S.p.A. promises not to mislead the market with incorrect reports again. A Parma court is expected to approve a vote on the debt-for-equity swap once Consob gives its approval. Sources said the voting requires no quorum, only the presence of at least 50% of voters. They expect to complete the process two months after Consob's ruling. CONTACT: PARMALAT FINANZIARIA Sede legale: 43044 Collecchio (Pr) - Via Oreste Grassi, 26 Codice fiscale e iscrizione nel Registro delle Imprese di Parma 00175250471 - Partita I.V.A. 01938950340 - R.E.A. Parma n. 188325 - U.I.C. n. 730 Sede amministrativa: 20122 Milano Piazza Erculea, 9 Phone: (39) 02.8068801 Fax: (39) 02.8693863 E-mail: x_affari_societari_it@parmalat.net PARMALAT U.S.A.: Stremicks Wants Affiliates' Claims Canceled ------------------------------------------------------------ On July 9, 2004, Parmalat S.p.A. and its affiliates filed claims against Milk Products of Alabama LLC -- now known as Farmland Stremicks Sub, L.L.C.: Claim Number Claimant Amount ------------ -------- ------ 804 Parmalat S.p.A. $363,937,810 884 Archway Cookies L.L.C. 632,005 829 Parmalat Finance Corp. BV 122,068,472 824 Parmalat Netherlands BV 144,880,348 879 Curcastle Corporation NV 72,049,960 869 Fratelli Strini Costruz. 20,640 Meccaniche S.r.L. 848 Centro Latte S.r.L. Undetermined 845 Coloniale S.p.A. Undetermined 842 Contal S.r.L. Undetermined 839 Dairies Holding Undetermined International BV 836 Eliair S.r.L. Undetermined 833 Eurolat S.p.A. Undetermined 868 Geslat S.r.L. Undetermined 862 HIT International S.p.A. Undetermined 865 HIT S.p.A. Undetermined 859 Lactis S.p.A. Undetermined 874 Parmalat Capital Undetermined Netherlands BV 826 Parmalat Finanziaria Undetermined 820 Parmalat Soparfi S.p.A. Undetermined 856 Newco S.r.L. Undetermined 851 Nuova Holding S.p.A. Undetermined 812 Olex S.A. Undetermined 810 Panna Elena S.r.L. Undetermined 807 Parma Food Corporation BV Undetermined 817 Parmatour S.p.A. Undetermined 814 Parmengineering S.r.L. Undetermined James M. Sullivan, Esq., at McDermott Will & Emery LLP, in New York, relates that Milk Products' Chapter 11 Plan requires sufficient funds to be reserved, in trust, to pay holders of disputed claims. Mr. Sullivan explains that Milk Products cannot make distributions to its creditors and equity holders under its Chapter 11 Plan until the claims filed by the Parmalat Entities have been resolved. Pursuant to the terms of a settlement among the parties, the Parmalat Entity Claims, other than the claims of Parmatour and Archway, will be withdrawn upon execution of a definitive document. In addition, Parmalat has indicated that the claim of Parmatour will be withdrawn in connection with the Settlement. Mr. Sullivan notes that because the Settlement is subject to approval by the Italian Ministry of Productive Assets, the Debtors expect that the definitive settlement documents will not be executed immediately. In any case, Mr. Sullivan contends that the Parmalat Entities' claims against Milk Products are unsubstantiated and without basis and should be estimated at zero for distribution purposes pending consummation of the Settlement. Thus, Farmland Stremicks asks the Court to estimate the Parmalat Entity Claims at zero. Parmalat Entities Object The Parmalat Entities assert that Farmland Stremicks' Request is premature because the Settlement negotiated among the parties is scheduled to close by May 31, 2005, subsequent to the Italian Ministry's approval. Assuming that the Settlement will close by that date, or some date relatively soon after, the Request would provide no meaningful relief to any party-in-interest and would add costs and expenses and needlessly consume the Court's resources, the Parmalat Entities assert. Nancy E. Delaney, Esq., of Curtis, Mallet-Prevost, Colt & Mosle LLP, contends that the Request glosses over the fact that if the Settlement does not close for some reason, the Parmalat Entities would have every right to assert their claims, which are fixed and liquidated. According to Ms. Delaney, the Request is fatally flawed because Section 502(c) of the Bankruptcy Code may not properly be used to finally adjudicate claims for distribution purposes. The role of the estimation process is to facilitate the plan confirmation process, including to allow the Court to determine claim amounts for purposes of gauging a plan's feasibility, Ms. Delaney clarifies. Estimation is not designed to provide a final adjudication of claims for distribution purposes. Moreover, Ms. Delaney says that even if estimation under Section 502(c) were available for the purpose of fixing the treatment of a claim for distribution purposes, it is inappropriate to utilize Section 502(c) to estimate claims that are neither "contingent" nor "unliquidated" and, accordingly, Section 502(c) on its face is inapplicable. Furthermore, the Parmalat Entities point out that Farmland Stremicks has failed to establish any "undue" delay. Within a few weeks the parties will have an informed view of whether or not the Settlement will close by the May 31 deadline. If the Settlement closes, the Request will be moot and the time and resources of the parties and the Court would be conserved. If it fails to close for any reason, the parties will determine whether to settle or adjudicate the subject claims and they will be able to advise the Court of how and when the claims should be resolved. Accordingly, the brief period of time between the filing of the Request and the time when the parties will be fully informed about the status of the Parmalat Entity Claims would not "unduly delay" the administration of the U.S. Debtors' bankruptcy cases, Ms. Delaney insists. The Parmalat Entities also argue that the estimation of their claims at zero for distribution purposes would, in effect, constitute an adjudication of the claims by fiat, in violation of their substantive and procedural due process rights. Ms. Delaney explains that it is misleading to characterize the Request as an "estimation" of claims because if it were granted, and if Farmland Stremicks were then to distribute all of its assets to creditors and equity holders as contemplated, then the Request would have resulted in a de facto final determination of the Parmalat Entity Claims. According to Ms. Delaney, Farmland Stremicks is asking the Court to make factual findings without evidence and without granting the parties the opportunity to conduct discovery. In addition, Ms. Delaney believes that the Request would violate the Plan, which requires Farmland Stremicks to create and fund a reserve for the treatment of disputed claims that become allowed claims on a pari passu basis with other claims in the same class. Ms. Delaney notes that Farmland Stremicks has not provided any reason why it should not comply with its own Plan. Ms. Delaney asserts that Farmland Stremicks should fully fund a reserve account for the benefit of the Parmalat Entities' claims if it wants to make a distribution to its other creditors and equity holders before the Parmalat Entity Claims are resolved. The Parmalat Entities, therefore, ask the Court to deny the Request. Headquartered in Wallington, New Jersey, Parmalat U.S.A. Corporation -- http://www.parmalatusa.com/-- generates more than EUR7 billion in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices. The company employs over 36,000 workers in 139 plants located in 31 countries on six continents. It filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., of Weil Gotshal & Manges LLP, represent the Debtors in their restructuring efforts. On June 30, 2003, the Debtors listed EUR2,001,818,912 in assets and EUR1,061,786,417 in debt. (Parmalat Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service, Inc., 215/945-7000) CONTACT: PARMALAT U.S.A. CORPORATION 520 Main Ave. Wallington, NJ 07057 Phone: 973 777 2500 Fax: 973 777 7648 Toll Free: 888 727 6252 Web site: http://www.parmalatusa.com ===================== N E T H E R L A N D S ===================== ROYAL SHELL: Posts 42% Increase in First-quarter Earnings --------------------------------------------------------- The Group's income for first quarter 2005 was US$6,673 million, an increase of 42% from the comparative period in 2004, reflecting higher hydrocarbon realizations, strong LNG earnings and higher earnings in Oil Products and Chemicals. Income in the first quarter 2005 included net gains of US$220 million, mainly from divestments partly offset by certain charges, compared with a net gain of US$490 million in 2004. Exploration & Production segment earnings of US$2,955 million were 9% higher than a year ago (US$2,707 million) mainly reflecting higher realized prices partly offset by lower volumes and higher costs including exploration and depreciation. Segment earnings in the first quarter 2005 included charges of US$41 million (mainly from divestment gains of US$82 million which were more than offset by a US$172 million charge for marking-to-market certain gas supply contracts in the U.K.), compared with net gains of US$245 million in the first quarter of 2004. Excluding these charges and net gains, segment earnings were 22% higher than a year ago. Liquids realizations were 44% higher than a year ago, compared to an increase in Brent of 49% and WTI of around 41%. Outside the U.S.A., gas realizations increased by 29%. In the U.S.A. gas realizations increased by 18%, compared to an increase in Henry Hub of 14%. Hydrocarbon production for the first quarter 2005 was 3,847 thousand boe per day. Excluding the impact of divestments of 18 thousand boe per day and the end of a Middle East gas contract of 100 thousand boe per day, total production was 2% lower than the same quarter last year, reflecting a 7% decrease in oil production and a 4% increase in gas production. Production benefited from new fields mainly in the U.K. and the U.S.A. and the ramp-up of production in the U.S.A. totaling some 183 thousand boe per day versus a year ago. New production volumes exceeded field declines of approximately 147 thousand boe per day, mainly in the U.S.A., Norway and Oman. This net increase was more than offset by operational issues totaling some 100 thousand boe per day, mainly in the U.K. North Sea, compared to a year ago. Gas & Power segment earnings were US$476 million, including gains of US$48 million mainly from divestments, compared to US$522 million a year ago, which included divestment gains of US$166 million. Earnings were helped by record LNG volumes (up 15%) and higher LNG prices and increased by 17% excluding the effect of divestments. Oil Products segment earnings were US$3,051 million compared to US$1,573 million for the first quarter of 2004. Results included net gains of US$427 million mainly from divestments versus a net gain of some US$100 million a year ago. Higher earnings due to increased refining margins (benefiting from wide light heavy crude differentials particularly in the U.S.A., and in Europe from middle distillates strength) were partially offset mainly by the impact of lower retail marketing margins in the U.S.A. (due to the impact of rising product cost which could not be fully recovered in the marketplace), lower trading results and higher costs mainly due to the weaker U.S. dollar. Chemicals segment earnings were US$449 million, compared to segment earnings of US$221 million in the same quarter last year. Earnings reflected higher operating rates, increased capacity and improved margins. Chemicals segment earnings in the first quarter 2005 included an impairment of the Group's investment in Basell of US$214 million. In 2004, Shell and BASF announced the review of strategic options for the Basell joint venture (Group interest 50%) and on May 5, 2005 announced that the companies are to sell Basell. The activities of Basell, including impairments, are reported as discontinued operations. Corporate and Other net costs were US$127 million in the first quarter 2005 compared to US$176 million a year ago, due to lower net interest expense from lower net gearing partly offset by lower insurance results. Cash flow from operating activities totaled US$8.1 billion in the first quarter 2005. There were US$1.1 billion gross proceeds from divestments, including US$0.8 billion in Oil Products with sales of businesses in Romania, the Canary Islands and the Eastern part of the Caribbean, the LPG business in Portugal and the Bakersfield refinery in the U.S.A. Capital investment in the first quarter 2005 was US$3.2 billion, compared with US$3.1 billion in the comparative period, of which US$2.4 billion was in Exploration & Production. Investments and Portfolio Developments Upstream portfolio developments during the quarter were the production licenses for Upper and Western Salym (Shell share 50%) in Russia were extended until 2032 and 2034 respectively. In Kazakhstan, Shell increased its equity interest in the North Caspian Sea Production Sharing Agreement (NCPSA), which includes the Kashagan Project, by 1.85% to 18.52% following the sale by BG Group. In Australia, Shell's divestment of the mature Laminaria (22% share interest) and Corallina (25% share interest) oil fields, is expected to be completed in the second quarter of 2005. Successful exploration wells were drilled in Nigeria, Norway, U.S.A., Malaysia, the Netherlands, the U.K. and Oman. Results to date are encouraging but awaiting completion of evaluation and clearance from governments and partners to provide more definitive information. Successful appraisal wells were drilled in Malaysia, Egypt, the Netherlands and the U.K. In Alaska, Shell is expected to be awarded 86 blocks in Lease Sale 195 for the Beaufort Sea. In the Gulf of Mexico, Shell is expected to be awarded nine blocks in Lease Sale 194. In Canada, Shell Canada acquired a 20% interest in eight existing exploration licenses in the Orphan Basin under a farm-in agreement. In Algeria, an exploration contract was awarded to Shell in the Reggane and Timimoun basins covering some 30,000 square kilometres (sq. km.). In Egypt, Shell acquired 30% of four Western Desert concessions covering some 60,000 sq. km. of exploration acreage. Shell and Qatar Petroleum signed a Heads of Agreement for the development of a large-scale integrated LNG project including Upstream gas and liquids production and a 7.8 million tonnes per annum (mtpa) LNG train (Qatargas 4, Shell share 30%). Intended LNG markets are North America and Europe with first deliveries expected to commence around 2010-2012. The Sakhalin II LNG joint venture (Shell share 55%) and Malaysia Tiga LNG (Shell share 15%) concluded 20-years sales commitments with Kogas, the Korean gas company to supply 1.5 to 2.0 mtpa each beginning in 2008. Shell and its partners in the Australian Gorgon LNG and domestic gas project agreed to integrate their interests in the Greater Gorgon area. Shell will hold a 25% interest in the joint venture to construct two 5 mtpa LNG trains. Shell expects to sell all or part of its share of gas from the Gorgon LNG project to the North American and Mexican markets. Shell received approval from the U.S. Maritime Administration for a 7.7 mtpa (initial capacity) offshore LNG import terminal (Gulf Landing) in the Gulf of Mexico. In Europe, Shell announced plans for the development of a 5.8 mtpa LNG import terminal in Sicily, Italy (Shell share 50%). In April 2005, Shell signed a Memorandum of Understanding with the Nigerian National Petroleum Corporation (NNPC) and partners for the joint development of a greenfield LNG project (Olokola LNG) in Nigeria. The project is expected to include a joint venture infrastructure and operating company, and initially up to four 5 mtpa LNG trains. Two of the four trains will be owned by NNPC and Shell. The intended markets are North America and Europe. In April 2005, Shell and Bechtel Enterprises Energy B.V. signed an agreement to sell InterGen N.V. (Shell share 68%) including 10 of its power plants for US$1.75 billion. Excluded from the sale are InterGen's assets in the United States, Colombia and Turkey pending further review. The transaction is expected to close mid-2005 and is subject to certain conditions and regulatory approvals. On May 3, 2005, The National Oil Corporation of the Great Socialist People's Libyan Arab Jamahiriya (NOC) and Shell Exploration and Production Libya GmbH (Shell) announced that they have reached a long-term agreement for a major gas exploration and development deal. The agreement covers the rejuvenation and upgrade of the existing Liquefied Natural Gas (LNG) Plant at Marsa Al-Brega on the Libyan coast, together with exploration and development of five areas located in the heart of Libya's major oil and gas producing Sirte Basin. The contract follows the Heads of Agreement signed in March 2004 between NOC and Shell, in which both parties agreed to establish a long-term strategic partnership in the Libyan gas sector. Downstream continued implementation of the Group's strategy for reshaping the portfolio during the quarter. On 1 January 2005, Shell implemented one integrated Downstream organization for the Oil Products and Chemicals businesses with a global line of business structure to optimize manufacturing facilities, standardize processes and improve services to customers. Oil Products completed the earlier announced sales of its businesses in Romania, the Canary Islands and the Eastern part of the Caribbean. In addition, Shell completed the sale of the LPG business in Portugal and the Bakersfield Refinery in the U.S.A. Total gross proceeds amounted to US$762 million. In China, the joint venture (Shell share 40%) with Sinopec started operating its first retail stations. At the end of the quarter over 200 retail stations were in operation. The joint venture is expected to build and operate 500 retail outlets in the Jiangsu Province. Shell signed a Letter of Intent with Qatar Petroleum for the development of a world-scale ethane-based cracker and derivatives complex in Ras Laffan, Qatar. In 2004, Shell and BASF announced the review of strategic options for the Basell joint venture (Shell share 50%). On May 5, 2005 BASF and Shell Chemicals announced that they are to sell Basell for a consideration of EUR4.4 billion, including debt. The transaction is subject to approval by the relevant antitrust authorities and closing is expected in the second half of 2005. A copy of these results is available free of charge at http://bankrupt.com/misc/RoyalShell(Q12005).pdf CONTACT: ROYAL DUTCH/SHELL GROUP OF COMPANIES Carel van Bylandtlaan 30 2596 HR The Hague The Netherlands Phone: +31 70 377 9111 Fax: +31 70 377 3115 Web site: http://www.shell.com ROYAL SHELL: Signs Joint Exploration Deal with Naftogaz Ukrainy --------------------------------------------------------------- National Joint Stock Company Naftogaz Ukrainy and Royal Dutch/Shell Group's Shell Exploration Company B.V. signed Tuesday a cooperation agreement to carry out technical studies leading to joint exploration and production of hydrocarbons in an area of interest in the Dniepr-Donets Basin. According to the agreement, NAK and Shell will embark on a joint study of an agreed area of joint interest, which covers an area of over 30,000 sq. km. with potential for further enlargement. According to geological data, the Dniepr-Donets Basin contains significant remaining undiscovered resources of natural gas. The recovery of these undiscovered resources is subject to considerable technological challenges and dependant on the application of modern insights and technology. Olexiy Ivchenko, Chairman of Naftogaz Ukrainy, said: "Naftogaz Ukrainy is pleased to enter into this agreement with Shell. We believe the combination of the detailed technical and operational knowledge of Naftogaz Ukrainy and access to state of-the-art technology from Shell will result in mutual benefits and we look forward to a fruitful partnership." Matthias Bichsel, Head of Exploration of Shell, said: "This cooperation agreement with Naftogaz Ukrainy marks Shell's entry into the Ukrainian upstream. We believe that the combination of NAK's geological and operational strength combined with the application of Shell's technology and insight into similar play settings will lead to the opening up of significant new opportunities to add more integrated gas from the Dniepr-Donets Basin. North-Eastern Ukraine is close to important regional gas markets, so we are excited to be beginning what should be a long and fruitful cooperation with Naftogaz Ukrainy." CONTACT: ROYAL DUTCH/SHELL GROUP OF COMPANIES Carel van Bylandtlaan 30 2596 HR The Hague The Netherlands Phone: +31 70 377 9111 Fax: +31 70 377 3115 Web site: http://www.shell.com UNITEDGLOBALCOM INC.: Q1 Results Close to Breakeven --------------------------------------------------- Highlights for the quarter: (a) revenue growth of 46% to US$798 million; (b) Operating Cash Flow growth of 37% to US$279 million; (c) net RGU additions of 140,100 (using new method), an increase of 101%; and (d) net loss of US$3 million compared to net loss of US$150 million. Mike Fries, President and Chief Executive Officer of UGC said: "We delivered excellent operating and financial results for the first quarter of 2005. We added 140,100 total RGUs during the period, which was more than double last year's net additions in the first quarter, driven by robust broadband data and digital phone sales. At March 31, 2005, we had approximately 11.2 million consolidated RGUs and customer growth has remained strong early in the second quarter. As a result, we believe that we're on track to meet or exceed our full year guidance for 600,000 net new RGUs. "On a reported basis, revenue and Operating Cash Flow (OCF) in first quarter 2005 increased 46% and 37%, respectively, in part due to favorable foreign currency (FX) movements. Using the same FX rates in effect during last year's first quarter, our revenue and OCF growth rates were 38% and 28% respectively, well ahead of our full year guidance targets of 20% growth for each of those performance measures. "We have made good progress recently on a number of our key strategic initiatives. In April, we closed on the merger or our Chilean subsidiary, VTR, with Metropolis-Intercom, which will strengthen our market leading position in broadband Internet, multi-channel video and triple-play services. We expect to benefit from a significant reduction in duplicative operating costs and other synergies as a result of the merger over the next 1-2 years. We also expect to generate meaningful synergies from merger of NTL Ireland's business with our Chorus asset, if the transaction receives regulatory approval. The Republic of Ireland is one of the fastest growing economies in Western Europe and we are well positioned to participate in the rapid growth of broadband services there. "In Europe, UPC is poised for the rapid expansion of digital phone (VoIP) services across several new markets. In the meantime, digital phone sales remain strong, averaging over 5,000 per week in the Netherlands and Hungary, and we recently began our commercial VoIP launch in France. We are also aggressively increasing the speeds of our broadband Internet products across Europe beginning with 20+ Mbps 'Extreme' products already launched in the Netherlands, Norway, Belgium, and Sweden. Finally, we recently announced our plans to migrate all of our cable subscribers to digital in the Netherlands, which we expect to begin in the fourth quarter of 2005. As a result of this initiative, we expect to eventually deploy over 2 million digital set-top boxes and enhance our leading position in the Dutch pay-TV marketplace." First Quarter 2005 Results Consolidated operating subsidiaries in Europe include UPC Broadband -- the cable television and broadband division with operations in 13 countries, and chellomedia -- the media and programming division, which also includes the Competitive Local Exchange Carrier (CLEC), Priority Telecom. In Latin America, primary operation is VTR, our cable television and broadband provider in Chile. Revenue Revenue for the quarter ended March 31, 2005 was US$798 million, an increase of 46% or US$251 million compared to the same period in 2004. Excluding the impact of foreign exchange movements, currency adjusted year-over-year revenue growth was 38% for first quarter 2005, well ahead of the 20% full year 2005 guidance target, as a result of higher average monthly revenue per subscriber (ARPU) and RGU growth. Excluding FX movements as well as acquisitions, organic revenue growth for the first quarter 2005 was 13% compared to the same period last year. Total European revenue increased 50% to US$711 million for the quarter ended March 31, 2005 compared to the same period last year, primarily due to a 49% increase in the core triple play operation, UPC Broadband. Excluding acquisitions (primarily Noos and Chorus), revenue in Western Europe increased 16% compared to the same period in 2004, while sales in Central and Eastern Europe increased 36% on the same basis. In Chile, revenue at VTR increased 18% for the first quarter 2005 compared to same period last year. Average monthly revenue (ARPU) per RGU, excluding acquisitions, for the three months ended March 31, 2005 was US$21.22, an increase of 13% compared to the same period in 2004. Excluding foreign currency movements, the organic increase in ARPU per RGU was approximately 8.6% year-over-year. ARPU per customer relationship was US$26.56 for the three months ended March 31, 2005, an increase of 18% from US$22.52 compared to the same period in 2004. Excluding foreign currency movements, the organic increase in ARPU per customer relationships was 13%. Operating Cash Flow Operating Cash Flow (OCF) for the quarter ended March 31, 2005 was US$279 million, an increase of 37% compared to the prior year. Excluding the impact of FX movements, OCF growth was 28% compared to the prior year period, significantly above the guidance target of 20% OCF growth for the full year. On an organic basis (excluding FX and the impact of acquisitions), OCF growth was 11% year-over-year. Excluding approximately US$7 million of charges associated with the potential business combination with Liberty Media International, organic cash flow growth rate for the quarter would have been 15%. Total European OCF increased 43% to US$261 million for the quarter ended March 31, 2005, primarily due to a 39% increase at UPC Broadband. OCF in Western Europe increased 36% to US$219 million (including Noos and Chorus), while OCF in Central and Eastern Europe increased 43% to US$68 million. Excluding acquisitions (primarily Noos and Chorus), OCF in Western Europe increased 17% to US$188 million. In Chile, OCF for the quarter ended March 31, 2005 increased 23% to US$31 million. For the quarter ended March 31, 2005, consolidated OCF margin was 35.0% compared to 37.3% for the same period last year. On a sequential basis, however, consolidated OCF margin increased by approximately 400 basis points compared to 31.0% in the fourth quarter of 2004 when OCF margin suffered primarily as a result of costs associated with the settlement of a legal dispute for a Dutch programming contract (MovieCo). Excluding the results of Noos and Chorus and approximately US$7 million of costs associated with the potential business combination with Liberty Media International, first quarter overall OCF margin was 38.0% compared to 37.3% for the same period last year due primarily to the inclusion of results from lower margin broadband business in France and Ireland in the current period. Net Income (Loss) Net loss was US$3 million or -US$0.00 earnings per share for the quarter ended March 31, 2005, which compares with a net loss of US$150 million or -US$0.21 per share in last year's first quarter. Free Cash Flow and Capital Expenditures Free Cash Flow (FCF) for the quarter ended March 31, 2005 was negative US$35 million due in part to an approximate US$50 million payment related to the litigation settlement of a Dutch programming contract (MovieCo). Excluding that payment, FCF for the period would have been a positive US$14 million, which compares to US$36 million that we generated in last year's first quarter. Subscriber acquisition costs and corresponding equipment costs were materially higher in this year's first quarter compared to last year given the substantial increase in net RGU additions. Capital expenditures for the quarter ended March 31, 2005 were US$167 million (21% of revenues) compared to US$80 million (15% of revenues) for first quarter 2004. The primary reason for the increase was higher spending on customer premise equipment (CPE) due to the significant increase in RGU growth in first quarter 2005 compared to the same period last year, as well as foreign currency movements. Balance Sheet, Leverage, and Liquidity At March 31, 2005, total long-term debt was US$4.9 billion and we had cash and cash equivalents (including short-term liquid investments) of US$1.1 billion. Net debt to annualized Operating Cash Flow or consolidated leverage ratio was 3.4x compared to 3.1x for the same period in the prior year, primarily as a result of increased borrowings to finance acquisitions, which were financed with additional debt and cash on hand. In addition to cash balances, the company currently has EUR1.0 billion of availability under the revolvers of our European credit facility subject to covenant compliance. Together with the market value of interests in the publicly traded securities of SBS Broadcasting and Austar United, and including cash balances at March 31, 2005, total liquidity was approximately US$3.0 billion using the market values and FX rates in effect on that date. Operating Statistics Total RGUs were approximately 11.2 million at March 31, 2005. UGC management has recently implemented a change in how we analyze RGUs with respect to its video business. As a result, the company no longer "double count" a digital video subscriber also as an analog video subscriber. It is providing subscriber results under both this "new" method as well as "old" method for comparative purposes. During the first quarter, the company added 140,100 net new RGUs, which represents a 101% increase from last year's first quarter RGU additions, primarily driven by strength in the broadband Internet and digital phone (VoIP) products in Europe. Under the "old method" of double counting digital RGUs currently used by most U.S. cable companies, the company added 163,100 net new RGUs during the quarter, a 77% improvement compared to the same period last year. Over the past 12 months and excluding acquisitions, the Company has added 535,700 net new RGUs on an organic basis. In terms of net additions by product, the company added a total of 102,900 broadband Internet subscribers during the first quarter, including 88,300 in Europe and 14,500 in Chile. As of March 31, 2005, broadband Internet subscriber base exceeds 1.5 million total RGUs. Telephony additions were 44,000 for the first quarter primarily driven by the early success of digital phone (VoIP) launches in the Netherlands and Hungary. The company expects the digital phone RGU additions to increase over the next several quarters as it launches the product across additional markets in Europe. A full copy of the financial results is available free of charge at http://bankrupt.com/misc/UnitedGlobalCom(Q12005).mht CONTACT: UNITEDGLBALCOM, INC. Richard S.L. Abbott Investor Relations Phone: (303) 220-6682 E-mail: ir@unitedglobal.com Bert Holtkamp Corporate Communications - UGC Europe Phone: + 31 (0) 20 778 9447 E-mail: communications@ugceurope.com Claire Appleby Investor Relations - UGC Europe Phone: +44 20 7 838 2004 E-mail: ir@ugceurope.com =========== N O R W A Y =========== PETROLEUM GEO-SERVICES: Revenues Lower Under U.S. GAAP ------------------------------------------------------ Petroleum Geo-Services A.S.A. (OSE and NYSE: PGS) said on Tuesday it has filed its Annual Report on Form 20-F for the year ended Dec. 31, 2004 containing consolidated financial statements prepared in accordance with U.S. GAAP. A copy of the Company's Form 20-F is on file with the U.S. Securities and Exchange Commission (SEC) and is available for viewing and/or downloading at http://www.sec.govor at http://www.pgs.com(select the link to "Investor Relations", "Financial Reports" then "SEC Filings"). As previously reported, the financial statements prepared in accordance with U.S. GAAP vary significantly from the financial statements prepared in accordance with Norwegian GAAP. The Company adopted fresh-start reporting effective Nov. 1, 2003 for U.S. GAAP reporting purposes. Under fresh-start reporting, the Company recorded assets and liabilities at estimated fair values as of Nov. 1, 2003, creating a large number of differences compared to the Norwegian GAAP financial statements, which are on an historical cost basis. As previously reported, these differences, in the consolidated statement of operations for 2004, relates predominantly to the amortization of the multi-client library and other intangible assets, but also other effects of fresh-start. There are no material differences in net cash provided by operating activities, net cash used in investing activities and net cash used in financing activities in the consolidated statement of cash flows. The tables below show the main differences in net income and shareholders' equity between the financial statements prepared in accordance with U.S. GAAP and those prepared in accordance with Norwegian GAAP. Due to fresh-start reporting there is a large number of differences and the tables and related comments that follow should not be considered a complete description of the differences. Net Income (In millions of dollars) 2004 Net loss Norwegian GAAP (including minority interest) (54.3) GAAP differences by caption: Revenues (a) (6.0) Cost of sales, R&D and SG&A (b) 7.0 Exploration costs (c) (16.3) Depreciation and amortization (d) (41.4) Other operating expenses, net/cost of reorganization 0.2 Income (loss) from associated companies (4.6) Interest expense 0.4 Other financial items, net 0.3 Income tax expense (e) (19.4) Minority expense (0.6) Net loss in accordance with U.S. GAAP (134.7) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Comments on main differences: (a) Revenues for 2004 reported in accordance with U.S. GAAP were lower principally because: (1) upon adopting fresh-start reporting, some elements of deferred revenues were recorded at estimated fair value; and (2) since under U.S. GAAP certain outstanding forward sales contracts for oil were recorded at fair value at December 31, 2004. (b) Cost of sales, R&D and SG&A for 2004 reported in accordance with U.S. GAAP were lower primarily since certain costs reported as cost of sales under Norwegian GAAP were presented as exploration cost under U.S. GAAP (ref. also (c)). (c) Exploration costs (which includes cost to explore for oil and natural gas) for 2004 are reported on a separate line in the statement of operations in accordance with U.S. GAAP, while these costs were included in cost of sales and depreciation and amortization under Norwegian GAAP (ref. also (b) and (d)). This difference only affects the classification in the statement of operations and has no effect on net income. (d) Depreciation and amortization for 2004 reported in accordance with U.S. GAAP was higher, as previously disclosed, mainly due to higher amortization of the multi-client library and amortization of several intangible assets recognized under fresh-start reporting. Higher amortization of the multi-client library was due to several factors, including higher book value of the library at the beginning of 2004 due to fresh-start reporting and higher minimum amortization caused by fresh-start minimum amortization profiles. Partially offsetting these effects, the costs related to a dry exploration well were included in depreciation and amortization under Norwegian GAAP while they were presented as part of exploration costs under U.S. GAAP (ref. also (c)). (e) Income tax expense for 2004 reported in accordance with U.S. GAAP was higher, mainly because: (1) the provision for tax contingencies at January 1, 2004 was lower than under Norwegian GAAP; and (2) realization of unrecognized tax assets generated before November 1, 2003 are recorded as a reduction of the carrying value of intangible assets under U.S. GAAP compared to a reduction of tax expense under Norwegian GAAP. Shareholders' Equity (In millions of dollars) Dec. 31, 2004 Shareholders' equity Norwegian GAAP: 304.1 GAAP differences:: Property, plant and equipment (f) (33.3) Multi-client library 4.1 Oil and natural gas assets (g) 7.5 Intangible and other long-lived assets (h) 38.6 UK lease related liabilities (i) (63.4) Accrual for pension liabilities (j) (20.1) Deferred tax, long-term (6.7) Other long-term liabilities (2.8) Accrued expenses (2.6) Taxes payable and short-term deferred tax (1.5) Shareholders' equity U.S. GAAP and minority interest 223.9 (f) Property, plant and equipment at December 31, 2004 in accordance with U.S. GAAP were lower mainly because, under fresh-start reporting, the estimated fair value of some of the contracts related to the FPSO fleet were recorded separately as intangible assets. Under Norwegian GAAP, when recording impairments on these assets in 2003, the contracts were included in the valuation of the FPSOs. (g) Oil and natural gas assets at December 31, 2004 in accordance with U.S. GAAP were higher mainly because, under fresh-start reporting, these were recorded at the estimated fair value. Offsetting this difference is the deferred income tax effect, which approximated 78% of this difference. (h) Intangible and other long-lived assets at December 31, 2004 in accordance with U.S. GAAP were higher mainly because, under fresh-start reporting, several intangible assets were recorded at estimated fair value, including the fair value of some of the contracts related to the FPSO fleet. (i) Accrual for U.K. lease related liabilities at December 31, 2004 in accordance with U.S. GAAP were higher because, under fresh-start reporting, the Company calculated and recognized a liability for certain tax indemnities related to these leases and also recorded the interest rate differential related to the leases at estimated fair value. (j) Accrual for pension liabilities at December 31, 2004 in accordance with U.S. GAAP was higher because, under fresh-start reporting, the Company recorded the liabilities at estimated fair value. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Petroleum Geo-Services is a technologically focused oilfield service company principally involved in geophysical and floating production services. PGS provides a broad range of seismic and reservoir services, including acquisition, processing, interpretation, and field evaluation. PGS owns and operates four floating production, storage and offloading units (FPSOs). PGS operates on a worldwide basis with headquarters at Lysaker, Norway. For more information on Petroleum Geo-Services visit http://www.pgs.com. CONTACT: PETROLEUM GEO-SERVICES A.S.A. Ola Bosterud Sam R. Morrow Christopher Mollerlokken Phone: +47 6752 6400 U.S. Investor Services Renee Sixkiller Phone: +1 281 679 2240 =========== P O L A N D =========== STOCZNIA GDYNIA: Headed into Bankruptcy --------------------------------------- The chances of Stocznia Gdynia (Gdynia Shipyard) surviving until next month looks dim after drafts of a plan that would allow it to extend restructuring failed to materialize. The firm is hoping Poland would amend its regulations concerning public aid to enterprises of particular importance to the job market before its restructuring deadline ends by June 5. However, according to a report from the Europe Intelligence Wire, authorities have not yet showed any draft to the amendment by May 9. According to the report, Economic Committee Head Adam Szejnfeld admitted hearing of the project, but thinks it still warrants a thorough investigation. An amendment would give the firm another 48 months of protection from creditors who are owed PLN40 million. The firm is about to complete its two-year reorganization. Its collapse would take PLN900 million from the state budget. CONTACT: STOCZNIA GDYNIA S.A. ul Czechoslowacka 3 Gdynia 81-969 Poland Phone: 48 58 627 1500 Fax: 48 58 621 0879 Web site: http://www.stocznia.gdynia.pl =========== R U S S I A =========== AUTOMOBILE COLUMN: Omsk Court Appoints Insolvency Manager --------------------------------------------------------- The Arbitration Court of Omsk region has commenced bankruptcy supervision procedure on open joint stock company Automobile Column - 1251. The case is docketed as K/E-158/04. Mr. O. Kratko has been appointed temporary insolvency manager. Creditors may submit their proofs of claim to 644093, Russia, Omsk region, Post User Box 9486. A hearing will take place on June 14, 2005, 10:00 a.m. CONTACT: AUTOMOBILE COLUMN - 1251 644036, Russia, Omsk region, 1st Kazakhtanskaya Str. 30 Mr. O. Kratko Temporary Insolvency Manager 644093, Russia, Omsk region, Post User Box 9486 BANK OF MOSCOW: Fitch Rates Proposed Eurobond 'BB+' --------------------------------------------------- Fitch Ratings assigned Kuznetski Capital S.A.'s upcoming issue of limited recourse loan participation notes an expected Long-term 'BB+' rating. The notes are to be used solely for financing a loan to Russia's Bank of Moscow (BOM, rated Long-term foreign currency 'BB+', Short-term 'B', Support '3', Individual 'D'). The assignment of the final rating is contingent on receipt of final documentation conforming materially to information already received. Kuznetski Capital S.A., a Luxembourg-domiciled special purpose vehicle (SPV), will only pay noteholders amounts (principal and interest), if any, received from BOM under the loan agreement. Under a trust deed, the issuer will charge to the trustee, J.P. Morgan Corporate Trustee Services Limited, as security for its payment obligations in respect of the notes and for the benefit of noteholders, its rights as lender under the loan agreement and amounts received pursuant to the loan in an account of the issuer. The notes will be offered both outside the U.S. (in reliance on Regulation S of the U.S. Securities Act of 1933) and within the U.S. (to qualified institutional buyers as defined in Rule 144A under the Securities Act who are also qualified purchasers within the meaning of Section 2(a)(51)(A) of the U.S. Investment Company Act). The SPV's claims under the loan agreement will rank at least pari passu with the claims of other unsecured borrowers, save those preferred by relevant (bankruptcy, liquidation etc.) laws. Under Russian law, the claims of retail depositors rank above those of other senior unsecured creditors. At end-2004, retail deposits accounted for 33% of BOM's total liabilities, according to the bank's IFRS accounts. The loan agreement between the SPV and BOM contains a cross default clause and covenants that limit disposals by BOM and its subsidiaries. The loan agreement also contains a negative pledge clause, which allows for a degree of securitization by BOM. Were such a deal to be undertaken, Fitch comments that the nature and extent of any over-collateralization would be assessed by the agency for any potential impact on unsecured creditors. BOM was founded in 1994 and is one of Russia's 10 largest banks, with consolidated assets of approximately US$5.7 billion at end-2004. Since 1995 BOM has been majority-owned by the government of the City of Moscow (rated 'BBB-') and its Long-term rating is driven by potential support from the government. The City government and associated organizations are a substantial source of, at times cheap, funds for the bank. Likewise, lending to the City or to parties closely related to the City constitutes a significant element of the bank's business. However, the bank has also been growing its retail operations very rapidly and has plans to expand further its branch network both in Moscow and across the wider Russian Federation. CONTACT: FITCH RATINGS Vladlen Kuznetsov, Moscow Phone: +7 095 956 9901 James Watson Phone: +7 095 956 9901 Media Relations: Alex Clelland, London Phone: +44 20 7862 4084 ELECTRIC DRIVE: Bankruptcy Hearing Set July ------------------------------------------- The Arbitration Court of Tula region has commenced bankruptcy supervision procedure on open joint stock company Electric Drive. The case is docketed as A68-13/B-05. Mr. V. Naumov has been appointed temporary insolvency manager. Creditors may submit their proofs of claim to 301114, Russia, Tula region, Leninskiy region, Plekhanovo. A hearing will take place on July 27, 2005, 10:00 a.m. at the Arbitration Court of Tula region. CONTACT: ELECTRIC DRIVE 301114, Russia, Tula region, Leninskiy region, Plekhanovo Mr. V. Naumov Temporary Insolvency Manager 301114, Russia, Tula region, Leninskiy region, Plekhanovo IZENSKIY MEKH-ENERGO-SERVICE: Under Bankruptcy Supervision ---------------------------------------------------------- The Arbitration Court of Ulyanovsk region has commenced bankruptcy supervision procedure on open joint stock company Izenskiy Mekh-Energo-Service. The case is docketed as A72-736/05-21/6-B. Mr. V. Ermilov has been appointed temporary insolvency manager. Creditors may submit their proofs of claim to 432071, Russia, Ulyanovsk, Federatsii St. 105, Office 14. CONTACT: IZENSKIY MEKH-ENERGO-SERVICE 433030, Russia, Ulyanovsk region, Inza, Transportnaya Str. 9 Mr. V. Ermilov Temporary Insolvency Manager 432071, Russia, Ulyanovsk region, Federatsii Str. 105, Office 14 KALININSKOYE: Declared Insolvent -------------------------------- The Arbitration Court of Saint-Petersburg and the Leningrad region commenced bankruptcy proceedings against Kalininskoye after finding the close joint stock company insolvent. The case is docketed as A56-14530/2004. Mr. A. Korobov has been appointed new insolvency manager. Creditors may submit their proofs of claim to 191119, Russia, Saint-Petersburg, Post User Box 131. CONTACT: KALININSKOYE 187683, Russia, Leningrad region, Boksitogorskiy region Mr. A. Korobov Insolvency Manager 191119, Russia, Saint-Petersburg, Post User Box 131 NAZYVAEVSKIY DAIRY: Bankruptcy Proceedings Begin ------------------------------------------------ The Arbitration Court of Omsk region has commenced bankruptcy supervision procedure on open joint stock company Nazyvaevskiy Dairy. The case is docketed as AK/E-4/05. Mr. D. Gindin has been appointed temporary insolvency manager. Creditors may submit their proofs of claim to 644010, Russia, Omsk, Post User Box 5135. A hearing will take place on Aug. 2, 2005. CONTACT: NAZYVAEVSKIY DAIRY Russia, Omsk region, Nazyvaevsk Mr. D. Gindin Temporary Insolvency Manager 644010, Russia, Omsk region, Post User Box 5135 NYANDOMSKOYE: Declared Insolvent -------------------------------- The Arbitration Court of Moscow commenced bankruptcy proceedings against Nyandomskoye (TIN 29018004718, KPP 290101001) after finding the auto-transport enterprise insolvent. The case is docketed as A05-14698/02-858/15. Mr. S. Tifanov has been appointed insolvency manager. Creditors have until June 2, 2005 to submit their proofs of claim to 163000, Russia, Arkhangelsk, Volodarskogo Str. 36A. CONTACT: NYANDOMSKOYE 164200, Russia, Arkhangelsk region, Nyandoma, Generala Kovyrzina Str. 39 Mr. S. Tifanov Insolvency Manager 163000, Russia, Arkhangelsk, Volodarskogo Str. 36A PROM-ZHIL-STROY: Tyva Court Names Ch. Ondar Insolvency Manager -------------------------------------------------------------- The Arbitration Court of Tyva republic has commenced bankruptcy supervision procedure on close joint stock company Prom-Zhil-Stroy (TIN 1701028849). The case is docketed as A69-581/05-3. Mr. Ch. Ondar has been appointed temporary insolvency manager. Creditors may submit their proofs of claim to 667000, Russia, Tyva republic, Kyzyl, Kochetova Str. 1, 2nd floor, Office 6. A hearing will take place on June 14, 2005, 10:00 a.m. CONTACT: PROM-ZHIL-STROY Russia, Tyva republic, Kyzyl, Mayakovskogo Str. 52 Mr. Ch. Ondar Temporary Insolvency Manager 667000, Russia, Tyva republic, Kyzyl, Kochetova Str. 1, 2nd floor, Office 6 RYAZAN-STROY 7: Undergoes Bankruptcy Supervision Procedure ---------------------------------------------------------- The Arbitration Court of Ryazan region has commenced bankruptcy supervision procedure on close joint stock company Ryazan-Stroy #7. The case is docketed as A54-566/05-S6. Mr. V. Salkazanov has been appointed temporary insolvency manager. Creditors may submit their proofs of claim to 391030, Russia, Ryazan region, Spas-Klepiki, Sovetskaya Str. 6. CONTACT: RYAZAN-STROY #7 390542, Russia, Ryazan region, Ryazan, Leninskogo Komsomola Str. 5 Mr. V. Salkazanov Temporary Insolvency Manager 391030, Russia, Ryazan region, Spas-Klepiki, Sovetskaya Str. 6 SARATOVSKIY: Bankruptcy Hearing Resumes June -------------------------------------------- The Arbitration Court of Saratov region has commenced bankruptcy supervision procedure on open joint stock company Saratovskiy. The case is docketed as A57-91 B/05-12. Ms. T. Perfilova has been appointed temporary insolvency manager. Creditors may submit their proofs of claim to 410029, Russia, Saratov, Sako I Vantsetti Str. 54/60, Office 201. A hearing will take place on June 8, 2005, 10:15 a.m. at 410002, Russia, Saratov, Babushkin Vvoz, 1. CONTACT: SARATOVSKIY 410071, Russia, Saratov region, Shelkovichnaya Str. 177 Ms. T. Perfilova Temporary Insolvency Manager 410029, Russia, Saratov region, Sako I Vantsetti Str. 54/60, Office 201 SPETS-STAL-COMPLEKT: Bankruptcy Proceedings Begin ------------------------------------------------- The Arbitration Court of Moscow commenced bankruptcy proceedings against Spets-Stal-Complekt after finding the close joint stock company insolvent. The case is docketed as A40-45511/4-73-32B. Mr. M. Frolov has been appointed insolvency manager. Creditors may submit their proofs of claim to 140188, Russia, Moscow region, Zhukovskiy, Post User Box 563. CONTACT: SPETS-STAL-COMPLEKT 103030, Russia, Moscow region, Novoslobodskaya Str. 26, Building 1 Mr. M. Frolov Insolvency Manager 140188, Russia, Moscow region, Zhukovskiy, Post User Box 563 ===================== S W I T Z E R L A N D ===================== ABB LTD.: Closure of French Factory Still On -------------------------------------------- ABB Ltd. communications director Jean-Luc Raphet revealed Tuesday the company's Champagne-sur-Seine factory in Seine-et-Marne will still be shut down. This contradicts earlier claims by trade unions that the company has suspended the closure of the factory, which employs 3,200 people. According to the Interactive Investor, the company has not disclosed any information regarding the proposed closure, despite the union's notification procedure against it in April. The unions reportedly said the move cannot push through until July 20 at the earliest, during which the central works committee will have a presentation. Union spokesman Manuel Gomez said they were set to meet with the company Wednesday. CONTACT: ABB LTD. Affolternstrasse 44 8050 Zurich, Switzerland Phone: +41-43-317-7111 Fax: +41-43-317-4420 Web site: http://www.abb.com CONVERIUM AG: Full Recovery May Take Time, Moody's Says ------------------------------------------------------- Moody's Investors Service assigned a negative outlook to the Baa1 insurance financial strength rating of Converium AG and the Baa1 IFSR of Converium Rueckversicherung (Deutschland) AG, as well as to the 8.25% subordinated notes due 2032 issued by Converium Finance S.A. and guaranteed by Converium AG. Moody's said that its rating action was taken following earnings announcement and as a result of the increased likelihood that Converium will take longer than expected to return to sustainable profitability. The rating agency pointed out that lackluster 2005 renewals, a high expense ratio, ongoing restructuring costs, and deteriorating prospects for the next renewals season as a result of weak operating performance are increasing negative pressure on the ratings. Moody's further stated that the Baa1 IFSR is predicated on the Group breaking even in 2005. To the extent additional evidence emerges later in the year that this expectation is unlikely to be met, Moody's will contemplate taking downward rating action at that time. Converium AG, based in Zurich, Switzerland, is the main operating company of Converium Holding AG, Zug, Switzerland. Converium Holding AG reported consolidated Gross Premiums Written of US$3,840.9 million in 2004 and Shareholders' Equity of US$1,580.8 million as of 31 March 2005. A negative outlook was assigned to these ratings: (a) Converium AG -- insurance financial strength rating of Baa1, (b) Converium Rueckversicherung (Deutschland) AG - insurance financial strength rating of Baa1, (c) US$200 million 8.25% guaranteed subordinated notes due December 2032 (callable in 2007) issued by Converium Finance S.A., a wholly owned subsidiary of Converium Holding AG -- subordinated debt rating of Ba1 CONTACT: MOODY'S INVESTORS SERVICE LTD. London Simon Harris, Managing Director Financial Institutions Group London Timour Boudkeev Vice President - Senior Analyst For Journalists Phone: 44 20 7772 5456 CONVERIUM HOLDING: Reports US$61.8 Mln Net Loss in Q1 ----------------------------------------------------- For the first quarter of 2005 Converium Holding reports a net loss of US$61.8 million and a pre-tax operating loss[1] of US$47.8 million. For the Company's ongoing operations, i.e. excluding U.S. run-off, the segment loss[2] amounts to US$21.0 million and the non-life combined ratio to 115.7%. The overall result is also attributable to an operating expense base, which is not yet fully reflective of the cost reduction measures initiated in March 2005. Converium reiterates its commitment to target an administration expense ratio for its ongoing operations of a maximum of 6.5% of net premiums written in 2006. Converium reports satisfactory results for its Life & Health Reinsurance segment with a segment income of US$6.2 million. Investment activities continued to exhibit satisfactory results, with the total investment income yield amounting to 3.9%. The April 1 renewals, primarily in Japan, were in line with expectations. Converium continued to pursue a disciplined underwriting approach and consequently declined any business, which did not meet the Company's profitability targets. Converium continues to be confident about the profitability of its underlying ongoing business. This portfolio a comprises a significant portion of longer-tail business, which can be profitably priced at combined ratios exceeding 100%. Terry Clarke, CEO, said: "Converium's financial results for the first quarter are disappointing. They are driven by losses arising from natural catastrophes and commutations of various retrocession contracts. The commutations reflect my unconditional commitment to operational prudence and strict risk management standards. Acts of God, however, are a constant phenomenon in the risk business and should, therefore, be assumed to occur from time to time producing volatility in results." Terry Clarke added: "All in all, I feel encouraged by the continuing profitability of our underlying ongoing business, particularly as the current, non-sustainable administrative expense base will come down significantly in the wake of the cost cutting measures initiated in March. I am also pleased about our reserve situation, which continues to be stable." First quarter 2005 highlights Gross premiums written: US$717.5 million Net loss: -US$61.8 million Pre-tax operating loss: -US$47.8 million Segment loss of ongoing operations: -US$21.0 million Segment loss of run-off operation: -US$4.6 million Ongoing non-life combined ratio: 115.7% Impact from winter storm Erwin: 6.1% Impact from the commutation of retrocession contracts: 7.2% Impact from late developments relating to 2004 hurricanes: 2.0% Adjusted ongoing non-life combined ratio: 100.4% Total investment income yield: 3.9% Shareholders' equity: US$1,580.8 billion Overview of first quarter performance and short-term outlook For the first quarter 2005 Converium reported a consolidated net loss of US$61.8 million and a pre-tax operating loss of US$47.8 million as compared to a net profit of US$65.7 million and a pre-tax operating income of US$77.9 million in the same period of 2004. These developments had measurable effects on the first quarter 2005 financial results: (a) The decrease in gross premiums written, net premiums written, and net premiums earned in the first quarter of 2005 (by 48.1%, 45.7% and 30.6%, respectively) is reflective of the reduction in business volume caused by the placement of the Company's North American reinsurance entity into orderly run-off in 2004 and the impact of the ratings downgrades which prompted clients to cancel their business or reduce their shares with Converium. Despite the decrease in premiums, there was still some growth in Property, Agribusiness and in the Life & Health Reinsurance segment resulting from increased shares in existing business and new client relationships; (b) Winter storm Erwin, which swept across Northern Europe in January 2005, caused pre-tax net losses in the amount of US$32.5 million; (c) As part of its risk management process Converium regularly evaluates the quality of its reinsurance assets taking into account all public domain information including the current rating and claims payment ability of Converium's retrocessionaires. Based on this process, the Company decided in the first quarter of 2005 to commute certain retrocessional reinsurance contracts with reinsurance recoverables in the amount of US$100.1 million (the full nominal value of future claims recoveries) for a commutation settlement of US$60.1 million (reflecting the discounted value of the commuted reserves). This commutation generated a negative impact of US$38.7 million on the technical result in the first quarter of 2005. This results from the long- tail nature of the expected future claims payment patterns of the underlying business; (d) In the first quarter of 2005 Converium recorded a net strengthening of prior years' loss reserves of US$10.4 million (including US$10.9 million related to the 2004 hurricanes). This compares with net reserve additions of US$43.0 million in the same period of 2004; (e) For the fifth consecutive quarter Converium's Life & Health Reinsurance segment produced a positive segment income which amounted to US$6.2 million in the first quarter of 2005. The Company reiterates that it considers the Life & Health Reinsurance operations a core element of its business; (f) In the first quarter of 2005, the administration expense ratio for the ongoing non-life business was 6.4% as compared to 2.8% in the same period of 2004. Total operating and administration expenses for the Company were US$56.9 million, an increase of US$5.9 million compared with the same period of 2004. This included retention plan costs of US$6.6 million. It will take until early 2006 before the cost management measures initiated in March 2005 take full effect. Converium's current cost base, therefore, is not yet in line with the reduced premium volume; and (g) For the first quarter of 2005, Converium's Run-Off segment reported a segment loss of US$4.6 million. Even though no material commutations took place during this period of time Converium reaffirms its commitment to commute North American liabilities. The operating and administration expenses incurred by the Run-Off segment amounted to US$10.0 million in the first quarter of 2005, as compared to US$12.3 million in the same period of 2004. The non-life combined ratio for Converium's ongoing operations was 115.7% for the first quarter of 2005 compared to 93.0% in the same period of 2004. Adjusted for winter storm Erwin and late loss development on the 2004 hurricanes (8.1 percentage points) as well as the negative impact from the commutation of retrocession contracts (7.2 percentage points), the adjusted non-life combined ratio for the ongoing operations was 100.4%. Given the mix of Converium's portfolio and the relatively large proportion of medium- to long-tail business, as well as considering the Company's extraordinary expense load this combined ratio indicates a continuing satisfactory performance of recent underwriting years, particularly as the administration expense ratio is expected to come down to a more sustainable level in light of Converium's cost reduction measures launched in March 2005. For the first quarter 2005, Converium's Standard Property & Casualty Reinsurance and Life & Health Reinsurance segments reported a segment income of US$2.4 million and US$6.2 million, respectively. This compares with a segment income of US$48.2 million and US$1.7 million for the same period of 2004. The positive performance of Converium's Life & Health Reinsurance business is reflective of the growth in premium income and the expansion of existing reinsurance transactions in Continental Europe. The Specialty Lines segment reported a segment loss of US$29.6 million compared with a segment income of US$49.3 million for the same period of 2004. The April 1 renewals have again proven the resilience of Converium's franchise. The Company retained 75.4% of the renewable business. In Japan, almost 70% of the business was successfully renewed. Converium maintained its very strong position with the largest clients. In South Korea the Company retained about three-quarters of the renewable business but withdrew from larger catastrophe programs only broker business, due to inadequate rates. The India renewals were less successful with a retention ratio of 45%, which is also reflective of softening market conditions. Converium is also satisfied with the renewal of its Medical Defence Union (MDU) book of business, which grew by 9.5%. Considering these results, Converium reiterates the expectation to generate gross premiums written for the 2005 calendar year of in excess of US$2 billion. The Company's net investment income continued to improve to US$82.2 million in the first quarter of 2005, an increase of 13.2% as compared to the same period of 2004. This increase largely resulted from growth in invested assets over 2004, as well as an allocation shift from equity securities to fixed income securities in mid-2004. In the first quarter of 2005, net realized capital losses amounted to US$0.7 million as compared to net realized capital gains of US$9.2 million in the same period of 2004. The total investment income yield for the first quarter of 2005 was 3.9% as compared to 4.1% in the first quarter of 2004, which benefited from net realized capital gains. Looking ahead, Converium will focus its efforts on the systematic implementation of its six-point road map to recovery: (a) Continue to operate as a stand-alone entity: The encouraging results of the January and April treaty renewals clearly testify to the resilience and viability of Converium's franchise; (b) Right-size the organization: In order to remain competitive Converium is currently adjusting its cost base to the reduced volume of business it has today. The Company reiterates its commitment to target administration expenses for its ongoing operations at a ratio of 6.5% of net premiums written in 2006; (c) Achieve a better financial strength rating: Converium's management is in regular contact with the rating agencies. Restoring their confidence based on a stable financial performance remains a key corporate objective; (d) Implement future business strategies: Based on its earnings record outside North America, Converium continues to feel very confident about its current business model and will continue; (e) with a clear geographical focus; (f) to write all major lines of business and offer value-adding services to its clients; (g) Successfully manage the run-off of Converium's North American entity: One of Converium's corporate priorities is to reduce legacy exposure from the U.S. business in a way which meets the interests of shareholders. Converium will continue to diligently pursue commutations, look into the option of selling Converium Reinsurance (North America) Inc. as well as constantly evaluate any other options for extracting maximum value for shareholders from the U.S. business; and (h) Enhance Converium's corporate culture: As well as restoring financial strength and management credibility, Converium promotes a corporate culture that appropriately balances the objectives of delegating authority to employees with ensuring a maximum level of accountability. Business development. This section comments on the development of Converium's business segments and the Corporate Center. In the first quarter of 2005, Converium implemented a new segment structure to reflect the placement of Converium Reinsurance (North America) Inc. into orderly run-off. Going forward, Converium's business will be organized around four operating segments: Standard Property & Casualty Reinsurance, Specialty Lines and Life & Health Reinsurance, which are based principally on ongoing global lines of business, as well as the Run-Off segment, which primarily comprises the business from Converium Reinsurance (North America) Inc., excluding the U.S. originated Aviation business portfolio. Standard Property & Casualty Reinsurance represented approximately 57.2% of total net premiums written in the first quarter of 2005. During this period of time, the segment reported a segment income of US$2.4 million as compared to a segment income of US$48.2 million for the same period in 2004. The segment's non-life combined ratio was 107.0% for the first quarter of 2005. The segment result was primarily attributable to these factors: (a) Winter storm Erwin resulted in pre-tax net losses in the amount of US$32.5 million during the first quarter of 2005. This compares with the absence of any major natural catastrophes in the first quarter of 2004; and (b) The hurricanes which occurred in 2004 resulted in late loss developments of US$7.4 million for the segment. The segment income was favorably impacted by positive development on prior years' loss reserves of US$10.2 million. This positive reserve development primarily consisted of US$7.5 million in Property (net of US$7.4 million for the 2004 hurricanes). In the first quarter of 2005, gross premiums written decreased by 34.9% to US$412.5 million, net premiums written dropped by 32.8% to US$402.9 million and net premiums earned decreased by 35.0% to US$242.0 million. The reduction in net premiums written was driven by the ratings downgrades of 2004, which resulted in the cancellation of business and reduced shares in current business. More specifically, developments by line of business included: (a) Motor, which decreased by 53.7% or US$138.9 million to US$119.6 million as a result of reduced writings in the United Kingdom and France due to profitability considerations; (b) General Third Party Liability, which declined by 45.3% or US$50.6 million to US$61.0 million, resulting from the cancellation of business and reduced shares in current business; and (c) Personal Accident (assumed from non-life insurers), which decreased by 43.4% or US$9.6 million to US$12.5 million as a result of the cancellation or non-renewal of business and reduced shares in current business. These decreases were partially offset by an increase in net premiums written within the Property line of business, which grew by 3.9% or US$7.8 million to US$209.8 million reflecting new business written and an increase in shares of current business. Specialty Lines represented approximately 22.0% of total net premiums written in the first quarter of 2005. During this period of time, the Specialty Lines segment reported a segment loss of US$29.6 million, as compared to a segment income of US$49.3 million for the same period in 2004. The segment's non-life combined ratio was 125.7% for the first quarter of 2005. The segment result primarily reflects these factors: (a) As a result of its retrocessional risk management process, Converium decided in the first quarter of 2005 to commute certain retrocessional reinsurance contracts with nominal reinsurance recoverables in the amount of US$100.1 million for a commutation settlement of US$60.1 million, which generated a negative impact on the technical result of US$38.7 million. This impact reflects the long-tail nature of the expected future claims payment patterns of the underlying business. As part of its risk management process Converium regularly evaluates the quality of its reinsurance assets taking into account all public domain information including the current rating of its retrocessionaires. If there are genuine concerns about retrocessionaires' future prospects and their ability to pay future claims Converium considers commuting the retrocessionaires' obligations in respect of future claims. In this type of transaction the reinsurance recoverables which are included in claims reserves on Converium's balance sheet and reflect the full nominal value of expected future claims recoveries are reduced to zero. In exchange, Converium receives commutation considerations, which reflect the time value of money on the commuted reserves in question. Due to the value of the discount in respect of future expected cash flows, Converium expects a negative accounting impact on the technical result when such a commutation takes place, but avoids future concerns about the recoverability of the Company's reinsurance assets including potential bad debt provisions. Additionally, Converium will economically benefit in future quarters from additional investment income on cash received and/or reduced interest expenses related to any funds held balance; and (b) The Specialty Lines segment recorded a net strengthening of prior years' reserves of US$4.2 million, including late loss developments of US$3.5 million relating to the hurricanes which occurred in 2004. In the first quarter 2005, gross premiums written decreased by 55.6% to US$154.5 million, net premiums written declined by 51.9% to US$155.4 million and net premiums earned increased by 3.7% to US$ 292.4 million. Premium volume was impacted by the ratings downgrades in 2004, which resulted in the cancellation of business and reduced shares in current business. More specifically, net premiums written by line of business decreased as: (a) Aviation & Space by 78.5% or US$75.9 million to US$20.8 million; (b) Credit & Surety by 48.7% or US$19.0 million to US$20.0 million; (c) Professional Liability and other Special Liability by 41.1% or US$42.7 million to US$61.1 million; (d) Engineering by 39.9% or US$17.0 million to US$25.6 million; and (e) Marine & Energy by 29.1% or US$10.2 million to US$24.9 million. These decreases were partially offset by an increase in net premiums written in the Agribusiness line of business by US$5.8 million to US$6.6 million. Life & Health Reinsurance represented approximately 16.1% of total net premiums written in the first quarter of 2005. In this period of time the Life & Health Reinsurance segment reported a segment income of US$6.2 million as compared to a segment income of US$1.7 million for the same period in 2004. The technical result for the first quarter of 2005 was US$6.0 million compared to US$1.3 million for the same period in 2004. Technical result is defined as net premiums earned minus losses, loss adjustment expenses and life benefits minus underwriting acquisition costs plus technical interest. The positive development of the segment's bottom-line was primarily attributable to growth in premium volume and the expansion of existing reinsurance transactions in Continental Europe, which was partially offset by a negative development of US$1.5 million related to the tsunami that occurred in late 2004. In the first quarter of 2005 gross premiums written decreased by 1.8% to US$117.1 million, net premiums written grew by 2.3% to US$113.8 million and net premiums earned rose by 19.8% to US$81.1 million. Net premiums written growth in the Life & Health Reinsurance segment by line of business included Life and Disability reinsurance (increased by 16.8% or US$12.6 million to US$87.7 million), which grew due to the expansion of existing reinsurance transactions as well as new business being written. This increase was offset by a decrease of 27.7% or US$10.0 million in net premiums written to US$26.1 million in the Accident & Health line of business due to the cancellation of contracts as a result of profitability considerations as well as the rating actions in 2004. The newly established Run-Off segment, which represents all business originating from Converium Reinsurance (North America) Inc. and Converium Insurance (North America) Inc., excluding the U.S.-originated Aviation business portfolio of GAUM, reported a segment loss of US$4.6 million. This result is largely attributable to a net strengthening of prior years' loss reserves by US$16.4 million. The reserve strengthening primarily occurred within Professional Liability and other Special Liability and Workers' Compensation. The Corporate Center carries certain administration expenses, such as costs of the Board of Directors, the Global Executive Committee, and other corporate functions. The Corporate Center costs decreased in the first quarter of 2005 primarily due to the reduced size of Converium's Global Executive Committee and its dedicated functions. The company has made it a policy not to provide any quarterly or annual earnings guidance and it will not update any past outlook for full year earnings. It will however continue to provide investors with perspectives on its value drivers, its strategic initiatives and those factors critical to understanding its business and operating environment. About Converium Converium is an independent international multi-line reinsurer known for its innovation, professionalism and service. Today Converium employs about 650 people in 20 offices around the globe and is organized into four business segments: Standard Property & Casualty Reinsurance, Specialty Lines and Life & Health Reinsurance, which are based principally on ongoing global lines of business, as well as the Run-Off segment, which primarily comprises the business from Converium Reinsurance (North America) Inc., excluding the U.S. originated Aviation business portfolio. Converium has a "BBB+" rating (outlook stable) from Standard & Poor's and a "B++" rating (outlook stable) from A.M. Best Company. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - [1] losses from winter storm Erwin (US$32.5 million adding 6.1 percentage points to the ongoing non-life combined ratio), [2] a negative impact on the technical result from the commutation of retrocession agreements (US$38.7 million or 7.2 percentage points), [3] net strengthening of prior years' loss reserves (US$10.4 million, including late developments of US$10.9 million relating to 2004 hurricanes), [4] costs associated with Converium's restructuring (US$10.1 million) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - A full copy of its financial results is available free of charge at http://bankrupt.com/misc/Converium(Q12005).pdf CONTACT: CONVERIUM HOLDING Esther Gerster, Head of Public Relations Phone: +41 (0) 1 639 90 22 Fax: +41 (0) 1 639 70 22 E-mail: esther.gerster@converium.com Zuzana Drozd, Head of Investor Relations Phone: +41 (0) 1 639 91 20 Fax: +41 (0) 1 639 71 20 E-mail: zuzana.drozd@converium.com ============= U K R A I N E ============= BERDYANSK: Zaporizhya Court Appoints Insolvency Manager ------------------------------------------------------- The Economic Court of Zaporizhya region commenced bankruptcy proceedings against Berdyansk (code EDRPOU 31401001) on March 29, 2005 after finding the tin plant insolvent. The case is docketed as 21/82. Mr. R. Gorbachov has been appointed liquidator/insolvency manager. Creditors have until May 13, 2005 to submit their proofs of claim to: (a) BERDYANSK 71100, Ukraine, Zaporizhya region, Berdyansk, Promislova Str. 9/8 (b) Liquidator/Insolvency Manager 69095, Ukraine, Zaporizhya region, Ukrainska Str. 6A/58 (c) Economic Court Of Zaporizhya region 69001, Ukraine, Zaporizhya region, Shaumyana Str. 4 BUDGAZMONTAZH: Succumbs to Bankruptcy ------------------------------------- The Economic Court of Kyiv region commenced bankruptcy proceedings against Budgazmontazh (code EDRPOU 32665541) on April 5, 2005 after finding the private enterprise insolvent. Mr. Sklyar has been appointed liquidator/insolvency manager. The company holds account number 26005052724248 at CB Privatbank, Pecherska branch of Kyiv, MFO 300711. Creditors have until May 14, 2005 to submit their proofs of claim to: (a) BUDGAZMONTAZH Ukraine, Kyiv region, Shors Str. 31 (b) Liquidator/Insolvency Manager Phone: 8 (044) 240-00-94 (c) Economic Court Of Kyiv region 01030, Ukraine, Kyiv region, B. Hmelnitskij Boulevard, 44-B DOVIRA: Undergoes Bankruptcy Supervision Procedure -------------------------------------------------- The Economic Court of Chernigiv region commenced bankruptcy supervision procedure on agroindustrial firm Dovira on March 29, 2005. The case is docketed as 5/116 b. Ms. Irina Stuk (License Number AA 485235) has been appointed temporary insolvency manager. Creditors have until May 14, 2005 to submit their proofs of claim to: (a) DOVIRA Ukraine, Chernigiv region, Priluki district, Ryashki, Lenin Str. 41 (b) Temporary Insolvency Manager 14008, Ukraine, Chernigiv region, Nahimov lane, 50 (c) Economic Court Of Chernigiv Region 14000, Ukraine, Chernigiv region, Miru avenue, 20 HLIBOROB: Creditors Have Until Friday to File Claims ---------------------------------------------------- The Economic Court of Sumi region commenced bankruptcy proceedings against Hliborob (code EDRPOU 30639483) on March 31, 2005 after finding the limited liability company insolvent. The case is docketed as 6/33-05. Mr. Vadim Zakorko (License Number AA 719836) has been appointed liquidator/insolvency manager. Creditors have until May 13, 2005 to submit their proofs of claim to: (a) HLIBOROB Ukraine, Sumi region, Trostyanets district, Kamyanka, Gagarin Str. 145 (b) Liquidator/Insolvency Manager 40030, Ukraine, Sumi region, Proletarska Str. 69, 2nd floor (c) Economic Court Of Sumi region 40477, Ukraine, Sumi region, Shevchenko Avenue, 18/1 LAJT: Chernivtsi Court Declares Firm Insolvent ---------------------------------------------- The Economic Court of Chernivtsi region commenced bankruptcy proceedings against LAJT (code EDRPOU 23249920) on Jan. 18, 2005 after finding the limited liability company insolvent. Mr. D. Popovich (License Number AA 779271) has been appointed liquidator/insolvency manager. Creditors have until May 13, 2005 to submit their proofs of claim to: (a) LAJT Ukraine, Chernivtsi region, Storozhinetska Str. 101/7 (b) Liquidator/Insolvency Manager 59223, Ukraine, Chernivtsi region, Vizhnitskij district, Koritne Phone: (067) 259-76-22 (c) Economic Court Of Chernivtsi region 58000, Ukraine, Chernivtsi region, O. Kobilyanska Str. 14 LVIVNASINNYA: Lviv Court Appoints Insolvency Manager ---------------------------------------------------- The Economic Court of Lviv region commenced bankruptcy proceedings against Lvivnasinnya (code EDRPOU 13822991) after finding the regional scientific-production state cooperative association insolvent. The case is docketed as 6/135-7/37. Mr. Volodimir Mashevskij (License Number AA 116211) has been appointed liquidator/insolvency manager. The company holds account number 260044399 at JSPPB Aval, Gorodok branch. Creditors have until May 13, 2005 to submit their proofs of claim to: (a) LVIVNASINNYA Ukraine, Lviv region, Gorodok, Lvivska Str. 557A (b) Liquidator/Insolvency Manager Ukraine, Lviv region, Lukich Str. 3/1 Mobile: 8 (050) 370-74-94 (c) Economic Court Of Lviv region 79010, Ukraine, Lviv region, Lichakivska Str. 81 UKRTRANSSERVICE: Deadline for Proofs of Claim Saturday ------------------------------------------------------ The Economic Court of Donetsk region commenced bankruptcy proceedings against Ukrtransservice (code EDRPOU 31738697) on March 29, 2005. Ms. Svitlana Babich (License Number AA 630006) has been appointed liquidator/insolvency manager. Creditors have until May 14, 2005 to submit their proofs of claim to: (a) UKRTRANSSERVICE 83052, Ukraine, Donetsk region, Burdenko Str. 27 (b) Liquidator/Insolvency Manager 02152, Ukraine, Kyiv, Serafimovich str. 5/15 (c) Economic Court Of Donetsk Region 83048, Ukraine, Donetsk region, Artema Str. 157 VAPNYARSKIJ: Succumbs to Bankruptcy ----------------------------------- The Economic Court of Vinnitsya region commenced bankruptcy proceedings against Vapnyarskij (code EDRPOU 03730414) on March 3, 2005 after finding the open joint stock company insolvent. The case is docketed as 10/142-04. Mr. Ruslan Gorbatyuk (License Number AA 783200) has been appointed liquidator/insolvency manager. The company holds account 260066389 at JSPPB Aval, MFO 302247. CONTACT: VAPNYARSKIJ 24240, Ukraine, Vinnitsya region, Tomashpilskij district, Vapnyarka, Gagarin Str. 6 Mr. Ruslan Gorbatyuk Liquidator/Insolvency Manager Ukraine, Kyiv, Timoshenko Str. 2/4-134 Economic Court Of Vinnitsya region 21036, Ukraine, Vinnitsya region, Hmelnitske Shose, 7 VYAZIVSKE: Agricultural Firm Goes Belly up ------------------------------------------ The Economic Court of Sumi region commenced bankruptcy proceedings against Vyazivske (code EDRPOU 30794530) after finding the agricultural company insolvent. The case is docketed as 6/141-04. Mr. Sergij Volovik (License Number AA 779353) has been appointed liquidator/insolvency manager. Creditors have until May 13, 2005 to submit their proofs of claim to: (a) VYAZIVSKE 42734, Ukraine, Sumi region, Ohtirka District, Vyazove, Pionerska Str. 12a (b) Liquidator/Insolvency Manager 40030, Ukraine, Sumi region, Proletarska Str. 69, 2nd floor (c) Economic Court Of Sumi region 40477, Ukraine, Sumi region, Shevchenko Avenue, 18/1 ZHITLOVIK: Declared Insolvent ----------------------------- The Economic Court of Donetsk region commenced bankruptcy proceedings against Zhitlovik (code EDRPOU 03337473) on March 21, 2005 after finding the repair-building enterprise insolvent. Ms. Svitlana Babich (License Number AA 630006) has been appointed liquidator/insolvency manager. Creditors have until May 14, 2005 to submit their proofs of claim to: (a) ZHITLOVIK 83100, Ukraine, Donetsk region, Naberezhna Str. 117 (b) Liquidator/Insolvency Manager 02152, Ukraine, Kyiv, Serafimovich Str. 5/15 (c) Economic Court Of Donetsk Region 83048, Ukraine, Donetsk region, Artema Str. 157 =========================== U N I T E D K I N G D O M =========================== ABBEY NATIONAL: Hundreds of Jobs More to Go ------------------------------------------- Abbey's new owner is cutting 1,000 more jobs, according to The Scotsman. Banco Santander Central Hispano, which took over the British bank in November for GBP9.5 billion, had earlier promised to axe only 3,000 jobs. So far, 1,000 employees had already left while 2,000 are on the way. The additional cut will be spread across the country and involve mostly back-office staff. Abbey employs 25,000 in Britain. Hugh Scullion, the regional officer of banking union Amicus, condemned the move. "They have been continually moving the goalposts at the expense of staff morale and job security, which can only have a knock-on effect on customer service," The Scotsman quoted him saying. The news came just as Banco Santander reported that Abbey had contributed EUR153 million (GBP104.56 million) to its first quarter results. Santander's profit in the period jumped 38.5% to EUR1.19 billion (GBP813.8 million). Abbey CEO Francesco Gomez-Roldan said: "It is too early for the changes we are making to have had a meaningful impact, but the first-quarter results include some encouraging early signs." CONTACT: ABBEY NATIONAL PLC Abbey National House, 2 Triton Square, Regent's Place London NW1 3AN, United Kingdom Phone: +44-870 607 6000 Web site: http://www.abbeynational.com BLACKFORDS FENCING: Sets Creditors Meeting Next Week ---------------------------------------------------- The creditors of Blackfords Fencing Services Limited will meet on May 19, 2005 at 10:00 a.m. It will be held at the offices of BDO Stoy Hayward LLP, Kings Wharf, 20-30 Kings Road, Reading, Berkshire RG1 3EX. Creditors who want to be represented at the meeting may appoint proxies. Proxy forms must be submitted together with written debt claims to BDO Stoy Hayward LLP, Kings Wharf, 20-30 Kings Road, Reading, Berkshire RG1 3EX not later than 12:00 noon, May 18, 2005. CONTACT: BDO STOY HAYWARD Kings Wharf, 20-30 Kings Road, Reading, Berkshire RG1 3EX Phone: 0118 925 4400 Fax: 0118 925 4470 E-mail: reading@bdo.co.uk Web site: http://www.bdostoyhayward.co.uk CARDIFF 2008: Liquidator to Give Update Next Month -------------------------------------------------- The general meeting of the members of Cardiff 2008 Limited will be on June 22, 2005 at 10:30 a.m. It will be held at KPMG, Marlborough House, Fitzalan Road, Cardiff CF4 0TE. The purpose of the meeting is to receive the account showing how the winding-up has been conducted and the property of the company disposed of, and to hear any explanation that may be given by the liquidator. Creditors who want to be represented at the meeting may appoint proxies. Proxy forms must be lodged with KPMG, Marlborough House, Fitzalan Road, Cardiff CF4 0TE not later than 12:00 noon, June 21, 2005. CONTACT: KPMG LLP Marlborough House Fitzalan Court Fitzalan Road Cardiff CF24 0TE Phone: 029 2046 8000 Fax: 029 2046 8202 E-mail: joff.pope@kpmg.co.uk CH MANAGEMENT: High Court Appoints Liquidator --------------------------------------------- The High Court in Ireland has wound up hotel management company CH Management Ltd., according to The Irish Examiner. Ms. Justice Mary Laffoy appointed Rory O'Ferall of Deloitte and Touche as official liquidator on Monday. In his affidavit, dancing star Michael Flatley, who owns the company, said he is owed a total of EUR2.2 million, representing loans he had granted the company over the years. In 2002, the year the company was incorporated, he lent it EUR63,486, followed by EUR902,879 in 2003, EUR1,129,864 in 2004, and EUR123,771 this year. The firm stopped trading at the end of January due to heavy losses. Shortly after, Mr. Flatley brought the winding-up petition to the court. The court said there was no notice of intention to appeal the application from any other contributor. Mr. Flatley does not expect to be paid because, with the exception of one or two items of furniture, the company no longer have any assets. All its employees had been made redundant. CONTACT: CH MANAGEMENT LTD. Castlehyde Hotel, Fermoy Co. Cork Ireland Contact: Stephen Murphy Marguerite, Director Girasole, Albert Farrell, Director Phone: (00353) [0] 25 31865 Fax: (00353) [0] 61 377 717 E-mail: cashyde@iol.ie Web site: http://www.castlehydehotel.ie DELOITTE & TOUCHE Deloitte & Touche House Earlsfort Terrace DUBLIN, IRELAND 2 Phone: 00 353 1 417 2200 Fax: 00 353 1 417 2300 E-mail: rory.o'ferrall@deloitte.ie CHURCHFIELDS SPRING: Members Decide to Wind up Company ------------------------------------------------------ At the extraordinary general meeting of the members of Churchfields Spring Company Limited on April 25, 2005 held at St James Building, 79 Oxford Street, Manchester M1 6HT, the extraordinary and special resolutions to wind up the company were passed. R. E. C. Cook of UHY Hacker Young turnaround and recovery, St James Building, 79 Oxford Street, Manchester M1 6HT has been appointed liquidator of the company. CONTACT: UHY HACKER YOUNG St James Buildings 79 Oxford Street Manchester Greater Manchester M1 6HT Phone: 0161 236 6936 Fax: 0161 228 0117 E-mail: e.cook@uhy-uk.com COOK STREET: Sets Members Meeting June 15 ----------------------------------------- The members of Cook Street Pallets Limited will meet on June 15, 2005 at 11:00 a.m. It will be held at Bridge House, Heap Bridge, Bury BL9 7HT. The purpose of the meeting is to receive the account showing how the winding-up has been conducted and the property of the company disposed of, and to hear any explanation that may be given by the liquidator. Members who want to be represented at the meeting may appoint proxies. Proxy forms must be lodged with Nuttall & Co, Bridge House, Heap Bridge, Bury BL9 7HT not later than 12:00 noon, June 14, 2005. CONTACT: NUTTALL & CO. Bridge House Heap Bridge Bury Lancashire BL9 7HT Phone: 0161 447 8394 Fax: 0161 447 8395 E-mail: phil.nuttall@nuttalls.net CRAFTSMAN FURNITURE: Creditors Meeting Set Friday ------------------------------------------------- The creditors of Craftsman Furniture Limited will meet on May 13, 2005 at 10:00 a.m. It will be held at 8 Baker Street, London W1U 3LL. Creditors who want to be represented at the meeting may appoint proxies. Proxy forms must be submitted together with written debt claims to 8 Baker Street, London W1U 3LL not later than 12:00 noon, May 12, 2005. CONTACT: BDO STOY HAYWARD LLP 8 Baker Street London W1U 3LL Phone: 020 7486 5888 Fax: 020 7487 3686 E-mail: london@bdo.co.uk Web site: http://www.bdostoyhayward.co.uk DERITEND ADVANCED: Members Pass Winding-up Resolutions ------------------------------------------------------ At the extraordinary general meeting of the members of Deritend Advanced Technology Limited on April 25, 2005 held at St James Building, 79 Oxford Street, Manchester M1 6HT, the extraordinary and special resolutions to wind up the company were passed. R. E. C. Cook of UHY Hacker Young turnaround and recovery, St James Building, 79 Oxford Street, Manchester M1 6HT has been appointed liquidator of the company. CONTACT: UHY HACKER YOUNG St James Buildings 79 Oxford Street Manchester Greater Manchester M1 6HT Phone: 0161 236 6936 Fax: 0161 228 0117 E-mail: e.cook@uhy-uk.com DIGITAL UNION: Appoints Tenon Recovery Administrator ---------------------------------------------------- Nigel Ian Fox and Carl Stuart Jackson (IP Nos 8891, 8860) have been appointed joint administrators for Digital Union UK Ltd. The appointment was made April 28, 2005. The company handles software consultancy. Its registered office is located at Highfield Court, Tollgate, Chandlers Ford, Eastleigh, Hampshire SO53 3TZ. CONTACT: TENON RECOVERY Highfield Court, Tollgate, Chandlers Ford, Eastleigh, Hampshire SO53 3TZ Phone: 023 8064 6464 Fax: 023 8064 6666 E-mail: southampton@tenongroup.com Web site: http://www.tenongroup.com DONCASTERS YEOVIL: Hires Liquidator from UHY Hacker Young --------------------------------------------------------- At the extraordinary general meeting of the members of Doncasters Yeovil Limited on April 25, 2005 held at St James Building, 79 Oxford Street, Manchester M1 6HT, the extraordinary and special resolutions to wind up the company were passed. R. E. C. Cook of UHY Hacker Young turnaround and recovery, St James Building, 79 Oxford Street, Manchester M1 6HT has been appointed liquidator of the company. CONTACT: UHY HACKER YOUNG St James Buildings 79 Oxford Street Manchester Greater Manchester M1 6HT Phone: 0161 236 6936 Fax: 0161 228 0117 E-mail: e.cook@uhy-uk.com E C & J KEAY: Members Decide on Winding-up ------------------------------------------ At the extraordinary general meeting of the members of E C & J Keay Limited on April 25, 2005 held at St. James Building, 79 Oxford Street, Manchester M1 6HT, the extraordinary and special resolutions to wind up the company were passed. R. E. C. Cook of UHY Hacker Young turnaround and recovery, St James Building, 79 Oxford Street, Manchester M1 6HT has been appointed liquidator of the company. CONTACT: UHY HACKER YOUNG St James Buildings 79 Oxford Street Manchester Greater Manchester M1 6HT Phone: 0161 236 6936 Fax: 0161 228 0117 E-mail: e.cook@uhy-uk.com ELITE MEDICAL: Hires Administrators from Leonard Curtis & Co. ------------------------------------------------------------- N. A. Bennett and S. D. Swaden (IP Nos 9083, 2719) have been appointed administrators for Elite Medical Services Limited. The appointment was made April 29, 2005. The company handles recruitment consultancy. Its registered office is located at 10-11 Grosvenor Place, Belgravia, London SW1X 7JG. CONTACT: LEONARD CURTIS & CO One Great Cumberland Place, Marble Arch, London W1H 7LW Phone: 020 7535 7000 Fax: 020 7723 6059 E-mail: solutions@leonardcurtis.co.uk Web site: http://www.leonardcurtis.co.uk EQUITABLE LIFE: Asked To Call Off Legal Claim --------------------------------------------- The counsel for six of former Equitable Life non-executive directors appealed for the company to withdraw its GBP1.7 billion claim against them. According to The Guardian Wednesday, Laurence Rabinowitz QC urged the insurer to "give very serious consideration" to its lawsuit versus nine former non-executive directors, six former executives, and its auditor for negligence and breach of fiduciary duty. A heated argument reportedly transpired in court regarding law firm Herbert Smith's non-disclosure of documents prior to the trial. Four new documents have surfaced, three of which were discovered by an Ernst & Young witness. Mr. Rabinowitz noted the cross-examination of witnesses proceeded without the necessary documents. Meanwhile, Robert Miles QC, acting for Herbert Smith, described the criticisms hurled against its client as "quite unfair and misplaced." Iain Milligan QC, representing Equitable Life, then started grilling former director Roy Ranson about the guaranteed annuity rates which were blamed for the company's downfall. The insurer claims the company was not informed of its need to reserve a substantial amount from 1997-99 to cover some policyholders' income guarantees, which consequently led to huge losses. CONTACT: THE EQUITABLE LIFE ASSURANCE SOCIETY Walton Street Aylesbury Buckinghamshire HP21 7QW United Kingdom Phone: +44-870-901-0052 Web site: http://www.equitable.co.uk FINNFOREST PLYWOOD: Sets Final Meeting Next Month ------------------------------------------------- The final meeting of Finnforest Plywood Ltd. will be on June 6, 2005 at 12:00 noon. It will be held at Numerica, PO Box 2653, 66 Wigmore Street, London W1A 3RT. The purpose of the meeting is to receive the account showing how the winding-up has been conducted and the property of the company disposed of, and to hear any explanation that may be given by the liquidator. Shareholders who want to be represented at the meeting may appoint proxies. Proxy forms must be lodged with Numerica, PO Box 2653, 66 Wigmore Street, London W1A 3RT not later than 12:00 noon, June 3, 2005. CONTACT: NUMERICA PO Box 2653, 66 Wigmore Street, London W1A 3RT Phone: 020 7467 4000 Fax: 020 7284 4995 Web site: http://www.numerica.biz FKI PLC: Buys 52.85% of Chinese Wire Rope Producer -------------------------------------------------- Further to the announcement on 21 January 2005 of the signing of the contract to acquire 52.85% of Tianjin Golik No 1 Steel Wire Rope Company Limited for US$1.63 million cash, regulatory approval has been received and the transaction has completed. Tianjin No 1 provides FKI's steel wire rope manufacturer, Bridon, with an opportunity to access the large and growing Chinese market for elevator rope. Tianjin No 1 has been renamed Bridon Tianjin Rope Limited and will have new funds of US$1 million available for investment. * * * In March, Moody's Investors Service lowered the senior unsecured ratings of FKI plc to Ba1 from Baa3. In addition, Moody's assigned a Senior Implied rating of Ba1 to the group. The outlook for all ratings was stable. This concluded the review process initiated on 15 December 2004. FKI has experienced trend weakness in its key cash flow metrics over the past three years due to, among others: (i) a prolonged fall in demand in the Logistex business which has seen turnover fall from its peak at the formation of the unit of approximately GBP540 million in the fiscal year 2000/2001 to just under GBP350 million at 12 months to September 30 2004; (ii) weakness in the Energy Technology business prompted by a fallout in demand for turbo generators after the 2002 California energy crisis; and (iii) the company's inability to reduce net adjusted debt levels to sufficiently match weakened cash flows. CONTACT: FKI PLC Falcon Works P. O. Box 7713 Meadow Lane Loughborough Leicestershire LE11 1ZF Phone: +44 (0) 20 7832 0000 Fax: +44 (0) 20 7832 0001 Web site: http://www.fki.co.uk GOVETT ENTERPRISE: Members Final Meeting Set June ------------------------------------------------- The final meeting of the members of Govett Enterprise Investments Limited will be on June 9, 2005 at 10:00 a.m. It will be held at 186 City Road, London EC1V 2NU. The purpose of the meeting is to receive the account showing how the winding-up has been conducted and the property of the company disposed of, and to hear any explanation that may be given by the liquidator. Members who want to be represented at the meeting may appoint proxies. Proxy forms must be lodged with RSM Robson Rhodes LLP, 186 City Road, London EC1V 2NU not later than 12:00 noon, June 8, 2005. CONTACT: RSM ROBSON RHODES LLP 186 City Road, London EC1V 2NU Phone: +44 (0) 20 7251 1644 Fax: +44 (0) 20 7250 0801 Web site: http://www.robsonrhodes.co.uk HERMES POOLED: Hires Deloitte & Touche Liquidator ------------------------------------------------- At the general meeting of Hermes Pooled Pension Funds Trustee Limited, the special, ordinary and extraordinary resolutions to wind up the company were passed. J. R. D. Smith and N. J. Dargan of PO Box 810, Athene Place, 66 Shoe Lane, London EC4A 3WA have been appointed joint liquidators of the company. CONTACT: DELOITTE & TOUCHE LLP Athene Place 66 Shoe Lane London EC4A 3BQ Phone: 00 44 (0) 207 936 3000 Fax: 00 44 (0) 207 779 4001 Web site: http://www.deloitte.com IDEAL INSURANCE: Members General Meeting Set July ------------------------------------------------- The general meeting of the members of Ideal Insurance Agencies Limited will be on July 13, 2005 at 12:00 noon. It will be held at KPMG LLP, 2 Cornwall Street, Birmingham B3 2DL. The purpose of the meeting is to receive the account showing how the winding-up has been conducted and the property of the company disposed of, and to hear any explanation that may be given by the liquidator. Members who want to be represented at the meeting may appoint proxies. Proxy forms must be lodged with KPMG LLP, 2 Cornwall Street, Birmingham B3 2DL not later than 4:00 p.m., July 12, 2005. CONTACT: KPMG LLP 2 Cornwall Street Birmingham B3 2RT Phone: (0121) 232 3000 Fax: (0121) 232 3500 Web site: http://www.kpmg.co.uk INCO 400: Sets Creditors Meeting Friday --------------------------------------- The creditors of Inco 400 Limited will meet on May 13, 2005 at 11:00 a.m. It will be held at Milsted Langdon, Winchester House, Deane Gate Avenue, Taunton, Somerset TA1 2UH. Creditors who want to be represented at the meeting may appoint proxies. Proxy forms must be submitted together with written debt claims to Milsted Langdon, Winchester House, Deane Gate Avenue, Taunton, Somerset TA1 2UH not later than 12:00 noon, May 12, 2005. CONTACT: MILSTED LANGDON Winchester House Deane Gate Avenue Taunton Somerset TA1 2UH Phone: 01823 445566 Fax: 01823 445555 E-mail: risaacs@milsted-langdon.co.uk IPM INDUSTRIES: Meeting of Creditors Set Next Week -------------------------------------------------- The creditors of IPM Industries Limited will meet on May 19, 2005 at 11:00 a.m. It will be held at Tenon Recovery, Tenon House, Ferryboat Lane, Sunderland SR5 3JN. Creditors who want to be represented at the meeting may appoint proxies. Proxy forms must be submitted together with written debt claims to Tenon Recovery, Tenon House, Ferryboat Lane, Sunderland SR5 3JN not later than 12:00 noon, May 18, 2005. CONTACT: TENON RECOVERY Tenon House, Ferryboat Lane, Sunderland SR5 3JN Phone: 0191 511 5000 Fax: 0191 511 5001 Web site: http://www.tenongroup.com JESSOPS PLC: Opens 18 New Stores in First Quarter ------------------------------------------------- Highlights of the interim results for the 26 Weeks to 27 March 2005: (a) total sales up 4.2% to GBP161.0 million (2004: GBP154.5 million); (b) total like for like sales up 1.7%; store like for like sales up 1.4%; direct like for like sales (Internet and Mail Order) up 5.8%; (c) gross margins held steady; (d) profit before interest, tax and amortization down 18% to GBP5.7 million (2004: GBP7.0 million); (e) basic earnings per share (pre exceptionals) of 0.2 pence; (f) maiden interim dividend of 0.7p per share; and (g) 18 new stores opened, 2 relocated and 2 closed, bringing group total to 276 stores. Derek Hine, Chief Executive of Jessops plc, said: "Despite a solid first quarter, trading became extremely difficult in February and early March. In response, we have set in train a number of projects to improve margins and drive efficiencies. "The second half accounts for the bulk of the Group's profits and the fourth quarter is our most important trading period, so it is still too early to forecast the outcome for the year. Sales in the past six weeks have shown some improvement on the very disappointing levels achieved in February and the actions being taken put the Group on track to meet its expectations on a lower level of like for like growth in sales than previously anticipated." Results The past six months to 27 March 2005 have been a period of significant change for Jessops and the second quarter in particular has been a challenge. Sales for the Group were up 4.2% to GBP161 million, with overall like for like sales up 1.7%. Store like for like sales up 1.4% and direct like for like sales (Internet and mail order) up 5.8%. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Sales by channel 6 Months 6 Months Inc To 27/3/05 To 28/3/04 % GBP million GBP million Like for Like Stores 140 138 1.4 Closed Stores - 3 - New Stores 7 - - Direct & Commercial Sales 14 13 4.6 - - - - - - - ------ ---------- --------- Total Sales 161 154 4.2 - - - - - - - ------- ---------- --------- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Earnings before interest, tax and amortization ('EBITA') were 18% down at GBP5.7 million. Profits on ordinary activities before tax for the period, which included a higher interest charge for October under the group's former financing structure, were GBP1.3 million. Net debt reduced to GBP42.8 million (2003: GBP126 million). In accordance with our stated intention in our flotation prospectus to pay approximately 20% of the annual reported Group net income (before goodwill amortization), we intend to pay a maiden interim divided of 0.7p per share, payable on 22 July 2005 to shareholders on the register on 24 June 2005. Review of Trading The period started with the conclusion of our GBP100 million fund-raising and flotation, which was completed in early November. This major step for the business was followed by a solid trading performance over the Christmas period, in what was widely regarded as the most difficult Christmas for the High Street for nearly a decade. However this positive start to our life as a listed company was in contrast to the Group's trading in February and early March, which saw an unprecedented decline in digital camera sales and the toughest trading conditions seen at Jessops at least since digital cameras were launched onto the market in the mid 1990s. Digital cameras accounted for 45% of the Group's total sales in the first 6 months. Data from GfK Marketing Services showed that the U.K. digital camera market grew by 36%, 32% and 20% in November, December and January compared to the prior year, yet recorded growth of just 0.1% in February, giving some context to the sudden decline in the Group's sales in the second quarter. Some recovery was evident in the industry figures for March as a whole, which saw growth of 21%, but the bulk of this increase was seen towards the end of the month, which this year included Easter. The impact of the sales shortfall in February and early March not only had a material impact on our profits for the period, but caused us to reconsider our projections for the second half of the year. This was communicated to the market on 21 March 2005. As the second quarter progressed, it became clear that these difficult market conditions were not confined to Jessops alone. The Group's overall share of the digital camera market held up well over the 6 months, in spite of further competition as more mass market merchandisers entered the market. In the fast growing area of digital SLR cameras, which in March 2005 accounted for 18% of the total market compared with 10% in October 2004, the Group's share has increased from 26.6% to 32.6%. They have also seen the first significant digital SLR camera launch of 2005, with the launch of Canon's 350D SLR camera on 16 March. While price competition has remained intense, it is not any more competitive than they have experienced in the past and the Group's margins remained steady in the period. In response to these difficult market conditions, the company has set in train a number of projects to drive sales and deliver efficiency savings. It also continues to progress its program of selective store openings. In the first half, its opened 13 new Jessops stores, relocated two and closed another two and opened five new photoexpress stores. It will continue to open further stores where they believe return criteria can be met. Outlook The company has confidence in the long-term prospects for the digital camera market and for the business. Household penetration of digital cameras remains relatively low, at approximately 35%, compared with 83% for analogue. The Developing and Printing (D&P) market continues to go through rapid change, with digital D&P now accounting for 43% of all first time processing. This is up from 25% in July last year. While the growth in digital processing has yet to fully offset the decline in analogue processing, the growth trend in digital D&P is encouraging and supports the strategy of offering digital mini-labs and digital instant kiosks in store to improve its share of the D&P market. At the time of the March announcement, the company stated that it expected to see a gradual recovery in sales from the very disappointing and significantly negative store like for like sales experienced in February. Total sales in the six weeks to 8 May 2005, which this year excluded Easter, were up 2.2%, with store like for like sales down 2.4%. While some sales improvement has been evident, the actions being taken should have the effect of enabling the Group to meet its expectations on a lower level of like for like growth in sales than previously anticipated. The second half accounts for the bulk of the Group's profits and the fourth quarter is the group's most important trading period. Thus, while it is still too early to forecast the outcome for the year, a continuation of the fragile consumer recovery combined with the actions being taken leads the Board to believe that the Group is on track to meet our expectations for the year. A full copy of the financial results is available free of charge at http://bankrupt.com/misc/Jessopsplc(Q12005).mht CONTACT: JESSOPS PLC Jessop House, Scudamore Rd. Leicester LE3 1TZ, United Kingdom Phone: +44-116-232-6000 Web site: http://www.jessops.com JESSOPS PLC: Names Robin Whitbread Non-executive Director --------------------------------------------------------- Jessops plc said Tuesday that Robin Whitbread has joined the Board as a non-executive Director, with immediate effect. He will be Chairman of Jessops' Remuneration Committee and will also take the role of Senior Independent Director. Mr. Whitbread, 54, brings extensive retail and management experience, gained from 32 years in supermarket retailing with Sainsbury's, including 11 years as a Main Board director. He joined Somerfield PLC in 2002 as Group Buying Director and until November 2004 was Group Buying and Marketing Director of Somerfield and Managing Director of Kwik Save. Gavin Simonds, Chairman of Jessops, said: "I am delighted that Robin has agreed to join the Board as a non-executive director and senior independent director. His combined plc, retailing, marketing and management experience will contribute to the strength we already have on the Board, and I have no doubt he will make a positive contribution as we tackle the near term challenges and maximize Jessops longer term potential." There are no further details that require to be disclosed under paragraph 6.F.2 (b) - (g) of the UKLA Listing Rules. CONTACT: JESSOPS PLC Jessop House, Scudamore Rd. Leicester LE3 1TZ, United Kingdom Phone: +44-116-232-6000 Web site: http://www.jessops.com JEWELLERY STORE: Administrators from Deloitte & Touche Move in -------------------------------------------------------------- Lee Antony Manning (IP No 006477) and Angus Matthew Martin (IP No 008331) have been appointed administrators for The Jewellery Store Limited. The appointment was made May 3, 2005. The company retails pieces of jewelry. Its registered office is located at Hill House, 1 Little New Street, London EC4A 4TR. CONTACT: DELOITTE & TOUCHE LLP Athene Place 66 Shoe Lane London EC4A 3BQ Phone: 00 44 (0) 207 936 3000 Fax: 00 44 (0) 207 779 4001 Web site: http://www.deloitte.com DELOITTE & TOUCHE LLP, Abbotts House, Abbey Street, Reading RG1 3BD Web site: http://www.deloitte.com KRUGER BRENT: Calls in Liquidator from Butcher Woods ---------------------------------------------------- At the extraordinary general meeting of Kruger Brent Limited on April 29, 2005 held at Monmore Business Park, Dixon Street, Wolverhampton WV2 2EE, the special and ordinary resolutions to wind up the company were passed. Roderick Graham Butcher of Butcher Woods, 79 Caroline Street, Birmingham B3 1UP has been appointed liquidator of the company. CONTACT: BUTCHER WOODS 79 Caroline Street, Birmingham B3 1U LLOYDS THERMALLOY: Members Hire Liquidator from Hacker Young ------------------------------------------------------------ At the extraordinary general meeting of the members of Lloyds Thermalloy Limited on April 25, 2005 held at St James Building, 79 Oxford Street, Manchester M1 6HT, the extraordinary and special resolutions to wind up the company were passed. R. E. C. Cook of UHY Hacker Young turnaround and recovery, St James Building, 79 Oxford Street, Manchester M1 6HT has been appointed liquidator of the company. CONTACT: UHY HACKER YOUNG St James Building 79 Oxford Street Manchester Greater Manchester M1 6HT Phone: 0161 236 6936 Fax: 0161 228 0117 E-mail: e.cook@uhy-uk.com MARGATE FOOTBALL: Names Langley & Partners Administrator -------------------------------------------------------- Philip Simons and Alan Simon (IP Nos 009289, 008635) have been appointed administrators for Margate Football Club Limited. The appointment was made April 29, 2005. The company is a football club. Its registered office is located at Hartsdown Park, Hartsdown Road, Margate, Kent CT9 5QZ. CONTACT: LANGLEY & PARTNERS Langley House Park Road East Finchley London N2 8EX Phone: 020 8444 2000 Fax: 020 8444 3400 E-mail: philip.simons@langleypartners.co.uk MG ROVER: Longbridge Revival Remote as Another Buyer Withdraws -------------------------------------------------------------- Alchemy head Jon Moulton has dropped its plans to buy MG Rover's sports car business, said The Times Wednesday. Mr. Moulton attributed the venture capital group's pullout to problems with intellectual property rights, supplies and warranties. The move, which further shrunk the company's hopes of restoring production at its Longbridge plant, comes as Rover administrator PricewaterhouseCoopers has only three days left to sell the group before splitting it up. A research and development and engineering center backed by Shanghai Automotive Industry Corporation was earlier speculated to be housed at the plant. However, the Chinese firm has so far offered only to acquire tooling for the Rover 25 and 75, the series K and L engines, and some R&D equipment. SAIC, which earlier refused to employ anyone directly in the U.K., owns the intellectual property rights to the 25, the 75 and two engines. The setup makes its all the more difficult for potential buyers to exploit Longbridge facilities. Rover, which is retained by former owner BMW, has reportedly received several bids. But most of them have lost interest already. The company fell into administration on April 8 after a tie-up with SAIC failed to materialize. CONTACT: MG ROVER GROUP LIMITED Longbridge, Bickenhill Birmingham B31 2TB, United Kingdom Phone: +44-121-475-2101 Fax: +44-121-482-2403 Web site: http://www1.mg-rover.com PRICEWATERHOUSECOOPERS Jon Bunn UK Head of Media Relations Phone: 020 7213 3279 Mobile: 07808 632167 Jenny Britton Business Recovery Services PR Manager Phone: 020 7212 2970 Mobile: 07855 522485 MOVTHERM LIMITED: Names Liquidator from UHY Hacker Young -------------------------------------------------------- At the extraordinary general meeting of the members of Movtherm Limited on April 25, 2005 held at St James Building, 79 Oxford Street, Manchester M1 6HT, the extraordinary and special resolutions to wind up the company were passed. R. E. C. Cook of UHY Hacker Young turnaround and recovery, St James Building, 79 Oxford Street, Manchester M1 6HT has been appointed liquidator of the company. CONTACT: UHY HACKER YOUNG St James Buildings 79 Oxford Street Manchester Greater Manchester M1 6HT Phone: 0161 236 6936 Fax: 0161 228 0117 E-mail: e.cook@uhy-uk.com MOWLEM PLC: Appoints New Executive Director ------------------------------------------- Further to its announcement on 3 March 2005, Mowlem plc appointed on Tuesday Mr. Paul Mainwaring as executive director. He succeeds Mr. G.T. Brown who leaves the board after 9 years as Group Finance Director. No further details are required to be disclosed in accordance with rule 6.F.2 (b) to (g) of the FSA Listing Rules. * * * In March, Fitch Ratings affirmed Mowlem plc's Senior Unsecured 'BB' and Short-term 'B' ratings and removed them from Rating Watch Negative. A Stable Outlook has been assigned. This rating action followed recent steps taken by Mowlem's new Chief Executive Simon Vivian to strengthen internal risk management structures and processes together with a more prudent approach to profit recognition and a greater focus on cash generation. Additionally, the agency considers important Mowlem's confirmation that sufficient bonding facilities remain available, that potential breaches have been resolved and that the FY04 audited accounts will receive an unqualified audit opinion. Fitch further noted the absence of negative surprises in the recently published FY04 preliminary financial statements. CONTACT: MOWLEM PLC White Lion Court, Swan St., Isleworth London TW7 6RN, United Kingdom Phone: +44-20-8568-9111 Fax: +44-20-8847-4802 Web site: http://www.mowlem.com MOWLEM PLC: Wins GBP175 Mln Barnsley Schools PFI Contract --------------------------------------------------------- Mowlem plc, as equal partners with Innisfree Ltd., signed Tuesday the GBP175 million Barnsley Schools PFI contract for client Barnsley Metropolitan Borough Council. The contract is to design, build, finance and operate 13 replacement new build primary schools at various locations throughout the Barnsley district. Mowlem will undertake the initial GBP45 million design and build capital works, to be carried out over a two-year period, and will then provide soft and hard services for a further 25 years. Construction work will commence immediately, with the first tranche of five schools scheduled to open in June 2006, the second tranche of three schools scheduled to open in February 2007 and the remainder due for completion in June 2007. Simon Vivian, Mowlem Group Chief Executive, said: "We are delighted to have been selected by Barnsley Metropolitan Borough Council as their partner on this exciting project. We look forward to a long and successful relationship with them and with the schools. Following our recent contract for the Redcar and Cleveland Schools PFI, this contract confirms Mowlem's position as a leader in schools PFI." CONTACT: MOWLEM PLC White Lion Court, Swan St., Isleworth London TW7 6RN, United Kingdom Phone: +44-20-8568-9111 Fax: +44-20-8847-4802 Web site: http://www.mowlem.com MOWLEM PLC: Suspended from Track Renewals ----------------------------------------- Over the weekend of January 8-9, renewals contractor Mowlem plc carried out track renewals work on the West Coast Main Line near Bushey (near Watford). Following a report of a 'rough ride' from a train driver on the Monday (10 January) afternoon, the line was blocked and inspected. Network Rail engineers found a small part of the new section of track that was not up to standard. The section of track had deteriorated during the day, eventually leading to the reported 'rough ride'. Network Rail immediately rectified the fault and launched a full and detailed investigation into how the track came to be in this condition. Mowlem was suspended from undertaking any further track renewals activity on the West Coast pending the outcome of the investigation. The investigation found weaknesses in the management and implementation of the works and made a series of recommendations. Network Rail also decided not to renew Mowlem's contract on the West Coast (which expired on 1 April). And in addition, Network Rail has suspended Mowlem from carrying out any track renewals work on its network until such time as it can demonstrate that it has implemented the improvements needed in its management and working practices relating to track renewals. CONTACT: MOWLEM PLC White Lion Court, Swan St., Isleworth London TW7 6RN, United Kingdom Phone: +44-20-8568-9111 Fax: +44-20-8847-4802 Web site: http://www.mowlem.com NTL INC.: Returns to Black in Q1 with GBP456.1 Mln Net Income ------------------------------------------------------------- Highlights of the first quarter results: (a) OCF of GBP 178 million, up 7%; (b) operating income of GBP16 million compared to loss of GBP7 million for Q1 2004; (c) OCF margins improved to 34% from 32%; (d) net cash provided by operating activities of GBP139 million; (e) Free Cash Flow from continuing operations of GBP59 million; (f) record quarter of 195,100 gross additions (157,000 on-net); (g) strong broadband growth of 112,900 (79,600 on-net); (h) triples up 17%; triple play penetration of 23.2% (24.6% on- net); (i) improvement in all key customer service metrics vs. Q4 2004; (j) Churn improved to 1.4%; net additions of 58,100 (on- net 32,800); (k) Ireland business sold for EUR325 million; and (l) 3.24 million shares repurchased to date for a total of US$215 million. Financial Highlights - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - % (GBP millions) Q1-2005 Q1-2004 change --------- --------- Revenue Consumer 384.5 369.8 4.0% Business 113.6 126.3 (10.1%) Ireland 19.2 17.5 9.7% --------- --------- Total Revenue 517.3 513.6 0.7% Operating income before depreciation, amortization and other charges (OCF) 177.5 166.2 6.8% Operating income (loss) 16.4 (7.3) n.m. (Loss) from continuing operations (62.6) (75.5) 17.1% ========= ========= - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Commenting on the results, Simon Duffy, Chief Executive Officer of ntl, said: "We have started the year with continued margin expansion, robust gross additions, improved customer churn and continued growth in our triple play customer penetration. Compared to the first quarter of last year, our OCF margins are up nearly two points to 34.3%. Gross additions of 195,100 and improved customer service -- which have helped reduce churn to 1.4 per cent -- resulted in total net additions of 58,100. Continued strong performance in gross additions and further improvements in churn should put us back on track for our long-term on-net target of over 50,000 net customer additions per quarter from Q2 onwards, resulting in over 200,000 on-net customer additions this year. "We have repurchased a total of 3.24 million shares in the open market at a cost of US$215 million and [on Tuesday] concluded the sale of our operations in the Republic of Ireland for EUR325 million, reinforcing our focus on building our U.K. cable business. This activity leaves us well positioned for the next stage of our development." Q1 2005 Review Revenue First quarter revenue was GBP517.3 million (US$977.8 million), up 0.7% compared to the prior year period. The increase is primarily due to growth in Consumer revenue, which is discussed in detail below. Consumer The company provides bundled services, including a range of broadband and dial-up Internet services, local, long distance and international telephone services, and digital and analogue cable television, to our residential customers through our Consumer sales channel. Included within Consumer are ntl's residential off-net and virgin.net customers. Consumer revenue was GBP384.5 million (US$726.8million), up 4.0 percent over the same period last year. The increase in revenue reflects the acquisition of virgin.net and strong growth in broadband RGUs which increased by 112,900 (79,600 on-net) in the quarter and by 414,400 (296,100 on-net) compared to the same period last year. Also contributing to Consumer revenue growth were an increase in digital TV customers, which grew by 16,900 compared to the same period last year, and two TV price increases. These positive factors were offset by a decline in telephony usage, lower pricing, fewer ATV customers and lower TV premiums and off-net revenue. The strength of the ntl product portfolio led to a record quarter of 195,100 (157,000 on-net) total gross customers additions. Customers taking all three services increased 17% from the first quarter of last year bringing triple customer penetration to 23.2% (24.6% on-net). Triples as a percentage of on-net gross additions increased to 11.8% up from 8.4% in the first quarter of 2004, reflecting a continued improvement in the value of our customer base. On-net gross customer RGU additions were evenly distributed between all three product categories with 35% for broadband, 35% for telephony and 30% for television. Following the major reorganization and billing system migrations that took place last year, customer service metrics improved considerably during the first quarter, with particularly strong results achieved in March. The average speed of answering a call improved from the fourth quarter to the first quarter by 42 percent and in March averaged 77 seconds, the fastest since Q2 2004. March call abandonment rates improved to 4.2% and calls answered within 20 seconds improved to 55%, levels last experienced in the first quarter of 2004. These improvements in customer service metrics contributed to a reduction in customer churn to 1.4% which resulted in a 70% increase in total net additions and 58% increase in on-net net additions compared to the fourth quarter. The company added 58,100 residential customers (32,800 on-net) to end the quarter with 3.19 million customers (3.01 million on-net), a 4.0% increase over Q1 2004. It also added 101,800 RGUs (72,700 on-net), ending the quarter with over 6 million RGUs (5.86 million on-net), a 4.7% increase over Q1 2004. On-net RGUs per customer also continued to improve to 1.95 RGUs per customer, up from 1.93 over the same period last year. There were no customer adjustments during the first quarter of 2005. The company successfully launched its video on demand service in Glasgow and Wales (Swansea and Cardiff) during the first quarter. It will be launching in three additional markets during the summer and expect to be in a total of 10 markets by year end. Business The company provides a range of retail and wholesale voice, data and Internet products and services to the business market comprising private and public organizations as well as resellers and mobile operators. Business revenue of GBP113.6 million (US$214.8 million) was down 10.1% over the same period last year primarily due to the loss of virgin.net revenue. Prior to the 100% acquisition of virgin.net by ntl in November 2004, virgin.net was a third party wholesale Internet customer. The remaining decline in Business revenue is primarily due to the previously announced conclusion of its contract with Vodafone and the continued transition toward replacing declining traditional circuit switched network services revenue such as voice, frame relay and ATM with higher growth "New Wave" IP-based data and managed services revenue such as Ethernet and Virtual Private Network (VPN) solutions. During the first quarter it launched its National Ethernet product, building on the existing portfolio of Ethernet services including Metro Ethernet and Ethernet VPN solutions. The Ethernet portfolio is aimed at enterprises that are seeking to modernize and consolidate their existing legacy networks and is also available to carriers and wholesale customers. National Ethernet will deliver improved operating efficiency at a lower cost and higher bandwidth than legacy ATM or frame relay technologies. The product will allow businesses to integrate their Wide Area Networks and Local Area Networks into a single, national LAN capable of supporting new services such as multimedia presentations, VoIP and video conferencing. One of the early wins for its new National Ethernet product was a managed services contract to deliver our National Ethernet solution to the Association of Chartered Certified Accountants. Other New Wave contract wins in the first quarter included a contract to provide one of the world's largest content delivery networks for a major public organization in the U.K. and a contract to provide a managed optical wavelength service for a Fortune 100 company. Ireland As announced on May 9, 2005, it has sold its operations in Ireland for EUR325 million. They intend to use the net sale proceeds to repay principal amounts outstanding under senior credit facility in accordance with its terms. In the second quarter of 2005, Ireland will be accounted for on the basis of discontinued operations. Ireland revenue is derived from digital and analogue cable television services provided to homes in the Republic of Ireland including Dublin, Waterford and Galway, and broadband in parts of Dublin. Additionally, the company has offered a full range of business telecommunications services in Ireland, including voice, data and Internet products. Ireland revenue was GBP19.2 million (US$36.2 million), up 9.7% over the same period last year, reflecting strong subscriber growth, greater take up of digital television services and increases in television pricing. In the first quarter, residential customers increased by approximately 2,400 to reach 350,100. Monthly customer churn declined to 0.7% vs. 1.1 percent during the same period last year. Digital television subscriber numbers grew significantly to reach 102,000, an increase of 31% over the same period last year. The ongoing investment in Broadband has increased the number of marketable Broadband homes to over 102,000. Broadband customers increased by 2,500 in the first quarter to 10,000, a penetration level of approximately 10% of marketable homes. Operating Income Before Depreciation, Amortization and Other Charges (OCF) OCF increased by 6.8% to GBP177.5 million (US$335.5 million) versus the same period last year. The increase reflects the improved product mix in Consumer and higher margin Internet revenue. Savings in operational overheads were achieved through the ongoing benefit of renegotiated maintenance contracts and lower costs due to a reduced level of set top box repair and recycling. These savings were partly offset by increased installs in pre-wired residential customer homes where the cost to install is expensed rather than capitalized, higher bad debt expense and the conclusion of the Vodafone contract. First quarter stock based compensation expense (SBCE), which is included in OCF, was GBP2.9 million (US$5.4 million) compared to GBP2.1 million (US$3.8 million) during the same period last year. Operating Income (loss) and Net Income (loss) Operating income was GBP16.4 million ($31.1 million) versus an operating loss of GBP7.3 million (US$13.5 million) during the same period last year. The improvement is primarily due to our increased OCF and lower depreciation charges. Net income was GBP456.1 million (US$1,068.0 million) versus a net loss of GBP65.4 million ($120.3 million) during the same period last year. The improvement reflects a GBP514.6 million (US$1,178.4 million) gain from the sale of our Broadcast operations completed on January 31, 2005, which was partly offset by exchange rate losses. Excluding the gain from the sale of Broadcast, (loss) from continuing operations was GBP62.6 million (US$118.2 million). Fixed Asset Additions (accruals basis) First quarter fixed asset additions from continuing operations were GBP67.2 million (US$123.7 million), an increase of GBP1.9 million over the same period last year. The increase is due to higher scaleable infrastructure costs primarily associated with broadband speed increases and other network enhancements and higher CPE (customer premise equipment) costs reflecting an increase in deliveries of set top boxes and cable modems. These increases were partly offset by lower Support Capital costs due primarily to decreased billing system migration and IT spend and Commercial costs related primarily to a reduction in business install costs. Cash and Cash Equivalents At March 31, 2005, cash and cash equivalents were GBP842.8 million (US$1,591.8 million), an increase of GBP717.5 million (US$1,351.8 million) over the prior quarter. The increase is primarily due to the retained balance of proceeds from the previously announced sale of our Broadcast operations. Other Matters As of the end of April, the company has purchased 3.24 million shares of common stock in the open market for a total of approximately US$215 million. A full copy of the financial results is available free of charge at http://bankrupt.com/misc/NTLInc(Q12005).mht CONTACT: NTL INCORPORATED Bartley Wood Business Park Bartley Way Hook Hampshire R627 9UP Phone: +44-1256-75-2000 Fax: +44-1256-75-4100 Web site: http://www.ntl.com Media Justine Smith Phone: 01256 752 669 07966 421 991 Buchanan Communications Richard Oldworth Jeremy Garcia Mark Edwards Phone: 020 7466 5000 Investor Relations Patti Leahy Phone: 610-667-5554 PARAMOUNT FITTINGS: Liquidator from UHY Hacker Young Moves in ------------------------------------------------------------- At the extraordinary general meeting of the members of Paramount Fittings Limited on April 25, 2005 held at St James Building, 79 Oxford Street, Manchester M1 6HT, the extraordinary and special resolutions to wind up the company were passed. R. E. C. Cook of UHY Hacker Young turnaround and recovery, St James Building, 79 Oxford Street, Manchester M1 6HT has been appointed liquidator of the company. CONTACT: UHY HACKER YOUNG St James Buildings 79 Oxford Street Manchester Greater Manchester M1 6HT Phone: 0161 236 6936 Fax: 0161 228 0117 E-mail: e.cook@uhy-uk.com PILKINGTON CHANNEL: Hires PricewaterhouseCoopers Liquidator ----------------------------------------------------------- Name of companies: Pilkington Channel Island Holdings Limited Pilkington (Glass Technologies) Limited Pilkington Micronics Limited Pilkington Overseas Holdings (1991) Unlimited Pilkington Overseas Holdings Unlimited Pilkington Overseas Investments Limited Sarhal Limited At the extraordinary general meetings of these companies on April 29, 2005, the special and ordinary resolutions to wind up the companies were passed. Tim Walsh and Jonathan Sisson of PricewaterhouseCoopers LLP, Benson House, 33 Wellington Street, Leeds LS1 4JP have appointed joint liquidators of these companies. CONTACT: PRICEWATERHOUSECOOPERS LLP Plumtree Court London EC4A 4HT Phone: [44] (20) 7583 5000 Fax: [44] (20) 7822 4652 Web site: http://www.pwc.com PROGRAM MARKETING: Calls in Administrators from Leonard Curtis -------------------------------------------------------------- J. M. Titley and A. Poxon (IP Nos 8617, 8620) have been appointed administrators for Program Marketing Limited. The appointment was made April 18, 2005. The company offers other business services. Its registered office is located at Hyde House, 4th Floor, The Hyde, Edgware Road, London NW9 6LA. CONTACT: DTE LEONARD CURTIS DTE House, Hollins Mount, Bury BL9 8AT Phone: 0161 767 1200 Fax: 0161 767 1201 Web site: http://www.dtegroup.com RICHARDS & ROSS: Calls in Liquidator ------------------------------------ At the extraordinary general meeting of the members of Richards & Ross Limited on April 25, 2005 held at St James Building, 79 Oxford Street, Manchester M1 6HT, the extraordinary and special resolutions to wind up the company were passed. R. E. C. Cook of UHY Hacker Young turnaround and recovery, St James Building, 79 Oxford Street, Manchester M1 6HT has been appointed liquidator of the company. CONTACT: UHY HACKER YOUNG St James Buildings 79 Oxford Street Manchester Greater Manchester M1 6HT Phone: 0161 236 6936 Fax: 0161 228 0117 E-mail: e.cook@uhy-uk.com RICOSS TRADING: Members Pass Winding-up Resolutions --------------------------------------------------- At the extraordinary general meeting of the members of Ricoss Trading Limited on April 25, 2005 held at St James Building, 79 Oxford Street, Manchester M1 6HT, the extraordinary and special resolutions to wind up the company were passed. R. E. C. Cook of UHY Hacker Young turnaround and recovery, St James Building, 79 Oxford Street, Manchester M1 6HT has been appointed liquidator of the company. CONTACT: UHY HACKER YOUNG St James Buildings 79 Oxford Street Manchester Greater Manchester M1 6HT Phone: 0161 236 6936 Fax: 0161 228 0117 E-mail: e.cook@uhy-uk.com STREAMCHASE LIMITED: Hires UHY Hacker Young Liquidator ------------------------------------------------------ At the extraordinary general meeting of the members of Streamchase Limited on April 25, 2005 held at St James Building, 79 Oxford Street, Manchester M1 6HT, the extraordinary and special resolutions to wind up the company were passed. R. E. C. Cook of UHY Hacker Young turnaround and recovery, St James Building, 79 Oxford Street, Manchester M1 6HT has been appointed liquidator of the company. CONTACT: UHY HACKER YOUNG St James Buildings 79 Oxford Street Manchester Greater Manchester M1 6HT Phone: 0161 236 6936 Fax: 0161 228 0117 E-mail: e.cook@uhy-uk.com TRIPLEX LIGHT: Members Decide to Wind up Firm --------------------------------------------- At the extraordinary general meeting of the members of Triplex Light Alloys Limited on April 25, 2005 held at St James Building, 79 Oxford Street, Manchester M1 6HT, the extraordinary and special resolutions to wind up the company were passed. R. E. C. Cook of UHY Hacker Young turnaround and recovery, St James Building, 79 Oxford Street, Manchester M1 6HT has been appointed liquidator of the company. CONTACT: UHY HACKER YOUNG St James Buildings 79 Oxford Street Manchester Greater Manchester M1 6HT Phone: 0161 236 6936 Fax: 0161 228 0117 E-mail: e.cook@uhy-uk.com TTG EUROPE: Falls into Administration ------------------------------------- TTG Europe plc was placed in administration Tuesday. These subsidiary companies have also been placed into administration: (a) Phone Direct Holdings Limited; (b) Phone Direct Limited; (c) Phone Direct International Limited; and (d) Cityphone International Limited. A further announcement will be made in due course. * * * Following the resignation of Michael Hanna, the Group's former Chief Executive, and the termination of the bulk trading activities, significant accounting irregularities were identified. These irregularities are likely to result in significant write offs and have had a major impact on cash flow. The Board therefore had to take immediate action to realize cash and reduce the Group's indebtedness as without additional support from the Company's bankers, which they were unwilling to provide, the Company would be unable to continue to trade. The total consideration payable is GBP10 million in cash and completion is conditional on no insolvency event having taken place in respect of Anglia or its parent companies, and Symphony having obtained bank finance to enable it to complete the acquisition. TTG has received assurances that the purchaser expects this condition to be satisfied. Andrew Smith, a Director of TTG and Chief Executive of Anglia, will resign from the board of TTG on completion and enter into a new service agreement with Symphony. CONTACT: TTG EUROPE PLC Unit 1 Clifton Court Corner Hall Hemel Hempstead United Kingdom HP3 9XY Phone: +44 1442 244 444 Fax: +44 1442 244 445 Web site: http://www.ttg-europe.com Julian Synett, Acting CEO and Group Finance Director Phone: 020 7681 6387 WATERSIDE PRESS: Creditors Meeting Set Next Week ------------------------------------------------ The creditors of Waterside Press (Hatfield) Limited will meet on May 17, 2005 at 10:00 a.m. It will be held at BDO Stoy Hayward LLP, 85 Great North Road, Hatfield, Hertfordshire AL9 5BS. Creditors who want to be represented at the meeting may appoint proxies. Proxy forms must be submitted together with written debt claims to BDO Stoy Hayward LLP, 85 Great North Road, Hatfield, Hertfordshire AL9 5BS not later than 12:00 noon, May 16, 2005. CONTACT: BDO STOY HAYWARD LLP Prospect Place, 85 Great North Road, Hatfield, Hertfordshire AL9 5BS Phone: 01707 255888 Fax: 01707 255890 E-mail: hatfield@bdo.co.uk Web site: http://www.bdo.co.uk WRE SERVICES: Hires Administrators from Tenon Recovery ------------------------------------------------------ Carl Stuart Jackson and Tina Yearsley (IP Nos 8860, 9298) have been appointed joint administrators for WRE Services Limited. The appointment was made April 26, 2005. The company handles animal incineration. Its registered office is located at Highfield Court, Tollgate, Chandlers Ford, Eastleigh, Hampshire SO53 3TZ. CONTACT: TENON RECOVERY Highfield Court, Tollgate, Chandlers Ford, Eastleigh, Hampshire SO53 3TZ Phone: 023 8064 6464 Fax: 023 8064 6666 E-mail: southampton@tenongroup.com Web site: http://www.tenongroup.com ********* 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, Liv Arcipe, Julybien Atadero and Jay Malaga, Editors. Copyright 2005. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. 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