/raid1/www/Hosts/bankrupt/TCREUR_Public/000509.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

         Tuesday, May 9, 2000, Vol. 1, No.2

                       Headlines

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B E L G I U M
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CERA HOLDING: Restructuring in Order to Compensate Shareholders


===========================
C Z E C H   R E P U B L I C
===========================

PVT.NET: Focus on Internet Applications After Sale of Subsidiary


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F R A N C E
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AIR LIBERTIE: British Airways will Lose o56 million on Sale


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G E R M A N Y
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BRAU UND BRUNNEN: Reports Loss for 1999
DEGUSSA HUELS: Paying $13 Million Fine for Vitamin Cartel
MERCK KGAA: Paying $14Mln Fine for Fixing Vitamin C Price


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I T A L Y
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SAINT GOBAIN: Moody's Lowers Long-Term Debt Rating


=====================
N E T H E R L A N D S
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BAAN COMPANY: S&P Cuts Company Credit Rating to CCC-Plus


=========
S P A I N
=========

AMADEUS: Lufthansa Sale Creates Doubt
HIDROELECTRICA DEL CANTABRICO: Seeks Arbitration on the TXU Stake
PESCAFINA: Wants to Take on Debt and Keep Operations Going
TELEFONICA: To Suffer From KPN Talks Failure


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S W E D E N
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ALTITUN AB: Unlisted Swedish Company to be Bought by ADC


=====================
S W I T Z E R L A N D
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VON ROLL: Selling Maintenance and Public Transport Components


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U N I T E D   K I N G D O M
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BOO.COM: Backers Demand Shake-up
BUPA: Company to Make Disposals to Help Bid
COOKSON GROUP: Sells Two US Telecom Units
CORUS PLC: Threatened By Crisis in British Manufacturing
DANKA BUSINESS: Records Huge o336 Million Loss
DIALOG: Thomson Buys Information Services Division
FORD MOTOR: Dagenham Restructuring to Be Confirmed
FREESERVE: Goldman Advice May Lead to Merger or Outright Sale
GO: British Airways May Sell Its Low-Cost Arm
JENNINGS BROTHERS: Sells Restaurants to Reduce Debt
KINGFISHER LEISURE: Sells Discotheque to Reduce Borrowings
LIBERTY: Struggling Dept. Store to Lose Freedom in o68m Takeover
SCOTIA: Drug Reaction Leaves Shares Burned
ULSTER BANK: RBS Continues Disposals


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B E L G I U M
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CERA HOLDING: Restructuring in Order to Compensate Shareholders
---------------------------------------------------------------
Reuters   May 5, 2000

Cera Holding said on Friday it had agreed to restructure in order
to compensate its cooperative shareholders for its handling of a
1998 merger that created Belgium's second largest financial
group.

Cera Holding said the "historic agreement" allowed it to maintain
its key shareholder role in Belgian holding company Almanij
(ALM.BRU), which controls the KBC Bancassurance (KBC.BRU) group
created in 1998.

Representatives of the cooperative shareholders said the
agreement set an important precedent on shareholder compensation
that could have ramifications for other European cooperative
companies seeking to demutualise.

Cera Holding, which holds 38 percent of Belgian holding company
Almanij (ALM.BRU), merged with Kredietbank and insurer ABB in
June 1998 to form KBC Bancassurance (KBC.BRU).

Cera shareholders filed suit in 1998 to try to block the merger,
claiming they had received "fraudulent and illegal
representation" at Cera general meetings and failed to receive
fair value for their shares.

A Belgian court last December ruled that Cera should compensate
shareholders for the way it handled the merger.

CERA TO MAINTAIN ALMANIJ ROLE

Under the agreement reached by Cera and a syndicate of 500 Cera
holders, Cera will place three-quarters of its Almanij stake, or
about 56 million shares, in a new limited partnership to be
listed on the Brussels bourse in the first half of 2001.

Cera Holding will be the general partner of the limited
partnership, New Ancora, a structure which will give it both
voting and management control of New Ancora.

Cera holders will have the right to exchange existing shares for
those of New Ancora.

The shares of New Ancora are designed to mirror the value of
Almanij.

Cera Holding said the pact allowed it to continue to safeguard
the stability and development of KBC by acting as an anchor for
Almanij and keeping the decision-making powers in Belgium.

"It is a historic moment for Cera," Paul Tanghe, a member of the
Cera management committee, told the news conference. "It
maintains the continuity of Cera Holding and the Almanij-KBC
group."

KBC and Almanij shares, which both rallied about five percent on
Thursday, retraced from their intraday highs after the news. At
1229 GMT KBC was off 1.62 percent at 43.03 euros and Almanij was
down 1.88 percent at 42.19 euros.
The Bel-20 blue chip index was down 1.68 percent.

SHAREHOLDERS SEE WIDER RAMIFICATIONS

Mischael Modrikamen, the lawyer representing the shareholders'
syndicate, said the agreement was a victory for shareholders.

"It should be a real signal for demutualisation in Europe," he
told Reuters following the news conference on the accord.

"This is a very important precedent," said Bernard Thuysbaert, a
partner in Deminor, a Brussels-based shareholder consultancy
group which negotiated an agreement with KBC in 1998 for
increased compensation to the Cera shareholders.

"It is a very interesting evolution of the court decision,"
Thuysbaert said.
Both Cera Holding and the shareholder representatives said they
would advise shareholders to maintain their existing Cera shares,
rather than exchanging them for shares in New Ancora.

The existing Cera shares provide tax advantages on dividends and
allow holders to share in the capital gains of Almanij.

Thuysbaert said shareholders would be advised to exchange shares
only when they wanted to sell shares in order to realise gains on
the market price of New Ancora shares.


===========================
C Z E C H   R E P U B L I C
===========================

PVT.NET: Focus on Internet Applications After Sale of Subsidiary
----------------------------------------------------------------
ISI Daily News   May 5, 2000

Computer company PVT will now focus on the development of
Internet applications after it sold its Internet network pvt.net
last week to Nextra Czech Republic, a subsidiary of the Norwegian
Telenor, PVT CEO Jiri Fabian told a news conference today.

PVT sold its network with over 50 access points for an
undisclosed price. The operation of the network used to generate
some 6-7 pct of PVT's turnover.

"Providing Internet access is impossible without a strong
telecommunication partner," said Fabian adding that the company
was trying to find a partner for a year and a half.

With the sale of pvt.net, PVT acquires 9.99 pct of Nextra which
will be its preferred partner in the marketing of its main
product, namely system integration.

Kjetil Ovesen, CEO of Nextra's Czech branch, said the company
wants to become a leading provider of Internet access to
corporate users. He did not rule out other possible acquisitions
in the Czech Republic.

PVT last year made a preliminary pre-tax profit of Kc69m on
revenues of Kc1.7bn. It is controlled by IPB.


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F R A N C E
===========

AIR LIBERTIE: British Airways will Lose o56 million on Sale
-----------------------------------------------------------
The Times  May 6, 2000

BRITISH AIRWAYS will suffer a loss of, Air Libert,, which is to
be sold to Taitbout Antibes, a holding company controlled by
Groupe Alpha and Marine Wendel.

Taitbout is buying BA's 86 per cent interest in Air Libert, for
o40 million in cash, ending the UK airline's disastrous seven-
year affair with the internal French airline market.

BA first ventured into France in 1993, buying a stake in TAT for
o17 million and purchasing the remainder for o21 million three
years later. BA invested a further o60 million in 1997 with the
rescue of Air Libert,.

The hope was to generate feeder traffic from French regional
airports for BA's international network. However, according to a
BA spokesman, the market proved more difficult to crack than
expected.

BA has invested some o100 million in Air Libert,, but the removal
of an annual operating loss of o40 million means that the sale
should enhance BA's earnings.


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G E R M A N Y
=============

BRAU UND BRUNNEN: Reports Loss for 1999
---------------------------------------
Handelsblatt    May 8, 2000

Drinks group Brau und Brunnen AG has posted a high loss for 1999.
It thereby failed to meet an earlier forecast that it would post
a profit and issue a dividend. Group loss came in at DM86.8m,
while parent-only loss was reported as DM56.2m, which Brau und
Brunnen said would be fully met from profit reserves. The group
said the profit decline was the result of write-downs and value
adjustments. The first quarter of 2000 had "not gone well," a
company spokesman added, though some positive trends were
emerging.


DEGUSSA HUELS: Paying $13 Million Fine for Vitamin Cartel
---------------------------------------------------------
Reuters   May 5, 2000

Four companies will plead guilty to participating in a criminal
conspiracy to fix vitamin prices and two former executives will
do jail time, the Justice Department announced Friday.
Merck KgaA and Degussa Huels Ag of Germany and the Nepera Inc.
unit of Cambrex Corp. (CBM) and Reilly Industries Inc. of the
United States will pay fines.

Merck will plead guilty to fixing the price of vitamin C from
1991 until 1995, paying a $14 million fine.

Degussa-Huels will pay a $13 million fine, Nepera a $4 million
fine and Reilly industries a $2 million fine for fixing the price
of niacin, or niacinamide, or both, from January 1992 to June
1995.

Roger Noack, former president of Nepera, will serve eight months
in prison and pay a fine of $50,000 and David Purpi, former vice
president of Nepera, will serve one year and one day in prison
and pay a criminal fine of $100,000. ((david.lawsky@reuters.com,
202 898 8463, washington bureau))


MERCK KGAA: Paying $14Mln Fine for Fixing Vitamin C Price
---------------------------------------------------------
Reuters   May 5, 2000

Four companies will plead guilty to participating in a criminal
conspiracy to fix vitamin prices and two former executives will
do jail time, the Justice Department announced Friday.

Merck KgaA and Degussa Huels Ag of Germany and the Nepera Inc.
unit of Cambrex Corp. (CBM) and Reilly Industries Inc. of the
United States will pay fines.

Merck will plead guilty to fixing the price of vitamin C from
1991 until 1995, paying a $14 million fine.

Degussa-Huels will pay a $13 million fine, Nepera a $4 million
fine and Reilly industries a $2 million fine for fixing the price
of niacin, or niacinamide, or both, from January 1992 to June
1995.

Roger Noack, former president of Nepera, will serve eight months
in prison and pay a fine of $50,000 and David Purpi, former vice
president of Nepera, will serve one year and one day in prison
and pay a criminal fine of $100,000.


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I T A L Y
=========

SAINT GOBAIN: Moody's Lowers Long-Term Debt Rating
--------------------------------------------------
Reuters  May 5, 2000

Moody's Investors Service said on Friday it had lowered its
rating on Saint-Gobain (SGO.PAR) long-term debt to A2 from A1.
Moody's said the rating reflected the increased risk related to
the firm's activities and financial risks linked to its ambitions
to participate in the consolidation of the building materials
sector.

The agency said consolidation in the industry had largely been
financed by increased debt.

The firm's short-term rating was confirmed at Prime-1.


=====================
N E T H E R L A N D S
=====================

BAAN COMPANY: S&P Cuts Company Credit Rating to CCC-Plus
--------------------------------------------------------
Moody's Investors Services   May 5, 2000

Standard & Poor's today lowered its corporate credit rating on
Baan Co. N.V. to triple-'C'-plus from single-'B' and its
subordinated debt rating on the company to triple-'C'-minus from
triple-'C'-plus.

The ratings remain on CreditWatch with negative implications
where they were placed on Jan. 5, 2000, following the company's
considerable 1999 fourth-quarter loss.

The ratings downgrade reflects Standard & Poor's increased
concerns about the company's ability to meet its near to
intermediate term financial obligations, including a $145 million
bond maturity in December 2001, coupled with deteriorating
financial performance. Virginia- and Netherlands-based Baan
provides business management software.

Sales decreased 14% to $635 million in 1999, and Baan posted a
net loss of $289 million for the year, owing to the impact of a
sharp decline in license revenues, restructuring costs, and
management turnover. Operating challenges have continued, and
sales for the quarter ended March 31, 2000, were 40% below the
first quarter of 1999, including a 59% decline in license
revenues.

The company posted an operating loss of $75 million for the
quarter, compared with a loss of $26 million for the
corresponding quarter of the previous year. Standard & Poor's
believes that continued adverse operating performance will
challenge Baan's ability to retain its existing customer base and
attract new customers.

Credit quality has been impacted by the company's poor operating
performance and sharply deteriorating financial flexibility.

Shareholders' equity was $9 million at March 31, 2000, and the
company has convertible bonds of $145 million due in December
2001 (Baan has no other significant financial liabilities).

Although the company had cash balances of $161 million at March
31, 2000, the first quarter's operating cash flows of negative
$70 million are indicative of future performance. Furthermore,
near-term liquidity is challenged by the company's now-restricted
access to financial sources.


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S P A I N
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AMADEUS: Lufthansa Sale Creates Doubt
-------------------------------------
Reuters   May 5, 2000

Madrid-based online travel reservations company Amadeus fell more
than five percent on Friday after Lufthansa (LHA.XET) said it was
going to sell part of its 25 percent stake.

At 1340 GMT Amadeus shares were down 5.6 percent at 12.10 euros.
"Amadeus is falling because of the doubt this news has created.
We don't know when Lufthansa will sell, how much or to whom. All
we know is that it wants out," said a trader at a foreign bank in
Madrid.

The German airline said on Friday it planned to sell part of its
25 percent stake in Amadeus.

Spanish airline Iberia [IBLI.CN] and French carrier Air France
also own 25 percent each of Amadeus, while the remaining 25
percent is traded on the stock market.

Amadeus spokesmen could not be reached for comment.


HIDROELECTRICA DEL CANTABRICO: Seeks Arbitration on the TXU Stake
-----------------------------------------------------------------
Reuters    May 5, 2000

MADRID, May 5 (Reuters) - Spanish electricity company
Hidroelectrica del Cantabrico said on Friday it was seeking
arbitration on the shareholding built up by U.S.-based power
group TXU (TXU).

In a note to the securities market commission CNMV, Cantabrico
said it wanted a ruling on "the purchase of Cantabrico shares by
TXU beyond five percent, despite a commitment not to pass that
level reached on December 11, 1998".

TXU launched a takeover bid for Cantabrico in mid March but was
outbid by Spain's third-largest power firm Union Fenosa . Since
Fenosa launched its counterbid, TXU has increased its stake in
Cantabrico from five to 13.1 percent, according to stock market
regulators.

That stake has allowed TXU to contribute to attempts to hamper
Fenosa's bid. It and other Cantabrico shareholders have blocked
an attempt to remove a 10 percent ceiling on voting rights held
by any shareholder, no matter how big their stake.


PESCAFINA: Wants to Take on Debt and Keep Operations Going
----------------------------------------------------------
Reuters   May 5, 2000

Spanish fishing company Pescanova is seeking to take a majority
stake in fish wholesaler Pescafina, it said in a note to the
National Securities Market Commission (CNMV) on Friday.

Pescanova said it was seeking a stake of at least 50.5 percent in
Pescafina, which filed for protection from creditors in March
1988. Pescanova is looking at ways to take on Pescafina's debt
and keep that company's operations going.

Pescanova shares were up 1.7 percent at 12.10 euros at 1100 GMT,
while the main Ibex index was flat.

Pescanova shares have gained about 20 percent so far this year,
making up for a loss of similar amount in 1999.


TELEFONICA: To Suffer From KPN Talks Failure
--------------------------------------------
Reuters  May 7, 2000

MADRID, May 7 (Reuters) - Spanish telecoms giant Telefonica is
likely to be punished by investors on Monday after the failure of
merger talks with Dutch KPN Telecom showed a divided management,
analysts said on Sunday.

The deal would have created Europe's fourth largest telecoms
concern but the Spanish government, which held veto power over
the deal, and core Telefonica shareholders opposed a merger
because the Dutch government holds a 43.5 percent share in KPN.

Telefonica shares rose in Madrid 6.5 percent between last
Monday's announcement that talks were ongoing and the close of
trade on Friday.

Analysts said they expect Telefonica shares to fall by a similar
amount.

"It may fall up to three percent in a day and a bit more in the
week to around six percent," said Vicente Castellano, an analyst
with broker Ibersecurities.

The two firms called off the talks late on Friday after trading
in Madrid had closed. A two-day Telefonica board meeting ended
with an 11-to-9 vote favouring a merger, which KPN said the voted
showed the board was too divided to go forward.

"It is bad this alliance did not go through," said Maria Rotondo,
chief analyst with BSCH bolsa in Madrid.

"Telefonica sooner or later needs to enter in some sort of
consolidation and it would be very bad if this would not happen
because of a power struggle," she added.

A Telefonica-KPN merger would have given the new entity muscle to
fight with rivals worldwide, especially in upcoming tenders for
third-generation UMTS mobile phone licences in Europe. Telefonica
has nailed down a massive presence in Latin America but lacks
major investments in Europe outside of Spain.

Trade was still open in New York when the companies reported that
talks were called off, and the Spanish telecoms firm's ADRs
closed down 2.6 percent to $68-1/16.

Telefonica shares had closed down 0.27 percent to 26.08 euros in
Madrid on Friday before the announcement.

"Even when New York ended on Friday not all the bad news was
known yet. During the weekend, newspapers wrote how divided is
Telefonica's board..it sounds really bad," Castellano added.

VILLALONGA UNDER FIRE

Coming under fire is Telefonica chairman Juan Villalonga, who has
enjoyed loyal support from investors -- support that will be
tested with Monday's opening bell. Commentators have speculated
Villalonga may be forced to step down.

"Villalonga's loneliness," read a headline in leading daily El
Pais on Sunday, followed by, "Villalonga lacks the backing of
core shareholders."

The main internal opponents were Spain's second biggest bank
Banco Bilbao Vizcaya Argentaria and savings bank La Caixa, who
have about 14 percent of Telefonica between them and six of the
20 seats on the board of directors.

Market focus will be on BBVA, which on Monday is due to launch a
$3 billion capital offer of 220 million new shares to fund the
bank's expansion in Mexico and its investment in the "new
economy," namely deals with Telefonica.

"No matter how big the division with Telefonica can be, BBVA's
priority in these days will be its capital increase and it is
very likely the bank's officials on Monday will defend the
Telefonica alliance," a banking source told Reuters.

BBVA said on Friday its alliance with Telefonica to develop
Internet and e-business ventures was still in place.

Analysts said that any comment by BBVA defending future
Telefonica alliance policy or supporting Villalonga would be seen
positively by a market that already considers Telefonica's share
price relatively cheap.

HOPES FOR MOBILE DEAL STILL ALIVE

"From what we have just seen no deals are possible for Telefonica
with France Telecom or Deutsche Telekom , which are still
public," Rotondo said. "But a consolidation at a second level
between Telefonica and KPN for their mobile units is still
possible."

She added that also a deal with Telecom Italia's mobile phone
unit would also be a possibility.

Analysts long have said an ideal partner for Telefonica would be
British Telecom , which does not have any government ownership
and would provide Telefonica with the European presence it
craves.


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S W E D E N
===========

ALTITUN AB: Unlisted Swedish Company to be Bought by ADC
--------------------------------------------------------
Financial Times   May 5, 2000

ADC, the US producer of communications equipment, said on Friday
it was buying Sweden's Altitun, a developer of tuneable lasers
used in broadband networks, in an all-share deal worth $872m.
That ADC is willing to pay so much for the unlisted Swedish
company that employs about 45 people reflects the surge in
interest for building broadband networks, as operators race to
provide high-speed internet access.

Broadband will enable users to access the internet at speeds of
several million bits a second - compared with 56,000 bits on
traditional telephone lines - allowing services such as video on
demand. Fibre-optic cables are seen as the best way of delivering
this huge jump in bandwidth.

Altitun's tuneable lasers make the routing of information on
fibre-optic cables both easier and cheaper. At present, a cable
using 100 wavelengths needs 100 different lasers, often requiring
a large number of back-up lasers each on a fixed wavelength.
A tuneable laser can be used for any wavelength, an advantage
which radically cuts the number of lasers network suppliers need
to acquire, reducing costs and increasing flexibility.

Altitun is the first company to deploy such lasers operationally
and to ship them commercially.

Several leading makers of network equipment are thought to be
evaluating the system.

ADC said telecommunications providers continued to face the
challenge of trying to deploy high bandwidth networks at
increasingly competitive costs.

For ADC, the Altitun acquisition represented "another aggressive
step forward" in becoming a leading optical components supplier
to the telecoms industry.

ADC also announced on Friday it was to pay $80m cash for the
Danish company Ibsen Micro Structures, which develops and
produces optical components.


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S W I T Z E R L A N D
=====================

VON ROLL: Selling Maintenance and Public Transport Components
-------------------------------------------------------------
Reuters   May 5, 2000

Technology group Von Roll Holding AG said on Friday it was
selling its rail network maintenance and public transport
components activities for an undisclosed price as part of efforts
to focus on core businesses.

Von Roll is selling the segments, which employ about 120 people,
to Swiss industrialist Jean-Louis Favez, who owns Swiss track
welding company EFSA.

He will combine the businesses into a new firm named TrackNet
Holding AG.

A TrackNet statement said the new company expected annual sales
of about 35 million Swiss francs ($20 million).

Von Roll focuses on three divisions: Inova (environmental
technology, waste treatment plants and recycling), Isola
(insulation systems) and Infratec (infrastructure systems,
industrial casting, processing technology and machine trading).


===========================
U N I T E D   K I N G D O M
===========================

BOO.COM: Backers Demand Shake-up
--------------------------------
The Observer   May 7, 2000

The founders of Boo.com will this week be given a dramatic
ultimatum by their financial backers: cut your involvement with
the company and accept sweeping management changes, or have the
plug pulled on further funding.

The move comes as the ailing online fashion retailer seeks a o20
million cash injection. The attempt to raise further funding
highlights how quickly the company has been haemorrhaging cash
after raising nearly o100m of financing last year.

City sources say JP Morgan and Goldman Sachs, two of the
company's high-profile backers who participated in the first
round of financing, have ruled out making any further
investments. Both banks refused to comment on their involvement
with Boo.

The sources say the remaining backers - which include the
investment arms of luxury goods giant LVMH and the Benetton
empire - are prepared to stump up more money, but only if the
company's Swedish founders, chief operating officer Ernst
Malmsten and chief marketing officer Kajsa Leander, relax their
grip on the business.

'You can expect some management changes to be announced in the
next few days,' a source said last night.

It is thought that Boo's backers are pushing for the duo to
follow the example of their co-founder Patrik Hedelin, who
resigned as the company's executive chairman in February 'to
spend more time with his family' in Sweden.

Worries about Boo's future have been circulating for several
months.

In a bid to expand its market share, Boo earlier this year
slashed prices. However, efforts to revive the company's flagging
fortunes have been unsuccessful, despite the fact it has spent
nearly o15m on advertising in the past few months. Recently Boo
laid off 70 staff as part of its restructuring programme.

Boo's backers may look to sell the company to a trade buyer.

Analysts have suggested interested parties could include Marks &
Spencer and Kingfisher.


BUPA: Company to Make Disposals to Help Bid
-------------------------------------------
Financial Times  May 5, 2000

Bupa, the UK's largest health insurer, on Friday indicated that
it would make disposals in an effort to have its agreed o230m
($351m) bid for Community Hospitals Group, the hospitals
operator, cleared by the competition authorities.

The company, which on Friday bought a 26.8 per cent stake in CHG
in the market, hinted it would dispose of about six CHG hospitals
that overlap with its existing facilities.

Bupa must sell those hospitals to avoid breaching an undertaking
given to the Office of Fair Trading after its 1997 acquisition of
Goldsborough Group, another hospitals operator.

At the time, Bupa had to sell the six hospitals to CHG to avoid a
referral to the competition authorities.

The OFT undertakings were also behind Bupa's decision to buy its
stake in CHG through a "warehousing" arrangement with Schroder
Salomon Smith Barney. The company loaned the broker o70m to buy
and keep the shares until the six hospitals are sold. The stake
was bought at the offer price of 650p per share from a number of
institutions.


COOKSON GROUP: Sells Two US Telecom Units
-----------------------------------------
The Independent   May 5, 2000

Cookson Group, the industrial materials company, yesterday
announced the sale of two telecoms units, almost completing its
restructuring.

The units, Neptco and Focas, were sold for a total of o98m. The
North American units make telecoms cable or service the cable
industry. Neptco was bought by a venture capital consortium led
by Corner Equity Investors, while an agreement has been reached
to sell the assets of Focas to Alcoa Fujikura, a joint venture
between US aluminium group Alcoa and Fujikura of Japan.

Stephen Howard, chief executive of Cookson, said: "We're pretty
much done with the transformation of the company; we now have
just one small disposal to go."

Since Mr Howard took the helm in 1997, the company has made o400m
of disposals and o900m of acquisitions. It has exited plastics
and engineering, and is left with three divisions: electronics,
ceramics and precious metals.

Mr Howard said he would continue to look for small bolt-on
acquisitions. The last unit for sale makes plastic pallets.

The company issued an upbeat trading update at yesterday's annual
meeting. It said the electronics division showed organic growth
of 18 per cent in the first quarter. Cookson, whose shares closed
3.5p higher at 220.5p, said its precious metals division
performed in line with expectations.


CORUS PLC: Threatened By Crisis in British Manufacturing
--------------------------------------------------------
The Observer   May 7, 2000

The jobs of 3,000 workers at steelmaker Corus's flagship Llanwern
plant in south Wales are threatened this weekend by the deepening
crisis in British manufacturing.

There is a 'very real threat' of it closing, said one union
leader. And the company, formed from British Steel and the Dutch
firm Hoogovens, warned Trade and Industry Secretary Stephen Byers
last week that none of its UK plants was safe.

In a series of urgent talks, the unions and Corus told Byers and
other Ministers of the devastating impact of the strong pound and
the Rover and Ford crises on the future of UK steel
manufacturing.

Sir Ken Jackson, head of the Amalgamated Electrical and
Engineering Union, told The Observer: 'Llanwern is on the brink.'

The problems are spreading to core sectors of Britain's
industrial base. Ministers now fear that manufacturing could drop
below 20 per cent of the gross domestic product, bringing
disaster to Labour's heartlands.

Rover and Ford account for 400,000 tonnes a year of Corus' strip
steel, which comes from UK plants.

A Corus spokesman said production was likely to switch to its
Continental plants when Ford's new Fiesta model was produced only
at the car firm's mainland factories from early next year. The
current Fiesta is made at Dagenham, too, and the east London
plant may stop making cars altogether.

The AEEU's national officer for metals, Bob Shannon, met Corus
excutives last Thursday and was told that Llanwern was in
imminent danger. Other Corus plants are also under threat,
including another Welsh strip mill at Port Talbot, which employs
3,200 people.

Jackson warned Byers: 'Llanwern is on the brink. There is a very
real threat of closure. The fallout from Rover has been
underestimated, and the strength of the pound is causing Corus to
haemorrhage profits.'

Other senior union figures, including John Monks, general
secretary of the Trades Union Congress, also fear Llanwern is in
grave peril.

Byers also met Corus' joint chief executives, John Bryant and
Fokko van Duyne, on Friday. They told him the high pound coupled
with government measures such as the climate change levy was
having a disastrous impact on the industry.

UK workers have feared the pound would lead to a switch of
production to the Netherlands since Corus was formed last year.

If the company's UK market share falls below 50 per cent from the
curent level only three points higher, a widescale restructuring
- certain to include closures - will be triggered.

Chancellor Gordon Brown, who met members of the ISTC steel union
last Thursday, promised to look into ways or relieving pressure
on the industry.


DANKA BUSINESS: Records Huge o336 Million Loss
----------------------------------------------
This is London    May 5, 2000

Photocopier equipment supplier Danka Business Systems has sprung
back into the black after recording a huge o336 million loss last
year.

It made a o22.1 million pre-tax profit in the year to end March
following a major restructuring and cost cutting programme.

However, the fourth quarter was ominously weak with depressed
margins in the US contributing to a o10.4 million deficit.

Chief operating officer Larry K Switzer said: 'While our fourth
quarter results were certainly a disappointment, our strong
equipment sales remain encouraging and reinforce the confidence
we have in Danka's future business.'

The company has been plagued with problems since it acquired
Eastman Kodak's photocopier division for o438 million in 1996.
Last November it received a $200 million cash injection from US
private equity firm Cypress Group.

The shares fell 8p to 63 1/2p.


DIALOG: Thomson Buys Information Services Division
--------------------------------------------------
Citywire  May 5, 2000

Station Dialog has completed the sale of the business that has
given it little but debt and grief from the City.

The company today confirmed it has sold its information services
division to the Thomson Corporation for $275 million (o180
million).

Thomson has been allotted 9.3 million shares in Dialog at 170.5p
per share, giving it a 5.4% share in the company. JIYU Holdings
has also been allotted 7 million shares, or 4.1%. The
subscriptions provide o27.9 million of new equity investment in
the company.

Dialog(DLG) originally bought the information services division
from Knight Ridder Information in late 1997 for o260 million. It
has since been dogged with debts of up to o170 million, and was
widely dubbed Dialadog.

Chief executive Dan Wagner remained undeterred by the slurs, but
no doubt to shake off the tag once and for all, the company will
officially change its name today to Bright Station On Monday, the
stock symbols will change to BSN on the London Stock Exchange and
BSTN on Nasdaq.

Bright Station will have three divisions, Web Solutions, focused
on its InfoSort content indexing technology, Ecommerce,
containing its B2B OfficeShopper Internet procurement business,
and Internet Ventures, being launched to invest in technology and
Internet start-ups.


FORD MOTOR: Dagenham Restructuring to Be Confirmed
--------------------------------------------------
Financial Times   May 5, 2000

Ford Motor Company will next week confirm plans to end car
assembly at Dagenham, its largest UK plant, as part of a Europe-
wide restructuring.

Up to 3,000 production jobs will be put at risk at the east
London site, where the carmaker is expected to end production of
Fiesta small cars in autumn 2001.

The end of car assembly at Dagenham is the centrepiece of
arestructuring plan drawn up by David Thursfield, new president
of Ford's European operations. The move has been forced by
widespread over-capacity in Europe.

However Ford executives have given assurances to the Thames
Gateway London Partnership, an alliance of local authorities and
other parties seeking wholesale regeneration of the area, that
there will be other new investments partially to compensate for
the loss of car assembly.

The restructuring plans are understood to have been completed at
a meeting of Ford's European vice-presidents in Cologne this
week.

Jac Nasser, chief executive of the group, was said to have been
in daily discussion with Nick Scheele, chairman of Ford of
Europe, about the shake-up.

Ford, however, will seek to soften the blow by announcing a
significant investment in diesel engine production at the site.
It is also expected to proceed with development of a supplier
park for component manufacturers, even though on a reduced scale
in the absence of car assembly, plus a technology park and
related facilities also aimed at creating high-quality jobs in
the area.

The diesel engine plant investment will underpin Dagenham's role
as Ford's European hub for diesel engine output. It is the sole
source of such engines.

The restructuring is also likely to involve the partial sale or
transfer of Ford's European transmission operations at Halewood,
Bordeaux and Cologne to a new partner. Industry analysts believe
those operations could be acquired or placed in a joint venture
with Geytag or ZF, the German transmission manufacturers.

Leaders of local authorities within the Gateway partnership last
week met Mr Scheele to discuss the future of the project, which
had envisaged total investment of o468m for complete regeneration
of the town of Dagenham and its surrounding area, including
environment and transport infrastructure improvements. Of this
o300m had been intended to be made by Ford, mainly for assembly
line modernisation.

Ford last night declined comment on its altered involvement in
the project.


FREESERVE: Goldman Advice May Lead to Merger or Outright Sale
-------------------------------------------------------------
The Independent  May 8, 2000

Dixons, the high street electrical retailer, is understood to
have hired the investment bank Goldman Sachs to conduct a wide-
ranging review of its Freeserve subsidiary, which could lead to a
merger or outright sale of the business.

Under the terms of last year's Freeserve flotation, Sir Stanley
Kalms, the Dixons chairman, is prevented from selling any more of
the group's holding until July. Dixons currently has an 80 per
cent stake in Freeserve.

But the appointment of Goldmans will fuel speculation that Dixons
is keen to find a partner for Freeserve. There have already been
rumours that Deutsche Telekom's internet offshoot, T-Online, and
British Telecom may bid for Freeserve.

Freeserve, valued at more than o4bn, pioneered subscription-free
internet access, making its money by taking a share of telephone
charges. Its leadership of the UK market has been threatened by
competitors such as NTL and AltaVista, who are launching flat-fee
services providing unlimited internet access.

A spokeswoman for Dixons last night refused to comment on whether
it had hired Goldman Sachs, saying: "We engage investment banks
all the time to advise on a variety of projects. In any business,
options are continually under review."

Earlier this year Freeserve announced a link with BT to allow
people to receive films and television programmesdown telephone
lines. But last month if failed to forge a partnership with the
magazine publisher Emap, which chose to put its content online
itself.


GO: British Airways May Sell Its Low-Cost Arm
---------------------------------------------
Financial Times    May 7, 2000

Rod Eddington, the new chief executive of British Airways, will
consider the airline's first ever compulsory redundancies in an
effort to cut capacity and costs, it emerged on Sunday.

It also emerged that BA has received approaches for Go, its
wholly-owned low-cost airline.

Mr Eddington will discuss the future of the subsidiary - which
may also involve demerging it - in talks with Barbara Cassani,
Go's chief executive, within the next six months.

The former chairman of Ansett, the Australian airline, took up
his new post last week amid plans to cut a further o1bn of costs,
expected to involve the loss of more than 6,500 jobs.

He has instigated a fresh review and in a weekend press interview
was reported as saying the airline could no longer avoid
compulsory redundancies and total job losses could be anywhere
between 2,000 and 10,000.

BA has previously made all staff cuts through voluntary
redundancy and early retirement.

"We've made no secret of the fact that we expect overall numbers
to reduce over the next few years as the airline strives to
reduce capacity by 12 per cent," the group said on Sunday.
"We've not identified definite numbers and no area of the
business has been singled out.

"We've never ruled out the distinct possibility of having
compulsory redundancies but we've always had a voluntary approach
to severance."

BA said it would not comment on speculation about the future
ownership of Go.


JENNINGS BROTHERS: Sells Restaurants to Reduce Debt
---------------------------------------------------
Citywire  May 5, 200

Jennings sells restaurants Cumbrian pubs group Jennings Brothers
has sold two of the three Burlingtons restaurants it acquired
with the takeover of Cafe Inns last July. The buyer is a company
set up by the former chairman and managing director of Cafe Inns.

Jennings will use the o1.65 million cash proceeds from the sale
to reduce debt.

The company decided that the restaurants near Preston at
Ribchester and Broughton competed with two existing Jennings
outlets nearby. It will keep the Slyne, near Lancaster,
restaurant which has been refurbished to attract drinkers as well
as diners.

Jennings shares were unchanged at 200p at mid-day. They have been
on a steady rise from 118p last June.


KINGFISHER LEISURE: Sells Discotheque to Reduce Borrowings
----------------------------------------------------------
Citywire  May 5, 2000

Kingfisher Leisure starts asset disposals Restaurant and disco
owner Kingfisher Leisure has sold its discotheque in Gillingham,
Kent, to Worldview 2000, the first sale in a promised programme
of asset disposals.

The o1.27 million gross proceeds from the sale will be used to
reduce company borrowings.

Kingfisher(KFL) announced the programme of disposals on 24 March
after a takeover bid by Springwood(SWO) fell through.
Shares in Kingfisher Leisure were unchanged at 63p.


LIBERTY: Struggling Dept. Store to Lose Freedom in o68m Takeover
----------------------------------------------------------------
The Independent   May 8, 2000

Marylebone Warwick Balfour, the property investment group, has
emerged as the frontrunner in the race to buy Liberty, the
struggling department store chain.

MWB's board is understood to be meeting this week to finalise
details of its bid, thought to be worth about o68m. The offer is
expected to beat rival proposals from Moorfield and Shaftesbury.
Both groups are understood to have abandoned earlier plans to
make a full bid for Liberty.

If MWB is successful, the group's chief executive, Richard
Balfour-Lynn, plans to convert one of Liberty's four main sites,
on London's Regent Street, into serviced offices.

He is also said to be keen to exploit the e-commerce potential of
the Liberty brand, although he does not intend to close down the
company's stores, and the flagship shop in Great Marlborough
Street will remain intact.

A o68m offer would value each Liberty share at o3, a 50 per cent
premium on the group's closing price on Friday. It would be
welcomed by Bryan Meyerson, the corporate raider who holds a 16.9
per cent stake in Liberty. Mr Meyerson last year forced a
boardroom coup that saw Denis Cassidy, the former chairman,
replaced by Philip Bowman, who is also chief executive of Allied
Domecq, the spirits group.

In order to seal the deal, MWB would also need to convince
Elizabeth Stewart-Liberty, the founding family matriarch who owns
20.7 per cent of the group's equity. She has previously warned
that an offer of less than o3 a share would be rejected.

Other investments in MWB's portfolio include the Howard Hotel,
near the Embankment, which it acquired from the Barclay brothers
in March, and a five-star development in Park Lane. It is also
the majority owner of the UK's second-biggest serviced offices
centre, the MWB Business Exchange.


SCOTIA: Drug Reaction Leaves Shares Burned
------------------------------------------
Financial Times    May 5, 2000

Scotia, the biotechnology company, lost more than a quarter of
its market value on Friday after a scientific journal reported
that patients using its leading product had suffered serious
side-effects.

An article in Friday's British Medical Journal said that Foscan,
Scotia's drug against head and neck cancer, had caused burns to
the arms of six volunteers.

According to the BMJ, the volunteers developed the burns two days
after the injection, following a brief exposure to sunlight.
"Healing was much slower than with [conventional burns], with
prominent scarring in several men," the journal said.

The six were part of a group of 14 healthy men who had been
trialing the drug at a London research centre.

Foscan is a light-activated drug, which starts acting after a ray
of red light is shone on the affected area. Under normal
circumstances patients are told to avoid sunlight for around two
weeks.

The article triggered fears the regulatory approval of the drug
and its licensing to a pharmaceutical partner could be delayed
and caused a 26 per cent fall in Scotia's shares to 1131/2p.
Foscan, which has been filed with the US and European regulators,
is Scotia's most advanced product and is crucial to its future.

The company said the episode would not influence the regulatory
process as the regulators had been aware of the incident since
September. The Food and Drug Administration, the US drug
watchdog, is due to decide on Foscan in the summer.

Chris Blackwell, director of drug development, said that the side
effects reported in the BMJ were highly unusual and could have
been caused by a mistake in administering Foscan.

"We have used the product in over 850 people and we have seen no
such instances. This is an isolated incident." Mr Blackwell said
that the burns might have been caused by a leaking of the drug
from the patients' tissue into their veins. This was a rare
occurence which is normally treating by protecting the arm from
sunlight for some weeks. He said the company was still confident
of signing up a marketing partner for Foscan in the next few
months.


ULSTER BANK: RBS Continues Disposals
------------------------------------
The Times    May 6, 2000

ROYAL Bank of Scotland has sold Ulster Bank Investment Managers
(UBIM) to KBC Group, the Dutch bank, for o60 million.

The sale is its second disposal since the completion of the
acquisition of NatWest in March. Last month RBS sold Gartmore,
NatWest's fund management subsidiary to Nationwide Mutual, the US
insurer, for o1 billion, representing 1.9 per cent of Gartmore's
funds under management.

UBIM has about o4.6 billion under management in institutional
pension fund money, and the price represents 1.3 per cent of
funds under management.

RBS succeeded in taking over NatWest after a five-month bidding
battle with BoS.

A spokesman for RBS claimed that it did not intend to make any
further significant disposals.


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-
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and Beard Group, Inc., Washington, DC.  Peter A. Chapman and
Sharon Cuarto, Editors.

Copyright 2000.  All rights reserved.  ISSN 1529-2754.

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