/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/000512.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Friday, May 12, 2000, Vol. 1, No.5 Headlines ============= F I N L A N D ============= NEPTUN MARITIME: Posts 4 Mln. Euro First Qtr. Operating Loss RAISIO: Posts 1.7 Mln. Euros ($1.53 Mln) Q1 Loss UPM-KYMMENE: Bonds under Review by Moody's for Possible Downgrade =========== F R A N C E =========== AIR LIQUIDE: US Regulators Block o8bn BOC Takeover =========== G E R M A N Y =========== DEUTSCHE BAHN: Posts Disappointing Results for FY1999 MANNESMANN AG: To Sell Loss-Making Welded-Tubes Businesses MSH INTERNATIONAL: Systematics Announces Takeover of Company SCHWARZ PHARMA: DM20.8Mln Fall on Operating Profit TDS INFORMATIONSTECHNOLOGIE: Pre-tax Profit Down by 2.5 Mln. Euro ========= I T A L Y ========= CALCEMENTO: Listing Cancelled Following Successful Takeover Bid GRANDI NAVI: Ferry Operator Q1 Operating Loss of 7.8 Bln. Lire MAGNETI MARELLI: To Sell Driving Mirror Operations ===================== N E T H E R L A N D S ===================== CIREX: Corus Finalises the Sale of Dutch Unit KPN TELECOM: Biggest Percentage Loser As Takeover Hopes Fade PINKROCCADE NV: Dutch State Plans to Sell Stake in InfoTech Group =========== N O R W A Y =========== KVAERNER: Engineering Group to Sell Pulp and Paper Business =========== P O L A N D =========== BANK HANDLOWY: Citigroup Cleared to Buy 66 Percent of Polish Bank JOSEFOW VODKA: Polish Vodka Plants Face Dispiriting Sell-off ========= S P A I N ========= AQUA 2000: Sold to Eden Springs =========================== U N I T E D K I N G D O M =========================== BRITISH ENERGY: Halves Dividends and Warns of Possible Losses BSKYB: Pay-TV Company Posts Fourth Straight Quarterly Loss EGG INTERNETBANK: Posts Losses of o150 Mln Last Year FORD: Britain's Biggest Plant Braced for Closure HOGG ROBINSON: Travel Agency to Go Private HUNTINGDON LIFE: o1.45 Million Pre-tax Losses for Q1 INDEPENDENT ENERGY: o80m Shortfall in the Company's Accounts LIBERTY INTERNATIONAL: Sold to Schroder at o60 million MARCONI: Sell-Off Telecom Network Subsidiary Via Trade Sale ROVER CARS: Phoenix to Use Debt Auction to Fund Rover Buy-out PPP HEALTHCARE: Sells Holdings for o73 Million SPORTS INTERNET: Wilkinson to Set Group for o301 Million UNITED NEWS: Pressed on Restructuring Programme YORKSHIRE BUILDING: Moody's Places Rating on a Possible Downgrade ============= F I N L A N D ============= NEPTUN MARITIME: Posts 4 Mln. Euro First Qtr. Operating Loss ------------------------------------------------------------ Ferry operator Neptun Maritime on Wednesday reported a first- quarter net operating loss of 4 million euros on revenues of 103 million euros, according to Reuters. This compares to a gain of 3 million euros on revenues of 116 million euros for the corresponding 1999 period. The total net loss for the period was 8 million in the most recent quarter; this is up from a 5-million euro loss during the same period in 1999. RAISIO: Posts 1.7 Mln. Euros ($1.53 Mln) Q1 Loss ------------------------------------------------ Finnish food and chemicals group Raisio on Wednesday posted a first-quarter loss of 1.7 million euros ($1.53 million) and said it may not reach its stated goal for 2000 operating profit of almost 35 million euros. The loss was heavier than the median estimate in a Reuters poll of analysts for a loss before extraordinary items of 1.0 million euros, but was inside the range of estimates for a loss of 3.5 million euros to a profit of 1.7 million. Raisio's share fell after the release, reversing early gains to trade down 5.6 percent at 2.69 euros by 0831 GMT on a broadly weaker Helsinki bourse. UPM-KYMMENE: Bonds under Review by Moody's for Possible Downgrade ----------------------------------------------------------------- NEW YORK, May 10 - Moody's Investors Service has placed the Baa1 ratings for the Euro 1 billion MTN programme of UPM-Kymmene Oyj ("UPM-Kymmene") and UPM-Kymmene Finance B.V. as well as bonds issued under this programme along with previous bond issues by UPM-Kymmene all on review for possible downgrade. This action follows today's earlier announcement that UPM-Kymmene has launched a $70/share all-cash bid for Champion International (senior notes-Baa1, on review for downgrade). =========== F R A N C E =========== AIR LIQUIDE: US Regulators Block o8bn BOC Takeover -------------------------------------------------- The United State Federal Trade Commission has effectively halted the plans of Air Liquide and Air Products to jointly take over BOC Group. They are seeking to split the company in a $12.9 billion (o8.2 billion) deal. The Times reported Thursday the companies hoped to sell some of BOC's American assets and divide the remaining assets. Air Liquide hoped to receive BOC's assets in Europe while US company Air Products was to receive the assets in Australia. The deal would have great enhanced both companies' dominance in the industrial gas industry. Air Liquide is still counting on creating a compromise with the FTC by negotiating a new set of terms for the BOC takeover. It is believed, however, that BOC is not happy with the way in which the two companies have handled the dealmaking so far and is not going to favor any further negotiations. However, because BOC's share price has slipped dramatically since the deal was first announced, another price close to the initial offer is not likely. BOC shares have been no higher than o13.87 since the deal was announced. BOC responded to the news of the deal's collapse by immediately seeking to reassert its position as an independent company. It said the group had been "significantly restructured and reorganised" in the past two years. =========== G E R M A N Y =========== DEUTSCHE BAHN: Posts Disappointing Results for FY1999 ----------------------------------------------------- For fiscal year 1999, national rail operator Deutsche Bahn AG posted an operating loss -- its first since 1994 -- of DM170m. Pretax group profit was down to DM177m from DM394m in 1998. Sales rose 1.8% to DM30.6bn. Likewise, first quarter operating results painted a similar picture. Handelsblatt English Summary says Deutsche Bahn fell in the first quarter of 2000, booking an operating loss of DM68m, after DM34.8m in the year-earlier period. The main culprit in the disappointing results is the cost of several major projects now underway, especially a rail line between Cologne and the Rhine/Main area. Costs for this project, said chief executive Hartmut Mehdorn may go as high as DM2.76bn over budget. The company issued the findings of auditors Price- waterhouseCoopers which suggested poor planning and management have led to the cost overruns. CEO Mehdorn said the rail operator was actively addressing the findings in the report. The company tried to remain more optimistic about its forecast for 2000. Chief financial officer Diethelm Sack said group sales are expected to increase due to better economic conditions and the Expo 2000 in Hanover. MANNESMANN AG: To Sell Loss-Making Welded-Tubes Businesses ---------------------------------------------------------- Mannesmann AG is reportedly in talks with Salzgitter AG on the takeover of Mannesmann's welded-tubes businesses, according to Handelsblatt English Summary. Salzgitter is interested in MHP Mannesmann Pr,zisrohr GmbH and Europipe GmbH in order to increase its presence in the automotive sector. This desire led to a failed merger with Luxembourg firm Arbed last year. While acknowledging that its welded-tubes businesses posts losses last year, Mannesmann declined to say by how much. In 1999, Mannesmann's tubes division as a whole accounted for DM3.38bn of group sales. MSH INTERNATIONAL: Systematics Announces Takeover of Company ------------------------------------------------------------ Systematics AG and MSH International announced Wednesday they intend to merge. A takeover by Systematics of MSH would be a first for Germany's Neuer Markt-listed technology sector. Handelsblatt English Summary says the purchase price was not disclosed. Systematics founder and chief executive Detlef Fischer aims to make his company "a leading supplier of e-commerce solutions in Europe" with the acquisition. Systematics offers complete e- commerce solutions, from consultancy to development and implementation. The deal calls for Systematics to acquire a 71.28% stake in MSH from venture-capital group Schroder Ventures, and 8% from MSH's management. Systematics will present external MSH shareholders with a stock-swap offer at a ratio of 1:25. This offer will be presented after Systematics' annual shareholders' meeting on May 22, at which it will request the approved capital necessary to finance the takeover. SCHWARZ PHARMA: DM20.8Mln Fall on Operating Profit ------------------------------------------- German pharmaceutical group Schwarz Pharma announced significantly lower first-quarter results for 2000 compared to the previous year's results. Operating profit fell to DM19.4m ($9.01m) in the period compared with DM40.8m a year earlier. Income from continuing operations almost halved to DM30.5m from DM60.8m. Pre-tax profit was 50.7 per cent lower at DM19.8m compared with DM40.2m. The company's net profit fell 42.8 per cent to DM13.9m from DM24.3m. Earnings a share fell to DM0.62 from DM1.08 in the three months to March 31. Group sales were the only area to hold their ground, slipping marginally to DM325.8m from DM326.2m in the first quarter of 1999. The Financial Times reported Schwarz Pharma's share price was little affected by the news, opening 1.73 per cent higher at E26.45. TDS INFORMATIONSTECHNOLOGIE: Pre-tax Profit Down by 2.5 Mln. Euro ----------------------------------------------------------------- TDS Informationstechnologie AG on Wednesday reported earnings before interest and taxation of some 0.6m euros for first-quarter 2000, down from 3.1m euros a year earlier. Handelsblatt English Summary reports sales fell to 33.8m euros from 43.8m euros. As at the end of March, orders on hand were 74m euros, as compared to 36m euros at the end of December 1999. In view of the very good orders situation, TDS would slightly increase full-year 2000 earnings, despite the sales decline in the first quarter. ========= I T A L Y ========= CALCEMENTO: Listing Cancelled Following Successful Takeover Bid --------------------------------------------------------------- Following the successful takeover bid for Calcemento SpA by Compart SpA, the stock market listing of Calcemento will cancelled on May 15, the Italian Stock Exchange said. The last day of trading in Calcemento shares will be May 12. AFX European Focus reports the liquidation of remaining Calcemento shares for cash will occur on May 17. GRANDI NAVI: Ferry Operator Q1 Operating Loss of 7.8 Bln. Lire -------------------------------------------------------------- Grandi Navi Veloci has reported first-quarter operating losses of 7.8 billion lire ($3.66 million). The Italian ferry operator says higher fuel costs and seasonal factors played a part in the results. Because most revenue was earned during the summer, the first quarter results do not reflect the entire year's results. Additionally, the company, which is part of the Grimaldi group, reported an attributable 1999 profit of 21.4 billion lire, which compares to 25.7 billion for 1998. Reuters says the board proposed a dividend of 130 lire per share. MAGNETI MARELLI: To Sell Driving Mirror Operations -------------------------------------------------- Ficosa International, Spanish manufacturer of components for automobiles, has bought Fiat SpA unit Magneti Marelli SpA, according to AFX European Focus and Cinco Dias. Magneti Marelli sold its rear view mirror operations for 11,600 million pesetas. The purchase relies on the acquisition of a unit formed by nine factories in France, Spain, Poland, Turkey, Brazil, Argentina, India and two in Italy), a labor force of 1,000 and sales of almost 24,000 million pesetas in 1999 (143 million euros). Ficosa aims to lead the European market in this product segment and to have an industrial presence in Italy. Ficosa will pay 11,600 million by means of a credit syndicated by value of 28,000 million that is being negotiated by BNP-Paribas and German LB-bw, among others. The liabilities of the group consists of two credits syndicated by 5,000 and 3,000 million and headed by the Institute of Official Credit and the Catalan Institute of Finances respectively. ===================== N E T H E R L A N D S ===================== CIREX: Corus Finalises the Sale of Dutch Unit ---------------------------------------------- Corus group has finalized the sale of its Dutch unit Cirex to Nimbus Investment Fund. The transaction was announced March 1. Cirex, says Reuters, is a foundry that produces steel parts for the German automotive industry. The Anglo-Dutch steel and aluminum group was formed in October 1999 from the merger of Dutch Hoogovens and British Steel Plc in a deal worth 2.9 billion pounds. No financial details of the deal were released. KPN TELECOM: Biggest Percentage Loser As Takeover Hopes Fade ------------------------------------------- KPN Telecom shares were hammered Wednesday as investors turned sour after KPN sold a 15 percent stake in its mobile unit to NTT DoCoMo, Japan's largest cellular phone company. Reuters reports the sale, for five billion euros ($4.51 billion), pushed the share price of KPN to down 104 euros. This has greatly decreased the possibility of a takeover on the part of NTT DoCoMo. The Dutch government owns a 44 percent stake in the company, although it has announced plans to divest its stake. Additionally, talks aimed at merging KPN and Spanish telecom carrier Telefonica broke down Friday. The deal would have created Europe's fourth largest telecoms company. PINKROCCADE NV: Dutch State Plans to Sell Stake in InfoTech Group ----------------------------------------------------------------- Information technology group PinkRoccade NV is likely to see another part of its government-owned stake sold off in the near future. This would approximately halve the government's current stake in the company. PinkRoccade was listed on the Amsterdam bourse last July, when the Dutch state sold a stake of 26.1 percent, with the remaining shares under a lock-up clause until May 1, 2000. Reuters reports ABN AMRO Rothschild is lead manager of the sale and Kempen and Company is financial adviser for the state. =========== N O R W A Y =========== KVAERNER: Engineering Group to Sell Pulp and Paper Business ----------------------------------------------------------- Kvaerner has announced its intention to sell its pulp and paper division. The Anglo-Norwegian industrial engineering group did not complete a pulp and paper merger last year with Finnish paper company Ahlstrom. Kvaerner is hoping to sell its pulp and paper division outright rather than merging it with another company, however. Kjell Almskog, Kvaerner chief executive, says there has been a great deal of interest in the deal. Pulp and paper represented NKr5.3bn ($584m) of Kvaerner's NKr70.9bn in sales last year. The company has been shedding other assets, such as shipbuilding, since instituting restructuring last year. The Financial Times says the company reported a NKr10m net profit for the first quarter of 2000, which compares to a NKr4.9bn net loss after NKr4bn in restructuring provisions. =========== P O L A N D =========== BANK HANDLOWY: Citigroup Cleared to Buy 66 Percent of Polish Bank ----------------------------------------------------------------- Citigroup has received clearance from Poland's Banking Supervision Commission to acquire a 66 percent stake in Bank Handlowy. Citigroup sought a 75 percent stake in ownership in February. Regulators feared that would result in a complete submersion of Bank Handlowy, one of Poland's leading banks. Assuming the deal is completed, the result would be Poland's third-largest bank with combined assets of 27.7 billion zlotys ($6.25 billion) last year. Reuters reports Citigroup is expected to publicly bid for Handlowy shares and merge retail operations with Citibank Polska. The acquisition by Citigroup has broken off a stalled merger between Handlowy and rival BRE. JOSEFOW VODKA: Polish Vodka Plants Face Dispiriting Sell-off ------------------------------------------------------------ Poland's 21 state-owned Vodka producers are staring at idling plants and tumbling profits. Although the government has stated its intention to begin privatizing the industry, it is feared that the plants' troubles will threaten the government's ability to do so. Meanwhile, modern facilities such as the Jozefow vodka plant are producing at a fraction of their capacity. Reuters reports the plant are over-staffed, under-capitalised and burdened by some of the highest excise taxes in Europe. Smugglers have capitalized on high duties to steal much of the industry's puny profits. Concerns are that once foreign investors acquire the top distillers, the other, smaller firms will go under. As it is, only three distillers make profits. Sharp declines in prices and sales have made this scenario more likely. The state is not in a position to help the industry recover sufficiently before privatization begins, however. ========= S P A I N ========= AQUA 2000: Sold to Eden Springs ------------------------------- Eden Springs group has purchased Aqua 2000 and thus has entered the Spanish mineral water by investing 3,000 million pesetas. Cinco Dias reports the Israeli group initiated its international presence in 1996 in Poland. Then last year Eden Springs made two purchases in Switzerland. Eden Springs plans to serve 40,000 springs by 2002. =========================== U N I T E D K I N G D O M =========================== BRITISH ENERGY: Halves Dividends and Warns of Possible Losses ------------------------------------------------------------- Financial Times May 10, 2000 Shares in British Energy plunged by more than a fifth to a record low of 132p after the nuclear generator cut its annual dividend by 50 per cent and warned of possible losses in the current financial year. Peter Hollins, chief executive, blamed unscheduled shutdowns at two nuclear power stations and falling UK electricity prices for an 18 per cent fall in pre-tax profits to o225m in the 12 months to the end of March. The shares, which peaked 15 months ago at 7391/2p, on Wednesday night stood at almost a third below their 1996 adjusted float price of 1951/2p. Mr Hollins, asked whether the company's performance threatened his position, said: "It would be absurd to claim that investors are not disappointed but there has been nothing to suggest that shareholders have been anything but supportive of management." The company had met all its cost-cutting targets but shutdowns at the Dungeness B and Heysham 2 power stations had been beyond the company's control, costing o113m in lost pretax profit. The group is thought to be interested in buying the electricity supply business of Norweb, which United Utilities wants to sell. It would also like to buy more US nuclear plants and is expected to be among the bidders for the Bruce nuclear power site in Ontario, Canada. British Energy, which is facing a Competition Commission investigation over opposition to the imposition by the industry regulator of a good behaviour clause in its operating licence, reduced its annual divided to 8p. BSKYB: Pay-TV Company Posts Fourth Straight Quarterly Loss ---------------------------------------------------------- Financial Times May 10, 2000 The ongoing cost of rolling out its digital product resulted in a fourth straight quarterly loss for BSkyB, the pay-TV company controlled by Rupert Murdoch's News Corp. The satellite operator's shares fell nearly 10 per cent, or 143p, to o13.69 on Wednesday after the release of the third-quarter figures. Analysts said concerns about the amount BSkyB would need to pay to win the key rights to Premiership football matches were also weighing on the shares. The deadline for bids is tonight. A pre-tax loss of o28.4m for three months ended March 31, compared with a profit of o16m year-on-year, was better than most analysts had expected. Operating profits eased to o23.3m from o45.9m and turnover excluding joint ventures rose to o467.2m (o391.1m). Tony Ball, chief executive, drew attention to BSkyB's digital performance, saying the company had attracted an additional 2.3m digital subscribers in the past 12 months and was installing more than 50,000 set-top boxes each week. During the quarter, new digital subscribers totalled 316,000 while 398,000 existing analogue customers made the switch. Net additional direct-to-home subscribers were 190,000 and total churn - the number of customers choosing not to continue with the service - rose to 14.1 per cent. Mr Ball said two-thirds of BSkyB's subscribers were digital, with access to email and interactive services. By the end of the year, BSkyB has said it hopes to have 5m mostly digital subscribers. As of March 31, the number of total subscribers stood at 4.16m. EGG INTERNETBANK: Posts Losses of o150 Mln Last Year ---------------------------------------------------- The Times May 11, 2000 Prudential has set a limit of o1,000 on applications by private investors for shares in egg, its Internet bank. Applications will also be limited to existing customers and the Pru's banking customers and staff, totalling about one million. The flotation is expected to take place next month, with up to 25 per cent of egg being listed on the stock market. The business, which has yet to make a profit, is likely to be valued at about o2 billion, barely half earlier valuations. Jonathan Bloomer, Prudential's chief executive, defended the timing of the float, which will be the UK's biggest Internet share offer. He said: "In March there was a lot of froth in the market. I would rather it was priced and valued in a much more solid market." Mike Harris, egg chief executive, said he expected the bank, which had losses of o150 million last year, to break even by 2001. Independent analysis by Morgan Stanley and UBS Warburg predicts it could make profits of up to o100 million in three to four years. In a management reshuffle, Mr Harris will become executive vice- chairman from the beginning of next year. He will be replaced by Paul Gratton, chief operating officer. Roberto Mendoza, former vice-chairman of JP Morgan, and Richard Delbridge, former NatWest finance director, will become non-executive directors. Lloyds TSB yesterday unveiled plans for a new Internet bank. Evolvebank.com will be launched in Spain this summer before making its UK debut later in the year. FORD: Britain's Biggest Plant Braced for Closure ------------------------------------------------ Reuters May 10, 2000 The ailing car industry is braced for another blow, as fears mount that Ford Europe will end car production at its giant Dagenham plant east of London. Prime Minister Tony Blair said Ford was due to make an announcement on Friday and gave an assurance the government would help any car workers who might lose their jobs as a result of Ford's decision. "We will of course do all we can to protect those jobs that can be protected," Blair told parliament on Wednesday. "We will be there ready to help with money and investment and help and advice for anyone that does lose their job." Ford announced last month that it would cut some 1,350 jobs at Dagenham and said further steps might be taken in an attempt to revive its struggling European operations, which have been battered by falling car sales and razor-thin profit margins. "Our belief is that it is possible that on Friday, Ford may announce the end of volume car production at the Dagenham plant, thereby bringing to an end mass production of Ford cars in the UK," London Mayor Ken Livingstone told reporters. Livingstone said he had spoken to Ford. He estimated that, in addition to direct redundancies, the closure of Dagenham would lead to 20,000 indirect job losses. Dagenham currently employs 7,700 workers, including 1,800 at an engine plant where production may be expanded. Excluding the 1,350 workers already earmarked for redundancy, some 4,550 jobs are at risk if Dagenham vehicle assembly ends completely. Under the changes announced last month, production at Dagenham is already to be halved to 2,700 cars a week from August. HOGG ROBINSON: Travel Agency to Go Private ------------------------------------------ The Times May 11, 2000 Hogg Robinson, the business travel agency, is to be taken private through a o231.9 million management buyout backed by Schroder Ventures. The deal, which values Hogg at 285p a share, comes just months after the directors rejected a mooted 330p-a-share offer from Brian Myerson's Active Value Advisor group. The management offer - comprising Hogg's four executive directors plus Neville Bain, the chairman - is at a 57 per cent premium to the closing price on March 20, the day before Hogg announced it was in advanced MBO discussions. That compares with a 325p high two years ago. The shares closed last night up 35p at 277�p. The offer, a cash deal that has been recommended by Hogg's independent directors, has been made through Farnborough, a specialist takeover vehicle. The MBO team, led by David Radcliffe, Hogg's chief executive, is being advised by Hawkpoint Partners. The directors, and up to 20 other senior Hogg managers, will share a 10 per cent stake in the company after it is taken private. HUNTINGDON LIFE: o1.45 Million Pre-tax Losses for Q1 ---------------------------------------------------- Citywire May 10, 2000 Huntingdon Life Sciences cuts its losses Huntingdon Life Sciences announced a narrowing of pre-tax losses in the first quarter of the current year. Huntingdon saw pre-tax losses of o1.45 million in the three months to 31 March from o2.8 million the previous year. Losses per share were 0.5p from losses of 1p the previous year. Executive chairman Andrew Baker says: `The strong year over year revenue growth and meaningful margin improvement is testament to our increasing success in strengthening Huntingdon's position as one of the world's leaders in non-clinical safety testing'. `Growth in backlog, new clients and returning clients builds our confidence that high standards of scientific excellence and customer service are the right focus for us'. INDEPENDENT ENERGY: o80m Shortfall in the Company's Accounts ------------------------------------------------------------ The Independent 11 May 2000 The energy regulator Ofgem yesterday ordered Independent Energy to stop taking on any more domestic electricity customers after billing problems led to its switchboard being jammed and a deluge of complaints. Independent Energy, which reports third-quarter results next week, had been signing about 4,000 new domestic and small business customers a week, but it will have to freeze its marketing campaign until billing problems are sorted out. The announcement from Ofgem prompted an 18 per cent slide in Independent Energy shares, wiping more than o180m from the company's market value. The shares closed 450p down at 2,100p. John Sulley, chief executive of Independent Energy, said he was confident that the billing problem could be largely cleared up by the end of June, allowing the company to start taking on new customers. The problem first emerged in February when Independent Energy disclosed that it had been unable to bill tens of thousands of customers for electricity already supplied because of difficulties in getting meter readings from their previous supplier. At the time Independent Energy had cleared 52 per cent of the backlog, but this still left an o80m shortfall in the company's accounts. By the end of March, more than 60 per cent of the backlog had been cleared and the company has made further progress since then. Mr Sulley stressed that the problem did not apply to the 50,000 or so new domestic and small business customers it had taken on since February. "We believe we are billing customers in a timely fashion," he said. But as Independent Energy began to send out more bills to clear the backlog, its customer call centre, run by United Utilities offshoot Vertex, was jammed by the sheer volume of calls. This resulted in customers not being able to get through at all and a "significant" increase in complaints to Ofgem, the regulator said. A new condition written into Independent Energy's licence by Ofgem prevents it from taking on new customers until it has satisfied the regulator that its performance has improved. This will mean the company demonstrating that bills are issued on time, that customers are transferred properly, and that the company can deal with queries and complaints satisfactorily. Callum McCarthy, head of Ofgem, said: "Customers are entitled to receive timely and accurate bills from their gas and electricity suppliers, and we are determined to ensure that they do. This licence condition clearly signals our intent in this area, not only to Independent Energy but to other suppliers." Mr Sulley stressed that the company was in full agreement about the need for the additional licence condition. However, he added: "We are confident that within a short space of time the group will resolve its customer service problems to provide improved and superior performance." Independent Energy has partly been a victim of its own success in attracting such large numbers of customers. The business has grown from a market capitalisation of o13m when it was floated four years ago to a value of o861m at last night's closing price. LIBERTY INTERNATIONAL: Sold to Schroder at o60 million ------------------------------------------------------ This is London May 10, 2000 Fund manager Schroders today paid o60 million for Liberty International Pensions, its first deal since selling its investment banking business to Salomon Smith Barney, writes Nick Goodway. The deal is small but significant since Liberty is a leading provider of defined contribution pensions which are likely to be a key growth area after the introduction of stakeholder pensions from next April. Liberty has policyholder funds of o3.2 billion and employs 50 people who will all join Schroders. Liberty was 80% owned by the property group Liberty International with 10% each held by the BT Pension Scheme and Capital Group. Liberty International's chief executive David Fischel said: 'This transaction is very much in line with our strategy of focusing on our core property business.' Liberty is the group behind the Lakeside shopping centre. It owns 75% of Capital Shopping Centres. Last summer, Liberty International underwent a major shake-up as South African Donald Gordon's Liberty Life cut its stake from a controlling 76% to less than 30%, signalling the end of its major ambitions in the UK financial services sector. David Salisbury, chief executive of Schroders, said: 'This acquisition enables us to achieve our stated aim to be a leading DC service provider.' MARCONI: Sell-Off Telecom Network Subsidiary Via Trade Sale ----------------------------------------------------------- This is London May 11, 2000 Electronics concern Marconi today revealed that it is considering floating its Fibreway high-capacity network and services business this year, writes Ross Davies. If it comes off, it will give a new meaning to the word flotation as a partner is to be British Waterways, a public corporation along whose canal towpaths about 50% of Fibreway's 1300 kilometres of cable runs. Marconi means to separate the business this year, and more than double the network to about 3000km. The snip allows Marconi to distance itself from Fibreway, which is capable of moving from supplying voice and internet links to the likes of BT to providing rival services. Marconi chairman George Greener said it would be 'an active partner' with British Waterways and would use all the proceeds from a Fibreway separation and possible stock market float for re-investment in inland waterways. ROVER CARS: Phoenix to Use Debt Auction to Fund Rover Buy-out ------------------------------------------------------------- Financial Times May 10, 2000 The Phoenix consortium, the alliance of Midlands businessmen behind the buy-out of Rover Cars, is planning a multi-million pound debt auction to raise additional finance for BMW's former UK subsidiary. The auction, expected to take at least 12 weeks, is expected to involve competing bids for lending against Rover assets, mainly its fleet of unsold cars. At least three financial institutions are expected to take part in the fund-raising exercise. One of them is said to be Burdale Financial, the UK arm of First Union Bank of North Carolina. Burdale has made a conditional loan offer of o200m in asset lending. But officials at Phoenix said a final deal had not been signed. The financing would provide extra working capital on top of the o500m repayable credit offered by BMW. It emerged on Wednesday that the o500m loan is subject to unusually soft terms. In the short-term, Phoenix will have to repay the facility only if it sells Rover. But if it remains a stand-alone business then the repayment will not fall due for 50 years. Funds raised by the debt auction, meanwhile, are expected to cover an estimated o1bn of dealer finance, at present handled by BMW's financial services arm. BMW hopes to transfer that lending, used by dealers mainly for showroom investment and vehicle purchases, to new institutions over the next 12 months. Phoenix stressed that the fund-raising would not involve a debt- for-equity swap. Instead, equity in Rover will be divided among dealers, production line employees and management. Shares will be distributed to workers at Rover's Longbridge plant through a new employee trust, which is expected to receive more than a third of the equity. BMW on Wednesday insisted that its decision to give Rover Cars to Phoenix with a o500m credit did not signal its intention to withdraw from Britain. The German carmaker said it would continue to employ about 10,000 workers in the UK, including 2,500 at its Swindon pressings plant, 2,000 at Longbridge and some 3,500 at its Cowley plant near Oxford. Some of the workers at Cowley are expected to be transferred temporarily to BMW plants at Munich and Regensburg, following the transfer of the Rover 75 from the Oxford plant to Longbridge under Phoenix ownership. Cowley is due to begin production of new Mini cars next year, with volumes put at up to 125,000 vehicles a year. PPP HEALTHCARE: Sells Holdings for o73 Million ---------------------------------------------- The Times reports PPP healthcare, the private medical insurer owned by AXA, will sell its 50 per cent holding in the PPP/Columbia joint venture to its partner Columbia/HCA Healthcare Corporation for o73 million. PPP/Columbia comprises four London hospitals. SPORTS INTERNET: Wilkinson to Set Group for o301 Million -------------------------------------------------------- The Times May 11, 2000 Peter Wilkinson, who was widely credited with creating Freeserve, notched up another dot-com fortune yesterday when he sold Sports Internet Group to BSkyB for o301 million. The takeover values Mr Wilkinson's 54 per cent shareholding at about o162 million. Sports Internet operates the Planetfootball.com websites, OPTA sports statistics and an offshore betting company. The company designs, builds and operates websites for Premiership clubs including Aston Villa, Leeds, Newcastle and West Ham. BSkyB's all-shares offer initially valued Sports Internet shares at 850p each, compared with Tuesday's closing price of 772�p. The shares joined the Alternative Investment Market in 1999 and have risen from 79p. However, Sports Internet shares fell 62�p to 710p after a fall in the value of BSkyB shares, which fell 178p to o13.34 amid concerns about the future of its rights to broadcast Premiership football. Competing bids for the rights when the current contract expires were submitted yesterday, with offers being made by ITV companies and cable operators such as NTL as well as by BSkyB. BSkyB, which is 40 per cent owned by News International, owner of The Times, yesterday said that in the three months to March 31 the total of subscribers to Sky's channels increased by 219,000 to 8.6 million, including cable and digital terrestrial. Digital subscribers now total 2.75 million. BSkyB earned operating profits of o51 million for the nine months to March, down from o153 million for the comparable period last year. The fall was attributed to the cost of the free digital television box offer. Free boxes, together with an increase in programme costs, led to an increase in operating costs of o275 million to o1.26 billion. UNITED NEWS: Pressed on Restructuring Programme ----------------------------------------------- The Independent 10 May 2000 Lord Hollick's United News & Media pressed on with its restructuring programme yesterday with the sale of US consumer magazine business, UAP, for $520m (o336m) in cash to Trader Publishing. Bernard Gray, director of strategy for United, said: "The sale of UAP is another milestone in the development of United as a focused media company." United still plans to sell the continental European operations and some of its Miller Freeman interests in the US. Yesterday's sale involved free distribution titles such as Apartments for Rent. It raises disposal proceeds to $840m since United began to streamline its operations in the wake of agreeing to merge with Carlton Communications in December. The merger is on hold pending regulatory approval approvals due in July. United shares closed up 16.5p at 769.5p. YORKSHIRE BUILDING: Moody's Places Rating on a Possible Downgrade ----------------------------------------------------------------- NEW YORK, May 10 - Moody's placed the A2/Prime-1 debt and deposit ratings and the C+ financial strength rating of the Yorkshire Building Society on review for possible downgrade. Moody's said that the review had been prompted by the society's declining profitability at a time when the mortgage and savings businesses are becoming increasingly commoditised and price sensitive. The ratings agency said that the forthcoming review will focus on the extent to which Yorkshire Building Society's more modest profitability might make it vulnerable to any deterioration in UK mortgage credit quality and also on the ability of the society to maintain and diversify its sources of revenue in the years ahead. Yorkshire Building Society is based in Bradford, England, and had assets at the end of 1999 of Euro 16.7bn. 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., Trenton, NJ, and Beard Group, Inc., Washington, DC. Peter A. Chapman and Sharon Cuarto, Editors. Copyright 2000. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. 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