/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/000516.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 16, 2000, Vol. 1, No. 7 Headlines * A U S T R I A * POSTSPARKASSE: Austria Begins Sale of Post Office Savings Bank * B U L G A R I A * BULBANK: Sell-Off to Move on Despite Rival Complaint * C Z E C H R E P U B L I C * SEVEROMORAVSKA ENERGETIKA: Fed-Up, TXU Puts 22% Stake Up for Sale * G E R M A N Y * VEAG AG: Energy Group Seeks Stakes in Troubled German Supplier * S L O V A K R E P U B L I C * SLOVAK TELECOM: Government Courts Bidders for Majority Stake * S P A I N * AMPERE: Registered a Net Loss of 97 Million Pesetas * S W E D E N * ALFA LAVAL: Tetra Laval Seeking Buyer for Swedish Unit * U N I T E D K I N G D O M * AGCO BRITAIN: Faces Closure if Pound Remains at High Level BOC GROUP: Moody is Reviewing for Possible Downgrade MIRROR GROUP: DTI to Invetigate Flotation & Collapse of Business Empire NISSAN UK: Operations Lost More Than ś100 million SCOTTISH & NEWCASTLE: To sell Its Center Parcs Holiday Villages Operation ============= A U S T R I A ============= POSTSPARKASSE: Austria Begins Sale of Post Office Savings Bank -------------------------------------------------------------- The Austrian government, determined to privatize its postal service, formally invited investors to come forward and express their interest in acquiring Postsparkasse. A published announcement appeared in the Wiener Zeitung newspaper, setting a May 19, 2000 deadline for interested parties to contact UBS Warburg in London. Postparkasse offers a full range of retail banking services over the counters of the country's 2,300 post offices, owned by Post AG. With some 300 billion schillings in assets, the bank is expected to fetch between 10 billion and 14 billion schillings. The new owner will also receive a 34 percent stake in national lottery operator Oesterreichische Lotterien, an affiliate of Casinos Austria. Reuters relates that Oesterreichishe Volksbanken, a network of cooperative banks, will reportedly make a joint bid with German insurer Ergo Versicherungsgruppe AG, majority controlled by Munich Re. If successful, Volksbanken and Ergo will offer a 25 percent stake in PSK to Post AG, which has been banned from participating directly in the sale, to underpin the contractual relationship which will continue at least until 2012. A second Austrian bid is expected from the Bank fuer Arbeit und Wirtschaft (BAWAG), in which Germany's Bayerische Landesbank owns a 46 percent stake, possibly together with Raiffeisen Zentralbank. Foreign banks mentioned in local media reports as possible bidders include Credit Suisse , Rabobank, ING , HypoVereinsbank and insurer Winterthur. The sale of PSK, which could take six months to complete, is the first of several privatisations planned by the new centre-right government. =============== B U L G A R I A =============== BULBANK: Sell-Off to Move on Despite Rival Complaint ---------------------------------------------------- Bulgarian Deputy Prime Minister Petar Zhotev says negotiations for the sale of state Bulbank to Italy's Unicredito and Allianz AG will continue despite complaints from a rival bidder. Canovas, a consortion between France's Credit Agricole and companies owned by Greece's Vardinioannis family, ranked second bidder for Bulgaria's biggest bank and cries that the choice is unfair. "The position expressed by Canovas cannot hinder the procedure that we have followed so far and there is nothing to be changed in it," Zhotev told repoters for Reuters and other local reporters. "UniCredito/Allianz's bid was the better one . . . we are starting negotiations," said Zhotev. The BCC and UniCredito/Allianz are expected to reach an agreement on the sale contract by June 16. If an agreement is not reached, the BCC can start talks with the second bidder or with all short-listed bidders, Zhotev said. =========================== C Z E C H R E P U B L I C =========================== SEVEROMORAVSKA ENERGETIKA: Fed-Up, TXU Puts 22% Stake Up for Sale ------------------------------------------------------------------ A news report appearing in the Mlada fronta Dnes MfD daily indicates that the British-American giant TXU, holding a 22-pct stake in power distributor Severomoravska energetika SME, has decided to sell that stake, having waited since 1996 for the privatisation of the state majority share in the firm. TXU's Graham Sephton, sitting on SME's supervisory board, has said that TXU will offer Severomoravska energetika for sale, as there is still no clear method or timetable available for the privatisation of the state stake. TXU also wants to focus more on the countries where the liberalisation of the power market goes faster, MfD quotes Sephton. TXU is the first foreign investor who decided not to wait for the government's decision regarding its further energy policy, MfD writes. ============= G E R M A N Y ============= VEAG AG: Energy Group Seeks Stakes in Troubled German Supplier --------------------------------------------------------------- The Finanical Times reports that Southern Company, the US energy giant, and Bewag, the Berlin utility company, want to create a major new force in the German electricity market by buying a substantial stake in Veag, the troubled eastern German supplier. The plans have emerged against the background of a rapidly restructuring German electricity market in which far-reaching liberalisation since 1998 has driven down prices by 30 per cent and forced the utilities to seek mergers. Bewag officials said on Sunday that Southern was keen to strengthen its links with the Berlin company before seeking a 50 to 75 per cent stake in Veag. "We have close connections with Southern," said a Bewag spokesman. "Together we can build a new energy company in the east of Germany." Southern already holds a 26 per cent stake in Bewag, which it bought in 1997. The other two main shareholders in the Berlin group are Bayernwerk, a unit of Veba, and PreussenElektra, a unit of Viag. Bewag in turn owns 6.25 per cent of Veag, whose main shareholders also include Bayernwerk and PreussenElektra as well as RWE, Germany's largest power group. A substantial part, if not all, of these stakes is likely to be up for grabs as a result of planned mergers between Viag and Veba and between RWE and VEW. ============================= S L O V A K R E P U B L I C ============================= SLOVAK TELECOM: Government Courts Bidders for Majority Stake ------------------------------------------------------------ Dusan Faktor, state secretary at the telecommunications ministry, disclosed last week that the Slovak government is inviting three bidders to make one or more alternative final offers - which could include some amendment to the bidding documents - in order to increase competition for a 51% or higher stake in Slovak Telecom. Deutsche Telekom, KPN of the Netherlands, Telekom Austria, and Telecom Italia, are expected to make final bids by the end of June after the Slovak parliament passes a new telecoms law this month under a fast-track procedure, according to a report appearing in the Financial Times. ========= S P A I N ========= AMPERE: Registered a Net Loss of 97 Million Pesetas ------------------------------------------- Cinco Dias reports that the technology company Ampere registered a net loss of 97 million pesetas in the first trimester of the year, 4.8 times less than in the same period of the previous year. The total sales ascended to 8,267 million pesetas, a 25% more, reason why the company considers that "the fruits have begun to take shelter of the rigorous plan of reconstruction in course." The plan in the last started up quarterly of 1999 with a provision of bottoms of 2,300 million. =========== S W E D E N =========== ALFA LAVAL: Tetra Laval Seeking Buyer for Swedish Unit ------------------------------------------------------ From Stockholm, Reuters reports that privately-owned packaging and processing giant Tetra Laval repeated it was seeking a buyer for Swedish unit Alfa Laval, but had no comment on a report it was selling to Swiss Bank UBS AG. "We are in the process of looking for a purchaser for Alfa Laval," Jorgen Haglind told Reuters. "The process is still continuing. Otherwise I have no comment on how far we have got or who we are talking to," he said. Indian newspaper The Economic Times reported on Friday that UBS was set to acquire Alfa Laval for $1.8 billion by month end. Alfa Laval, a dairy and separator unit, had turnover last year of 1.6 billion euros. Tetra Lavalsaid last August it planned to sell Alfa Laval as it no longer formed part of its core business. Tetra Laval grouping Tetra Pak, Alfa Laval and Alfa Laval is owned by the Swedish Rausing family. =========================== U N I T E D K I N G D O M =========================== AGCO BRITAIN: Faces Closure if Pound Remains at High Level ------------------------------------------- The US company that makes Massey Ferguson tractors has warned that its plant in Coventry faces closure if the pound remains at high levels and Britain fails to commit itself to the euro soon. "The strong pound is not favouring our continued [manufacturing] presence in the UK," Robert Ratliff, chairman of Agco, tells the Financial Times. Agco has operated the plant in Coventry since 1994 when it bought the factory from Varity of the US. The site has made tractors since 1946 and employs 1,800 people. If it were to shut, the Times indicates, it would be a devastating blow to the West Midlands economy, which has been hit by the problems of other manufacturers affected by the strength of sterling, including Rover. BOC GROUP: Moody is Reviewing for Possible Downgrade ----------------------------------------------------- Moody's Investors Service is maintaining its review for downgrade for the long and short term securities of the BOC Group plc following the announcement yesterday of the lapsed bid for the group by Air Products and L'Air Liquide. Ratings still on review are: - The BOC Group plc's Prime-1 rating for its euro-commercial paper programme - BOC Group Inc.'s Prime-1 rating for the BOC Group plc-guaranteed US commercial paper programme - A1 ratings of the three Eurobond issues by the BOC Group plc - A1 rating of the BOC Group plc- guaranteed notes of BOC Group Inc. - A1 ratings of various industrial and PC revenue bonds supported by BOC Group, Inc. The continued rating review will consider the impact that the ten-month, now failed, takeover bid by Air Products and L'Air Liquide will have on the business of the group going forward as well as consider the likely strategic options that may be undertaken by BOC to enhance shareholder value and grow its business over the coming years. Moody's expects to be able to conclude the review of the ratings for BOC's debt securities over the coming few weeks. The BOC Group plc is the parent company of a leading global industrial gases company headquartered in Windlesham, Surrey. MIRROR GROUP: DTI to Invetigate Flotation & Collapse of Business Empire ----------------------------------------------------------------------- From The Sunday Times, May 14, 2000: KEVIN MAXWELL has finally agreed to meet inspectors at the Department of Trade and Industry who are investigating the flotation and collapse of his late father's business empire, Mirror Group Newspapers (MGN). He has set aside up to 15 working days between June and August to be interviewed. His decision means that the long-awaited report into Robert Maxwell's fraudulent financial affairs could be published by the end of the year. It is expected to be highly damning of advisers in the MGN flotation and is likely to censure directors and other individuals involved in the business. The DTI has already prepared a 1,500-page report on the company's collapse, but so far it has held back from criticising individuals. Maxwell said: "We have reached agreement on procedures to be applied in the interview. Dates have been fixed and I certainly believe that the process will be finished by the end of August." He added: "It was a bad collapse that was avoidable, and there will be heavy criticism of managers, of me and of professional advisers." Maxwell, a discharged bankrupt, has been assured that the DTI investigation will not result in a second fraud trial. At worst, he could be disqualified as a director of a British company, but this is unlikely to cause him much hardship. His business interests are now in America and while he spends most of his time in Britain, based in London's West End, he holds no directorships in this country. In America he is chairman of Telemonde, a fledgling telecoms company, which in recent months has suffered a series of financial setbacks. Maxwell now believes the worst is behind him. Last Friday Telemonde published first-quarter revenue figures, which showed a 277% increase from $4.8m (ś3.2m) to $18.3m and an operating profit of $1.2m. The group admits it still lacks sufficient working capital but it is thought that several of its creditors, including MCI WorldCom, are close to reaching a settlement. At one time, creditors were owed $90m after Telemonde defaulted on supplier contracts. It is thought some groups owed money could exchange debt for shares. Earlier this year the group's financial difficulties led to it being removed from the OTC Bulletin Board, a junior share-trading service in America. However, the company is now understood to be close to securing consent from the Securities and Exchange Commission to relist its shares on the OTC. Maxwell says he is also in the process of honouring his promise to help Mirror pensioners who lost money after the collapse of his father's business. He intends to use some of Telemonde's equity to set up a trust. If the share price improves sufficiently, the proceeds can be distributed to those suffering financial hardship. The collapse of the Maxwell business resulted in one of Britain's most expensive fraud cases. The trial cost the British taxpayer ś30m. Telemonde specialises in supplying fibre-optic bandwidth for the telecoms industry. After it reversed into a shell company, Pac-Rim Consulting, it lined up several acquisitions, but these were aborted after the share price collapsed. NISSAN UK: Operations Lost More Than ś100 million ------------------------------------------- The Observer reports that Nissan is threatening to switch production of its next Micra car away from the UK, raising the spectre of thousands more job losses in the battered motor industry. The Japanese company, like other manufacturers, has found its profits savaged by the high value of the pound. It revealed the crisis facing its Sunderland plant as Ford announced the end of car production at Dagenham last week and admitted its European operations had lost more than ś100 million last year. A spokesman for Nissan, which has called on Britain to join the euro, said: 'We have not decided on where we are going to build the next Micra. 'The UK is a good site but it must win the investment, and to do that it has to reduce its costs by 30 per cent.' SCOTTISH & NEWCASTLE: To sell Its Center Parcs Holiday Villages Operation -------------------------------------------------------------------------- Scottish & Newcastle, the UK's largest brewer, has selected a shortlist of bidders in the auction of its Center Parcs holiday villages operation, according to an article appearing in the Financial Times. Analysts say the business can fetch up to ś800m, but S&N hopes the competing trade and financial bidders will push the price up. The shortlist includes three venture capitalists and a single trade bidder: * CVC Capital Partners; * West Private Equity - the venture capital arm of Westdeutsche Landesbank; * Compass Partners; and * Pierre et Vacances, a French group, is the trade bidder that is believed to have made it through. Morgan Stanley Dean Witter, the investment bank handling the auction, refused to say when it was likely to select a frontrunner. People close to the deal suggest it is six weeks away from completion, which means S&N would hope to pick its preferred bidder in the next fortnight. Next week the competitors will be allowed into the data room detailing all the assets and financial performance of the Center Parcs business. It is not known if the management of the subsidiary will be allowed to complete a buy-out or if they have held talks with any of the financial sponsors involved. S&N's holiday businesses made operating profits of ś59.4m on sales of ś329.2m in the year to April 30 1999. The division includes Pontins, the UK holiday camps that are being sold in a separate auction, because Pontins is targeted at the lower end of the market while Center Parcs is more upmarket. The strategy of the Center Parcs auction process seems likely to keep as many interested parties involved for as long as possible. This will reduce the possibility of a financial bidder "haircutting" its offer - reducing its bid at the last minute. The proceeds will help fund S&N's ś1.7bn purchase of Danone's beer businesses in France, Italy and Belgium. One leisure analyst said that anything less than ś800m for Center Parcs would be disappointing. 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. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *