/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/000629.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Thursday, June 29, 2000, Vol. 1, No. 38 Headlines B U L G A R I A SOLVAY SODI: BGN 22.5 Million Loss Posted C Z E C H R E P U B L I C INVESTICNI A POSTOVNI: Acquisition Creates Region's Largest Bank INVESTICNI A POSTOVNI: List of IPB's Shareholdings INVESTICNI A POSTOVNI: Securities Commission Investigates INVESTICNI A POSTOVNI: Timeline of Events G E R M A N Y COMPUTEC MEDIA: To Discontinue U.S. Business H U N G A R Y MOL RT: Gas Company to Consider All Offers MOL RT: Government Meets with Oil and Gas Companies R O M A N I A BANCA AGRICOLA: Privatization May Be Delayed, But Not Beyond July BANCA AGRICOLA: Deadline For Bids Extended to August BANK OF RELIGIONS: BNR Conditions Threatens Bank with Bankruptcy COLUMNA BANK: BNR Chooses Suspension COLUMNA BANK: Legal Liquidation Being Sought by FPS FPS-CLUJ: Still No Sale PETROTUB: Transfer to FPS Could Lead To Liquidation RAFO-ONESTI: Petrom Takeover to be Studied by Government SOMESUL-DEJ: Ailing Company Saved by Hovis GmbH TEPRO-IASI: Two Investors Negotiating for Factory TUTUNUL ROMANESC: Agriculture Minister Considers Court's Decision TUTUNUL ROMANESC: Privatization Cancelled by Court U N I T E D K I N G D O M BOO.COM GROUP: Clothing E-tailer Lacked Financial Controls BOO.COM GROUP: Company's Remains Strengthen New Search Engine BOO.COM GROUP: Liquidation Proceedings CARE ASSURED: Liquidation Proceedings CHAPEL PHOTOFRAMES: Liquidation Proceedings DISPLAY AND GRAPHIC: Liquidation Proceedings EASY FIX: Liquidation Proceedings EURO-TEC GLAZING: Liquidation Proceedings FARMTRACK LTD: Liquidation Proceedings FIELDBUS PUB: Liquidation Proceedings GLADMATCH LTD: Liquidation Proceedings HOPKINS-WILCOX LTD: Liquidation Proceedings ITS DRYLINING: Liquidation Proceedings INTA LTD: Liquidation Proceedings JAZZTEL: Moody's Assigns Caa1 Rating to Telecom Company JOHN SCOTT: Liquidation Proceedings KENT CARPENTERS: Liquidation Proceedings LARKIN & DEMAIN: Liquidation Proceedings M & R ELECTRICAL: Liquidation Proceedings MAINTABLE LTD: Liquidation Proceedings MAIR & SINCLAIR: Liquidation Proceedings MANOR JOINERY: Liquidation Proceedings MILDCRAFT LTD: Liquidation Proceedings RS MEAT: Liquidation Proceedings REALISTIC FASHIONS: Liquidation Proceedings RIPON BUSINESS: Liquidation Proceedings SPORTING MEDIA: Liquidation Proceedings STOUTFELLOWS BEER: Liquidation Proceedings TANKCARE SERVICES LTD: Liquidation Proceedings TIGERCO LTD: Liquidation Proceedings UNIVERSAL WINDOWS: Liquidation Proceedings WONDERCLIFF LTD: Liquidation Proceedings =============== B U L G A R I A =============== SOLVAY SODI: BGN 22.5 Million Loss Posted ------------------------------ BULGARIAN NATIONAL FINANCIAL AND BUSINESS NEWS DAILY, June 28, 2000 A NEGATIVE result of BGN 22,540,000 was posted for 1999 at the general shareholder meeting of Solvay Sodi held yesterday. =========================== C Z E C H R E P U B L I C ============================ INVESTICNI A POSTOVNI: Acquisition Creates Region's Largest Bank ---------------------------------------------------------------- PRAGUE BUSINESS JOURNAL, June 26, 2000 A sweltering weekend seemed to light a fire under state and central bank officials seeking to mitigate the effects of forced administration imposed at third-largest Investicni a Postovni Banka on June 16. Intense negotiations resulted in the region's fastest bank acquisition ever, as Ceskoslovenska Obchodni Banka, the local arm of Belgian KBC Group, assumed IPB's assets in a non-equity transaction aimed at safeguarding some Kc 190 billion ($5 billion) in client deposits after a run on the bank. The deal was signed last Monday, 66 hours after a forced administrator was ushered into IPB's Prague headquarters by special police units to seize control of the bank's Kc 355 billion balance sheet. "It's not something that happens every day - a bank failure and acquisition over the weekend," said Maurice Topiol, director at Rothschild, which advised CSOB along with Consilium, a Rothschild joint venture with CSOB. The move creates the post-communist region's largest bank by assets, with an estimated Kc 669 billion ($16 billion) between the two institutions at the end of last year. The Social Democratic government gave its blessing to the forced administration and arranged the sale along with central bank officials. They immediately came under political fire from their power-sharing partner outside the government, the Civic Democratic Party (ODS) of former Prime Minister Vaclav Klaus. Politicians of all stripes, along with bankers and analysts, criticized the fact that CSOB was handed control in the absence of a tender. Klaus' party has enjoyed close ties to the IPB management and supervisory boards, but his 1992-1997 administration lost control of the bank to management-related companies and Nomura Europe. Last Thursday, he called the treatment of IPB state-assisted "bank robbery." He and other senior party leaders have hinted they plan to block the transfer of control, adding that ODS had filed a criminal complaint against an unknown person in connection with the affair. Finance Minister Pavel Mertlik said not intervening could have cost the Czech economy 2-4% of GDP. The central bank said it had filed a criminal complaint of its own in the case last month, and press reports confirmed that a police white-collar crime unit was investigating former managers. Two key IPB bank managers, Jiri Tesar and Libor Prochazka, recently moved to a parent holding, IPB Group Holding, and could not be reached for comment last week. Their whereabouts were unknown. IPB was privatized to Nomura in 1998 after it had allied itself with the management, but Nomura Europe has since done a disappearing act. Representatives of parent Nomura International insist they don't hold a single share, though they have consistently refused to provide information concerning investment vehicle Saluka Investments, which bought the 46% stake from Nomura. Criticism of Nomura has mounted ever since it purchased the shares from the state, as it appeared to provide little or no strategic help while profiting from the sale of IPB's former industrial holdings like leading Czech brewer Plzensky Prazdroj. Nomura last week complained of actions taken by the government concerning IPB in a press release, and a representative said "lawsuits are one of the options. Taking control CSOB's 200-member management team arrived at IPB's headquarters on the morning of June 19, taking over the scattered remnants of the cash-strapped bank from the forced administrator. CSOB's swift approach to negotiations allowed it to pick up IPB with little risk, at least ostensibly. Assets had been fully guaranteed by the Ministry of Finance, while the Czech National Bank pledged to protect depositors the previous week. After the CNB moved against IPB, the forced administrator was securing assets. CSOB was assisted by laywers from Baker & McKenzie, while Kocian, Solc, Balastik worked for the central bank on the deal. Rating agencies downgraded by one notch both KBC's and CSOB's ratings, but otherwise the brisk birth of the largest bank in Central Europe with combined assets equal to 25% of Czech GDP received the initial blessing of many in the financial community. However, as the post-signing euphoria was waning, both CSOB managers and insiders close to the deal admitted the government had issued CSOB a blank check with little insight into its eventual cost. The estimates of the final bill to the state have varied from Kc 50 billion, mentioned by Finance Minister Mertlik, to the over Kc 100 billion suggested by analysts and insiders in the deal. But they could also reach as high as Kc 222 billion - a figure suggested by Nomura representative Randall Dillard, IPB's supervisory board chairman, according to sources close to previous negotiations over the fate of the bank. Klaus put the number at Kc 25,000 per taxpayer in a country of 10 million. Speaking last Monday, after sleepless nights of negotiations, CSOB manager Pavel Kavanek admitted that his bank was not quite sure what it had bought, as the size of IPB's balance sheet had fluctuated since the Kc 355 billion was reported by the end of last year. Comparing IPB to South Korean chaebols, he said CSOB managers had yet to tally their assets. Government and bank sources later said they expected a detailed audit to take up to nine months. As the forced administration came, IPB managers were in the process of transferring many of the bank's most valuable assets in financial service companies into the separately owned IPB Group Holding. Although forced administrator Petr Stanek subsequently bought IPB Group Holding back, CSOB was last week trying to untangle its holdings. "We only have 40% of [insurer] IPB Pojistovna and we have no idea where the rest is," said one CSOB official, adding that case was emblematic of the problem. CSOB also does not appear to have control over national television license-holder FTV Premiera, which was once IPB's and is now held by GES Holding. Another source familiar with the IPB's books said that last week the only certainty was the nearly Kc 190 billion in deposits on the liabilities side - down from Kc 244 billion at the end of 1999 - and IPB's franchise and banking license. He cast doubt even on the bank's valuable contract with postal office outlets, as well as its branch buildings. In line with the single British pound that ING paid for collapsed Barings Bank in 1995 - an example cited by Mertlik - CSOB is reportedly setting a limit of between Kc 1 and Kc 16 billion for the bank, according to a source close to the transaction. The price should be calculated by March following two alternative evaluations while the bulk of the bad assets should be ring- fenced and partially dumped into state workout bank Konsolidacni Banka. Members only IPB's assets were handed to CSOB on a golden platter, and the government would have saved face had there been a tender, critics charged last week. The government and the Czech National Bank by- passed the interest of joint bidders from Italian UniCredito Italiano - with advisers from J.P. Morgan - and German Allianz, citing time constraints and the need for Czech-speaking management. The week prior to the forced administration, as IPB was wilting under the heat of frantic depositors, UniCredito was considering buying the banking license of Banka Hana - a failed bank partly owned by both IPB and KBC - to become eligible for the purchase in case only the assets were being sold, according to several sources close to the transaction. At the same time it continued negotiations with Nomura and its representative, Dillard. Unlike their rivals from CSOB, who were not let anywhere near the bank's books, UniCredito and Allianz's audit teams were conducting due diligence on the premises by virtue of their talks with Nomura. But this "cooperative" scenario failed, mainly due to a failure in negotiations between the state and IPB's negotiators, headed by Nomura's Dillard as the bank's supervisory board chairman, government and CNB officials said. "Mertlik wanted to see Dillard's head in the aquarium on his desk," said the source close to UniCredito. The government could then either liquidate IPB and sell off its assets through an auction - but that would take time and extend the period of uncertainty - or put it under forced administration and sell the assets to CSOB. UniCredito is expected to express interest in the looming privatization of Komercni Banka, until last week's merger the country's largest bank. The source suggested that the government had been concerned about a lack of interest and wanted to save UniCredito's interest for Komercni. Early interest CSOB, which was privatized to KBC last year, has been courting IPB since March, when it hired Boston Consulting Group and later Rothschild as it was seeking to spend Kc 20 billion in cash from privatization and profits to boost its sparse branch network. According to one CSOB senior manager, the idea did not appear likely to materialize throughout the spring, and the bank put the plan under wraps. Not even a May 30 meeting between Mertlik, CNB governor Josef Tosovsky and KBC head Remi Vermeiren in Paris, broke the stalemate. But on June 16, when forced administration was declared, the government definitively killed the cooperative scenario and invited CSOB in as the only party with a plan. "We just pulled the plan out of the drawer again and only dusted it off," said the CSOB manager. Working out the technical details in a transaction where the size of the sold assets is unknown and the government guarantee covers the whole package did not bring major complications, participants to the negotiations insisted. "The biggest obstacle in our negotiations over the weekend was probably a lack of sleep," said David Hejnar from Consilium, which helped draft the contract along with the central bank and IPB's forced administrator. Others, however, took a more sober view. They questioned the quality of vague guarantees outlined in a contract that's no longer "than a two-page piece of paper." INVESTICNI A POSTOVNI: List of IPB's Shareholdings ------------------------------ PRAGUE BUSINESS JOURNAL, June 26, 2000 A look at IPB's shareholdings in various industrial companies: Agrobanka Praha a.s. (in liquidation) 4.78% Autoklub Bohemia Assistance, a.s. 1.67% Banka Hana 0.83% Bankovni informacni technologie s.r.o. 100% Bankovni institut 6.90% Beseda holding, a.s. 9.92% Burza cennych pap¡r- Praha, a.s. 10.13% C - realiza?n¡ fond a.s. 0.84% Centex Brno 61.60% Eesk, sklo a.s. 50.00% Eeskomoravsk hypote?n¡ banka, a.s. 47.37% Eeskomoravsk l,k rnick platebna, a.s. 10.00% Eeskomoravsk nemovitostn¡, a.s. 10.00% Eeskomoravsk realitn¡, a.s 100.00% Eeskomoravsk stavebn¡ spooitelna, a.s. 55.00% Eeskomoravsk z ru?n¡ a rozvojov banka, a.s. 12.66% Eesky Mobil a.s.14.00% CS. Plavba labska 28.2% E.T.I., a.s.10.00% Energomont ze Liberec, a.s. 49.80% Hotel ESPLANADE Praha, a.s. 3.70% HP INVEST a.s. 100.00% Chemapol Group, a.s. 19.9% IPB Real a.s. 100.00% IPB Real Slovakia, a.s. 100.00% JM Drevar. Z. Brno 40.79% Jihomoravsk, doevaosk, z vody, a.s. 40.79% KOH-I-NOOR Mlad Vozice a.s. 75.83% Komer?n¡ banka, a.s. 2.46% Obchodn¡ centrum Zl¡n, a.s. 100.00% OMNYX, a.s. 21.00% PETRA a.s. - konkurz 66.67% Pivovary a sladovny Praha 16.08% Porcela Plus a.s. 22.70% Premedia, a.s. 25.00% Prvn¡ Eesko-Rusk Banka, s. r. o. 97.30% Prvn¡ investi?n¡ spole?nost a.s. 81.30% Prvn¡ m?stsk banka, a.s. 10.00% PVT, a.s. 36.71% Ralsko - International spol. s r.o. 99.90% Restitu?n¡ investi?n¡ fond Eesk, republiky, a.s. 9.74% S.W.I.F.T. Brusel 0.38% SG-Industry, a.s. 13.72% SPOLANA a.s. 49.55% Spooiteln¡ privatiza?n¡ - Vseobecny investi?n¡ fond,a.s. 0.27% TCHECOMALT GROUP, a.s. 2.50% Tradeinvest, a.s. 31.36% UNIPETROL, a. s. 1.13% Velkomoravsk banka, akciov spole?nost - konkurz 12.43% Vojensk, stavby CZ a.s. 99.90% Vyzkumny £stav pivovarsky a sladaosky, a.s. 16.08% ZIVNOBANKA - 1.INVESTIENI FOND, a.s. 5.63% Source: Center for Securities, AliaWeb INVESTICNI A POSTOVNI: Securities Commission Investigates ------------------------------ PRAGUE BUSINESS JOURNAL, June 27, 2000 June 27 - The Securities Commission (KCP) is investigating eight trades involving IPB shares settled by the Central Securities Registry after trading was suspended June 16, CTK reports. It is not ruling out that the transactions, which involved around 8,000 shares, took place after the suspension. The KCP is also looking into a June 14 off-market RM-System transfer of 4.8 mln IPB shares at a price double the trading value at the time of the transaction. INVESTICNI A POSTOVNI: Timeline of Events ------------------------------ PRAGUE BUSINESS JOURNAL, June 27, 2000 The following is a timeline of events from 1991 to 1996, when state officials let majority control of Investi?n¡ Banka, and subsequently Investi?n¡ a Postovn¡ Banka, slip through their fingers. September 19, 1991 The Czechoslovak government requests a proposal for the privatization of state-owned financial institutions (to be executed by then-Finance Minister V clav Klaus and the governor of the State Bank of Czechoslovakia, Josef Tosovsky). Direct state stake: 100% February 20, 1992 The Czechoslovak government approves a privatization plan for Investi?n¡ Banka to be executed by then-Deputy Prime Minister V clav Klaus and Pavel Rychetsky (who is currently the Social Democratic deputy prime minister in charge of legislation). Direct state stake: 100% 1992-1993 Some 52% shares of IPB shares are included in voucher privatization, while the National Property Fund (FNM) is to maintain a 45% stake and Restitu?n¡ Investi?n¡ Fund receives 3%. After the first wave of privatization, however, not all the shares are subscribed and the FNM's stake remains at 47.42%. Direct stake: 47.42% August 1, 1993 IPB increases equity by K? 500 million to K? 1.5 billion. The FNM participates in the rights issue, so its stake is not diluted. Direct stake: 47.42% December 11, 1993 Another equity increase of K? 446 million to K? 1.964 billion takes place. This time, the FNM decides not to participate and its stake is diluted. Direct stake: 36.5% December 12, 1993 Investi?n¡ Banka is merged with Postovn¡ Banka following approval from the Czech National Bank and the FNM, and equity is increased to K? 2.068 billion. The FNM does not participate because "it couldn't." Direct stake: 34.4% Eesk Posta (controlled by the state): 4.85% Combined stake: 39.25% March 3, 1994 Equity is hiked by K? 599 million to K? 2.668 billion. The FNM participates but Eesk Posta is not allowed. Direct stake: 34.4% Eesk Posta: 3.14% Combined stake: 37.54% June 6, 1994 Equity is hiked by K? 527 million to K? 3.195 billion. The FNM participates and gains 1,000 shares with special veto rights over key decisions attached - so-called "golden shares." Direct stake: 34.45% Eesk Posta: 3.14% Combined stake: 37.59% December 31, 1994 Equity is increased via a capital injection from Eesk Posta of K? 152 million to K? 3.348 billion. The FNM does not participate, saying there was no possibility. Direct stake: 32.88% Eesk Posta: 7.56% Combined stake: 40.44% September 31, 1995 IPB is merged with Investi?n¡ Fond Rychl,ho Vynosu, which increases capital by K? 382 million to K? 3.7 billion. The FNM, which did not agree with the merger according to press reports at the time, does not participate. Direct stake: 29.5% Eesk Posta's: 6.71% Combined stake: 36.21% November 11, 1995 Equity is increased by K? 300 million to K? 4.031 billion. The FNM doesn't participate, and Eesk Posta is not given permission to subscribe. Direct stake: 29.58% Eesk Posta's: 6.28% Combined stake: 35.87% March 4, 1996 Equity is increased by K? 491 million to K? 4.523 billion. The FNM participates, but again Eesk Posta is not allowed. Direct stake: 29.66% Eesk Posta's: 5.59% Combined stake: 35.29% December 6, 1996 Equity is hiked by K? 800 million to K? 1.5 billion, which increases equity to K? K? 5.681 billion. The FNM participates, but Eesk Posta cannot. Direct stake: 31.49% Eesk Posta's: 4.45% Combined stake: 35.94% Source: National Property Fund, PBJ, press reports ============= G E R M A N Y ============= COMPUTEC MEDIA: To Discontinue U.S. Business ------------------------------ HANDELSBLATT, June 27, 2000 Electronic entertainment company Computec Media AG has decided to stop its loss-ridden U.S. publications business. Since the U.S. business started in November 1999, advertising revenues haven't developed as expected, due especially to strongly reduced advertising budgets at US software manufacturers. ============= H U N G A R Y ============= MOL RT: Gas Company to Consider All Offers ------------------------------ BUDAPEST BUSINESS JOURNAL, June 27, 2000 June 27 - MOL Rt, Hungary's oil and gas monopoly, said it will consider all offers for its gas business from potential industry partners in addition to mulling a government proposal to buy the money-losing division. Minister Viktor Orb n said yesterday that the state has already made an offer to the company to buy its natural gas operations; however, the seller must first set a price. MOL expects its gas business to post an operating loss of Ft 100 billion this year after the government decided to cap domestic price increases as import costs surge. The company said it plans to take legal action against the state, which owns 25% of MOL. MOL RT: Government Meets with Oil and Gas Companies ------------------------------ THE BUDAPEST SUN, June 22, 2000 Jun. 22, 2000 - The Government met last week with local oil and gas company Mol and the eight other largest petrol retail companies (Agip, Aral, Conoco, Esso, Jet, OMV, Shell and Total) in Budapest to discuss how they could co-operate to set up a joint `petrol patrol' or monitoring system to watch local fuel prices. The Finance Ministry discussed with the groups a long term monitoring system, which would be set up within a fortnight. The idea behind the initiative is that each retailer would inform the Finance Ministry on a regular basis by sending a list of its retail prices. However the ministry confirmed that neither of the parties raised the issue of how a price increase would ignite taxes (60% of the final retail price). Leaders of foreign interest groups like OMV and Shell said that they would first consult with their home bases before making any commitments on the Government's proposal. ============= R O M A N I A ============= BANCA AGRICOLA: Privatization May Be Delayed, But Not Beyond July ------------------------------ Bucharest - The privatization of Banca Agricola (BA) will be delayed, but no later than the end of July, declared Nicolae Cinteza, Director of the Bank Monitoring Department of National Bank of Romania (BNR) on Wednesday. Cinteza considers that the privatization of the bank will be extended because of the suit in court initiated by the representatives of SIF - Oltenia, contesting a 90% reduction of the share capital of the bank, from 1,081 billion lei to 108 billion lei. The court recently ruled in favor of the investments company. Cinteza says that BA has external offers for privatization, and in such conditions he does not think the privatization will extend beyond the end of July. Recently, BA President Eugen Radulescu stated that the deadline for submitting letters of intention for the BA privatization might be extended as a result of the request from the consortium consisting of Banca Agricola of Greece, Rabobankk (by a subsidiary) and the American Fund of Investments. The World Bank and International Monetary Fund agreed to extend the deadline for letters of intention, and the Privatization Commission of the bank is to pronounce its decision in a few days. The deadline for letters of intention is 23 June. At the beginning, two letters of intention were submitted for the BA privatization, one from Banca Agricola of Greece and the other from a consortium including Banca Agricola of Greece, Rabobankk and the American Fund of Investments. The State Ownership Fund (FPS) put up for sale, on April, 4, its 56.5% stake in BA. The privatization consultant is the consortium formed of Bank of Investments Lazard Freres, Raiffeisen Investment AG and Musat & Associates law firm. BANCA AGRICOLA: Deadline For Bids Extended to August ------------------------------ ROMANIAN ECONOMIC DAILY, June 27, 2000 Bucharest - The submission of final offers for the privatization of Banca Agricola (BA) has been postponed until the beginning of August in order for problems related to the bank's equity capital - problems between the State Ownership Fund and the five financial investment companies - to be settled, declared FPS Executive Director General Alin Giurgiu on Monday. Giurgiu affirms that there are good chances for one of the offers to be submitted by a consortium consisting in Greece's Agricultural Bank, the Romanian-American Fund of Investments and a Dutch bank. The representatives of FPS and of the five financial investment companies will decide on Tuesday which companies from the FPS portfolio would be assigned to them, in exchange for the shares owned by the SIFs in BA and to what size of the bank's equity capital can they relate, starting with 1.081 trillion lei, or at the lower one, 108 billion lei. This alternative represents "overcoming a stalled situation", it is also agreed by the five SIFs and does not delay the privatization process at BA until the end of the year, Mr. Giurgiu appreciated. FPS President Radu Sarbu affirmed that the SIFs have not yet agreed to any of the three alternatives proposed by Prime Minister Mugur Isarescu for sorting out the differences between them and FPS, which have hindered the continuation of the procedures for privatizing BA and the withdrawal of the investors interested in privatizing it. According to the FPS chairman, the SIFs had to choose between withdrawing the action brought to the court for the bank to be privatized, not giving up the trial and the bank to be liquidated or to take over Banca Agricola. SIF - Oltenia sued FPS following BA's AGA's agreement in the winter, upon the Fund's request, to cover the bank's losses by reducing the equity capital from 1.081 trillion lei to 108 billion lei. Mr. Sarbu affirms that SIF - Oltenia used a "formal pretext" such that FPS has not released the full decision made by AGA. "The AGA decision was published in the Monitorul Oficial, thus they are not right, but for the time being, two courts have ruled in favor of the SIF, which has made us lodge an extraordinary appeal with the Supreme Court of Justice", Sarbu explained. According to the officials from FPS, the BA privatization is the last issue of the PSAL program negotiated by the Romanian Government with the World Bank. BANK OF RELIGIONS: BNR Conditions Threatens Bank with Bankruptcy ------------------------------ ROMANIAN ECONOMIC DAILY, June 26, 2000 Bucharest- The leadership of the British group Jaquila considers it necessary to review its position on investing in the International Bank of Religions (BIR), if BNR "continues to ignore the conditions of the investment accord signed with BIR, to impose arbitrary dead lines, to ignore the financial capacity of Jaquila Group and to threaten BIR with bankruptcy," says an open letter addressed to BIR President Ion Popescu from Jaquila Executive President John Edwards. The Jaquila group decided to continue taking the steps for the investment foreseen at BIR, beginning with the liquidation of a minimum of $20 million from the assets held by the group in the USA, after its transfer to BIR, an amount which will be placed in an account of a foreign bank operating in Romania, and then BIR will receive the afferent interest from this deposit. The financial capacity of Jaquila, mentioned in the letter, refers to "assets worth $142 million, formally validated and confirmed by an American bank before they were rolled by BIR." 26 June 24:00 is Jaquila's dead line, set by BNR, to deposit $20 million in a Romanian bank representing its participation in the increase of the social capital of BIR. The amount has not yet been deposited in a Romanian bank. Also, Jaquila hasn't deposited at BNR any reference material concerning the intention of increasing the social capital of the bank. BNR's board of directors decided that if Jaquia doesn't deposit the amount for the increase of the social capital, it will seek the bankruptcy of BIR. COLUMNA BANK: BNR Chooses Suspension ------------------------------ ROMANIAN ECONOMIC DAILY, June 26, 2000 Bucharest - In its last meeting, the administrative board of BNR decided to withdraw its authorisation for the functioning of Columna Bank, declared Governmental Counselor Adrian Vasiescu at Victoria Palace. Vasilescu claimed that the reason for this decision is that the litigation which Columna Bank has with its most important creditors - CEC and FPS - has lasted a long time and there is no quick solution for solving the probem. "Columna Bank is functioning within normal standards, and BNR's preoccupation is to cleanup the banking system and to quickly finalise the improvement of the banking system. Any bank with health problems can contaminate the system", said Vasilescu. He stated that, usually, the next measure which is taken would be the initiation of the liquidation process of the bank. Vasilescu specified that if there are persons who have deposits at this bank, they will receive back the upper limit guaranteed by law, which is 54 million lei. "But as far as I know, there are no depositors at this bank. Long ago BNR decided to forbid its work with clients", said Vasilescu. COLUMNA BANK: Legal Liquidation Being Sought by FPS ------------------------------ ROMANIAN ECONOMIC DAILY No.405, June 28, 2000 Bucharest - The State Ownership Fund (FPS) has petitioned the court for the legal liquidation of Columna Bank in order to recover the deposits at this bank in 1996, FPS President Radu Sarbu stated. Sarbu declared that there is little chance for FPS to recover the money deposited at this bank. According to Sarbu, FPS funds worth $8 million and several dozen billion lei were deposited at Columna Bank "from the singular and personal order of its President Emil Dima during the Vacaroiu Government in its final days." During its latest meeting, the Board of Administration of the National Bank of Romania decided to withdraw the license of Columna Bank for reason that the trial between Columna Bank and its main creditors - the Savings House and FPS - has lasted too long and there is no foreseeable solution to the problem FPS-CLUJ: Still No Sale ------------------------------ ROMANIAN ECONOMIC DAILY, June 27, 2000 No offerer showed any interest in the auction held on Monday, for the third time this year, by FPS - Cluj in order to privatize the "Mafir" company of Cluj. FPS - Cluj had set a starting price of 12,500 lei for a "Mafir" share, the value of the entire stock amounting to approximately 5 billion lei. FPS - Cluj Director Ioan Sucala says that, although it is the third time this year that the fund tried to sell the shares stock, there was no offerer interested in buying the stock of 70% it has in this company. Sucala considers that the main reason why the inverstors are not interested in "Mafir" is the lack of a market for its products, but also the very great debts of the company, which, at the end of 1999, were 16.45 billion lei. Sucala says that only after the company closes the financial situation for the first semester of this year will a decision about the future of this company be made. Sucala did not avoid mentioning the possibility that this company may ask to be declared in default and to go through judicial reorganization. The "Mafir" company has a share capital of 14.3 billion lei and ended the year 1999 with losses of 6.5 billion lei. Mafir projects, produces and sells machines for light industry. PETROTUB: Transfer to FPS Could Lead To Liquidation ------------------------------ ROMANIAN ECONOMIC DAILY, June 27, 2000 Bucharest - The Petrotub company in Roman might go into a liquidation process if the Bucharest Appeals Court does not reject the decision passed by the Competition Council providing for the termination of the sale-purchase contract of Petrotub shares, concluded between FPS and the Tubman International company, declared FPS President Radu Sarbu on Monday. He specified that the arguments brought by the Competition Council were false, where the majority is represented by members of PDSR and PD, the institution invoking that Tubman would have held a monopoly position in the pipe production in the Romanian market, since there are countries where an investor holds two or more factories active in the same line without a private monopoly to occur in that field. The British company Tubman International bought the stake of 70% in Petrotub - Roman last year. It also owns the major stakes in Silcotub - Zalau and in Braila Laminor since last autumn. "It seems inadmissible to me that the unions and the company ranking second, Soconor - Belgium, which was asked whether it maintained its offer, were being investigated by the Competition Council at the same time I was being called by the leader of PD. It is clear abuse of influence coming from the PD", Sarbu specified. He showed that Soconor returned with a financial offer that was better than the one initially submitted, but the law forbids FPS to negotiate with the company ranking second as long as a privatization contract has been concluded. On June 15 the Competition Council canceled the privatization offer for Petrotub SA - Roman whose major stake of 70% was purchased from FPS by the British company Tubman International. It disputed, in the Appeals Court, the decision passed by the Competition Council. Petrotub SA has debts of about 48 million dollars, and the production of pipes during the first quarter of the year reached only 18,000 tons, as against 40,000 tons during the same period of 1999. RAFO-ONESTI: Petrom Takeover to be Studied by Government ------------------------------ ROMANIAN ECONOMIC DAILY, June 28, 2000 Bucharest - A governmental commission is studying the possibility of including Rafo - Onesti in the National Oil Company SNP Petrom after the State Ownership Fund (FPS) failed in its attempts at privatisation and selection of an administrator and financing source for the refinery in Onesti, FPS President Radu Sarbu stated on Monday. He explained that the Government should make such a decision which does not suit SNP because it would delay the company's privatisation. Recently the refinery lost a processing contract of 200,000 tons of oil per month signed with the British company Claymore which withdrew after learning that FPS received no offer for the privatisation of the refinery. Rafo stopped functioning last year and accumulated debts of 2.42 trillion lei and losses of 603 billion lei. The main creditors of the company are Glencore and Mansfield along with the Romanian state. SOMESUL-DEJ: Ailing Company Saved by Hovis GmbH ------------------------------ ROMANIAN ECONOMIC DAILY, June 27, 2000 Bucharest - On Monday the Austrian company Hovis GmbH acquired from FPS the 69.99% stake in Somesul - Dej, a company specialized in cellulose and paper production and trading. The contract was signed by Alin Giurgiu, FPS Executive General Manager, and Jurriaan Hovis, Manager of Hovis company. The total value of the transaction is $18.8 million, from which $13.8 million are the company's debts (calculated at the exchange rate of 21,113 lei/USD), $4 million are investments assumed by the Austrian firm over a 2-year period and guaranteed by securities, while $1 million is the price of the company's shares. Alin Giurgiu declared that "this privatization is a success, because the company is under liquidation and restructuring, having been saved at the last moment." Somesul - Dej, which was set up as a stock company, a legal person, subject to Governmental Resolution no. 1200/1990, took over the whole patrimony of Dej Cellulose and Paper Plant. On December 29, 1998, the General Shareholders' Assembly (AGA) reviewed the financial situation of the company and decided to initiate the judicial organization procedure, in compliance with Law 64/1995, as amended. Following the mandate from the AGA to the Board of Administration of the company, the demand for initiating the judicial reorganisation procedure was registered with Cluj County Court. By Civil Decision no. 20/C/07/01/1999, Cluj County Court resolved to open up the procedure through a reorganisation plan, decision which became final and enforceable starting January 22, 1999. Through Civil Decision no. 1043/1999, of July 3, 1999, the Cluj County Court confirmed the reorganisation plan of Somesul - Dej, a plan which stipulated that, during 1999-2004, the company would refund 70% of the receivables, which totaled 266,421 million lei. The FPS Executive General Manager also said that the investor fully assumed the restructuring plan discussed and accepted by the company's creditors. Alin Giurgiu also gave other examples of companies which were saved from liquidation through privatization, such as: Alor - Oradea, Laminorul - Focsani, Avicola - Ploiesti, Semanatoarea - Bucharest and Promex - Braila (the last 2 to be privatised this summer), but he added that "unfortunately there are other companies for which nothing could be done, having found no markets to sell their products." According to the contract, the investor commits not to modify the business focus of the company (except for expanding it) during the fulfillment of the investment, and not to make mass lay-offs until the end of the year. Jurriaan Hovis estimated that the investments needed by Somesul - Dej amount to $30 million, investment which could be achieved by the Austrian firm in 3-4 years after the signing of the contract. Thus, production could be doubled both for cellulose (from 60,000 to 120,000 t/year) and paper (from 30,000 to 50,000 t/year). "This production is reasonable for the survival of the company in the next decades," J. Hovis added. Somesul - Dej has a share capital of 90.801 trillion lei. The other shareholders, besides FPS, are SIF - Banat-Crisana (21.15%) and other shareholders (8.86%). TEPRO-IASI: Two Investors Negotiating for Factory ------------------------------ ROMANIAN ECONOMIC DAILY, June 27, 2000 Bucharest - Two investors are negotiating with the Czech company Zelearny Veseli, owner of the Tepro - Iasi factory, the concession of the shares bought by the Czech investor from the State Ownership Fund (FPS), FPS Executive Manager Alin Giurgiu stated on Monday. Mr. Giurgiu stated that there are a foreign investor and a Romanian one without mentioning their names. Other investors willing to take over the Tepro privatisation contract from the Czech investor may save the company which has major losses reaching 66 billion lei at the end of last year with debts of 187 billion lei. The Executive Manager declares that FPS sued the company Zelezarny Veseli in order to solve the problem related to the privatisation contract because the promisory notes with which the foreign investor guaranteed its investments in Tepro were not guaranteed in their turn by Citibank. FPS again became shareholder at Tepro, but in a smaller proportion compared to the past, after the court ruled in its favor in the trial with the shareholders from Zelezarny Velesi and SIF - Moldova and allowed to include some land in the company's share capital. "This allows us to be involved in major decisions in the company's development", Giurgiu explained. Tepro - Iasi was privatised in 1998 when the Czech company Zelezarny Veseli bought the major sharepackage owned by FPS for $3 milion. After the privatisation, the company's Board of Administration decided to gradually reduce the number of employees, a fact which the unions contested and they requested the annulment of the privatisation contract. TUTUNUL ROMANESC: Agriculture Minister Considers Court's Decision ------------------------------ ROMANIAN ECONOMIC DAILY, June 23 - 25, 2000 Bucharest - The Minister of Food and Agriculture (MAA) considers that the main effect of the Court of Appeal regarding the privatisation of the National Company "Tutunul Romanesc" (SNTR) consists in preventing the payment of the $30 million second tranche of the share price and in stopping the investments made by InterAgro, the winner of the negotiations. As the public institution involved in the SNTR privatisation process, MAA considers that the decision of the court is illegal considering the Law 99/1999 providing certain measures for the accelaration of the economic reform which do not permit the cancellation of the legal acts issued by the public institutions involved in the privatisation process and allow only the complaints of the interested parties. The Commercial Department of the Bucharest Court of Appeal ruled the cacellation of the decision of the Privatisation Commission concerning the sale of the SNTR shares to InterAgro S.A. and the contract signed wth this company. The SNTR privatisation was finalised by the signing of the contract of selling and purchasing of shares with InterAgro. The first installament of the price reached $10 million. MAA will respect the jugdement of the Bucharest Court of Appeal but at the same time it is determined to continue all the legal proceedings to change this illegal decision and to annul the legality of the SNTR privatisation process, according to the press-release. MAA claims that the privatisation process was legal. The company Leaf Tobacco A Michailidis from Greece contested at the Court of Appeal, the result of the privatisation bidding for SNTR won by the Romanian company InterAgro and stated that during the negotiations it did not receive the fiscal certificate, the criteria for the final decision of the privatisation commission and the minutes of the negotiation meetings. The presentation of these documents is an obligation included in the legislation regarding the privatisation in Romania. TUTUNUL ROMANESC: Privatization Cancelled by Court ------------------------------ ROMANIAN ECONOMIC DAILY, June 26, 2000 Bucharest - On Friday the Appeals Court canceled the auction result for privatizing the National Corporation Romanian Tobacco (SNTR). The court ruled that the decision according to which InterAgro company was awarded as the highest bidder was null. The judges also decided that the minutes of the session from May 8 related to the assessment of offers and the contract concluded between the Ministry of Food and Agriculture (MAA) and InterAgro company are both null and void. The situation of privatization from SNTR has been brought to the court pursuant to the complaint lodged by Leaf Tobacco A Michailidis from Greece, a participant in the auction. The latter complained that during the negotiations, it did not receive the fiscal certificate and the scoring grid which was used by the privatization commission to make the final decision was also not received; nor were the minutes of the meetings for negotiations received, although the transmission of these documents is provided in the Romanian privatization legislation. On the other side, the Ministry of Food and Agriculture affirms that the privatization was developed in keeping with the legal provisions and it was determined to continue all judicial procedures for changing this decision. Initially, the unions from the tobacco industry agreed with the InterAgro offer. Petre Istrate, President of the "Tigareta" union, declares that MAA was supposed to abide by all the provisions and that the employees he represents agree with the offer which gives the most attention to the social problems. At the same time, he specifies that unless the decision passed by the Court remains unchanged, then the privatization process of the company is delayed. Minister of Agriculture, Ioan Muresan, declared on May 10, when the highest bidder was announced, that InterAgro paid the best price and it also offered the best collateral for investments. SNTR has a domestic market share of 42-43% and had a net profit of about 200 billion lei in 1999. The company has debts of 55 million dollars. =========================== U N I T E D K I N G D O M =========================== BOO.COM GROUP: Clothing E-tailer Lacked Financial Controls ------------------------------ THE WALL STREET JOURNAL LONDON -- On a gloomy afternoon last January, Ernst Malmsten confronted the limits of his expertise as an Internet mogul. The shy Swede, who had sold his first Internet start-up for millions, was chief executive of Boo.com Group Ltd., the most hyped and hip of European e-commerce start-ups. He made the cover of Fortune magazine before age 30. But when it came time to lay off 130 staffers in a do-or-die cost-cutting drive, Mr. Malmsten wasn't sure how to proceed -- "Do you break the news to them one at a time or do it all at once?" he recalls wondering. He finally decided the honorable thing was to call them in one by one. Four months later, a bankruptcy liquidator finished the job for him. It summarily fired the rest of Boo's staff. The demise of Boo, an ingenious way of selling clothes over the Web, was the flashiest failure of the dot-com shakeout so far. With its virtual changing room and 3D graphics that let customers examine clothes from any angle, plus prices calculated for 18 countries and given in seven languages, the Boo site was a wonder. "As an Internet business, Boo was like the moonshot," says Ben Narasin, whose U.S. company fashionmall.com picked up Boo's Web site at the liquidation auction. Catching the Internet frenzy, prestigious investors ranging from Italy's Benetton family to France's Bernard Arnault eagerly poured money into the project. All that was missing was a little adult supervision. In the summer of 1998, Boo's business plan was five typed pages that Mr. Malmsten had pieced together in his Stockholm apartment, along with Kajsa Leander, a former model and his childhood friend. The two, both now 29 years old, had just sold an Internet book retailer they started called Bokus for several million dollars and were game for something more ambitious. They flew to New York and began cold-calling investment banks. Lacking contacts, they bluffed their way through corporate switchboards and won meetings with top financiers, armed with a packet of magazine clippings describing a New York poetry festival they had organized through Sweden's foreign office. One Is Interested Many of the banks, including Goldman Sachs Group and Morgan Stanley Dean Witter & Co., declined, explaining that they didn't cater to start-ups. J.P. Morgan & Co. didn't either, but it was intrigued by the boldness of the idea. Fashion suppliers, Morgan bankers thought, were likely to applaud the plan, because Boo wouldn't undercut traditional retailers with cut-rate pricing as many e-retailers do. The bankers also were impressed that the founders had Internet experience and complemented each other: The dreamy Mr. Malmsten saw the big picture, while Ms. Leander was brainy and focused on details, almost to the point of obsession. If Boo succeeded, the rewards could be enormous: The company promised 55% gross margins and profitability within two years. "If branded retailing on the Internet is going to work, this is going to be the way it looks," says a former J.P. Morgan banker. If it made Boo a success and took the business public, J.P. Morgan could become a leading financier of hot European Internet properties, leapfrogging dominant underwriters such as Goldman and Morgan Stanley. After refining his plan for a week in J.P. Morgan's London offices, Mr. Malmsten got thrilling news: J.P. Morgan was willing to find early-stage investors for Boo, taking its fees in stock. Although unschooled in the ways of finance, he grasped the significance. "J.P. Morgan doesn't do start-ups. The last start- up they did was General Electric," he says. With J.P. Morgan's involvement, investors weren't hard to find. Within weeks, the bank had recruited two of its best clients to the deal, European fashion titans both. The first was Luciano Benetton, patriarch of the family that controls the trendy Italian clothing chain. Reminded that Ms. Leander had once been a Benetton model, Mr. Benetton invited the founders to supper at the family's Villa Minelli in Treviso, Italy, in the winter of 1998. There, as they ate a simple meal of pasta and red wine in the cavernous dining hall, Ms. Leander explained the finer points of the business. Mr. Benetton put up $5 million in seed money and volunteered his son, Alessandro, to take a seat on Boo's board. At a later meeting in a Paris office, described by Ms. Leander as "all bulletproof glass and bodyguards," the founders got a similar cash commitment from billionaire Bernard Arnault, head of luxury-goods empire LVMH Moet-Hennessy Louis Vuitton. He ultimately poured $12 million into Boo. With the big-name investors roped, J.P. Morgan bankers decided in early 1999 to raise $12 million to start, $12 million about six weeks later and $40 million more by midsummer. There were plenty of takers. One latecomer says he was drawn to the deal after seeing the founders on the cover of Fortune magazine, which dubbed Boo a "cool company" a full six months before it launched. A British magazine ran a glowing spread on Mr. Malmsten's Notting Hill apartment, decorated in a minimalist Scandinavian style with pale walls and plenty of teak furnishings. Boo paid the rent. Competitors of J.P. Morgan were suddenly bewitched as well. Fanning their interest was a third Boo principal, a 31-year-old Swede named Patrik Hedelin. He had spent six months as a junior investment banker at HSBC Holdings PLC and arranged the sale of the founders' Internet bookstore while working for a small Swedish investment bank. Mr. Hedelin helped them find their way around Wall Street and the world of investors. "Patrik spoke their language," Mr. Malmsten says. Mr. Hedelin became chief financial officer, although J.P. Morgan had doubts about his accounting skills. For his part, Mr. Hedelin doubted J.P. Morgan's ability to put a value on a hot Internet concept. While J.P. Morgan preached prudence, Mr. Hedelin pushed for sharply higher prices with each slice of equity sold. By last fall, before the site had even launched, he was attempting to value the company at $390 million, although Morgan talked him into reducing that figure somewhat. More disturbing to J.P. Morgan was that Mr. Hedelin appeared to be shopping for new financial advisers. He shuttled between Europe and New York to meet with Morgan Stanley, Credit Suisse First Boston and Goldman Sachs. Goldman in particular seemed keen to cultivate Boo's favors, and it eventually became a $3 million investor in the company. Its presence infuriated the J.P. Morgan bankers. Mr. Hedelin says now that he never intended to let J.P. Morgan take Boo public. Yet the planned IPO was the chief motivator for J.P. Morgan. Mr. Hedelin acknowledges that his wooing of other banks "affected our whole relationship with J.P. Morgan. They were very upset." Mr. Malmsten sometimes had to intercede. "I had no idea how much these banks all hated each other," he says. Delayed Launch Mr. Malmsten had more pressing concerns. The complexity of the Web site, featuring rich graphics, a virtual inventory system, multiple languages and currency conversions, delayed its launch from midsummer to September 1999, and then to November. Investors grumbled but could do little: Management controlled most of the board seats. Not that the outside directors were an activist bunch. Mr. Arnault's designated board member attended one meeting and didn't show up again for months. Mr. Benetton, instead of putting his son on the board, sent a lawyer who barely spoke English. J.P. Morgan abandoned its board seat, citing a potential conflict in case it was called on to take the company public. None of the four outside directors had much retail or Internet experience, and few attended meetings with any great regularity. A reason some give is that they had little board control anyway. Despite the launch troubles, Boo's spending continued apace. Employees say Ms. Leander was obsessed by the appearance of the Web-site mascot, Miss Boo, originally a blonde but then made a brunette and less wholesome-looking. Ms. Leander hired a noted hairdresser to redesign the animated character's hair, plus an ad copywriter to write dialogue for her. Debates about Miss Boo could rage for days, and employees complain they were sometimes called in on weekends to discuss her attributes. "Everyone in the company had strong feelings about Miss Boo," Ms. Leander says. Anticipating a midsummer launch, Boo secured satellite office space in Munich, Paris, New York and Amsterdam and hired hundreds of staffers to service orders. With the Web-site postponements, many sat idle. The founders traveled with an entourage and stayed at hotels like New York's swanky Soho Grand. They set up offices in six cities. "With all those trophy offices, Boo looked more like a 1950s multinational than an Internet start-up," says Marina Galanti, who was marketing director. But investors' initial eagerness to pour money into Boo fueled executives' free-spending ways, she adds, and "made them think they could solve any problem just by throwing more money at it." The biggest investor of all wasn't one of the first backers. The Hariri family of Lebanon, who made their fortune in construction, ultimately invested $41 million in Boo. What Boo really poured money into was technology. Boo devised its Internet platform and customer-fulfillment system from scratch, in-house. "It was like they were trying to build a Mercedes-Benz by hand," says a prospective investor who took a pass. More Money, Please In September, with its site still not up, Boo said it had burned through nearly $70 million and needed a fresh infusion. The news sparked recriminations. J.P. Morgan and investors complained about the company's lack of financial controls, and Mr. Hedelin specifically. "His figures changed from week to week," one investor says. Mr. Hedelin says that he isn't an accountant, and that even though he passed financial figures along, "I wasn't in charge of the finance department." In general, he says, the investors are correct: The company did suffer from a profound lack of financial controls. At a board meeting in October, the founders began what came to be a monthly request for more shareholder cash. The Benettons' board designee clamored to take the company public. J.P. Morgan said it couldn't do so until management agreed to quit tinkering with the Web site and simply launch, and to replace Mr. Hedelin with an experienced CFO. But the founders felt kindly toward him and were loath to let him go. In November, Boo launched its site -- to horrible reviews. Customers said it was very slow for most computers and didn't work at all on Macs, and that it was complex and hard to navigate. The poor launch scared off one prospective new investor, Federated Department Stores, say people familiar with the matter. Federated declines to comment. Within six weeks, Boo was discounting its clothes by 40% in a desperate attempt to move them. The new year brought glimmers of better news. J.P. Morgan began working on an IPO plan after Boo stripped Mr. Hedelin of his executive rank. Boo hired Dean Hawkins, an experienced CFO from German sportswear maker Adidas Salomon AG. "The first adult," one investor later called him. Mr. Hedelin now was a nonexecutive chairman. By April, monthly sales had grown to $1.1 million, although expenses were running 10 times that. But that month, the market for Internet start-ups abruptly soured, scotching Boo's plans. And then the brand-new CFO left for another Web company. A few weeks later, J.P. Morgan jolted Boo executives and investors by abruptly bowing out of the deal. The bank's departure came as its client Benetton fired off a letter complaining about how its investment was faring, say people familiar with the matter. Benetton and Morgan decline to talk about the letter. Texas Pacific In April, lacking a banker and a CFO, Mr. Malmsten tried to devise a restructuring plan of his own. To raise another $50 million, Boo called in Texas Pacific Group, a U.S. private-equity firm. Its people arrived and went through all the numbers carefully. The verdict: Boo could have the money but only if it cut the equity of existing investors to zero. Although Texas Pacific held out the promise to restore some equity if Boo ever went public, the response was harsh. Benetton vetoed the proposal in a sharply worded letter. One person involved says that Francois Tison, the Arnault board representative, was more blunt: "Tell them to go to hell." Mr. Tison says he can't recall his exact words. He adds that he was told that better offers were waiting in the wings. Boo's lead investors then sought to raise $30 million among themselves for a stripped-down version of the restructuring, but fell $12 million short. After a series of intense meetings on May 17, Mr. Malmsten called in the liquidators. Later in the day, he gave a farewell speech to his staff in London, drawing an appreciative ovation. Now the buyer of Boo's remains, fashionmall.com, a portal through which e-retailers offer merchandise, is considering an online museum dedicated to the many looks and poses of Miss Boo. Mr. Malmsten and Ms. Leander both call it "sad" that Boo failed. Asked how they feel about the $135 million of investor money that vanished, Mr. Malmsten says it's "not good that our investors lost money," though Ms. Leander adds that it's also regrettable that investors didn't stick with the company longer and give it a chance to mature. Mr. Hedelin, the CFO J.P. Morgan wanted out, says: "Of course I feel sorry for the investors. But at the same time, they're all qualified professionals and in a position to understand the risks in a deal." Mr. Malmsten and Ms. Leander still appear to be in demand. Headhunters call to dangle offers, Mr. Malmsten says, "although I don't know if any of them are real." Investment bankers still call, too, but for a different reason now. "They want to get the inside briefing," Mr. Malmsten says. "They want to hear how it all went wrong." BOO.COM GROUP: Company's Remains Strengthen New Search Engine ------------------------------ REUTERS, June 28, 2000 LONDON, June 28 (Reuters) - Bright Station Plc unveiled a souped- up Internet search engine on Wednesday, to be fed at first from the remains of fallen online retailer Boo.com. The British-based information technology company said its revamped Webcheck (www.webtop.com) had digested half a billion Internet pages to provide what it said was one of the most comprehensive online search resources. Dispensing with the traditional search box on a Web page, users can just highlight any amount of text, from a word to a whole document, and click for related information, which itself is sorted into categories. John Snyder, chief executive of the company's Webtop unit, told Reuters the intelligent search engine combined Bayesian probability theory -- as used by Autonomy's Kenjin Web searcher - - with categorisation of information into logical subjects. The range of the search has been boosted five times by enlisting powerful computers from Boo, which went bust earlier this year. Bright Station -- a Web services, e-commerce and Internet ventures group formerly known as Dialog -- bought Boo software for a quarter of a million pounds ($373,500) and hardware for another 900,000 pounds and has hired 45 of its 60 technical staff. Snyder said the company would make money by offering its search technology to online clients who could put their own branding on it and tailor its searches to their users. BOO.COM GROUP: Liquidation Proceedings ------------------------------ Company Name: boo.com ireland Ltd Previous Name: Company No: IR Com. Appointed on: 07/06/00 Type: Compulsory Appointed by: The Court Liquidators: J W Jackson IPno: 6036 Firm Name: KPMG Address: 1 Stokes Place St Stephens Green City Postcode: Dublin 2 CARE ASSURED: Liquidation Proceedings ------------------------------ Company Name: Care Assured Agency Ltd Company No: 3366088 Com. Business: Contract Care Services Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: David A Taylor IPno: 8273 Firm Name: Mazars Neville Russell Address: Lancaster House 67 Newhall Street City Postcode: Birmingham B3 1NG CHAPEL PHOTOFRAMES: Liquidation Proceedings ------------------------------ Company Name: Chapel Photoframes International Ltd Company No: 3190728 Com. Business: Manufacture of Photo Frames Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: John Kelmanson IPno: 4866 Firm Name: Kelmanson Partnership Address: Avco House 6 Albert Road City Postcode: Barnet EN4 9SH DISPLAY AND GRAPHIC: Liquidation Proceedings ------------------------------ Company Name: Display & Graphic Production Ltd Company No: 2904812 Com. Business: Printing Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: Kikis Kallis IPno: 4692 Firm Name: Kallis & Co Address: Mountview Court 1148 High Road Whetstone City Postcode: London N20 0RA EASY FIX: Liquidation Proceedings ------------------------------ Company Name: Easy Fix Windows Ltd Company No: 2687486 Com. Business: Manufacture Plastic Products Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors Liquidators: Derek Oakley IPno: 8630 Firm Name: Latham Crossley & Davis Address: Arkwright House Parsonage Gardens City Postcode: Manchester M3 2LF EURO-TEC GLAZING: Liquidation Proceedings ------------------------------ Company Name: Euro-Tec Glazing Specialists Ltd Company No: 3541088 Com. Business: Double Glazing Manufacture/Install Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors Liquidators: H J Sorsky IPno: 5398 Firm Name: Sorskys Address: Gable House 239 Regents Park Road City Postcode: London N3 3LF FARMTRACK LTD: Liquidation Proceedings ------------------------------ Company Name: Farmtrack Ltd Company No: 3657691 Com. Business: Retail Butchers Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: A H Beckingham IPno: 8683 D R Wilton 5708 Firm Name: PricewaterhouseCoopers Address: 31 Great George Street City Postcode: Bristol BS1 5QD FIELDBUS PUB: Liquidation Proceedings ------------------------------ Company Name: Fieldbus Pub Ltd Company No: 2843793 Com. Business: Magazine Publishers Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: James R Tickell IPno: 8125 David J Waterhouse 5732 Firm Name: PricewaterhouseCoopers Address: Savannah House 3 Ocean Way Ocean Village City Postcode: Southampton SO14 3TJ GLADMATCH LTD: Liquidation Proceedings ------------------------------ Company Name: Gladmatch Ltd Company No: 3496464 Com. Business: Restauranteur Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members L iquidators: Sudhir Rishi IPno: 6357 Firm Name: S Rishi & Co Address: 314 Regents Park Road City Postcode: London N3 2JX HOPKINS-WILCOX LTD: Liquidation Proceedings ------------------------------ Company Name: Hopkins-Wilcox Ltd Previous Name: Company No: 3455293 Com. Business: Manufacture/Supply Chemicals Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: Pamela M Roe IPno: 6427 Firm Name: Pamela M Roe Associates Address: Victoria Chambers Crown Street City Postcode: Caernarfon LL55 1SY ITS DRYLINING: Liquidation Proceedings ------------------------------ Company Name: ITS Drylining Ltd Company No: 3431539 Com. Business: Plastering/Drylining Contractors Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: D R Acland IPno: 8894 Firm Name: Begbies Traynor Address: 1 Winckley Court Chapel Street City Postcode: Preston PR1 8BU INTA LTD: Liquidation Proceedings ------------------------------ Company Name: Inta Ltd Previous Name: Novelhalf Ltd Company No: 3218035 Com. Business: Computer Consultants Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: Michael R Ellingworth IPno: 6050 Firm Name: Begbies Traynor Address: 17 Paradise Square City Postcode: Sheffield S1 2DE JAZZTEL: Moody's Assigns Caa1 Rating to Telecom Company ------------------------------ London, 27 June 2000 -- Moody's Investors Service has assigned a Caa1 rating to Jazztel p.l.c.'s ("Jazztel") proposed EUR 125.0 million offering of unsecured senior notes due 2010. In addition, Moody's has confirmed Jazztel's senior implied rating of B3 and unsecured issuer rating of Caa1. The rating outlook is stable. Jazztel p.l.c. existing ratings at Caa1: - EUR 400.0 million 13.25% senior unsecured notes due 2009; - EUR 110.0 million and $100.0 million 14.0% senior unsecured notes due 2009. Net cash proceeds from the notes offering will be used to continue to fund Jazztel's network buildout, operating losses, and for general corporate purposes. The ratings reflect Jazztel's early stage of development as an integrated telecommunications, data, and Internet service provider in the Iberian peninsula, as well as the relatively small size of the company's operations compared to the local incumbent telecommunications service providers in Spain and Portugal. The ratings factor in the company's highly-leveraged capital structure, with total debt/capital in excess of 90.0% at pro forma March 31, 2000. The ratings also take into consideration Jazztel's significant funding requirements over the next 12-24 months and our expectation that the company will tap the equity capital markets in the near future. The ratings also reflect Moody's expectation that Jazztel will face increasing competition in Spain and Portugal from incumbent operators and alternative carriers alike, as the recently liberalized Portuguese telecommunications market creates opportunities to access a truly "Iberian" market. Moreover, the ratings take into consideration execution risks associated with Jazztel's aggressive expansion, both geographically and in terms of product offering, and the rapid growth of the business to date. Positively, the ratings reflect Jazztel's strong operating progress to date, with 4,224 km of backbone network and 725 km of local access networks completed as of May 31, 2000, in line with building targets, as well as the company's generally improving profitability, evidenced by gross profit break-even of the company's Spanish CLEC activities in 1Q00. In addition, the company's recent win of a broadband wireless local loop license through the 51.0%-owned Banda26 consortium should allow Jazztel to complement its network build-out and accelerate the roll-out of its direct services. The ratings factor the company's proven access to the debt and equity capital markets to-date, as well as Moody's expectation that Jazztel will seek additional equity funding over the near term to strengthen its balance sheet. Jazztel's experienced and strengthened management team is also viewed as a ratings positive. Moody's continues to recognise Jazztel's ability to deliver on the business plan to date, as well as the competitive advantage provided to Jazztel by its time to market advantage in Spain and Portugal. The ratings on the notes reflect their structural subordination to the liabilities of Jazztel's operating subsidiaries. Although Jazztel liquidity benefits from a EUR 300.0 million bank credit facility, availability is currently restricted due to agreement with its banks following the waiver of certain covenants. Moody's does not consider the restriction on availability to be a ratings negative at this juncture. Moreover, it is Moody's expectation that the company will seek other means of financing (additional debt or equity issuances) before utilizing the bank facility (upon availability) as it executes its business plan. A review of the rating notch on the notes may be warranted were the company to employ senior secured financing as a significant and more permanent part of its capital structure. On a pro forma annualized 1Q00 basis, Jazztel generated revenues of EUR 92.8 million and negative EBITDA of EUR 179.6 million, with total debt outstanding (including current portions) of EUR 827.3 million. The company currently counts 601,000 direct customers (975,000 lines) and 300 contracted indirect customers. Jazztel Telecom SA, headquartered in Madrid, Spain, is a facilities based telecommunications provider and plans to be the first Iberian competitive local exchange carrier ("CLEC"). Jazztel Telecom SA is a fully-owned subsidiary of Jazztel p.l.c. which is a holding company headquartered in London, U.K. JOHN SCOTT: Liquidation Proceedings ------------------------------ Company Name: John Scott (Knitwear) Ltd Company No: SC Com. Business: Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors Liquidators: Robert Barclay IPno: 6487 Firm Name: Pannell Kerr Forster Address: 17 Rothesay Place City Postcode: Edinburgh EH3 7SQ KENT CARPENTERS: Liquidation Proceedings ------------------------------ Company Name: Kent Carpenters Ltd Company No: 3451165 Com. Business: Sub Contract Carpenters Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors Liquidators: D L Platt IPno: 2669 Firm Name: Sorskys Address: Gable House 239 Regents Park Road City Postcode: London N3 3LF LARKIN & DEMAIN: Liquidation Proceedings ------------------------------ Company Name: Larkin & Demain Ltd Previous Name: Youcon Developments Ltd Company No: 1165802 Com. Business: Builders Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: A J Clark IPno: 8760 Firm Name: Carter Clark Address: Meridien House 62 Station Road City Postcode: London E4 7BA M & R ELECTRICAL: Liquidation Proceedings ------------------------------ Company Name: M & R Electrical Contractors Ltd Company No: 2943083 Com. Business: Installation Electrical Wiring Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: Gordon Craig IPno: 7983 Firm Name: Begbies Traynor Address: 1 Winckley Court Chapel Street City Postcode: Preston PR1 8BU MAINTABLE LTD: Liquidation Proceedings ------------------------------ Company Name: Maintable Ltd Company No: 1796804 Com. Business: Catering Supplies Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: Alan G Haden IPno: 8823 Firm Name: Haden Address: Haden House 485 Birmingham Road City Postcode: Bromsgrove B61 0HZ MAIR & SINCLAIR: Liquidation Proceedings ------------------------------ Company Name: Mair & Sinclair Ltd Company No: SC Com. Business: Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors Liquidators: Matthew P Henderson IPno: 6884 Firm Name: Grant Thornton Address: 1/4 Atholl Crescent City Postcode: Edinburgh EH3 8LQ MANOR JOINERY: Liquidation Proceedings ------------------------------ Company Name: Manor Joinery Ltd Company No: 3639961 Com. Business: Furniture Contractors Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: A J Findlay IPno: 8744 Firm Name: Findlay James Address: Kensington House 33 Imperial Square City Postcode: Cheltenham GL50 1QZ MILDCRAFT LTD: Liquidation Proceedings ------------------------------ Company Name: Mildcraft Ltd Company No: 3755811 Com. Business: Car Spares Distributors Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors Liquidators: H J Sorsky IPno: 5398 Firm Name: Sorskys Address: Gable House 239 Regents Park Road City Postcode: London N3 3LF RS MEAT: Liquidation Proceedings ------------------------------ Company Name: R S Meat & Poultry Ltd Company No: 3517495 Com. Business: Poultry Portioners Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors Liquidators: Stephen D Watson IPno: 6337 Firm Name: Nottingham Watson Address: 12 St Pauls Square City Postcode: Birmingham B3 1RB REALISTIC FASHIONS: Liquidation Proceedings ------------------------------ Company Name: Realistic Fashions Ltd Company No: 3266035 Com. Business: Dressmakers Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: Andreas G Kakouris IPno: 4691 Firm Name: Kakouris & Michaelides Address: 43 Blackstock Road City Postcode: London N4 2JF RIPON BUSINESS: Liquidation Proceedings ------------------------------ Company Name: Ripon Business Services Ltd Previous Name: Jorvik Computers Ltd Company No: 1633966 Com. Business: Provision of Business Services Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors Liquidators: Andrew H Wilkinson IPno: 6282 Firm Name: Revell Ward Horton Address: Norwich Union House 26 High Street City Postcode: Huddersfield HD1 2LN SPORTING MEDIA: Liquidation Proceedings ------------------------------ Company Name: Sporting Media Ltd Company No: 3182506 Com. Business: Publisher Golf/Rugby Magazines Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: David Rubin IPno: 2591 Firm Name: David Rubin & Co Address: Pearl Assurance House 319 Ballards Lane City Postcode: London N12 8LY STOUTFELLOWS BEER: Liquidation Proceedings ------------------------------ Company Name: Stoutfellows Beer Co Ltd Company No: 3214901 Com. Business: Import/Export/Distribution of Wines Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: John W Davies IPno: 6425 Peter W Engel 8103 Firm Name: BDO Stoy Hayward Address: Riverside House 31 Cathedral Road City Postcode: Cardiff CF1 9HB TANKCARE SERVICES LTD: Liquidation Proceedings ------------------------------ Company Name: Tankcare Services Ltd Company No: 3066586 Com. Business: Installers/Servicers of Water Tanks Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: Richard A Segal IPno: 2685 Firm Name: A Segal & Co Address: Albert Chambers 221-223 Chingford Mount Road City Postcode: London E4 8LP TIGERCO LTD: Liquidation Proceedings ------------------------------ Company Name: Tigerco Ltd Previous Name: Company No: SC Com. Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors Liquidators: Matthew P Henderson IPno: 6884 Firm Name: Grant Thornton Address: 1/4 Atholl Crescent City Postcode: Edinburgh EH3 8LQ UNIVERSAL WINDOWS: Liquidation Proceedings ------------------------------ Company Name: Universal Windows & Doors Ltd Company No: Com. Business: Manufacture/Install Double Glazing Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors Liquidators: Kian Seng Tan IPno: 8032 Firm Name: K S Tan & Co Address: 10-12 New College Parade Finchley Road City Postcode: London NW3 5EP WONDERCLIFF LTD: Liquidation Proceedings ------------------------------ Company Name: Wondercliff Ltd Company No: 2119222 Com. Business: Retail Golf Equipment/Accessories Appointed on: 07/06/00 Type: Creditors Appointed by: Creditors and Members Liquidators: Geoff Robbins IPno: 6622 Neil C Money 8900 Firm Name: Casson Beckman & Partners Address: Lichfield Place 435 Lichfield Road City Postcode: Birmingham B6 7SS 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. 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