/raid1/www/Hosts/bankrupt/TCREUR_Public/000714.mbx      T R O U B L E D   C O M P A N Y   R E P O R T E R     

                        E U R O P E

            Friday, July 14, 2000, Vol. 1, No. 48


                        Headlines

B E L G I U M

CREDIT PROFESSIONEL:  Fitch Affirms Rating At `C/D'


C Z E C H   R E P U B L I C

KOMERCNI BANKA:  State Cleans Up Before Sell-Off
KOMERCNI BANKA:  Sale Expected by March 2001


F R A N C E

BANQUE FEDERAL: Fitch Downgrades Rating to C


G E R M A N Y

GIGABELL: "Death-List" Says ISP's Future is in Doubt
POET HOLDINGS:  Share Prices Fall By More Than Half


H U N G A R Y

MOL:  Premier Attacks Gas Company Privatization
POSTABANK:  APV Rt to Develop Sale Plan


P O R T U G A L

CAIXA ECONOMICA: Fitch Lowers Rating to `C'


R O M A N I A

BANCA AGRICOLA:  Sale Final by Mid-September


S E R B I A   &   M O N T E N E G R O

YUGOSLAV RAIL:  Hungarian MAV Seeks Debt Payment


S W E D E N

LETSBUYIT.COM:  IPO Postponed
LETSBUYIT.COM:  Struggling Retailer Banks on Float
LETSBUYIT.COM: Retailer Halves Prices and Extends Order Period
LETSBUYIT.COM:  CEO Blames IPO Delay on Market Rules


U N I T E D   K I N G D O M

90 DEGREES:  Receivership Proceedings
AN 2000:  Receivership Proceedings
ALBERMARLE PATERNOSTER:  Receivership Proceedings
BRITISH LAND:  Bondholders Fear Investment Deterioration
BRUCE CLARK:  Receivership Proceedings

CHALECREST LTD:  Receivership Proceedings
DIFSL RE-ORGANISATION:  Receivership Proceedings
DATA ARCHIVING:  Receivership Proceedings
FATTY ARBUCKLES:  Diner Group to Shut Down Losing Restaurants
LIFESTYLE CONTRACT:  Receivership Proceedings

MAREHART LTD:  Receivership Proceedings
SES GROUP:  Receivership Proceedings
SKILLBEECH LTD:  Receivership Proceedings
SOMERFIELD PLC:  Low Sales at Kwik Halves Profit
SOMERFIELD PLC:  More Losses Predicted

SOUTHERN DISTRIBUTION:  Receivership Proceedings
WYNDHAM ENGINEERING:  Receivership Proceedings
WYNDHAM ENGINEERING:  Receivership Proceedings


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B E L G I U M
=============

CREDIT PROFESSIONEL:  Fitch Affirms Rating At `C/D'
------------------------------
FITCH, July 11, 2000

Fitch, the international rating agency, has affirmed Belgium's
Credit Professionel's (CP) Individual rating at 'C/D', removing
it from Rating Watch Negative and changed the bank's Support
rating to '3' from '2'. It has also affirmed CP's Short-term
rating of 'F2'.

These rating actions follow a review of the bank carried out in
the wake of the acquisition earlier this year of a majority stake
in CP by the French bank, Credit Mutuel du Nord (CMN). The
Individual rating of CP depends on the bank's niche franchise,
its low operating profitability, reasonable credit risks, and
restructuring plans. For some years, CP has sought a larger
partner to provide financial support, greater strategic focus,
and to help in updating its systems, services and products. CMN
should be able to assist in these matters, given its expertise in
northern France in dealing with a similar client base, and its
network of 168 local credit institutions. In view of CP's
improved prospects, Fitch has affirmed the Individual rating,
removing it from Rating Watch Negative. However, should the
planned recovery not materialise, the agency may reconsider its
rating.

The Support rating was changed to reflect the new majority
ownership of CMN. The agency considers that, in case of
difficulties, CP's first resort would be to its new majority
shareholder, although its former majority shareholder, the state-
owned Societe Federale des Participations, retains a 23% stake.

Both shareholders injected fresh capital into the bank in May
2000, demonstrating support.


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

KOMERCNI BANKA:  State Cleans Up Before Sell-Off
------------------------------
PRAGUE BUSINESS JOURNAL, July 10, 2000

The Czech state is likely to offer new guarantees at the
country's second-largest bank, Komercni Banka, in hopes of
offsetting the bank's poor lending record ahead of a sell-off
slated for early next year.

Government and National Property Fund officials say the figure
for the clean-up, which follows more than Kc 80 billion ($2.1
billion) in bad-asset transfers over the past 18 months, will be
determined based on a forensic audit of Komercni's loan
portfolio.

"The size of [any] guarantee hasn't been determined yet," Deputy
Finance Minister Jan Mladek told the Prague Business Journal. "It
would be partially determined by the results of a forensic
audit."

Advisers from Goldman Sachs and CA IB Securities, working for the
government in what should be its last major bank sale,
recommended a bailout in an effort to heighten interest and the
eventual sale price.

That audit would most likely be conducted by Komercni's regular
auditor, Big Five firm Deloitte & Touche, he added, which has
carried out forensic audits of some of the bank's troubled
clients in the past.

The privatization of Komercni should be discussed by Cabinet
ministers later this month, and the government is expected to
acknowledge a delay in the original timetable, from the end of
this year to the beginning of next year, Mladek said.

Many observers expect the seizure on June 16 and subsequent sale
of third-largest bank Investicni a Postovni Banka to divert
considerable attention from the sale of Komercni as well.
Political fallout has been sharp, prompting a war of words
between the ruling Social Democrats and their power-pact allies
from the Civic Democratic Party (ODS).

A senior official from the National Property Fund (FNM) confirmed
that some form of guarantees were being planned for the 60%
state-owned Komercni. The bank has seen its share price tumble
amid an Kc 8 billion lending scandal and management shuffle - and
it could certainly use a vote of confidence, the official said.

"The bank has a horrible reputation, there was the [fraud] case
of B.C.L. Trading, and also it had to be saved from bankruptcy
three times," he said.
Komercni Banka showed a consolidated loss of Kc 9.28 billion in
1999, according to International Accounting Standards, and
reported Kc 377 billion ($10 billion) in assets in the first
quarter.

The bank's shares were trading around Kc 724 early last week,
above their 52-week low of Kc 532 but well below their high
during the same period of Kc 1,152.

Komercni has already seen tens of billions of crowns in poorly
performing assets carved out by the state, along with a capital
increase and the removal of nearly its entire board. Police have
handed down charges against at least 11 former managers or
employees.

But by the end of first quarter of this year, the bank was still
burdened with some Kc 23.7 billion of loans in the three worst
categories, according to the Czech National Bank's five-grade
classification system.

It held just Kc 15.8 billion in reserves, or 67%, created against
those assets. At the same time, there is an additional Kc 35
billion of watched loans (the second category after standard
loans) with virtually no reserves created on them, some Kc 260
million, according to Jiri Stanik, a banking analyst with
Raiffeisen Capital & Investment. "And that's only the balance
sheet, while there may be more off the balance sheet," he said.
The B.C.L. exposure came in off-balance sheet letters of credit.

Mladek conceded there might be more problematic loan cases
uncovered by the forensic audit, but expressed hope that no
skeletons of such magnitude would be found.

At the same time, an approach that calls for selling a cleaned-up
bank is very much in line with the way the Social Democrats have
proceeded since taking power in mid-1998. Analysts noted that so
far, suitors have demanded full loan-book guarantees such as
those offered to Austrian Erste Bank in its acquisition of former
monopoly savings bank Ceska Sporitelna and to Ceskoslovenska
Obchodni Banka in its takeover of Investicni a Postovni Banka's
assets after its June 16 collapse. The strategy has raised
expectations among analysts, at least.

"This is something that can be expected after we've seen how
Sporitelna and IPB were privatized," said Stanik.

Senior government officials repeatedly declared early last year
that not another crown would be spent to bail out the banking
sector, but gave in as sales approached and the lists of
potential buyers were unimpressively short.

During the sale of savings giant Sporitelna, signed early this
year, Erste negotiated for the transfer from the bank of the
bottom three loan categories. The top two categories, including
standard loans, received full government guarantee after the
Austrians questioned Sporitelna's classification accuracy. Erste
also received a guarantee on Sporitelna's other businesses, such
as leasing and some off-balance sheet items.

In its acquisition of IPB, KBC-backed CSOB received a full
guarantee from the government on all assets - estimated around Kc
315 billion - and from the Czech National Bank on the deposit
side without a crown changing hands.

It is not yet clear who might bid on Komercni. A senior executive
in charge of regional acquisitions at Deutsche Bank told the
Prague Business Journal earlier this year that the German giant
was not likely to be interested in Komercni, as its interest lay
in CSOB, which was sold Belgian KBC Group a year ago.
Representatives from two other major players in the region, ING
Barings and ABN Amro Bank, have been quoted in the local press as
saying they were not interested in Komercni.

"It's hard to see . [because] when you think about KB - it's
involved in the restructuring of the economy," said the Deutsche
source, when asked about potential suitors. Furthermore, the bank
was concerned about the unpopularity of the decisions that a new
investor would have to make in the bank. "In KB you have to do a
lot of restructuring, and social problems - most likely it's not
my piece of business."

Among the possible candidates Spanish banks are mentioned along
with Italian UniCredito Italiano, which along with a related
group, Allianz, was negotiating to the bitter end over control of
IPB last month. A source close to UniCredito suggested he
believed the Italian bank was cut out of the IPB sale in part to
leave an interested player for Komercni.

Mladek in fact expressed hopes that the Italians were not too
frustrated over Czech banks after IPB was sold to CSOB, according
to news agency CTK.

The government is currently finishing an information memorandum
evaluating the bank's books, and should soon be sending out
invitations to investors to come up with initial bids.

Government officials pointed specifically to the upcoming meeting
in Prague of the International Monetary Fund and the World Bank
at the end of September as an ideal platform to lead talks with a
number of big-name investors.


KOMERCNI BANKA:  Sale Expected by March 2001
------------------------------
REUTERS, July 12, 2000

The Czech Finance Ministry said on Tuesday it expected the
government to make the final decision on a strategic partner for
bank Komercni Banka at the beginning of March 2001.

The ministry has earlier acknowledged it would not be able to
meet the previous November 2000 deadline, but had not specified
the delay which occurred due to a need of additional audits of
the bank's assets.

The ministry also said in a material for Wednesday's government
meeting that the sale of the 60 percent state stake in the second
largest Czech bank would probably require state guarantees for
potential future losses in the bank's loan portfolio.

This could mean a further state bailout of the bank after the
government took over more than 80 billion crowns in Komercni's
bad assets since the last year and took part in a capital
increase.

Komercni's privatization has been delayed by several months by a
revelation last year of an over eight billion crown loss from
transactions with one foreign client.

The discovery initiated several audits at the bank and a
management reshuffle.

The Finance Ministry expects to release a privatization
memorandum for potential investors in mid-September, followed by
due diligence in the bank and binding bids of the broader
investors' group in December, the report for the cabinet said.

Auditors are currently examining Komercni's loan portfolio for
potential risks, which holds back further government steps at
present, the Ministry added.

The state has been widely expected to issue guarantees for any
further losses at the bank but the government had not previously
confirmed it would cover future risks.


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F R A N C E
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BANQUE FEDERAL: Fitch Downgrades Rating to C
--------------------------------------
FITCH, July 7, 2000

Fitch, the international rating agency, has lowered the
Individual and Long-term ratings of Banque Federale Mutualiste
(BFM) to 'C' from 'B/C' and to 'BBB+' from 'A-' (A minus),
respectively. At the same time it has affirmed the bank's Short-
term rating at 'F2' and Support at '3'.

BFM is a co-operative bank set up in 1986 by Mutualite Fonction
Publique (MFP), the union of 30 French civil service mutual
companies governed by the specific Code for Mutual Organisations.
Some 4.5 million civil servants and their families belong to
these mutual companies. BFM's main purpose is to offer a range of
specific banking services and to that end has signed a
partnership agreement with Societe Generale (SG), giving it
access to the latter's 2,000 offices throughout France. The bank
has no branches and currently has a staff of 89. At end-1999 it
had total assets of EUR 504 million, essentially comprised of
consumer credit loans.

The lowering of BFM's Individual and Long-term ratings primarily
reflects its declining profitability and insufficient
optimisation of available resources in the context of its rapidly
expanding business. While BFM continues to benefit from an
essentially low risk profile, its partnership with SG and
satisfactory capitalisation, the outlook for the bank is
negative.


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

GIGABELL: "Death-List" Says ISP's Future is in Doubt
----------------------------------------------------
HANDELSBLATT, July 12, 2000

For Germany's Neuer Markt, the summer lull has been enlivened by
the circulation of a number of lists of companies seen as
potential bankruptcy candidates. On Wednesday, the growth-share
segment's two indices were barely changed by the end of trading.
The all-inclusive Nemax closed up 0.18% at 5,155.08, while the
relatively exclusive Nemax-50 was off 0.12% at 5,841.83.

Gigabell is a name that is common to many of the so-called death-
lists currently doing the rounds. This is perhaps hardly
surprising, since the group itself, a Frankfurt-based internet
multi-service provider, conceded on Monday that it faced
liquidity problems.

Since this admission, the share price has plummeted. On
Wednesday, it was down 35% intraday. With this in mind, its
closing price of 19.10 euros, representing as it does a
relatively modest decline of 12.4%, can be seen as something of a
rally. As recently as early March, the share was changing hands
for no less than 131 euros. Such is life in the cut-and-thrust
environment of Germany's growth segment.

When it made its announcement on Monday, Gigabell said its cash-
flow problems would have been overcome by the weekend. But board
member Johannes Funke, in an interview with Handelsblatt, was
unable to say whether this was still a feasible proposition.
"There has been good progress, but we will need time to bring the
negotiations to a reasonable conclusion," he said.

Furthermore, the rumor machine continues to churn out Gigabell-
related material. On Wednesday, the name of US group Viatel was
added to the list of companies said to be interested in Gigabell.
Here it will find itself keeping company with Sweden's Telia and
Italy's Tiscali.

Ricardo.de, the online auction house, is another company whose
survival looks to be in doubt, if many of the list-compilers are
to be believed. But the group's share price turned in a
noteworthy performance on Wednesday. It started out in negative
terrain; but then around 13.00 CET, the growing demand for
Ricardo stock became almost palpable. By the close of trading,
the share had soaked up 14.5% at 39.50 euros.

Only one share outperformed Ricardo on the day. The distinction
of heading the tops list went to Austrian pharmaceuticals group
Sanochemia, whose shares rose 15.5% to 67.80 euros.

The group had announced that licences had been approved for
Reminyl to be marketed in Norway, Iceland and Switzerland.
Reminyl is an Alzheimer's treatment developed by cooperation
partners on the basis of Sanochemia's active ingredient,
Galantamine


POET HOLDINGS:  Share Prices Fall By More Than Half
------------------------------
EUROPEAN INVESTOR, July 10, 2000

BRUSSELS -- German/US POET Holdings Inc (POXA.FNM), a provider of
data management software, was last week's (July 3 - 7) biggest
loser on the Neuer Markt, dropping 59% to 16.19 euros by Friday.

After an excellent start to the new year, POET reached its peak
of 200.00 euros on March 7, from where it slipped to 39.50 euros
by the end of June.

The fall quickly accelerated, when the company on Thursday,
admitted that it would not be able to reach its turnover
predictions for the second quarter of 2000. On the same day, the
stock fell 40.7% to 19.28 euros. The downwards trend seemed to
continue, when the company on Monday morning lost additional 4.9
% to 15.40 euros.

An analyst who prefers to remain unnamed told EIC News that
institutional investors were disappointed about POET's
performance. They have become cautious and wanted to see some
proof that the company was able to keep its promises.

The analyst said it was important to remember from where the
company started listing on Frankfurt's high-tech market. It held
its initial public offering on the Neuer Markt on November 16,
1999 at an issue price of 12.50 euros.

Within four months it had been up to 200.00 euros.

"The shares climbed very high, and this included an extreme risk
for a sharp decline. Two hundred euros were certainly an
exaggerated price. Companies with such a share development were
especially hit of the general market corrections," he explained.

An additional factor for POET's descent from dizzy heights were
the numbers for the first quarter of 2000.

"The first quarter report did not look terrific. The negative
factors were understandable and explainable. So the stock lost
ground to about 45.00 euros. And then the bad news about the
turnover figures for the second quarter arrived," the analyst
said. "It was difficult to say how the stock would develop," he
continued. "In the current situation it could easily gain 3.00 to
4.00 euros, but there was also a risk, that investors would keep
on selling.

"I would say there is no fundamental reason to sell, this is just
an overreaction," the analyst said. Following bad sales results
of POET Content Management Suite the company had decided to
concentrate on its business-to business product line POET
eCatalog Suite (eCS), software that manages electronic product
catalogues. POET had claimed in a press release, that the
turnover results for eCS were above the expectations. The analyst
said he believed in the future potential of eCS and he expected
the turnover in this business area to grow significantly.

As a result of the disappointing results of the second quarter,
the analyst downgraded POET from "buy" (on April ,27) to
"accumulate."

"This is the result of lost confidence. But I still believe in
POET's positive potential," he said.

During Monday morning's trading on the Neuer Markt, POET managed
to slow down the downward trend. The stock was last traded at
15.95 euros, a fall 1.5%.


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H U N G A R Y
=============

MOL:  Premier Attacks Gas Company Privatization
------------------------------
REUTERS, July 12, 2000

Hungarian Prime Minister Viktor Orban on Wednesday criticized the
privatisation of oil and gas group MOL under the previous cabinet
and said the government would not give up the idea of buying back
MOL's gas business.

Orban, speaking on Hungary's Kossuth Radio, said the Hungarian
oil and gas industry was privatized without the previous
government having a clear idea what the country's gas and oil
business should look like in the future.

"I had the feeling... then, and now I see this proved that a very
serious privatisation decision was made without consideration for
the future," Orban said.

The government and MOL are at loggerheads over gas prices and the
future of MOL's gas business, with the cabinet capping this
year's gas price rise in an effort to curb inflation and avoid
social tensions.

MOL's chairman resigned in the aftermath of a decision of the
government to allow only a six percent gas price rise, which the
company says will result in heavy losses on its gas business and
has caused a sharp drop in its share price.

MOL fell 150 forints to close at 3,650 forints on Tuesday,
extending its recent sharp losses.

Orban that by re-nationalizing the gas business, MOL could keep
and strengthen its leading role in the region without pushing
Hungarians, who now pay a considerable part of their income on
gas bills, into a hopeless situation.

"That the government buys back the gas business as a result of a
lengthy bargaining process is one of these possible solutions. I
have not given this up, I see a possibility for this," Orban
added.

Orban said it was in the interests not only of MOL's owners but
also the country for MOL to remain a strong company in the longer
term.

"If the price of MOL's stocks is low now, this only leads to one
thing - that this is the time to buy because this way one can
acquire a stake in a company that will strengthen further," Orban
added.

"There will be an agreement and I think we will be able to agree
with MOL's management in a way that serves the interests of
Hungary, MOL and Hungarian families," Orban said.


POSTABANK:  APV Rt to Develop Sale Plan
------------------------------
BUDAPEST BUSINESS JOURNAL, July 10, 2000

The government has asked the State Privatization and Holding Co.
(APV Rt) to prepare a plan for a potential sell-off of state-
owned Postabank Rt, Government Spokesman Gabor Borokai announced
on July 4.

The study "would clarify the current market price of the bank,
and the size of capital investment needed to make Postabank
competitive for a long period of time," Borokai said at a news
conference following the weekly cabinet meeting. The report
should be ready by October, he noted, adding that once it is
complete, "further decisions can be made."

The government currently owns over 99% of Postabank. It took
control of the bank in 1998, using a capital increase of over
$700 million to compensate for the massive losses the bank
incurred under previous President and CEO Gabor Princz.

Borokai also announced that police are currently investigating
the reasons behind Postabank's earlier problems, and that
according to an Interior Ministry report, there are indications
that major financial crimes were committed by Postabank's
previous managers.

Borokai said that the Interior Ministry's summary report
identifies five different crimes of a serious nature.

"These are crimes in connection with asset management, and are
obviously connected to Postabank's management," he said. "If the
alleged crimes turn out to be proven, and if charges are pressed,
the nature of the crimes will be publicized at that time."

Based on 1998 unconsolidated assets, Postabank is Hungary's
fifth-largest commercial bank. It currently has registered
capital of Ft 20 billion ($73.6 million), and made pre-tax
profits of Ft 913 million in 1999, with shareholders equity of Ft
40.4 billion for the same year.

Although its profits are now on the rise, the bank's managers
have indicated that further measures must be taken, and have
asked the government to privatize the bank within a year.

This spring financial investors, including OTP Bank Rt, the
Hungarian Foreign Trade Bank Rt (MKB) and CIB Bank Rt, expressed
an interest in Postabank.

"Postabank welcomes the government's decision to create a long-
term ownership structure for Postabank," CEO Henrik Auth said in
an official release. "I am convinced that the state . will offer
the best solution for the bank to ensure its successful future."


===============
P O R T U G A L
===============

CAIXA ECONOMICA: Fitch Lowers Rating to `C'
-------------------------------
FITCH, July 11,2000

Fitch, the international rating agency, has lowered the
Individual rating of Caixa Economica Montepio Geral (Montepio
Geral) to 'C' from 'B/C'. Its Short-term and Long-term foreign
currency ratings of 'F2' and 'A-' (A minus) and Support rating of
'4' have been affirmed. This action reflects the decline in the
bank's profitability, an outlook of continued fierce competition
in the mortgage market in Portugal and the agency's reservations
about the bank's market risk systems.

Montepio Geral, which is wholly-owned by Montepio Geral
Associacao Mutualista, a non-profit mutual organisation, focuses
on collecting retail deposits and providing housing and
construction loans. It controls a 10% share of the Portuguese
mortgage lending market, well in excess of its 2.7% market share
of total assets. Montepio Geral's ratings reflect its low risk
lending and sound asset quality. It also enjoys an important
franchise in its niche, despite its modest size. The agency has
lowered its Individual rating, as the bank's profitability has
come under pressure. Assisted by fiscal advantages, the bank's
results have been superior to those of its peers in the past,
stemming from the bank's very high proportion of loans to assets,
primarily funded by retail deposits. New lending on lower spreads
is, however, rapidly reducing the bank's margin to market levels,
while the bank's commission income is less significant than for
its peers due to a more limited, and under-exploited, product
range. Pressure on margins has continued in 2000, faced with
strong competition within the housing finance market. In mid-1999
the bank was also exposed to significant market risk on a
substantial portfolio of Portuguese treasury bills, as the market
value declined in the face of rising interest rates. Actual
losses were, however, limited and the bank is now introducing a
more sophisticated asset and liability management system.


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R O M A N I A
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BANCA AGRICOLA:  Sale Final by Mid-September
------------------------------
REUTERS, July 12, 2000

The sale of Romania's state-run commercial bank Banca Agricola
(BA) is expected to be completed by end-September, Alin Giurgiu,
head of the bank's privatization commission, said on Wednesday.

"The commission has extended the deadline for investors to submit
binding bids for BA to August 8," Giurgiu, also executive manager
of the main privatization agency FPS, told a news conference.

Initially, investors had until Friday to place their bids.

Privatization of the bank, which underwent restructuring over the
past three years, is a key target under Romania's accords with
international lenders.

Last month, a consortium including the Agricultural Bank of
Greece, Rabo International Advisory Services and the Romanian
American Enterprise Fund, asked the privatization commission to
extend the deadline for final bids to allow clarification of the
bank's capital and to come up with a solid bid.

Giurgiu said local investment company SIF5 agreed this week to
swap its BA stake of around five percent for shares in other
companies in the portfolio of FPS. The FPS has 56.6 percent of
the bank.

SIF5 has shares in various companies including debt-ridden steel
mill Sidex and state-run commercial bank Banca Comerciala Romana,
due for sell off later this year.

Four other SIFs, owning a combined stake of some 21.7 percent,
were expected to swap their BA holdings within a week.

Giurgiu did not say whether the sell off would involve the FPS's
initially offered stake of 56.5 percent or its holding after the
swaps with the SIFs.

The three members of the consortium said they might invite other
investors - such as the European Bank for Reconstruction and
Development or the International Finance Corporation - to join
the consortium, Giurgiu said.

Last month, BA president Eugen Radulescu said EBRD had expressed
willingness to give BA a convertible loan. He gave no details of
loan terms, but said its amount was "significant".

The BA has a share capital of 108 billion lei, but the government
pledged to recapitalise the bank.

Giurgiu declined to indicate the size of the state inflow to
recapitalise BA, saying it was to be negotiated with investors.

Officials previously said the BA needed a capital injection of
$150 million to $200 million to operate efficiently.


=====================================
S E R B I A   &   M O N T E N E G R O
=====================================

YUGOSLAV RAIL:  Hungarian MAV Seeks Debt Payment
------------------------------
BUDAPEST BUSINESS JOURNAL, July 10, 2000

Last week Hungarian State Railways Rt (MAV) persuaded another ex-
Yugoslav republic to start repaying its debt, and is about to
resume re-payment talks with Yugoslav Rail (JZ_), its largest
debtor in the region.

After eight years of fruitless negotiations, Macedonian State
Railways agreed last week to start repaying its #8.6 million
($8.1 million) debt to MAV by next March. The entire debt will be
paid over a seven-year period, officials of the two companies
announced after talks in Skopje, Macedonia, last Wednesday.

Officials of JZ_, MAV's biggest debtor from the former Yugoslavia
(#71.7 million, including #25.2 million in interest), are to
arrive in Budapest this week to start talks on ways to repay
JZ_'s debt. The meeting marks the renewal of talks that collapsed
several years ago when JZ_ walked away from the negotiating
table.

Former Yugoslav republics and Yugoslavia owe #123 million in
total debts to various rail companies in Central Europe, dating
back to 1991.

Even though members of the International Railway Organization
(UIC) and railway executives from Austria, Romania, Poland,
Slovakia and the Czech Republic met in Budapest on June 6 to
discuss ways to settle the debts owed by the railways, only MAV's
efforts proved successful.

"What we have achieved so far is an exemplary success, a tribute
to our persistence," said Annamaria Benczedi, head of the ad hoc
working group of the UIC and MAV's deputy CFO. "Nobody has been
as successful as us."

This year, Bosnian Railways met a deadline negotiated last year,
and paid #3.3 million, or 10% of its total debt to MAV, by June
30. Croatian Railways, after many delays, paid up last January
and reduced its debt to #2 million. Slovenian Railways has no
outstanding debt.

MAV projects Ft 29.8 billion ($110 million) in losses on Ft 179.2
billion revenue this year.


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

LETSBUYIT.COM:  IPO Postponed
------------------------------
HANDELSBLATT, July 12, 2000

Swedish online retailer LetsBuyIt.com said Wednesday it will list
its shares on Germany's Neuer Markt growth segment in one week's
time, and will likely fix an issue price next Tuesday.

The Internet retailer late Tuesday for the second time extended
the subscription period for its initial public offering and
lowered the bookbuilding range to 3-4 euros from 6-7 euros, but
said it was undecided about the listing.

Peter Jaco, managing director of the Internet retailer's U.K. and
Irish operations, also said that even with its reduced issue
volume, the company meets Neuer Markt regulations.

LetsBuyIt will issue 16.7 million shares, not including a 2.5
million share greenshoe option. The company said it will likely
exercise 1.1 million shares of the greenshoe, bringing the total
issue volume to between 53.4m euros and 71.2m euros. With the
complete greenshoe, about 21.3% of the company's stock will be in
free float.

According to the requirements laid down by German stock market
operator Deutsche B"rse AG, companies listing on the Neuer Markt
with an issue volume of between 5m euros and 100m euros should
have at least 20% of their stock in free float. Companies seeking
a listing with less than 20% free float must have an issue volume
of over 100m euros.

The Swedish on-line retailer previously postponed its IPO in June
owing to weak market conditions. On Tuesday, it emerged that Sal.

Oppenheim Jr. & Cie abandoned the IPO's four-brokerage
underwriting team last week. Oppenheim's withdrawal means it
won't be taking up the portion of shares it would have absorbed.

Robertson Stephens Inc. is lead-managing the listing with co-
managers DG Bank AG and Swedish bank SEB.

Shares in LetsBuyIt fell to 2.50-3.50 euros on the gray market on
Wednesday from 4-5.50 euros on Tuesday, having traded between
5.50 and 6.00 euros for the past week.


LETSBUYIT.COM:  Struggling Retailer Banks on Float
------------------------------
REUTERS,  July 12,2000

LONDON, July 12 (Reuters) - Letsbuyit.com, the struggling London-
based online retailer, on Wednesday brushed aside concern that it
would never come to market after halving its IPO issue price
overnight and postponing a flotation by one week.

The loss-making company, which had already delayed a market debut
in May amid a global Internet stock sell-off, was adamant it
would push through a flotation on Germany's technology-heavy
Neuer Markt around next Wednesday.

"I am 110 percent sure the flotation is going ahead," Chief
Executive Martin Coles told Reuters in an interview.

The group's country manager for Germany, Rolf Hansen, added that
the lower price range, which has slashed the market value of
Letsbuyit.com to a maximum 356 million euros ($338 million) from
623 million, could have already secured a successful float.

"In the current price span, we would have been able to realise
the IPO (already)," Hansen said.

However, the pressure is on to get the offer on the road before a
cash crisis brings the group to its knees.

Letsbuyit has cash reserves of only 15 million euros. It spends
five million euros per month and still has few revenues.

"If we march on for another three months, the money will be gone.

We have a reach of between two and three months," Hansen said.

GERMAN REGULATORS HELP DELAY FLOAT

The group, which sells products from CD players to garden
furniture and runs Web operations in 14 countries, cut the issue
price range to three to four euros from an original six to seven
euros overnight.

Nevertheless, it was still hoping for a market debut on
Wednesday. But earlier, German bourse regulators dashed those
hopes, saying any changes to a float price required an extended
bookbuilding and quiet period for investors to study the IPO.

Bookbuilding will now continue until Friday -- and Letsbuyit
expects to float around next Wednesday.

The group reckons it can fund its operations from any issue until
the middle of 2001. It will then have to raise fresh funds,
either privately or on the bourse. Until then, the company has to
prove to investors it has a viable business plan.

Although Letsbuyit will remain heavily loss-making until 2003,
with aggregated operating losses of well over 200 million euros,
it expects revenues to climb strongly. Sales should rise to 734.4
million euro in 2003 from 48.8 million in 2000.

In the first quarter of this year it was still only turning in
revenues of 2.2 million.

By cutting the issue price from the original range, Letsbuyit
would raise between 53.4 million euros and 76.8 million euros --
only half of the proceeds it had expected.

Therefore, costs are under scrutiny.

"We are certainly going to look at our costs," Coles said, adding
that marketing expenditure was an obvious target.

Instead of buying expensive TV advertising, the Internet shop
would now focus on word-of-mouth Net marketing, Coles said.

Customers will be rewarded if they bring on new clients.

LATEST SHOCK FOR BELEAGUERED INTERNET MARKET

In the wake of the high profile collapse of European online
sports fashion shop boo.com -- the continent's first major
Internet casualty -- Letsbuyit.com's funding problems have sent a
fresh ripple of concern through the investor community.

"Investor confidence in Internet stocks is undermined," said
Matthew Norden, research director at Forrester in Amsterdam.

However, Norden sees a big difference between a Web-based
retailer such as boo.com and a company such as Letsbuyit, which
pools customers together to bargain for lower prices at the
manufacturers.

"This is not just a shop that goes online, but a company that
uses the network effect," he said. More users will make the site
ever more valuable because they can negotiate lower prices.

Other sector analysts warned however that Letsbuyit's business
model was easy to replicate, which would pressure profit margins.

"Competitors are already standing up," said Matthew Checkey at
Beeson Gregory.

More casualties are expected in highly competitive arenas such as
fast moving consumers goods, travel, CD's and books, said
Forrester's Norden. "Within three years, three out of four Web
companies will be gone", he said.


LETSBUYIT.COM: Retailer Halves Prices and Extends Order Period
------------------------------
BLOOMBERG, July 12, 2000

LetsBuyIt.com NV, an unprofitable Internet retailer, cut the
price range in its Neuer Markt initial share sale in half and
extended the order period in a bid to entice new investors before
it runs out of money.

LetsBuyIt lowered the price range to between 3 euros and 4 euros
from 6 euros to 7 euros, meaning it will raise a maximum of 71.2
million euros ($67.8 million). That's assuming the company can
sell 1.1 million shares more than it initially planned.

The company hopes to raise additional funds to make sure it can
continue to operate as losses mount. Last year, LetsBuyIt, which
employs 350 people, lost 24.4 million euros on sales of 2.2
million. It aims to post its first operating profit in 2003.

``They need money and that's not a good basis,'' said Lars
Ewaldsen, who manages IQInternet, a German fund that invests in
Internet companies. ``At the moment, this is not a good sector.''

Lowering the price doesn't change the product, he added.

LetsBuyIt had 38.1 million euros in cash left at the end of 1999,
according to a May report by analysts at sale manager Robertson
Stephens. They estimated the company will spend almost 10 million
euros each month this year, and would be ``cash consumptive''
until 2002. The company raised 49 million euros in its third
round of financing in January.

German broker Schnigge AG has suspended when-issued trading of
the stock, and is considering whether to continue in the face of
the uncertainty surrounding the offering, a spokesman said.

Offer Period

The stock traded as low as 4 euros in when-issued trading
yesterday before the company and Robertson Stephens decided to
cut the price and extend the offer period. Investors now have
until July 14 to subscribe. The shares were due to start trading
today on the Neuer Markt.

LetsBuyIt also said it will sell as many as 19.2 million shares,
including a 2.5 million share over-allotment option, and will try
to sell 1.1 million shares of that ``greenshoe'' immediately. The
sale is new and is necessary to comply with Deutsche Boerse AG
rules governing the shares that have to be freely traded in
issues worth less than 100 million euros.

``The decision to extend the subscription period is the result of
continued market volatility for technology stocks,'' the company
said late Tuesday. LetsBuyIt.com and Robertson Stephens ``remain
confident'' about the offering, they added.

Other companies that were forced to extend their order-taking
periods or cut the price have had little success.

Bottom of Range

Wapme Systems AG, an Internet software maker that sold shares at
20 euros this month, fell as low as 12.5 euros when it started
trading last week. The company first lowered the price range and
then had to price the stock at the bottom of the range.

Yes Television Plc, a U.K. company, cut its price range twice as
it tried to sell shares in May, only to scrap the initial public
offering altogether in the end.

LetsBuyIt, founded in January 1999 and based in Amsterdam,
abandoned its first attempt at selling shares in May, citing
market declines. It had originally hoped to make as much as $150
million, co-founder John Palmer said last year. It would be the
49th company based outside Germany to list on the Neuer Markt.

Apart from Robertson Stephens, DG Bank AG and VEM Virtuelles
Emissionshaus AG are managing the sale. Sal Oppenheim Jr. & Cie
dropped out of the group of advisers last week, according to
Managing Director Wolfgang Jensen. He wouldn't comment on the
reason for the withdrawal.


LETSBUYIT.COM:  CEO Blames IPO Delay on Market Rules
------------------------------
EUROPEAN INVESTOR, July 12, 2000

BRUSSELS -- The CEO of Internet retailer Letsbuyit.com (LBC.FNM)
has defended his company's market credibility and blamed the
third delay of its Neuer Markt IPO (initial public offering) on
strict exchange rules.

Martin Coles told Europeaninvestor.com that it was not his
decision to have the listing put back from Wednesday to Friday
(July 14) and claimed the firm was partly a victim of the
aftermath of previous doomed Internet IPOs. It was originally
preparing to list on June 7, but unfavorable market conditions
prevented that and they haven't improved much since.

As a result, the Stockholm-based firm was due to start trading
Wednesday, but it has instead extended the subscription period by
another two days after the stock fell as low as 4.00 euros on the
gray market.

It is now revising the price range to between 3.00 and 4.00 euros
per share, although it hoped to sell them at 6.00 to 7.00 euros
apiece. It is now likely to raise just half to two-thirds of the
originally anticipated 134.4 million euros.

Coles defended the company's market prospects, stressing; "First
of all, this is not a postponement. If the process allowed us to
change the price per share and still let us start trading today,
then we would loved to have done that. Unfortunately, market
guidelines have not allowed us to do that and we now have to wait
until Friday, but it is certainly not a postponement on our part.

"But the issue of share price is less important than getting us
into the public domain, so we can focus on driving the company
forward."

The firm operates Web sites in 13 countries, through which
customers can co-buy. This means that the more members agreeing
to buy a particular branded product on the site, the cheaper the
item becomes.

Some market watchers question whether the company can make
significant enough profits from that concept.

"Investors like the idea," said Coles. "We're obviously
frustrated about the current market climate, but last year there
were several companies with sketchy plans and ideas. Some have
since disappeared or lost a lot of money. We're having to live
with the legacy of some of these earlier Internet issues.

"We will probably raise around two-thirds of the original amount
we wanted, but, in a year's time, we can come back to the market
and have the benefit of a year's worth of results behind us,
while demonstrating what this company can do. We might then be
selling at 20.00 euros per share."

While this latest delay is a severe setback to the company's
plans to raise cash for further funding, some market watchers
believe it should be delayed even further.

Markus Alefelder, a trader with Deutsche Bank in Frankfurt, said
Letsbuyit.com was the victim of the current market climate,
adverse press and its own idea.

"This is a very bad story," said Alefelder. "The company now has
such bad standing in the market.

"The current market climate for tech stocks means this is very
bad timing for an IPO. The negative press for the company and
this sector will also be difficult to recover from, and I also
wonder how much of a profit they will make by selling products
cheaply."


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

90 DEGREES:  Receivership Proceedings
------------------------------
Company Name: 90 Degrees Ltd
Company No: 2868196
Com. Business: Wholesale of Clothing
Trade clasif.: 5142
Appointed on: 19/06/00
Appointed by: Barclays Bank PLC
Type: Administrative
Receivers: Maurice Moses
IPno: 5542, Shay Bannnon 8777
Firm Name: Levy Gee
Address: 66 Wigmore Street
City Postcode: London W1A 3RT


AN 2000:  Receivership Proceedings
------------------------------
Company Name: A N 2000 Ltd
Company No: 2300000
Appointed on: 21/06/00
Appointed by: Yorkshire Bank Plc
Type: Administrative
Receivers: Derek L Woolley
IPno: 6047, Brian S Creber 1062
Firm Name: Poppleton & Appleby A
ddress: 93 Queen Street
City Postcode: Sheffield S1 1WF


ALBERMARLE PATERNOSTER:  Receivership Proceedings
------------------------------
Company Name: Albermarle Paternoster Ltd
Company No: 3898269
Trading Name: Albermarle Communications Ltd
Trade clasif.: 38
Appointed on: 15/06/00
Appointed by: T G A Chapmans Ltd
Type: Administrative
Receivers: Andrew Fender
IPno: 6898,
Firm Name: Sanderlings
Address: Sanderling House Springbrook Lane
City Postcode: Solihull B94 5SG


BRITISH LAND:  Bondholders Fear Investment Deterioration
------------------------------
FINANCIAL TIMES, July 12, 2000

Last May, British Land launched the largest European property
securitisation to date, issuing a bond backed by rental income
from the Broadgate complex in the City of London.

Since then, the company's senior unsecured bondholders have seen
their investment deteriorate to junk-bond status.

Now investors in Capital Shopping Centres, whose assets include
the Lakeside complex in Essex, fear that their bonds could face
the same fate if British Land succeeds in a bid to buy CSC's
majority shareholder, Liberty International.

Concerns like these are making investors look more critically at
the level of protection provided by bond covenants. More buyers
want assurance, for example, the borrower will adhere to gearing
limits or that the bonds will be bought back after a takeover.

Some bonds have no covenant, and many that do provide little
protection. The Broadgate deal complied with the asset coverage
ratios laid out in British Land's covenant, but holders of the
company's senior unsecured debt found that other investors now
had a prior claim to what they considered the company's most
valuable asset.

"The deal dragged the property sector down as investors worried
that other companies might set out to do this as well. And their
bonds were less compelling because few of them offered much
covenant protection," said Karl Bergqwist, head of fixed income
credit research at HSBC.

British Land's unsecured debt presently yields almost 400 basis
points more than gilts. In other words, although the company has
a BBB+ credit rating, the market is treating its bonds as low
double B debt.

CSC's covenants are less rigorous than British Land's. Negative
pledges for the 2009 and 2013 bonds restrict the company's non-
sterling borrowings. The wording does not preclude
securitisation.

"I'm nervous about my CSC holdings," said Gareth Quantrill, an
investment manager at Morley Fund Management. "CSC has relatively
low gearing for a property company. We and several other
investors bought in to the story that this was how the balance
sheet was going to be managed."

Analysts predict that if British Land plans to raise ?2.5bn
($3.78bn, E3.98bn) in debt to buy Liberty International, the
group will be forced either to dispose of assets or to securitise
them. CSC's shopping centres would be a prime target.

This has taken its toll on bond prices. Since June, when British
Land said it had agreed to acquire a 29.9 per cent stake in
Liberty, the yield spread on CSC's 2013 bonds has widened by
around 50 basis points. Investment banks involved in private
placements say they are adopting a tougher stance on covenants.

Private investors have less say over covenant packages, but
yields in the new issues market suggest they are being more
aggressive about pricing when they think covenants offer
insufficient protection. Rather than face the financing
restrictions implicit in rigorous covenants, companies are
structuring coupon rates to offer some compensation for possible
event risk.

TI Group, the British engineering company which issued both euro
and sterling denominated bonds this month, included covenants in
both issues. This contrasts with earlier issues. Stagecoach's
sterling bond became the best performer of the year when the
transport company sold its Porterbrook train leasing operation
and investors were bought out at a premium in terms of the
covenant. The euro issue, which was not covered by a covenant,
has been one of the year's worst failures.

"I cannot imagine anyone doing an uncovenanted unsecured deal in
the sterling market any more - even once market conditions have
calmed down," said a London analyst.

Investors in continental Europe have been less concerned about
covenant protection. But Gary Jenkins, head of European credit
research at Barclays Capital, believes that all bond investors
are becoming more demanding.

"All roads have led to bad news for bondholders this year, and
investors have had their fingers burned. Any long-dated deal that
comes to the market today is going to look very different to what
it would have this time last year," he said.

"The fact that Deutsche Telekom's bond issue has had to be priced
wider than comparable debt, and the level of downside protection
given to investors, gives a good indication of the type of market
we're in. It also shows that investors are driving this market.
They're demanding the two P's: price and protection."


BRUCE CLARK:  Receivership Proceedings
------------------------------
Company Name: Bruce Clark Scotland Ltd
Company No: SC
Appointed on: 20/06/00
Type: Administrative
Receivers: Blair C Nimmo
IPno: 8208,
Firm Name: KPMG
Address: Saltire Court 20 Castle Terrace
City Postcode: Edinburgh EH1 2EG


CHALECREST LTD:  Receivership Proceedings
------------------------------
Company Name: Chalecrest Ltd
Company No: 3228668
Com. Business: Property Management
Trade clasif.: Appointed on: 14/06/00
Appointed by: Dunbar Bank Plc
Type: Administrative
Receivers: Michael C Sanders
IPno: 8698, Shirley A Jackson 5383
Firm Name: BN Jackson Norton
Address: 1 & 2 Raymond Buildings Grays Inn
City Postcode: London WC1R 5BZ


DIFSL RE-ORGANISATION:  Receivership Proceedings
------------------------------
Company Name: DIFSL Re-organisation Ltd
Company No: SC
Appointed on: 15/06/00
Appointed by:
Type: Administrative
Receivers: F J Gray
IPno: 8905,
Firm Name: Kroll Buchler Phillips
Address: 144 West Regent Street
City Postcode: Glasgow G2 2RQ


DATA ARCHIVING:  Receivership Proceedings
------------------------------
Company Name: Data Archiving Co Ltd - The
Company No: 3571616
Com. Business: Electronic Data Archiving
Trade clasif.: 36
Appointed on: 15/06/00
Appointed by: Lefa Enterprises Ltd
Type: Administrative
Receivers: Simon G Paterson
IPno: 6856, Allan J Clark 6759
Firm Name: Moore Stephens Booth White
Address: Victory House Admiralty Place
City Postcode: Chatham ME4 4QU


FATTY ARBUCKLES:  Diner Group to Shut Down Losing Restaurants
------------------------------
ANANOVA, July 12, 2000

Fatty Arbuckles, the American diner restaurant group, is cutting
200 jobs and closing 12 of its restaurants across the UK after
incurring heavy losses.

The chain, which has more than 50 sites across the UK and employs
a total of 500 staff, has appointed accountants Ernst & Young as
administrative receivers.

Alan Bloom of Ernst & Young, said: "A majority of the sites have
been heavily loss-making for some time and will be closed
immediately and as a consequence redundancies will follow, but as
far as the rest of the business is concerned, it will continue to
trade as normal as a going concern."

Mr Bloom added that the company was in talks with a funded
management buy-out team and hoped for "significant progress"
towards a sale of the rest of the business during the coming
weeks.

Half of the Fatty Arbuckles restaurants are owned by the company
and the remainder are operated under franchise.


LIFESTYLE CONTRACT:  Receivership Proceedings
------------------------------
Company Name: Lifestyle Contract Furnishings Ltd
Company No: 2813294
Com. Business: Refurbishers
Trade clasif.: 25
Appointed on: 20/06/00
Appointed by: The Lifestyle Group Ltd
Type: Administrative
Receivers: Robert Cooksey
IPno: 9040, Jonathan Lord 9041
Firm Name: Casson Beckman & Partners
Address: Bow Chambers 8 Tib Lane
City Postcode: Manchester M2 4JB


MAREHART LTD:  Receivership Proceedings
------------------------------
Company Name: Marehart Ltd
Company No: 3790254
Appointed on: 16/06/00
Appointed by: Yorkshire Bank Plc
Type: Administrative
Receivers: Alec D Pillmoor
IPno: 7243, Stuart G Falconer 5911
Firm Name: HLB Kidsons
Address: Wilberforce Court Alfred Gelder Street
City Postcode: Hull HU1 1YH


SES GROUP:  Receivership Proceedings
------------------------------
Company Name: S E S Group Ltd
Company No: 2776975
Com. Business: Servicing Vending Machines
Trading Name: Strategic Services
Trade clasif.: 46
Appointed on: 16/06/00
Appointed by: HSBC Bank Plc
Type: Administrative
Receivers: Steven J Bilot
IPno: 8358, Christopher Laughton 6531
Firm Name: Levy Gee
Address: Wettern House 56 Dingwall Road
City Postcode: Croydon CR0 0XH


SKILLBEECH LTD:  Receivership Proceedings
------------------------------
Company Name: Skillbeech Ltd
Company No: 1156449
Com. Business: Transport/Forwarding Agents
Trade clasif.: 28
Appointed on: 14/06/00
Appointed by: GMAC Commerical Credit
Type: Administrative
Receivers: P S Dunn
IPno: 2368, S R Thomas 1289
Firm Name: Horwath Clark Whitehill
Address: Sherlock House 7 Kenrick Place
City Postcode: London W1H 3FF


SOMERFIELD PLC:  Low Sales at Kwik Halves Profit
------------------------------
BLOOMBERG, July 12, 2000

Somerfield Plc, Europe's worst-performing food stock, said full-
year profit more than halved after sales plunged at its Kwik Save
stores.

Profit from operations for the 53 weeks ended April 29 fell below
analysts' expectations to 66.3 million pounds ($100.5 million) or
15.9 pence a share, from 158.5 million, or 31.8p, a year earlier.

Somerfield warned profit will fall further in the first half of
the current year. The shares fell 4.3 percent.

The retailer is revamping the Kwik Save chain it bought two years
ago after failing to find a buyer for the stores, which proved
unsuitable for conversion to the Somerfield brand. Other food
retailers such as Wal-Mart Stores Inc.'s Asda have lured
customers by offering lower prices.

``There is a mountain to climb just to stabilize the group, let
alone start to grow it,'' said Rowan Morgan, an analyst at
Teather & Greenwood Ltd. who recommends selling the stock.

Shares in Somerfield fell 2.5 pence to 57.5p. The retailer has
lost four-fifths of its value since buying Kwik Save in February
1998.

Sales at Kwik Save stores open longer than a year tumbled 15
percent while sales at Somerfield outlets slipped 1.8 percent.

Worsening Picture

In the first nine weeks of the current year same-store sales at
Somerfield stores worsened, falling 7.1 percent compared with a
drop of 5.1 percent in the fourth quarter of last year. Same-
store sales at Kwik Save fell 15 percent compared with a decline
of 16 percent in the fourth quarter.

Pretax profit before one-time items fell 68 percent to 70.7
million pounds. Analysts polled by IBES International had been
expecting a pretax profit of about 80 million pounds.

``We are now concentrating on our basic retailing activities,''
Executive Chairman John von Spreckelsen told journalists. ``The
group's financial performance will worsen in the first half of
the current year before the benefits of our actions translate
into improved results.''

Last month the struggling supermarket group ended its home
shopping business in an attempt to stem losses. The move,
reversing the strategy of ousted Chief Executive David Simons,
reflects the high costs of developing food shopping services
through the Internet and interactive television, analysts said.

Not Engaged

Somerfield admitted last month it had considered takeover
interest from unnamed venture capital groups. It decided ``not to
engage in any further discussions.''

The company said in March it was in talks with a number of
parties interested in buying the business. At the time it emerged
that Simons had fallen out with the board over his desire to take
the group private with the backing of venture capital firms,
analysts said.

Simons was ousted, and von Sprekelsen brought in as executive
chairman from rival food retailer Budgens Plc.

Somerfield said it won't pay a final dividend.


SOMERFIELD PLC:  More Losses Predicted
------------------------------
THE INDEPENDENT, July 13, 2000

Somerfield, the struggling supermarket group, cut its final
dividend yesterday as it announced a slide into loss and warned
that its financial performance would get worse before it gets
better.

Reporting losses of ?14.5m for the year to April, compared to
profits of ?208.5m in the previous year, Somerfield admitted
strategic mistakes and said it was time to get "back to basics".

John von Spreckelsen, who joined as executive chairman from
Budgens in May following the dismissal of David Simons, said he
supported Somerfield's decision to merge with Kwik Save two years
ago. The mistake, he said, was the attempt to re-brand all the
Kwik Save stores under the Somerfield banner. "That was the most
important decision." he said.

Somerfield had suffered from "internal issues" such as lack of
clarity of the future direction of the business, confused
marketing and problems in the supply chain, said Mr von
Spreckelsen. The operational difficulties led to a collapse in
sales by 14.7 per cent at Kwik Save on an underlying basis last
year. Sales at Somerfield fell by 1.8 per cent on the same basis.

Trading has deteriorated since the end of April with like-for-
like sales down 7 per cent at the key Somerfield format, with
Kwik Save sales down by a marginally improved 14.2 per cent. "The
company brought most of its problems on itself," added Mr von
Spreckelsen.

He pointed to Somerfield's low gearing and a recently agreed
banking facility of ?270m as grounds for confidence. But he said:
"It is too early to suggest the group has turned the corner."

Though the shares fell 2.5p to 57.5p analysts agreed Somerfield
may be past the worse. "It feels like it's got to the stage when
you can't kick it any more," said Jonathan Pritchard, food retail
analyst.

Philip Dorgan at West LBPanmure, said: "It is dangerous to
underestimate John von Spreckelsen. But he is trading with assets
that nobody else wants and he has some of the weakest brands."

The comments came as Somerfield announced a slump in full year
profits from ?218m to ?71m before exceptional items.

But exceptional changes of ?85m pushed the group into at ?14.5m
pre-tax loss. Somerfield raised ?107m in book profit from the
sale of 46 stores in the year, with a further ?40m to come.

This was overshadowed by charges of ?180m to cover re-structuring
costs, and the recently announced closure of Somerfield's 24-7
internet home shopping service which cost ?16m. The final
dividend was scrapped, leaving only the interim pay-out of 1.5p
per share compared with a total dividend of 13.2p the previous
year. Mr von Spreckelsen said sales declines at the Somerfield
and Kwik Save chain had slowed.

Somerfield has been struggling for more than a year since the
merger with Kwik Save started to unravel. The shares peaked at
481p two years ago when the City began to warm to the cost
savings of the Kwik Save merger.

But increased competition, fuelled by Wal-Mart's takeover of Asda
led to all the savings being passed on in the form of lower
prices.

Somerfield was the subject of bid speculation a few months ago as
US venture capital finds circled the group. But the company
called off all takeover talks in April after no attractive offers
materialised.


SOUTHERN DISTRIBUTION:  Receivership Proceedings
------------------------------
Company Name: Southern Distribution Services Ltd
Previous Name: Payload Ltd
Company No: 3914930
Com. Business: Road Transport
Trade clasif.: 28
Appointed on: 14/06/00
Appointed by: Singer & Friedlander
Type: Administrative
Receivers: S D Swaden
IPno: 2719, J J Schapira 5784
Firm Name: Fisher Curtis
Address: 1 Great Cumberland Place
City Postcode: London W1H 8LE


WYNDHAM ENGINEERING:  Receivership Proceedings
------------------------------
Company Name: Wyndham Engineering (Site Div) Ltd
Company No: 3788536
Com. Business: Manufacture Metal Structure/Parts
Trade clasif.: 07
Appointed on: 19/06/00
Appointed by: Barclays Bank Plc
Type: Administrative
Receivers: Derek A Howell
IPno: 6604, Robert W Birchall 6623
Firm Name: PricewaterhouseCoopers
Address: One Kingsway
City Postcode: Cardiff CF10 3PW


WYNDHAM ENGINEERING:  Receivership Proceedings
------------------------------
Company Name: Wyndham Engineering Ltd
Company No: 1796232
Com. Business: Engineering
Trade clasif.: 07
Appointed on: 19/06/00
Appointed by: Barclays Bank Plc
Type: Administrative
Receivers: Derek A Howell
IPno: 6604, Robert W Birchall 6623
Firm Name: PricewaterhouseCoopers
Address: One Kingsway
City Postcode: Cardiff CF10 3PW



S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter -- Europe is a daily newsletter co-
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USA, and Beard Group, Inc., Washington, DC USA.  Lexy Mueller and
Joan Florido, Editors.

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

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