/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010228.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 Wednesday, February 28, 2001, Vol. 2, No. 41 Headlines B E L G I U M SABENA SA: EU Probes Sabena Bailout SABENA SA: SAirGroup Doubts Future Involvement with Sabena B U L G A R I A BALKAN AIRLINES: Zeevi Sells Balkan Air Assets C Z E C H R E P U B L I C KONSOLIDACNI BANKA: State Bank Posts 12.7 Billion Crown Loss TRIVAL: Sells Slevarna CB in Auction G E R M A N Y DEUTSCHE TELEKOM: Investors Pressure Chief Sommer to Quit DEUTSCHE TELEKOM: Sommer Will Not Step Down EM.TV: Executives Question Kirch Funding for Formula One N E T H E R L A N D S BAAN COMPANY: Konecranes Takes Baan to Court INTERXION: Sees Breakeven in First Quarter of 2002 LETSBUYIT.COM: Reopens Business in Four Countries P O L A N D BANK PRZEMYSLOWO: To Cut 20 Percent of Workers DAEWOO-FSO: Car Plant Cuts 1,300 Jobs U N I T E D K I N G D O M ALLDAYS PLC: Chief Clapham Leaves Convenience Store Group ALLDAYS PLC: Shares Fall as Talks End EQUITABLE LIFE: Insurer may Face Legal Action EQUITABLE LIFE: Treves Readies for Equitable's Reform EUROTELECOM COMMUNICATIONS: Appoints EuroTelecom Administrator J2C PLC: Directors Leave E-commerce Company L & J: Liquidation Proceedings PAPERAMBER LTD: Liquidation Proceedings READING INDUSTRIAL: Paul Smith Saves Packing Company TRAINLOAD (UK): Liquidation Proceedings ============= B E L G I U M ============= SABENA SA: EU Probes Sabena Bailout ------------------------------------ The European Commission has launched an inquiry into whether a rescue plan that includes a cash injection of 250 million euros ($229.5 million) by the Belgian government and Swissair parent SairGroup to save Sabena violates European Union rules, The Wall Street Journal reported on Monday. The investment by Sabena's co-owners is part of a 750-million- euro restructuring plan that includes job cuts and internal reorganization. The EU asked the Belgian government for information on the move last Friday, when Sabena's shareholders approved the restructuring plan. If EU's executive panel finds that the injection violates EU competition rules on state aid, it would cast doubt on the future of the ailing airline. "As long as a private shareholder is prepared to put money into a company, if the government as a shareholder does the same, and to a lesser extent than the other, that would be an indication that it's not state aid," said Michael Tscherney, EU spokesman for Competition Commissioner Mario Monti. SABENA SA: SAirGroup Doubts Future Involvement with Sabena ----------------------------------------------------------- Chairman Eric Honegger of SAirGroup has told staff in a letter that the company's long-term future interest in Sabena is uncertain, M2 Communications said in its Monday edition. Honegger has contacted the Belgian government to discuss the future of the Swissair/Sabena partnership while the company was contributing a EUR150 million cash injection for Sabena. A withdrawal from commitments to Sabena in the mid-term is a possible solution. It was also indicated that the government intends to hold SAirGroup to an agreement under which the company will raise its stake in Sabena from 49.5 percent to 85 percent. =============== B U L G A R I A =============== BALKAN AIRLINES: Zeevi Sells Balkan Air Assets ----------------------------------------------- On February 12 Israel's Zeevi Holding sold major assets of Balkan Airlines including the administrative building at the airport, the airport land owned by Balkan and Hotel Pliska to ZBI EAD, according to Reuters in its February 24 report, citing Balkan's receiver Vladimir Petkov. ZBI EAD is represented on Balkan's board of directors. Ten days later, these same assets were sold to an offshore firm registered in the British Virgin Isles Universal Aviation Services Ltd, Petkov added. Zeevi, which bought 75 percent of the airline in 1999 for $150,000, grounded all Balkan flights on February 15, saying it was experiencing financial difficulties. The Sofia City court installed two receivers at the airline last week and froze its assets after local insurer Bulstrad filed a claim seeking Balkan's insolvency over dues of $11 million accumulated since 1993. The court is due to rule on March 6. =========================== C Z E C H R E P U B L I C ============================ KONSOLIDACNI BANKA: State Bank Posts 12.7 Billion Crown Loss ------------------------------------------------------------- Czech state restructuring bank Konsolidacni Banka s.p.u. said on Friday it had a 12.7 billion crown loss last year compared to 36.1 billion in 1999, according to Reuters on Monday. The 2000 result excludes losses at several other vehicles owned by Konsolidacni. The bank, which was set up to buy non-performing credits from commercial banks, swaps some of the receivables for equity in troubled companies under government programs tied to post- Communist company restructuring and privatization. Konsolidacni Banka expects to lose up to 60 billion crowns this year, mainly due to as much as 50 billion in losses from the failure of IPB last year. TRIVAL: Sells Slevarna CB in Auction ------------------------------------- CKD Kutna Hora will take part in a May auction called by Trivl's creditor committee in its third attempt to sell the Slevarna Ceske Budejovice foundry at a starting price of Kc50 million, according to CTK in its February 23 edition, citing CKD Kutna Hora CEO Pavel Krenk. CKD, which has been leasing the production part of the foundry for two years, paid Kc45 million for the lease. The company has taken part in a repeated public tender after no one showed interest in the foundry in the first round. However, creditors did not accept its Kc27 million bid. Slevarna Ceske Budejovice was the largest producer of steel castings in the then-Czechoslovakia in the 1970s. Trival bought it in late 1996 from the National Property Fund for less than Kc200 million. ============= G E R M A N Y ============= DEUTSCHE TELEKOM: Investors Pressure Chief Sommer to Quit ---------------------------------------------------------- Deutsche Telekom AG Chief Executive Ron Sommer is under pressure to quit following a collapse in the group's share price and his failure to deliver on key promises, according to Reuters on Sunday. With the status of Telekom's shares, which have fallen 75 percent since early last March, investors say his position is in jeopardy and that a new CEO could bring a change in fortunes at the embattled group. Sommer, however, said that he had the support of the group's management board, supervisory board, staff and politicians. He even wrote a letter to staff insisting that he would stay. Most analysts believe the VoiceStream takeover, valued at $26.5 billion, will go ahead but they question whether the German group has necessary resources to manage the U.S. cellphone operator. DEUTSCHE TELEKOM: Sommer Will Not Step Down -------------------------------------------- Deutsche Telekom AG chairman Ron Sommer reiterated that he would not step down, following the Welt am Sonntag report that the company has already made a list of potential successors for Sommer, according to AFX News UK yesterday. Sommer said that the 75 percent fall in Deutsche Telekom's share price since early last March would quickly recover with correct strategies. EM.TV: Executives Question Kirch Funding for Formula One --------------------------------------------------------- Some EM.TV & Merchandising executives have questioned KirchHolding GmbH's $1.5 billion financing to buy 75 percent of Formula One auto racing, the Wall Street Journal said on Monday, citing people familiar with the matter. Last week, Westdeutsche Landesbank Girozentrale, Credit Suisse First Boston Inc., Lehman Brothers Holdings Inc. and Deutsche Bank AG refused to finance the transaction. Also last week, Kirch agreed to buy half of EM.TV's 50 percent stake in SLEC, the family trust of Formula One's billionaire Bernie Ecclestone, for $550 million. It has also raised money to allow EM.TV to exercise an option to buy a further 25 percent stake in SLEC for $987 million. ===================== N E T H E R L A N D S ===================== BAAN COMPANY: Konecranes Takes Baan to Court --------------------------------------------- Finnish crane maker KCI Konecranes has started arbitration proceedings against software group Baan Company N.V. to recover 15.2 million euros ($13.82 million) in receivables. In a Monday Reuters report Konecranes said that the dispute was instigated by severe problems and uncertainties in the software Baan delivered last year in a project that was discontinued in April. Konecranes had booked in its 2000 balance sheet receivables of 15.2 million euros related to license, development and implementation fees and costs paid to vendors. INTERXION: Sees Breakeven in First Quarter of 2002 --------------------------------------------------- Loss-making Internet infrastructure provider Interxion, which operates across Europe's 13 Internet Exchange Centres, expects to break even by the first quarter of 2002, according to Reuters reported on Monday. Interxion founder and Chief Executive Bart van den Dries forecast 2001 sales to grow from 14.5 million euros ($13.18 million) at the end of 2000 and would lead to an EBITDA (earnings before interest tax, depreciation and amortization) breakeven. The chief said that as companies' need for data transmission expands, increasing demand for Web-hosting and related services would boost sales. He declined to specify LBITDA (losses before interest, tax, depreciation and amortization). Van den Dries added that Interxion would announce more link-ups with European media facility companies this year, particularly in countries where there is a strong concentration of media. He declined to say where. LETSBUYIT.COM: Reopens Business in Four Countries -------------------------------------------------- Retail Website Letsbuyit.com N.V. said on Monday it had reopened its businesses in Germany, Britain, France and Sweden, according to Reuters' February 26 report. This follows a 4 million euros last-minute rescue package funded by German investor Kim Schmitz, just when Letsbuyit.com was contesting bankruptcy in an Amsterdam court. Anonymous lenders also supplied 53 million euros. The rejuvenated Web site operator, which has cut staff to around 150 from almost 400 as a restructuring measure, will be branching out into areas such as business-to-business sales, straight catalogue sales, reverse auctions and outlet sales. =========== P O L A N D =========== BANK PRZEMYSLOWO: To Cut 20 Percent of Workers ----------------------------------------------- Bank Przemyslowo Handlowy, controlled by HypoVereinsbank of Germany, said that 20 percent of its 6,500 workers would be terminated as a result of its restructuring plans, according to Warsaw Business Journal on Monday. DAEWOO-FSO: Car Plant Cuts 1,300 Jobs -------------------------------------- Poland's second largest passenger car maker, Daewoo-FSO, on Friday laid off 1,300 workers, according to Reuters in its February 24 report. Daewoo has laid off more than half of its 8,700 workers since the start of 2000 and has frequently shut down operations at its plants to reduce unsold stock. The Polish government wants to persuade Daewoo creditors to either sell the Warsaw factory to fellow Korean car firm Hyundai or allow the Korean government to take it over and restructure it. =========================== U N I T E D K I N G D O M =========================== ALLDAYS PLC: Chief Clapham Leaves Convenience Store Group ---------------------------------------------------------- An Alldays spokesman says Alldays managing director David Clapham has left the group by mutual agreement after only a year, following some differences over strategic direction, according to Electronic Telegraph on Tuesday. The spokesman further denied the chief was ousted. Clapham, who introduced several price promotions in Alldays that backfired, was unavailable for comment. On Monday the group posted a full-year pre-tax loss of 64 million pounds after a 49.3 million exceptional charge. ALLDAYS PLC: Shares Fall as Talks End -------------------------------------- Shares of Alldays Plc fell 1.25 to 14.5p on Monday as the debt- laden convenience stores group said it had terminated talks with potential acquirers, according to The Times yesterday. Its pre-tax losses rose from 5.9 million pounds to 14.7 million pounds for the year to October 29. The group also posted a full- year pre-tax loss of 64 million pounds after a 49.3 million exceptional charge. The previous year's losses were 90.7 million. At the end of 1999, Alldays' current liabilities were 158.49 million pounds while total current assets were 85.14 million pounds. EQUITABLE LIFE: Insurer may Face Legal Action ---------------------------------------------- Troubled mutual insurer Equitable Life may face legal action from the Office of Fair Trading over a 10 percent exit penalty placed on policyholders wishing to move funds, the Financial Times reported on Tuesday. The mutual doubled the penalty in December after closing its doors to new business in order to prevent a hemorrhage of Equitable's policyholders. Equitable has until Thursday to announce its plans to remedy the cause of complaints. Otherwise, OFT will seek legal advice with a view to taking legal action. Most of Equitable's 2,000 employees are set to transfer to mortgage bank Halifax, which earlier this month agreed to pay 500 million pounds for the mutual's operating assets. EQUITABLE LIFE: To Stop Paying Guaranteed Bonuses -------------------------------------------------- Equitable Life will stop paying all 450,000 with-profits policyholders guaranteed bonuses based on the performance of their investments last year until it reaches a stronger financial position, according to The Times yesterday. The move ensures that policyholders back a deal to cap its 1.5 billion-pound liabilities to holders of guaranteed annuity policies. Last year, Equitable was forced to put itself up for sale after the High Court ruled that about 90,000 Equitable policyholders have a right to a guaranteed rate of return on their retirement annuity plans. The decision left the company with a 1.5 billion- pound liability, which it could not afford to honor. EQUITABLE LIFE: Treves Readies for Equitable's Reform ------------------------------------------------------ Vanni Treves will arrive on Thursday for his first day as chairman of Equitable Life and embark on a root and branch shake- up of the organization and its top executives, according to Guardian Unlimited on Monday. Treves, who is forgoing the 300,000 pounds a year salary, will try to unite Equitable's warring policyholders behind a yet-to-be formulated compromise deal that will allow the insurer to end its troubled past. The new chairman also revealed that he is reviewing the position of every member of his staff, including chief executive Chris Headdon. EUROTELECOM COMMUNICATIONS: Appoints EuroTelecom Administrator --------------------------------------------------------------- EuroTelecom Communications Inc. announced that an Administrator has been appointed to administer the business and affairs of its principal operating subsidiary, EuroTelecom Corporation Limited, in a United Kingdom proceeding similar to a United States bankruptcy action, according to Business Wire on Monday. While the board previously reported that it had been in discussions to raise additional capital, these discussions have not resulted in any firm proposals. In a related action, trading in the company's shares of Class A Common Stock on the Alternative Investment Market of the London Stock Exchange has been suspended. J2C PLC: Directors Leave E-commerce Company -------------------------------------------- E-commerce exchange operator J2C Plc said operations director Graeme Lowdon and commercial director Ann Palmer have quit the board as of Thursday, following its February 1 announcement of seeking a buyer for the company, the Financial Times reported in its February 23 edition. Four other directors will receive no remuneration between March 1 and June 1. J2C also announced plans to restructure and dispose of two of its exchanges. According to Andy Kyte, vice president and research director for computing industry research firm Gartner, companies in J2C's line of business have fallen out of favor with venture capitalists and face some extremely tough competition. Formerly known as Just2clicks.com plc, J2C operates three vertical communities -- Pulp and Paper, Electric Power and Road Transport. L & J: Liquidation Proceedings ------------------------------- Company Name: L & J F Lakin Ltd Company No: 682596 Com. Business: Property Letting & Investment Appointed on: 02/02/01 Type: Members Appointed by: Members Liquidators: Michael Gerrard IPno: 7238 Firm Name: Grant Thornton Address: 43 Queen Square City Postcode: Bristol BS1 4QR PAPERAMBER LTD: Liquidation Proceedings ---------------------------------------- Company Name: Paperamber Ltd Company No: 3658839 Com. Business: Clothing Manufacturers Appointed on: 02/02/01 Type: Creditors Appointed by: Creditors and Members Liquidators: John M Munn IPno: 7859 Gavin G Bates 8983 Firm Name: F A Simms & Partners Address: Insol House 39 Station Road City Postcode: Lutterworth LE17 4AP READING INDUSTRIAL: Paul Smith Saves Packing Company ----------------------------------------------------- Packaging company Reading Industrial Therapy was headed for insolvency until director Paul Smith stepped in and negotiated a corporate voluntary arrangement (CVA) with creditors under which they agreed to be paid later, according to The Sunday Times' February 25 edition. "We sold every asset we could, including our factory, which we now lease back," Smith said. "The CVA gave us breathing space. Without it, we wouldn't be here." The changes in the insolvency act, which are set to take effect in April, give firms a legal entitlement to a moratorium of up to three months from creditors and petitions to prepare a recovery plan for the company. The new rules are also believed to make CVAs more attractive to owner-managers. TRAINLOAD (UK): Liquidation Proceedings ----------------------------------------- Company Name: Trainload (UK) Ltd Company No: 3581022 Com. Business: International Rail Load Specialists Appointed on: 02/02/01 Type: Creditors Appointed by: Creditors Liquidators: A D Pillmoor IPno: 7243 Firm Name: HLB Kidsons Address: Wilberforce Court Alfred Gelder Street City Postcode: Hull HU1 1YH 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 USA, and Beard Group, Inc., Washington, DC USA. Lexy Mueller, Salve M. Mordeno and Cristina Pernites, Editors. Copyright 2001. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is $575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *