/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010315.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, March 15, 2001, Vol. 2, No. 52 Headlines * B E L G I U M * SABENA SA: May End Joint Venture With Swissair * F R A N C E * TISSAFIL: Becomes Insolvent * G E R M A N Y * DAIMLERCHRYSLER AG: To Calm Angry Shareholders EM.TV: Considers Muppets Sale PHILIPP HOLZMANN: Completes Restructuring T-ONLINE INTERNATIONAL: Plans Job Cuts * I T A L Y * GRUPPO TIRRENA: Nears Completion of Liquidation * R U S S I A * NTV: Gazprom Suffers Another Delay to Control Russian TV Station * S L O V A K R E P U B L I C * IRB BANK: OTP Bank to Take Majority Stake in IRB * S P A I N * TERRA LYCOS: On Track for Break-Even Year * S W E D E N * ASSIDOMAN AB: Moody's Places Baa2/Prime-2 Ratings on Review LM ERICSSON: S&P Places Ericsson Rating on CreditWatch LM ERICSSON: Shares Dive to 20% * S W I T Z E R L A N D * SAIRGROUP: Chief Muehlemann Accepts Blame SAIRGROUP: Tries to Regroup Businesses * U N I T E D K I N G D O M * ALLDAYS PLC: Alldays Sinks With 198 Million-pound Debt BRITISH TELECOM: Under More Pressure on Debt Issue CARGO FORWARDING: DTI to Wind Up Cargo Forwarding PHARMAGENE PLC: 2000 Loss Widens to 6.5 Million Pounds SEMPLE COCHRANE: Completes Restructuring ============= B E L G I U M ============= SABENA SA: May End Joint Venture With Swissair ---------------------------------------------- Financially ailing Sabena SA acknowledged that it might soon end its joint venture with equally troubled Swissair, according to Dow Jones on Tuesday. Sabena chief executive Christoph Mueller has discussed with trade unions the possibility of a breakup with Swissair and the shedding of as many as 4,000 jobs. Stock in SAirGroup, Swissair's parent, plummeted this week after nine of its 10 directors said they will quit. Swissair's troubles stem in large part from unprofitable operations in part-owned smaller airlines such as Sabena. =========== F R A N C E =========== TISSAFIL: Becomes Insolvent --------------------------- Tissafil is on the verge of being declared insolvent after having faced difficulty for two years, the La Tribune & World Reporter in its March 12 edition said. Company chairman Philippe Joly will present a restructuring plan in the coming weeks. Tissafil's turnover fell from FFr61.2 million in 1999 to FFr49.7 million. Its losses increased by FFr1.86 million to FFr2.8 million for the same period. The French vegetable texturing specialist employs 90 people on three sites in La Grand Croix and Ardeche. ============= G E R M A N Y ============= DAIMLERCHRYSLER AG: To Calm Angry Shareholders ---------------------------------------------- DaimlerChrysler AG tried to soothe angry shareholders and avoid an embarrassing censure on Monday with a six-page letter that briefly summarized 26 complaints filed by individual shareholders, according to Dow Jones. Last week, the German shareholders said it would file a censure motion against its senior management at the April 11 shareholders' meeting in Berlin because of its poor performance-- the company's value has dropped by around EUR50 billion since 1998. Shareholders also say the executive board reacted too late in attempting to turn around losses at Chrysler and that the supervisory board neglected its duties in overseeing the troubled group. EM.TV: Considers Muppets Sale ----------------------------- EM.TV & Merchandising may sell Muppet Show creator, Jim Henson Company, as part of the film and TV rights company's restructuring program, BBC News in its Tuesday edition said. Commerzbank media analyst Sarah Schmitz expects possible bidders, Disney and Nickelodeon, to offer only between $200 to 250 million. EM.TV, which also has a stake in the Formula One TV-rights, ran into financial difficulties after a massive spending spree a year ago. In the end, German broadcaster Kirch Group bailed out EM.TV in exchange for a 25% stake in the company. PHILIPP HOLZMANN: Completes Restructuring ----------------------------------------- Construction company Philipp Holzmann AG has recovered from the brink of insolvency and has completed its restructuring, Suddeutsche Zeitung & World Reporter in its March 12 edition said. According to Chairman of the management board Konrad Hinrichs, the company was now in better shape than most of its similar- sized competitors. He believes Holzmann is now ripe for merger and co-operation with other companies. T-ONLINE INTERNATIONAL: Plans Job Cuts -------------------------------------- T-Online International, Europe's largest Internet service provider, hopes to slash 200 customer service workers to 1,750 by the end of the year and begin charging for calls to its customer support lines as it battles to profitability, according to the Financial Times on Monday. The job cuts and charges for calls to its support lines are Chief Executive Thomas Holtrop's steps to make significant gains in turning T-Online's red balance sheet black. ========= I T A L Y ========= GRUPPO TIRRENA: Nears Completion of Liquidation ----------------------------------------------- The liquidation of insurance group Gruppo Tirrena is almost complete after seven years of trying to complete the process, La Repubblica & World Reporter in its March 12 edition said. Gruppo Tirrena was made up of Tirrena Assicurazioni, which had losses of 1,686 billion lira and debts of 1,173 billion lira, Sida with debts reaching 484 billion lira, and Unione Euro Americana, whose debts amounted to 129 billion lira. The company, which has losses of more than 2,000 billion lira and thousands of creditors, have saved 5,000 jobs. =========== R U S S I A =========== NTV: Gazprom Suffers Another Delay to Control Russian TV Station ---------------------------------------------------------------- A Moscow arbitration court ruled on Sunday that independent television network NTV could keep the voting rights attached to the 19% stake it owns in the station, a ruling that prevents Gazprom from obtaining a majority holding, Interfax news agency reported. Gazprom's subsidiary Gazprom-Media already owns 46% of NTV's shares and has been trying for months to obtain the 19% the station owns. Last month, Gazprom also suffered a setback when the arbitration court decided to postpone a decision whether Gazprom or NTV's parent company Media-MOST will control this 19%. ============================= S L O V A K R E P U B L I C ============================= IRB BANK: OTP Bank to Take Majority Stake in IRB ------------------------------------------------ The Slovak Finance Ministry said on Tuesday that Hungarian OTP Bank was the only interested party for the Slovak government's 65.52% stake in the once troubled bank IRB, Reuters in its March 13 edition reported. According to the ministry, OTP Bank will begin the due diligence process in IRB in the second half of March, and this process should be finished at the latest by the end of next month. Meanwhile, IRB posted a pre-tax profit of 4.5 million Slovak crowns in the first nine months of last year following a 6.4 billion-crown state bailout of its bad debts. ========= S P A I N ========= TERRA LYCOS: On Track for Break-Even Year ----------------------------------------- Internet group Terra Lycos S.A. is on track to break even in terms of core earnings (or EBITDA) by the end of this year, Reuters reported on Monday. Terra Lycos announced a loss before interest, taxation, depreciation and amortisation (EBITDA) of about $330 million in 2000, resulting from the merger between Telefonica's Terra Networks and U.S. search engine Lycos Inc., in October. =========== S W E D E N =========== ASSIDOMAN AB: Moody's Places Baa2/Prime-2 Ratings on Review ----------------------------------------------------------- Moody's Investors Service has placed the Baa2 and Prime-2 ratings for debt issues by AssiDoman AB, Europe's largest timberland owner, on review for possible downgrade, following the company's announcement that it would sell its corrugated and containerboard assets for SEK 10.4 billion on a debt-free basis. The review was prompted by the uncertainty regarding AssiDoman's capital structure going forward, reduced cash flows with anticipations of weaker debt protection measures, higher dividend pay-outs and a more leveraged balance sheet. Moody's recognizes the less cyclical nature of the company's cash flows but expects AssiDoman to become more focused on shareholder value. The review will consider the negative implications of the reduction of the company's cash flows due to the sale of its corrugated and containerboard assets as well as the anticipated distribution of AssiDoman's shareholding in Billerud to its shareholders. The rating agency will also review the capitalization plans of AssiDoman going forward, the nature and stability of its cash flows and its dividend policy. LM ERICSSON: S&P Places Ericsson Rating on CreditWatch ------------------------------------------------------ Standard & Poor's on Tuesday placed its ratings on Ericsson (Telefonaktiebolaget L.M.), the largest manufacturer of equipment for mobile-phone networks and a significant producer of mobile handsets, on CreditWatch with negative implications. The CreditWatch placement is based on Standard & Poor's concern over the impact of forecast first-quarter 2001 pretax losses on cash flows and future debt protection measures. Ericsson has announced an estimated first quarter 2001 pretax loss in the range of 4 billion to billion Swedish krona ($0.4 billion to $0.5 billion), compared with previous guidance of break-even profitability for the quarter. In addition, group sales volumes have a flat forecast compared with previous estimates of 15% sales growth. Underlying the drop in forecast profit are continued losses within Ericsson's mobile handset business, combined with a slowdown in sales across most operations as Ericsson's customers postpone investment in the face of increasing economic uncertainty. Standard & Poor's will soon meet with Ericsson's senior management to gain a better appreciation of the operational and cash flow implications from the recent announcements. Standard & Poor's expects to resolve Ericsson's CreditWatch by the time Ericsson announces its first quarter results in April. Should a rating adjustment be required, Standard & Poor's considers it unlikely that Ericsson's long-term ratings would be reduced by more than one notch when the CreditWatch is resolved. LM ERICSSON: Shares Dive to 20% ------------------------------- Shares in Telefon AB LM Ericsson plunged more than 20% on Monday after the telecommunications giant said it expected a pretax loss of as much as 5 billion Swedish Kronas for the first quarter of 2001, according to Dow Jones on Tuesday. Ericsson shares were down 16.5 Swedish Kronas, or 20.2%, at 65 Swedish Kronas. The company traced the struggles to economic slowdowns in the U.S. and western Europe, as well as sagging demand for new mobile phones, which led network operators to postpone capital spending. It also said phone sales have suffered due to low demand for replacement phones, a reduction in operator subsidies in Europe, a buildup of unsold phones and continued price pressure. ===================== S W I T Z E R L A N D ===================== SAIRGROUP: Chief Muehlemann Accepts Blame ----------------------------------------- SAirGroup board member and Credit Suisse Group Chief Executive Lukas Muehlemann said he would accept part of the responsibility for the troubled airline, according to Dow Jones' March 13 report. By staying on the board until 2002, Muehlemann emphasized that he would make personal contribution to the future of SAirGroup. Muehlemann's term of office was to expire at this year's general meeting but he was not among the five board members who announced that they would step down this April. SAIRGROUP: Tries to Regroup Businesses -------------------------------------- SAirGroup now faces a fateful decision of whether to sell some of its healthy aviation-related businesses, which include hotels, duty-free sales and baggage handling, according to a report in the Wall Street Journal yesterday. This move followed the company's risky but losing strategy that has claimed a chief executive and nine of 10 board members, as well as mounting losses at its minority airline holdings. The proceeds would go toward losses at foundering airlines in France, Belgium and Germany that SAirGroup now says it wants to unload. SAirGroup managers are now revising their strategy and promised to present a new plan on April 2, along with the company's 2000 financial results. =========================== U N I T E D K I N G D O M =========================== ALLDAYS PLC: Alldays Sinks With 198 Million-pound Debt ------------------------------------------------------ Convenience store group Alldays Plc's 13.6 million-pound interest bill on its 198 million-pound debt massively outstripped its 1.1 million-pound operating profit for the last financial year to October, according to The Scotsman on Saturday. With this debt and no dividend being paid, the group still has failed to find a bidder since its announcement in November that it was effectively up for sale. The banks also said they want their money back. BRITISH TELECOM: Under More Pressure on Debt Issue -------------------------------------------------- Following pressure for a multi-billion pound rights issue to help British Telecom reduce its 30 billion-pound debt mountain, some institutional investors now want the removal of chairman Sir Iain Vallance, according to a report in the Scotsman on Tuesday. BT needs to reduce its debt from a likely peak of 30 billion pounds at the end of this month and by around 10 billion pounds before the year end to avoid credit rating agencies downgrading its bonds to below investment grade levels. Other options include selling some or all of BT Wireless and also other operations to its existing shareholders at a discount. CARGO FORWARDING: DTI to Wind Up Cargo Forwarding ------------------------------------------------- The Secretary of State for Trade and Industry presented a petition in the High Court on Friday to wind up Cargo Forwarding International plc in the public interest, following inquiries made by the Companies Investigation Branch of the DTI under the provisions of s447 of the Companies Act 1985. On the application of the Secretary of State the Court appointed the Official Receiver as the provisional liquidator of Cargo Forwarding International pending the hearing of the petition. The DTI identified that the directors have abandoned the company by resigning and that no replacements have been nominated, the company is unable to pay its creditors, and that the company has been shipping goods but failing to pay the freight charges. PHARMAGENE PLC: 2000 Loss Widens to 6.5 Million Pounds ------------------------------------------------------ Biotechnology company Pharmagene Plc, which reported a wider operating loss of 6.5 million pounds ($9.52 million) last year from 4.2 million in 1999, has signed a research agreement with Germany's WITA Proteomics AG, according to a report in Reuters on Tuesday. Under the terms of the deal, Pharmagene and WITA Proteomics would work together to identify, validate and develop potential drug targets for pharmaceutical and biotechnology partners. Pharmagene had closing cash and short-term investments of 38.3 million pounds, with annual cash spending of 4.1 million, before financing and management of liquid resources. SEMPLE COCHRANE: Completes Restructuring ---------------------------------------- Troubled Semple Cochrane, which is trying to recover from a financial crisis, has completed its restructuring and announced the appointments of a new chief executive and two non-executive board members, according to The Scotsman on Tuesday. In November, Bank of Scotland relieved Semple Cochrane of 12 million pounds, from its 23 million pounds total debt, as part of a plan to restructure its balance sheet. The company also announced the appointment of Mike Smith as chief executive, to replace Bob Lundy who was managing director of Semple Cochrane throughout the group's restructuring, and new non-executive directors Tom Allison and Jim Cooper. Allison is chief executive of Clydeport and has previously held board and senior management positions with Rank Xerox and Thistle Hotels. Cooper is a non-executive director of Stiel, First Engineering, and Encon Group, and is also a non-executive director of Scottish Enterprise Lanarkshire and two venture capital trusts managed by Murray Johnstone. Furthermore, the engineering firm said they would not drop from the official list of the stock exchange to the Alternative Investment Market and change the company's name to make a fresh start. 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. Kimberly MacAdam, 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 * * *