/raid1/www/Hosts/bankrupt/TCREUR_Public/010323.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, March 23, 2001, Vol. 2, No. 58


                            Headlines

* B E L G I U M *

LERNOUT & HAUSPIE: Bankruptcy Judge to Rule Next Week on Trustee
SABENA SA: Swissair to Get Rid of Sabena
SPECTOR PHOTO: Appoints Bain & Co As Strategic Adviser
SPECTOR PHOTO: Photo Porst Disposal Cuts Sales to 37%

* C Z E C H   R E P U B L I C *

ZETOR BRNO: Seeks for Strategic Partner

* F R A N C E *

GENSET SA: Looses Value in Three Days
MARESCHAL INDUSTRIES: Lafuma and Delsey Show Interest in Superior

* G E R M A N Y *

DEUTSCHE POST: To Restructure Parcel Operation
DEUTSCHE TELEKOM: Ratings Downgrade, a Threat to DT
DEUTSCHE TELKOM: To Axe Jobs at Real Estate Unit

* N E T H E R L A N D S *

KPN TELECOM: Debt Shackles Hard to Loosen

* S P A I N *

MINAS DE RIO: Trafigura to Buy Mining Firm

* S W E D E N *

LM ERICSSON: Owners Hold Meeting Today
LM ERICSSON: Shareholders Demand Management Change

* S W I T Z E R L A N D *

SAIRGROUP: New Boss to Fix Airline Finances

* U N I T E D   K I N G D O M *

BRITISH TELECOM: Shareholders Seek Debt Lifeline
BRITISH TELECOM: Shares Are Lowest in Three Years
CAMMELL LAIRD: Moody's Cuts Senior Notes to Ca From Caa2
DAEWOO MOTOR: Sports Car Firm Deal Nears End
PURE ENTERTAINMENT: Closes Games Website


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


LERNOUT & HAUSPIE: Bankruptcy Judge to Rule Next Week on Trustee
----------------------------------------------------------------

U.S. bankruptcy judge Judith H. Wizmur plans to announce her
decision at a March 29 hearing on whether to appoint a trustee to
oversee the assets of a Lernout & Hauspie Speech Products NV
subsidiary, Dow Jones in its Wednesday report said.

Janet Baker, founder of the former Dragon Systems Inc., have
requested for a bankruptcy trustee to protect Dragon assets and
interests. Baker and her attorneys, who said that fraud,
dishonesty, incompetence and mismanagement are caused to appoint
a trustee, also asserted L&H has driven away Dragon employees and
drawn the company's assets to other L&H businesses.

Meanwhile, Cerberus Capital Management LP has threatened to
foreclose its provision of $60 million in debtor-in-possession
financing to L&H if the judge appoints a trustee.

Judge Wizmur also plans to consider high-tech auto parts maker
Visteon Corp.'s offer to buy C-RECT and SDX technologies from L&H
for $13.1 million.


SABENA SA: Swissair to Get Rid of Sabena
----------------------------------------

SAirgroup's new senior executive Mario Corti wants to get rid of
loss-maker Sabena, according to Telegraaf's March 19 edition. The
Belgian Minister for Public Enterprises, Rik Daems, thinks that
the Swiss will have to pay dearly if they give up Sabena.


SPECTOR PHOTO: Appoints Bain & Co As Strategic Adviser
------------------------------------------------------

Troubled photo finishing chain Spector has retained Bain & Co to
advise it on strategic choices as it sought to return to
profitability, Reuters in its March 21 report said.

Bain & Co will examine the different divisions of the group in
order to allow management to make good strategic choices for the
future.

Last month, Spector agreed to sell its loss-making German unit
Photo Porst for a token sum of one mark.


SPECTOR PHOTO: Photo Porst Disposal Cuts Sales to 37%
-----------------------------------------------------

Spector Photo Group NV expects 37% of its sales to disappear
after it decided to sell its German Photo Porst unit, AFX in its
yesterday's report said.

Other negative factors affecting the results are pressure on
wholesale margins in photo development.

Meanwhile, the troubled photo finishing chain announced a group
net loss of 72.5 million euros for 2000, compared to a 1999 net
profit of 7.4 million euros.


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


ZETOR BRNO: Seeks for Strategic Partner
---------------------------------------

Following Brno's Regional Court approval of a settlement between
Zetor Brno and its creditors at the end of February, the company
has warded off the threat of bankruptcy and received the go
signal to keep restructuring and searching for a strategic
partner, Prague Business News in its March 19 edition said.

Around seven foreign companies are interested in Zetor. This
includes a U.S. gardening machinery producer, Turkish tractor
producer Uzel, India's Mahindra and Mahindra, another Chinese
producer and a British financial investor. The preliminary
purchase proposals shall be presented until April 20.

The company is currently operating through a Kc 700 million loan
issued by state-owned Konsolidacni Banka.


===========
F R A N C E
===========


GENSET SA: Looses Value in Three Days
-------------------------------------

Genset, S.A. has now lost more than 50% of its value in the last
three days when its shares were down 18.7% to 10.2 euro on
Wednesday, having lost 14% on Tuesday and 17% on Monday, as
investors remained nervous about the company's future strategy,
the Financial Times reported.

Genset, which specializes in medical research with the aim of
expanding and developing DNA and gene related information, in
February reported a consolidated net loss of $32.3 million for
the year ended December 31, 2000, as compared to a net loss of
$21.2 million in 1999.

Along with the pharmaceutical industry, Genset performs research
into various illnesses and diseases and in turn develops drugs to
be used in their treatment.


MARESCHAL INDUSTRIES: Lafuma and Delsey Show Interest in Superior
-----------------------------------------------------------------

Groupe Lafuma, which specializes in fabric for hiking and French
luggage group Delsey are candidates for the takeover of Superior,
the luggage subsidiary of Mareschal Industries, according to La
Tribune & World Reporter's March 20 edition.

The subsidiary has been in receivership since January 22 and has
generated FFr92.8 million in turnover last year.


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


DEUTSCHE POST: To Restructure Parcel Operation
----------------------------------------------

Deutsche Post AG will restructure its business parcel operations
as the result of a European Union ruling Tuesday, which found the
postal monopoly guilty of predatory pricing practices, cross-
subsidizing its commercial products with revenue from its
monopoly services and creating an unfair and un-level competitive
playing field, Business Wire reported.

The ruling will result in a separation of Deutsche Post's
monopoly letter mail services and its competitive parcel business
that compete directly with the private sector. Further
reinforcing the significance of the ruling, the EC ordered
Deutsche Post to pay a substantial fine for abusing its monopoly
position.

As a result of the EC ruling, UPS called on the U.S. Department
of Transportation to act quickly to revoke a foreign air freight
forwarder license granted to DHL Worldwide Express, which is
owned and controlled by the Deutsche Post. The license gives
Deutsche Post the ability to establish interstate package
delivery services in the U.S.


DEUTSCHE TELEKOM: Ratings Downgrade, a Threat to DT
---------------------------------------------------

Rating agencies Moody's Investors Service and Standard & Poor's
are eyeing Deutsche Telekom for possible downgrades.

In a Wednesday report, Dow Jones said that Moody's pointed the
weakening of equity markets as key to its worries about DT's
ability to sell assets and pay down debt. If the telecom company
decides not to float its T-Mobile arm this year, Moody's will
likely downgrade at least one level.

With possible downgrades, investors may take some concern when
measuring the company's prospects against the sharp drop in its
shares, which is now down roughly to 74%.

Meanwhile, DT, faced with some challenging cash-raising disposals
this year, is mulling a bond issue to raise as much as EUR2
billion to pay off unsecured, higher-interest debt.


DEUTSCHE TELKOM: To Axe Jobs at Real Estate Unit
------------------------------------------------

Deutsche Telekom AG will cut more than half of its staff in the
next 3 to 4 yrs at its DeTe Immobilien unit, The Irish Times
reported yesterday. The number of staff will fall to 4,000 from
9,500 as many workers are not being fully utilized.

DT neither confirmed nor denied the planned lay-offs.


=====================
N E T H E R L A N D S
=====================


KPN TELECOM: Debt Shackles Hard to Loosen
-----------------------------------------

Institutional investors in KPN Telecom are hoping the embattled
group will next week prove it can loosen its heavy debt of about
21 billion euros, according to Reuters' March 21 edition.

Earlier, the telecom company said it would sell its stake in call
center systems company Teledynamics to data services group
TietoEnator.


=========
S P A I N
=========


MINAS DE RIO: Trafigura to Buy Mining Firm
------------------------------------------

Mining company Minas de Rio Tinto has decided to seek partner but
has so far received only one offer, Expansion & World Reporter in
its March 15 edition said.

Dutch multinational Trafigura proposed an initial investment of
12 million euros in the mine, as well as the retention of 475
jobs.

Minas de Rio Tinto came out of temporary receivership last
December and is currently inactive due to lack of liquidity.


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


LM ERICSSON: Owners Hold Meeting Today
--------------------------------------

Several institutional owners of Ericsson stock are gathering in a
meeting today to discuss how they will act at the company's AGM
on Wednesday, Dow Jones reported. They will also discuss the
board's new leadership.


LM ERICSSON: Shareholders Demand Management Change
--------------------------------------------------

Aktiespararna, a Swedish small shareholder group, demanded
Telefon AB LM Ericsson to immediately appoint a replacement for
chairman of the board Lars Ramqvist, Dow Jones reported on
Wednesday.

Aktiespararna is eyeing Percy Barnevik, board chairman of
Investor AB to replace Ramqvist, who was said to be clumsy in
handling the board's problems.

According to the group, Barnevik possesses the capacity to turn
around Ericsson's development and regain confidence for the
company and its board.


=====================
S W I T Z E R L A N D
=====================


SAIRGROUP: New Boss to Fix Airline Finances
-------------------------------------------

New SAirGroup AG chairman Mario Corti will tackle financial
issues in a first step to clean up the mess at the airline
company, suggesting that up to CHF3 billion in losses and
restructuring costs could be booked in 2000 accounts, Dow Jones'
Wednesday edition reported.

Other issues to be taken up is the cut in the company's share par
value to CHF10 from CHF69, and that a bank consortium could
finance the company's restructuring in exchange for new stock.

Corti shall also consider stopping the losses at its airline
affiliates in Germany, France and Belgium as quickly as possible.


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


BRITISH TELECOM: Shareholders Seek Debt Lifeline
------------------------------------------------

Shareholders of British Telecom want to know how the company will
reduce its estimated 30 billion-pound debt, following the
postponement of a meeting on Tuesday, according to BBC News'
March 21 report.

A company spokesman said BT is not considering an option
considered by German counterpart Deutsche Telekom, which is
looking at using its future income from phone bills to cut the
cost of its debt.


BRITISH TELECOM: Shares Are Lowest in Three Years
-------------------------------------------------

Shares of British Telecom struck a three-year low on Wednesday,
leaving the shares 28«p or 5% lower at 494p, as hopes faded to a
quick resolution of its debt problems and the possible
resignation of chief executive Sir Peter Bonfield or chairman Sir
Iain Vallance, according to The Times. It was the first time BT
shares had closed below 500p since early 1998.

BT, which is facing pressures to clarify its 10 billion-pound
debt-reduction strategy, is believed to sacrifice its A-grade
debt rating rather than sell or float assets too cheaply.


CAMMELL LAIRD: Moody's Cuts Senior Notes to Ca From Caa2
--------------------------------------------------------

Moody's Investors Service on Wednesday downgraded to Ca from Caa2
the rating for the Euro 125 million senior notes of shipbuilder
Cammell Laird Holdings plc, following the company's announcement
of a strategic review of its operations and financial structure
which may lead to a restructuring of the notes.

The following ratings were downgraded: CLH's senior implied
rating to Caa2 from B3, the rating of a GBP 50 million secured
revolving credit facility to Caa2 from B3, CLH's issuer rating to
Ca from Caa2 and the bond rating to Ca from Caa2.

The ratings remain under review for possible further downgrade.

The downgrade reflects Moody's concern that CLH's financial
flexibility and liquidity position are further deteriorating
following the termination of a high value contract by a key
customer at the end of January. Moody's notes that interest
payments under the notes due on April 15, 2001 are currently not
assured.

A possible restructuring of the bonds would likely involve losses
for the noteholders. Moody's acknowledges that CLH is in
negotiations with the U.K. government regarding an aid and loan
guarantee package to secure a $500 million contract for the
construction of two cruise ships for Luxus Holdings.

However, negotiations are taking longer than originally
anticipated and may not be concluded in time to fund the interest
payment. Moody's also notes that CLH still has to renegotiate
terms and conditions of a GBP 50 million revolving credit
facility.

The review focuses on the company's ability to reinstate
financial flexibility through additional funding sources and the
ongoing commitment of its bank lenders. It will also assess the
implications for bondholders of the possible restructuring and
with a view to the medium term CLH's ability to generate a stable
flow of ongoing high volume orders once its current liquidity
constraints are resolved.


DAEWOO MOTOR: Sports Car Firm Deal Nears End
--------------------------------------------

Talks to sell the Daewoo Motor Technical Centre at Worthing are
in the final stages, according to a Birmingham Post report on
Tuesday. Potential buyer for the technical center is understood
to be a British specialist sports car maker.

With a huge financial problem, the carmaker would either sell or
seek independent survival for its overseas production and sales
operations. The South Korean government has been spending 81.7
million pounds a month to keep Daewoo Motor operating.

Daewoo's FSO plant in Poland and DMIL plant in India are
successfully implementing restructuring plans. Daewoo, which
operates 12 production plants in 11 countries, issued last month
redundancy notices to 1,750 workers at its main production plant,
triggering fierce protests.


PURE ENTERTAINMENT: Closes Games Website
----------------------------------------

Pure Entertainment Games Plc, the world's leading online
publisher of premium entertainment software, said it will close
its computer games download website freeloader.com, Press
Association reported on Wednesday.

The decision comes despite the website attracting more than
750,000 registered users since its launch in January.
Freeloader.com targets audiences in Germany, France and the US,
and is said to be the first website to offer free premium
downloadable games.

Pure Entertainment has a large cash balance in 2000, with only
482,989 pounds in sales and cash and short term investments of
8.61 million pounds.



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
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Information contained herein is obtained from sources believed to
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