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         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, May 02, 2001, Vol. 2, No. 86


                            Headlines

B E L G I U M

LERNOUT & HAUSPIE: Co-Founders Remain in Jail


B U L G A R I A

BALKAN AIRLINES: May Have New Investor


F R A N C E

CS COMMUNICATIONS: Gunnebo Acquires CS Security
CS COMMUNICATIONS: Units File for Protection
VALEO S.A.: Announces Group Appointments


G E R M A N Y

BANKGESELLSCHAFT BERLIN: Declines Comment on Stake Sale
BANKGESELLSCHAFT BERLIN: May Sell Unit to DGZ-Bank
DAIMLERCHRYSLER AG: Bombardier Completes Adtranz Acquisition
EM.TV: Posts $1.3 Billion Loss
EM.TV: CFO Rickmeyer Faces Dismissal
PHILIPP HOLZMANN: Aid Package Approval Set for May 8


G R E E C E

ENTERPRISES SHIPHOLDING: S&P Cuts Ratings to 'CC'


I R E L A N D

W&R MORROGH: Appoints PwC as Receivers


N E T H E R L A N D S

LETSBUYIT.COM: Gets More Funding from GEM Group
LETSBUYIT.COM: Net Loss Widens to 141.7 Million Euro


P O L A N D

ELEKTRIM S.A.: Rating Under Review for Further Downgrade


U N I T E D   K I N G D O M

BRIGHT STATION: Seeks New Funds
BRITISH TELECOM: Set to Ask For 7 Billion Pounds
BRITISH TELECOM: To Sell Japan Telecom Stake
CAMMELL LAIRD: Alchemy to End Big Orders
CAMMELL LAIRD: Will Discuss Bid with Alchemy Head
MOTOROLA: Bosses Get 2.5 Million Pounds Before Closure
RAILTRACK GROUP: Regulator May Increase Pressure on Railtrack
RAILTRACK GROUP: Regulator Warns Investors Re Bail-out



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


LERNOUT & HAUSPIE: Co-Founders Remain in Jail
---------------------------------------------

Co-founders Jo Lernout and Pol Hauspie, of embattled high-
technology firm Lernout & Hauspie Speech Products, will remain in
jail for at least two more weeks. They were charged with forgery
and stock manipulation last week, Dow Jones reported April 30.

The Ieper-based judge decided Monday not to release the men
pending trial. Lernout and Hauspie are remanded to jail until the
court reconvenes in two weeks.

The judge and the prosecutor's office were unavailable for
comment.



===============
B U L G A R I A
===============


BALKAN AIRLINES: May Have New Investor
--------------------------------------

Balkan Airlines' administrator Ralitsa Topchieva has indicated
that a potential investor may have been found for the carrier,
according to M2 Communications Ltd.'s April 30 report.

Although details have not been revealed, the administrator stated
a potential investor proposed a plan for Balkan's rehabilitation,
which includes acquiring the shares of Zeevi Group's companies in
Balkan and paying off the debts to the remaining creditors.

The airline's majority owner, Zeevi Holdings, grounded Balkan
Airlines on February 13. Local insolvency insurer Bulstrad
launched proceedings against the carrier in March. Bulstrad has
filed a claim for US$11 million against the airline.



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


CS COMMUNICATIONS: Gunnebo Acquires CS Security
-----------------------------------------------

Gunnebo has acquired CS Communications & Systems' unit CS
Security, according to the April 27 edition of Business Wire. The
purchase price for the shares amounts to MFRF 25 (MSEK 35).

The acquisition of CS Security is expected to have a positive
impact on earnings per share this year. The full impact of the
acquisition will be felt in one to two years when the integration
is fully completed.

CS Security develops, manufactures and sells security solutions
primarily to banks, public authorities (military units,
ministries etc.), public transportation companies, airports and
museums.

CS has a turnover of MFRF 330 (MSEK 460) with 425 employees
located in France, Germany and Portugal, and holds the well-known
brands Ritzenthaler and Haffner.


CS COMMUNICATIONS: Units File for Protection
--------------------------------------------

Computer and telecom-systems producer CS Communication & Systemes
is filing for creditors protection for its unprofitable CS
Telecom unit and legal protection for its manufacturing and
materials logistics unit CS Electronics, Financial Times said in
its April 30 edition. CS Communication also sold CS Security to
Swedish security firm Gunnebo.

CS Communication began seeking a partner or a buyer last May for
its telecom unit. It was unable to financially support the unit,
which posted an operating loss of 215 million francs last year.


VALEO S.A.: Announces Group Appointments
----------------------------------------

Valeo, in the April 26 edition of Business Wire, announced
organizational changes and appointments within the group.

As of March 26, the Electronics and Connective Systems Branches
were re-organized to complete the integration of the Labinal
activities acquired last year into the Group. The new Electronics
& Connective Systems Branch includes the electronics, body
controllers and wiring harnesses activities. It is headed by
Claude Leichle, who was previously Vice President of the
Electronics Branch. The new Switches & Detection Systems Branch
includes the switches and sensors activities. Wolfgang Dehen is
Vice President of the Switches & Detection Systems Branch.

Xavier Veret was appointed Chairman's Delegate March 30. He has
been in the Valeo since 1996 and was previously Director for
Internal Audit.

Bernard Geymond is Group Vice President for Human Resources and
Administrative Affairs, while Alain Marmugi is Vice President of
Engine Cooling Branch. Marmugi was formerly General Manager of
the Magneti Marelli/Bosch Automotive Lighting joint venture
headquartered in Germany.

Vincent Marcel is Group Vice President of Financial Affairs and
Strategic Operations. He joined the Valeo in 1998 as Director of
Strategic Operations.

Robert Charvier is Director of Financial Control for the
Electronic and Electrical activities. He was formerly Group
Financial Controller. Former director for Financial Control of
the Wiper Systems Branch Gerard Bouctot is now Group Financial
Controller.



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


BANKGESELLSCHAFT BERLIN: Declines Comment on Stake Sale
-------------------------------------------------------

Bankgesellschaft Berlin declined to comment on a report that
public sector bank DGZ-Deka Bank was considering acquiring a
major stake in it, said the April 27 edition of Reuters.

The bank's main shareholder is the Berlin state government, with
a 57% stake.

A spokesman for Bankgesellschaft said the bank had no comment on
speculation about changes to the bank's shareholder structure.
DGZ-Deka also declined to comment.


BANKGESELLSCHAFT BERLIN: May Sell Unit to DGZ-Bank
--------------------------------------------------

DGZ-DekaBank Deutsche Kommunalbank is in talks to buy Berliner
Sparkasse from its troubled parent Bankgesellschaft Berlin AG,
Handelsblatt according to its May 1 edition.

Berliner Sparkasse's value is at 1 billion euros, which is the
same amount Bankgesellschaft Chairman Wolfgang Rupf said his bank
needs in the short term.

Bankgesellschaft ran into problems earlier this year when banking
regulator BAKred began investigating its real-estate business. In
the ensuing turmoil, five of the bank's officials quit.


DAIMLERCHRYSLER AG: Bombardier Completes Adtranz Acquisition
------------------------------------------------------------

Bombardier has completed the acquisition of DaimlerChrysler Rail
Systems GmbH (Adtranz), the April 30 edition of Business Wire
said.

This transaction follows the sale and purchase agreement with
DaimlerChrysler AG of Stuttgart announced on August 4, 2000. The
purchase is for a cash consideration of US$725 million (Cdn$1.1
billion), subject to equity adjustments.

Bombardier will now have full responsibility for Adtranz'
activities. Details will be provided on the new Bombardier
Transportation organization at a press conference to be held in
Berlin today.

Bombardier Inc. is a world-leading manufacturer of business jets,
regional aircraft, rail transportation equipment and motorized
recreational products. It is also a provider of financial
services and asset management. The Corporation employs 58,000
people in 12 countries in North America, Europe and Asia, and
more than 90% of its revenues are generated outside Canada.
Bombardier's revenues for its fiscal year ended January 31, 2001
totaled $16.1 billion.


EM.TV: Posts $1.3 Billion Loss
------------------------------

Troubled EM.TV & Merchandising posted on Monday a 2.8 billion
marks (1.43 billion euros or $1.28 billion) loss on the cost of
acquisitions, CNN reported April 30. The annual loss was more
than twice the size of its 1.3 billion marks sales in 2000.

The entertainment company took a 1.3 billion marks charge on a
50% stake in Formula One racing holding company SLEC and wrote
off 684 million marks from the purchase of the Jim Henson
Company.

EM.TV, whose bank debt was reduced to 234 million marks as of
March 30, down from 1.5 billion marks, said it is looking for a
partner for the loss-making Jim Henson Company.


EM.TV: CFO Rickmeyer Faces Dismissal
------------------------------------

CFO Rolf Rickmeyer of EM.TV & Merchandising AG will probably be
replaced by Marius Schwarz, the AFX news reported on April 27.

Schwarz, who currently works for the cinema chain Cinemaxx, said
he has been in talks with EM.TV but he has not been made an offer
or signed any contracts.

Rickmeyer replaced Florian Haffa, brother of EM.TV chairman
Thomas Haffa, who was sacked in December after the company
announced its fourth quarter profit warning.


PHILIPP HOLZMANN: Aid Package Approval Set for May 8
----------------------------------------------------

The rescue package approval for Philipp Holzmann AG is slated on
the European Commission's May 8 meeting, the April 27 edition of
AFX News said. It is not certain when the necessary final talks
between the 20 commissioners will take place.



===========
G R E E C E
===========


ENTERPRISES SHIPHOLDING: S&P Cuts Ratings to 'CC'
-------------------------------------------------

Following an announcement by Enterprises Shipholding Corp.
(Enterprises) that it did not intend to make the May 1, 2001,
interest payment on its $175 million 8.875% notes due 2008,
Standard & Poor's on Monday lowered its long-term corporate
credit and $120 million senior secured bank loan ratings on the
refrigerated cargo shipping operator to double-'C' from triple-
'C'-plus.

At the same time, the senior unsecured debt rating on Enterprises
was lowered to single-'C' from triple-'C'. In addition, the
ratings on Enterprises were placed on CreditWatch with negative
implications.

Enterprises has engaged financial advisors to review
restructuring alternatives and has stated that it intends to
continue to service its $120 million senior secured bank loan.
Once a default has occurred, Standard & Poor's will further lower
its long-term corporate credit rating on Enterprises to selective
default (SD) and its senior unsecured debt rating to default (D),
Standard & Poor's said.



=============
I R E L A N D
=============


W&R MORROGH: Appoints PwC as Receivers
--------------------------------------

Tom Grace of PricewaterhouseCoopers has been appointed receiver
of W & R Morrogh, according to The Irish Times' report Monday.
The Central Bank ordered the stockbroking firm to cease trading
four days ago after financial irregularities were discovered.

Grace's first task will be to carry out a formal audit of the
broker's books to find out exactly what the shortfall is. He will
then find out which Morrogh clients are out of pocket as a result
of the irregularities.

The firm sold in excess of 2 million pounds worth of its shares
in the London Stock Exchange after it discovered the
irregularities.

Sources close to the company say that the prospects of the
receiver finding anybody to buy the firm are remote and it is
likely that he will ultimately preside over a winding-up of the
firm.



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


LETSBUYIT.COM: Gets More Funding from GEM Group
-----------------------------------------------

Letsbuyit.com NV has secured 25 million euros ($22.3 million) in
financing from New York private-equity group GEM Group and is
currently renegotiating its first funding agreement with another
backer.

In a report dated April 30, the Wall Street Journal said
Letsbuyit has access to GEM's financing at any time over the next
two years.

Shmulik Stein International Investments, which agreed to invest
30 million euros in the group, is part of the consortium with
Henderson Global Investors and NeSBIC that organized the first
round of financing of 52.8 million euros to avert the online
retailer's insolvency. Shmulik and Letsbuyit are renegotiating
the terms of the original agreement and have not yet finalized
the deal.

Letsbuyit requested protection from creditors in December and
persuaded an Amsterdam district court that it was in creditors'
best interests to give the company an extension after it first
failed to secure financing.


LETSBUYIT.COM: Net Loss Widens to 141.7 Million Euro
----------------------------------------------------

LetsBuyIt.com's net loss in 2000 widened to 141.7 million euro,
from 24.4 million euro the previous year, the April 30 edition of
AFX news said.

LetsBuyIt.com attributed the scale of its losses to the
investment needed to build up its brand, as well as the technical
and personnel resources involved in its geographic expansion.

The company also said that it had secured a commitment of some 25
million euro from the New York-based private equity group, GEM
Group. The additional investment will be used to fund future
growth opportunities as well as drive efficiencies and economies
of scale in order to achieve profitability as planned at the end
of next year



===========
P O L A N D
===========


ELEKTRIM S.A.: Rating Under Review for Further Downgrade
--------------------------------------------------------

Moody's Investors Service lowered the ratings of Elektrim S.A.
and placed the ratings under review for further downgrade on
April 30.

The ratings downgrade is prompted by the announcement that
Elektrim and Deutsche Telekom failed to reach an agreement
regarding the proposed acquisition by Deutsche Telekom of 51.0%
of Elektrim's fixed-line and datacom businesses for approximately
$180.0 million.

Ratings affected by the downgrade are (1) Senior implied rating
lowered from Ba3 to B1; (2) Unsecured issuer rating lowered from
B2 to B3; (3) Elektrim Finance B.V. 440.0 million euro 3.75%
convertible notes due 2004 lowered from B2 to B3.

The ratings continue to reflect the need for Elektrim to secure
further adequate medium- to long-term funding in order to
continue financing substantial capital and operating expenditures
in the roll-out of its telecommunications operations,
particularly in the fixed-line business.

The ratings downgrade reflects Moody's belief that the $180.0
million contribution from Deutsche Telekom would have been the
primary source of funds for the fixed-line and datacom businesses
in 2001, which continues to require opex and capex financing in
order to enhance its competitive position in Warsaw, as well as
meet continued license fee payments.

In addition to financing requirements in its fixed-line and
datacom businesses, Elektrim will need to continue meeting
payments relating to short-term debt obligations, currency
fluctuations, as well as various costs associated with the
continued re-structuring of the company's corporate structure.

The ratings also continue to reflect the risks associated with
the fact that holders of the convertible notes benefit from a put
option (at 109.22% of nominal value) exercisable on December 15,
2001, with potential further cost and funding implications for
Elektrim.

Moody's continued review of Elektrim's ratings will focus on: (i)
the company's ability to further enhance its liquidity profile by
securing adequate medium- to long-term funding to finance the
continued roll-out of its operations, particularly in light of
the collapse of the Deutsche Telekom transaction, (ii) enhanced
clarity on the company's relationship with Vivendi and Deutsche
Telekom, including any potential upside afforded to Elektrim by
an enlarged role of either company, (iii) further clarity on the
company's strategy in addressing the put option on the
convertible notes, (iv) the continued execution of Elektrim's
ongoing re-structuring away from non-core businesses, including
further proceeds from asset disposals and the successful
implementation of stand-alone financing at certain operating
subsidiaries, and (v) the resulting overall credit profile of the
company.



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


BRIGHT STATION: Seeks New Funds
-------------------------------

E-commerce service provider Bright Station PLC said it would
restructure its business and seek additional funds to secure its
future, Dow Jones said in its April 30 edition. The options it is
negotiating include a convertible bond facility with Credit
Suisse First Boston Corp.

Bright Station added it would reposition itself through its
Smartlogik Internet search-engine subsidiary and rationalize its
e-commerce businesses, which includes the possible disposal or
closure of the Sparza and Officeshopper units and a reduction of
corporate overheads.

The group's founder and CEO Dan Wagner and the rest of its board
of directors, which includes Chairman Allen Thomas and finance
director David Mattey, are believed to be stepping down amidst
talk of job cuts and the selling or closure of some of the
group's e-business units.


BRITISH TELECOM: Set to Ask For 7 Billion Pounds
------------------------------------------------

British Telecom is expected to ask its shareholders for at least
7 billion pounds to rescue the firm from its financial
difficulties, The Times reported yesterday.

On average, each private investor could be asked to give the
company about 750 pounds if expectations of fundraising are
fulfilled. If BT attempts to raise 7 billion pounds, investors
will be asked for about 110p for every share owned.

The Times added that the city's biggest fund managers such as
Schroders and Credit Suisse Asset Management would support a
multibillion-pound rights issue as long as it came with a
credible strategic plan designed to revive the company's
fortunes.


BRITISH TELECOM: To Sell Japan Telecom Stake
--------------------------------------------

British Telecommunications PLC will sell its 20% stake in Japan
Telecom Co. and J-Phone to Vodafone Group PLC for more than 3
billion pounds, according to the Financial Times' May 1 edition.

The sale is part of British Telecom's attempt to deal with its
$43 billion in debt, and is expected to bring in over $4.3
billion. The deal will also put Vodafone in a position to take
full control of J-Phone.

Earlier Monday, AT&T Corp. said it sold its 10% stake in Japan
Telecom to Vodafone for $1.35 billion cash. British Telecom's
sale will bring Vodafone's stake in Japan Telecom to 45% and its
stake in J-Phone to 46%.


CAMMELL LAIRD: Alchemy to End Big Orders
----------------------------------------

Private equity firm Alchemy Partners will bring about the end of
shipbuilding and ship conversion at Cammell Laird if its bid to
buy the Merseyside shipyard succeeds, the April 30 edition of The
Times said.

According to Alchemy head Jon Moulton, they will stick to small
contracts such as ship repairs since Cammell Laird's collapse
into receivership was caused by overambition, adding that it
could not sustain big orders.

Moulton said the fixed overheads at Cammell Laird were much too
high, indicating that a successful Alchemy bid would also mean
big job losses.


CAMMELL LAIRD: Will Discuss Bid with Alchemy Head
-------------------------------------------------

Cammell Laird directors, which include Brett Martin, Jon
Schofield, and chairman Juan Kelly, are planning to meet Jon
Moulton, head of venture capital firm Alchemy Partners, to
discuss buying the company out of receivership, The Observer said
April 29.

Moulton's involvement will cause unease among unions, who are
opposed to Alchemy involvement following its failed attempt to
buy Rover last year. However, the Alchemy head believes Cammell
Laird can return to the profitability it enjoyed less than a year
ago, before it was hit by the failure of two major contracts, and
that some of its former management team are capable of steering
it back to health.

Cammell directors have also been in talks with ship repairer A&P
about merging the two businesses, and are constructing a deal
with possible backing from Alchemy. They have also been
approached by other venture funds.


MOTOROLA: Bosses Get 2.5 Million Pounds Before Closure
------------------------------------------------------

Five senior Motorola executives received bonuses of more than 2.5
million pounds just weeks before the company shut its Scottish
plant, The Scotsman newspaper in its Monday edition reported.

A company spokesman said the performance related pay-outs to the
top bosses, made under a company plan called Performance
Excellence Equals Rewards, was necessary to keep key talent in
the boardroom.

Under the PEER, Motorola president Robert Growney was given a
610,000-pound bonus on top of his annual salary of 680,000
pounds. Chairman Christopher Galvin received an 870,000-pound
bonus to go with his annual salary of 890,000 pounds.

Vice-presidents Frederick Tucker and Keith Bane were awarded
bonuses of 380,000 pounds each, while finance chief Carl
Koenemann received 310,000 pounds.


RAILTRACK GROUP: Regulator May Increase Pressure on Railtrack
-------------------------------------------------------------

Rail regulator Tom Winsor warned he would not ease, and could
increase, pressure on rail infrastructure operator Railtrack, the
Financial Times reported yesterday.

Since his 1999 appointment, Winsor has been accused of being too
hard on the company, and lately of being too soft. The rail
regulator said he would be tough for a reason. "The objective is
to raise the company from its knees and make it successful and
competent," Winsor added.

The regulator published his draft plan as train operators' hopes
were raised regarding obtaining compensation from Railtrack for
lost business after the fatal Hatfield accident in October.


RAILTRACK GROUP: Regulator Warns Investors Re Bail-out
------------------------------------------------------

Chief economist Paul Plummer of the Office of the Rail Regulator
warned shareholders that if Railtrack gets into a financial
crisis because of inefficiency or mistakes, it will not receive
extra public subsidy to support it, the April 30 edition of the
Financial Times said.

The warning is a blow to the company and investors who had
assumed Railtrack would not be allowed to run out of money or
lose its investment grade status.

Plummer, however, said it could benefit the rail industry if it
stopped assuming that Railtrack would always get help because it
would force shareholders to demand more radical changes to turn
the company around.

Railtrack is particularly vulnerable at the moment, with an
expected announcement of big losses for last year. It faces a
bill of at least GBP580 million ($835m) for compensation and
repairs following the fatal Hatfield crash in October caused by a
broken rail.




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. Lyndsey Resnick,
Salve M. Mordeno and Cristina Pernites, Editors.

Copyright 2001.  All rights reserved.  ISSN 1529-2754.

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