/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010509.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, May 09, 2001, Vol. 2, No. 91 Headlines * B E L G I U M * LERNOUT & HAUSPIE: Korean Court Declares L&H Unit Bankrupt * D E N M A R K * LEGO COMPANY: Sheds 500 Jobs, Abandons Non-core Assets * G E R M A N Y * DAIMLERCHRYSLER: Warranty Costs Rise to $1.5 Billion ZURICH FINANCIAL: Chairman Denies Scudder Sale Talks * I R E L A N D * EIRCOM PLC: O'Brien Bid Fails With Unions * I T A L Y * CDB WEB TECH: Loss Widens to 12.03 Million Euro * N E T H E R L A N D S * PHILIPS ELECTRONICS: Prepares to Close Mobile Phone Ops VERSATEL TELECOM: To Post 26 Million EBITDA Loss * R U S S I A * NTV: New Chief Claims $750 Million Is Missing * S W E D E N * FRAMFAB AB: Carries Out Share Issues Worth SEK325 Million * S W I T Z E R L A N D * MODEX THERAPEUTICS: Net Loss Widens to 89% SAIRGROUP: Club Med Does Not Exclude Stake in AOM-Air Liberte Ops * U N I T E D K I N G D O M * BRITISH TELECOM: To Raise $7.2 Billion in Shares Sale EQUITABLE LIFE: Imposes 15% Exit Penalty MARKS & SPENCER: Sir David Leaves Retailer ============= B E L G I U M ============= LERNOUT & HAUSPIE: Korean Court Declares L&H Unit Bankrupt ---------------------------------------------------------- L&H Korea, a trouble-ridden subsidiary of voice recognition solution developer Lernout & Hauspie, was declared bankrupt on Friday by Seoul District Court's bankruptcy division, the May 5 edition of The Korea Herald said. The court also said L&H Korea forged revenue figures to extend its own credit and did not report the fact to its headquarters. Former CEO of L&H Korea Seo Ju-cheol was charged with irregularities in inflating revenue. Creditors of the company are set to have a meeting on June 28. L&H Korea has 81 billion won of liabilities as of the end of last year, exceeding its asset worth 58.8 billion won, qualifying for the bankruptcy application. ============= D E N M A R K ============= LEGO COMPANY: Sheds 500 Jobs, Abandons Non-core Assets ------------------------------------------------------ Plastic toy maker Lego will lay off 500 of its 7,700 employees after recording a net loss of 831 million kroner (69 million pounds) in the year to December 31, compared with a profit of 274 million kroner (23 million pounds) in 1999, The Times in its yesterday's edition said. Lego, which has lost out to computer and video games, will also abandon non-core interests such as books, clothes and wristwatches. Legoland was opened on the site of Windsor Safari Park. It went into receivership in 1991. ============= G E R M A N Y ============= DAIMLERCHRYSLER: Warranty Costs Rise to $1.5 Billion ---------------------------------------------------- US-German carmaker DaimlerChrysler is suffering from quality problems at its Mercedes-Benz luxury car unit that cost the group about $1.5 billion (DM3.4 billion) in warranty payments in 2000, the May 7 edition of the Financial Times reported. The quality problems coincide with the group's increasing dependency on the German luxury unit, as it struggles to restructure Chrysler and Mitsubishi. DaimlerChrysler declined to comment on the cost figure, but it said per-car warranty costs remained stable on a comparative basis. ZURICH FINANCIAL: Chairman Denies Scudder Sale Talks ---------------------------------------------------- Chairman Rolf Hueppi of the Zurich Financial Services AG denied it was in negotiations to sell 70% of its U.S. asset management unit Zurich Scudder Investments Inc. for about $3 billion, the May 7 edition of Dow Jones said. "There's no such negotiations at this time," Hueppi said. Though Hueppi considers asset management a core operation for Zurich Financial and an important service for customers, he didn't specifically rule out the sale of Zurich Scudder or other units. Last month, Zurich Financial hired Goldman Sachs Group Inc. and Morgan Stanley Dean Witter & Co. to examine alternatives for Scudder, as it seeks to enhance the group's asset management business and its ability to deliver financial products and services globally. ============= I R E L A N D ============= EIRCOM PLC: O'Brien Bid Fails With Unions ----------------------------------------- Entrepreneur Denis O'Brien failed to reach an agreement with Eircom unions on the sale of their 15% stake, The Sunday Times reported. A meeting of the board of Eircom was scheduled for Friday to discuss the offer, but the deal between Eircom's powerful trade union and O'Brien's eIsland consortium had fallen. O'Brien's consortium is believed to have offered to increase the stake of Eircom's workers in the company, held through an employee-owned trust ESOT. His offer is not thought to be as generous as the 29.9% he was reported to be giving last week. The unions are not expected to agree to sell to any of Eircom's suitors until the board indicates its position. ========= I T A L Y ========= CDB WEB TECH: Loss Widens to 12.03 Million Euro ----------------------------------------------- CDB Web Tech widened its first quarter pretax loss to 12.03 million euro, compared with 1.93 million euro a year earlier, Dow Jones in its May 7 edition reported. The losses were attributed mostly to the devaluations of 11.74 million euro for cross-over funds and direct and indirect investments in venture capital funds. ===================== N E T H E R L A N D S ===================== PHILIPS ELECTRONICS: Prepares to Close Mobile Phone Ops ------------------------------------------------------- Electronics giant Royal Philips Electronics NV is preparing to close troubled Philips Consumer Communications, following the sudden resignation of the unit's chief executive Thom Swartsenburg, Dow Jones reported on Monday. Alex Rueckert, a 25- year veteran at the McKinsey consultancy firm, will replace Swartsenburg. The closure of loss-making mobile phone division will result in the layoff of almost 6,000 employees and a one-time charge of approximately NLG1 billion. Philips executives declined to comment on the matter, although group spokesman Ben Geerts said the resignation is related to the current situation of the PCC unit, where it reported a loss in the first quarter of this year. VERSATEL TELECOM: To Post 26 Million EBITDA Loss ------------------------------------------------ VersaTel Telecom International NV is expected to post a first- quarter loss before interest, taxes, depreciation and amortization of around 26 million euro, better than a loss of 28.1 million euro in the fourth quarter of 2000, the May 7 edition of Dow Jones reported. Some analysts said that VersaTel may face an embarrassing delisting or warning from the Amsterdam Stock Exchange later this year if the company's net equity dips below zero. =========== R U S S I A =========== NTV: New Chief Claims $750 Million Is Missing --------------------------------------------- Boris Jordan, the new general director of NTV, said he could only identify $460 million that had been invested in operating businesses, and estimated that $750 million would never ultimately be accounted for, the May 7 edition of the Financial Times reported. Jordan's remarks will further fuel a fierce propaganda battle waging over the fate of NTV. Founder Vladimir Gusinsky claimed that his company has been taken over in an effort to crush freedom of speech in Russia, while Gazprom has said that it wants to recover outstanding commercial debts from a badly-managed company. =========== S W E D E N =========== FRAMFAB AB: Carries Out Share Issues Worth SEK325 Million --------------------------------------------------------- Framtidsfabriken AB said Monday it would carry out two new issues worth a maximum of SEK325 million, the May 7 edition of Dow Jones said. Full subscription to the directed share issue, targeted at strategic and institutional investors, is expected to bring in SEK175 million, while the second one is expected to raise SEK150 million from the issue to shareholders. ===================== S W I T Z E R L A N D ===================== MODEX THERAPEUTICS: Net Loss Widens to 89% ------------------------------------------ Due to rising expenses, especially for research and development, the net loss of biotechnology company Modex Therapeutics SA widened in the first quarter to CHF3.024 million, the Wall Street Journal in its May 7 edition said. This was compared with the CHF1.597 million loss in the same period last year. SAIRGROUP: Club Med Does Not Exclude Stake in AOM-Air Liberte Ops ----------------------------------------------------------------- Club Mediterranee SA has not excluded the possibility of taking an extremely small minority participation in the charter activities of SAirGroup AG's AOM-Air Liberte if they are split off from the rest of the company, the May 7 edition of AFX News said. According to a company spokesman, a third of Club Med's charters are with AOM-Air Liberte. As a result, the company is studying many alternative solutions with other carriers in case of AOM-Air Liberte going bankrupt. If there is a separation of charter from regular operations, Club Med could study with interest an extremely small minority participation in the charter operation to secure the activity, AFX added. =========================== U N I T E D K I N G D O M =========================== BRITISH TELECOM: To Raise $7.2 Billion in Shares Sale ----------------------------------------------------- British Telecommunications plc is finalizing plans of a cut-price shares sale to raise around $7.20 billion to reduce its massive debt burden, the May 8 edition of The Irish Times reported. The share sale is priced at up to half BT's stock market price in order to convince investors to subscribe to the deal. It will form the centerpiece of a resuscitation that began with the appointment two weeks ago of Sir Christopher Bland to replace Sir Iain Vallance as chairman. It was followed last week with the sale of investments in Japan and Spain to Vodafone Group plc for 4.8 billion sterling pound. BT is also intending to demerge its mobile phone business by giving shares in BT Wireless to existing shareholders and planning to cut its dividend and working on a sale of its business directory division Yell for around 3 billion sterling pounds. EQUITABLE LIFE: Imposes 15% Exit Penalty ---------------------------------------- Troubled insurer Equitable Life has further angered its members by insisting on a 15% exit penalty for savers who move with- profits income drawdown policies to a rival provider, according to the May 5 edition of The Times. Derek Baptist of the independent financial adviser (IFA) Nolan, Baptist & Bond said it is regrettable that Equitable Life is applying the penalty, particularly given that many of the people's original funds were transferred to Equitable at the point of drawdown from other life companies. MARKS & SPENCER: Sir David Leaves Retailer ------------------------------------------ Sir David Sieff, the last member of the dynasty that founded Marks & Spencer, will leave the company as part of a fresh boardroom shake-up, the May 7 edition of the Financial Times said. Sir David has worked for M&S for 44 years. He is not due to retire from the board until 2006 but is understood to consider leaving to pursue other interests. On the other hand, the non-executive departure of Sir Ralph Robins was expected. He is due to retire from Marks & Spencer after serving the traditional nine-year stint on the board. **************** 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 Ma. Cristina D. 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 * * *