/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010510.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, May 10, 2001, Vol. 2, No. 92 Headlines * A U S T R I A * AIR ALPS: Italian Consortium to Buy Airline Stake * B E L G I U M * LERNOUT & HAUSPIE: Stonington Files Suit Against Ex-L&H CFO SABENA SA: Quits South African Market * D E N M A R K * LEGO COMPANY: Black Joins Toy Company as President LEGO COMPANY: Posts Pretax Loss of 1.070 Billion Danish Krone * F R A N C E * BSN GLASSPACK: Moody's Downgrades Rating * G E R M A N Y * BANKGESELLSCHAFT BERLIN: Berlin to Detail Plan in Late May EM.TV: Prosecutor Blocks Haffa Wealth MORGAN GRENFELL: Director Lanphere Quits PHILIPP HOLZMANN: EU Approves State Aid Package * I R E L A N D * W&R MORROGH: Court Gives Two Weeks to Pursue Talks * N E T H E R L A N D S * VERSATEL TELECOM: Loss Narrows to $23 Million VERSATEL TELECOM: Needs to Raise 100 Million Euro * P O L A N D * STATE RAILWAYS: To Sign $175 Million Credit Agreement * R U S S I A * MEDIA-MOST: Court to Consider Bankruptcy of MOST-Bank NTV: Alfa-bank Gives $12 Million Credit * S P A I N * TERRA LYCOS: Cuts 15% of Workforce * S W E D E N * FRAMFAB AB: Appoints Ekesioo as VP FRAMFAB AB: Elects New Board FRAMFAB AB: Plummets on Bankruptcy Fears FRAMFAB AB: Withdraws Proposed Non-cash Issue in Framfab Labs * S W I T Z E R L A N D * ACTELION AG: Widens Losses to CHF9.1 Million in First Quarter SWISSAIR GROUP: Lends AUA Stake to Raise Cash * U N I T E D K I N G D O M * BRITISH TELECOM: Transfers French Business to Italian I.NET CAMMELL LAIRD: 35 Companies to Buy Shipbuilder LASTMINUTE.COM: Forecasts Profit Within a Year NTL INCORPORATED: Shares Tumble on Bond Issue NTL INCORPORATED: To Cut 3,000 Jobs NTL INCORPORATED: Unit to Commence Private Placement WILLIAM BAIRD: Rebels Fail to Oust CEO ============= A U S T R I A ============= AIR ALPS: Italian Consortium to Buy Airline Stake ------------------------------------------------- A group of entrepreneurs, comprised of 20 leading businessmen from the Alto Adigre region of Italy, will acquire a majority stake in Air Alps for approximately Sch70 million, Die Presse in its May 5 edition said. The acquisition will significantly enhance the prospects of Austria's regional carrier, successfully concluding a settlement with creditors. The identities of the Italian consortium have not been disclosed. No assurances have yet been received, however. ============= B E L G I U M ============= LERNOUT & HAUSPIE: Stonington Files Suit Against Ex-L&H CFO ----------------------------------------------------------- Stonington Partners, a large shareholder in Lernout & Hauspie Speech Products NV, has filed a lawsuit with a U.S. court against former Lernout Chief Financial Officer Carl Dammekens and several KPMG officials for fraud, the May 8 edition of Dow Jones said. Stonington Partners, which became an L&H shareholder after selling Dictaphone Corp. to L&H in a share deal, said that financial statements released by L&H and audited by KPMG gave it a false impression of the financial condition of Lernout & Hauspie. In a press release, Stonington said it has filed suits against KPMG Belgium, KPMG U.K., KPMG International, former KPMG partner Paul Behets, as well as Dammekens. A KPMG spokesman said the accounting group would give a formal reaction once it has received details of the case. SABENA SA: Quits South African Market ------------------------------------- Sabena is one of the eight commercial airlines who have abandoned the South African market since 1994 due to a combination of reasons, the Xinhua News Agency reported on Tuesday. The withdrawal of the airlines, which includes Austrian Airlines, Alitalia, Air India, Air Lanka, Gulf Air, Balkan Bulgaria and Aeroflot reduced competition in the market and pushed up prices in some cases. Some industry observers said that the departure of these airlines was not due to lack of demand, but the high operating costs combined with fares being paid in soft currency. ============= D E N M A R K ============= LEGO COMPANY: Black Joins Toy Company as President -------------------------------------------------- Andrew Black was named on Tuesday as president of Lego Systems Inc., the American branch of the Danish toy maker, the Business Wire reported. The former Nike executive will succeed Peter Eio, who has served as president since 1989. Eio plans to retire next month and work part-time as an independent consultant. Black will serve on Lego's Global Management Team, and specifically oversee marketing, sales and operations for the companies market. Black, who also served as vice president of U.S. marketing at Dr Pepper/Seven Up Inc, began his marketing career at Colgate- Palmolive from 1984 to 1989. LEGO COMPANY: Posts Pretax Loss of 1.070 Billion Danish Krone ----------------------------------------------------------- Lego said its final results for the full year ending Dec 31, 2000 showed a pretax loss of 1.071 billion Danish krone, compared with a profit of 516 million Danish krone the year before, the May 4 edition of AFX News said. The year 2000 was a difficult year for the entire toy industry, Lego said. The toy maker announced preliminary pretax losses of around 1 billion Danish krone in March. Lego said it will start to focus again on its core business, such as playing materials, and plans to reduce or even stop certain activities as watches, publishing and other lifestyle products. =========== F R A N C E =========== BSN GLASSPACK: Moody's Downgrades Rating ---------------------------------------- Moody's Investors Service has on Tuesday downgraded BSN Glasspack's senior implied rating from Ba2 to Ba3, the issuer rating to B1 from Ba3 and the rating of the bank debt facilities from Ba2 to Ba3. This concludes a review initiated on April 4, following BSN Glasspack's announcement of an additional restructuring plan. Moody's rating action reflects concerns about the weak outlook for the container glass market in continental Europe. Volume growth is expected to remain low in the medium term mainly as a result of substitution initiated by Coca-Cola from glass to PET in the German non-alcoholic beverage business. Substitution should lead to a circa 15% decline in volume for the German market by the end of 2002. Moody's believes that the situation should not further deteriorate thanks to recent initiatives taken by BSN Glasspack's recently appointed Chief Executive such as the closure and transfer of a few of the company's production lines to growth areas. In order to counter the unfavorable market outlook, BSN Glasspack recently announced another restructuring program aimed at optimizing production and reducing capacity and headcount. This new program will cost 58 million euro spread over the 2001-2003 period. The restructuring expenses will come on top of the remaining 31 million euro to be spent from the previous restructuring program. Moody's anticipates cost improvements linked to plant closure and the significant headcount reduction (14%) but is concerned there may be further delays or cost overruns as witnessed with the previous plan. ============= G E R M A N Y ============= BANKGESELLSCHAFT BERLIN: Berlin to Detail Plan in Late May ---------------------------------------------------------- The city of Berlin would reveal concrete plans at the end of May to help beleaguered Bankgesellschaft Berlin, according to the May 7 edition of Reuters. Bankgesellschaft, unable to complete its 2000 financial accounts pending the outcome of a probe by German banking regulator BAKred, admitted last month it could not solve its problems alone and said it was looking for an outside investor to prop up its capital base. Berlin regional government finance minister Peter Kurth said the bank needs an injection of between one billion and 1.5 billion marks ($456.6 million-$684.9 million). The bank expects a 2000 loss of around 800 million euros ($714.9 million) due to the real estates losses. EM.TV: Prosecutor Blocks Haffa Wealth ------------------------------------- The Munich state prosecutor's office has banned some 20 million deutsche marks of the personal wealth of EM.TV & Merchandising AG's former chief financial officer Florian Haffa, the May 6 edition of AFX News said. The state prosecutors wanted the 20 million deutsche marks as a guarantee for damages demanded by shareholders, who claim Haffa was involved in insider trading. MORGAN GRENFELL: Director Lanphere Quits ---------------------------------------- Director Scott Lanphere has resigned from Morgan Grenfell Private Equity, which has been struggling to hold itself together after suffering multi-million pound paper losses from its exposure to media group EM.TV, the May 7 edition of Financial Times said. Lanphere is understood to retain carried interest in the profits of the fund that could still turn in a reasonable performance from other investments. He is thought to have opposed the exit but to have been overruled by MGPE chief executive Graham Hutton. PHILIPP HOLZMANN: EU Approves State Aid Package ----------------------------------------------- The European Commission has approved a state aid package pledged by the German government for Philipp Holzmann AG, the May 8 edition of AFX News said. The state aid comprises a subordinated loan of 76.7 million euro from the state-run Kreditanstalt fuer Wiederaufbau and an 80% federal guarantee for a 63.9 million euro credit. Creditor banks agreed to contribute more than 90% towards a reorganization plan of over 1.5 billion. ============= I R E L A N D ============= W&R MORROGH: Court Gives Two Weeks to Pursue Talks -------------------------------------------------- The High Court has given troubled stockbrokers W & R Morrogh two weeks to pursue negotiations with potential investors, according to The Irish Times in its yesterday's edition. The court on April 27 appointed accountant Tom Grace of PricewaterhouseCoopers as receiver and manager over the firm's affairs, following a claim by Alexander Morrogh, the senior partner in the firm, that Stephen Pearson, the junior partner in the firm, defrauded W & R Morrogh. Morrogh and employees told bank officials that Pearson had sustained a loss of 3.2 million pounds while trading futures on his personal trading account. It was also claimed that 1.9 million pounds of those alleged losses remained unpaid. It appeared that 1.3 million pounds was unaccounted for in an account entitled "spare client a/c". Michael Collins SC of the Central Bank said the deficit was unquantified at the moment but was potentially very serious and appeared to have arisen from the activities of Stephen Pearson rather than Morrogh. The Bank suspended the firm from trading until June 30, at least. It also froze all the firm's accounts. ===================== N E T H E R L A N D S ===================== VERSATEL TELECOM: Loss Narrows to $23 Million --------------------------------------------- VersaTel Telecom International NV on Tuesday said its first- quarter loss before interest, taxes, depreciation and amortization narrowed to 25.8 million euros ($23 million) from 29.8 million euros a year earlier, according to the May 8 edition of Dow Jones. The Dutch telecommunications group also cut 300 employees in the first quarter. The first-quarter operations show a decline in selling, general and administrative expenses to 47.3 million euros from 49.1 million euros in the fourth quarter of 2000, driven by continued cost rationalization across business units, the implementation of restructuring and the elimination of high-cost consultants. In a statement, chief Executive Raj Raithatha said the first quarter's results mark the moment that VersaTel changed from a network builder into a sales and marketing organization. VERSATEL TELECOM: Needs to Raise 100 Million Euro ------------------------------------------------- Versatel Telecom International NV still needs to raise around 100 million euro to fully finance its business plan, AFX News in its May 8 edition said, citing chief executive Raj Raithatha. The estimate includes cash needed for refinancing outstanding convertible bonds. Versatel also said it may soon report a negative net asset position. =========== P O L A N D =========== STATE RAILWAYS: To Sign $175 Million Credit Agreement ----------------------------------------------------- Polish State Railways (PKP) will soon sign a 700 million zloty ($175 million) credit agreement with a consortium of foreign banks, the Warsaw Business Journal in its May 7 edition said. Among the banks that make up the credit consortium are Citibank (Polska), Dresdner Bank Luxembourg, Westdeutsche Landesbank Girozentrale and Westdeutsche Landesbank Polska. =========== R U S S I A =========== MEDIA-MOST: Court to Consider Bankruptcy of MOST-Bank ----------------------------------------------------- The Moscow Arbitration Court will consider the case on the bankruptcy of MOST-Bank on August 2, RosBusiness Consulting in its May 8 edition said. As reported earlier, the Central Bank withdrew the MOST-bank license on April 20. On May 3, Vneshekonombank appealed to the court demanding to announce MOST-bank bankrupt. MOST-bank is part the Media-MOST company. NTV: Alfa-bank Gives $12 Million Credit --------------------------------------- Alfa-bank gave a $12 million credit to NTV television company for 18 months at a market interest rate, RosBusiness Consulting in its May 8 edition said. The credit is supposed to be spent on financing current activities of the company. ========= S P A I N ========= TERRA LYCOS: Cuts 15% of Workforce ---------------------------------- The world's third largest Internet service provider Terra Lycos said it would slash 15% of its 3,352 employees spread across 42 countries after reporting falling revenues, the May 8 edition of BBC News reported. It did not say when or where the job losses would occur. A number of upheavals at the company have put it under strain this year including the resignation of three senior executives in April, and a number of downgrades by investment houses. Furthermore, Terra Lycos reported first-quarter losses to 174.5 million euros ($157 million), up from a loss of 70.0 million euros in the same period of last year. =========== S W E D E N =========== FRAMFAB AB: Appoints Ekesioo as VP ---------------------------------- Johan Ekesioo has been appointed as Vice President Business Reengineering in Internet consultancy group Framfab, making him part of the senior management team in the company, Business Wire in its May 8 edition reported. Ekesioo will focus on leading the current action program to restructure Framfab, and bring the company back to profitability during the last quarter this year. "We are now focusing all our efforts on restructuring the company back to profitability. Johan is the perfect leader for this challenging task and I welcome him aboard. This way I will have greater opportunities to focus on clients," Framfab CEO Johan Wall said. FRAMFAB AB: Elects New Board ---------------------------- Internet consultancy company Framfab has elected a new board at its Annual General Meeting on May 4. The new board consists of Sven Skarendahl, previously head of European Operations Intermec Technologies Corporation, CEO Johan Wall of Framfab, Antfactory deputy Chairman Robert Gogel and EDS Norden CEO Kaj Green. Meanwhile, chairman CW Ros, deputy chairman Jonas Birgersson and board members Meg Tiv,us, Ken Ceder and Paul Saffo III left the previous Board of Directors. FRAMFAB AB: Plummets on Bankruptcy Fears ---------------------------------------- Framfab plummeted to 1.09 Swedish krona or 41.44% at 1.56 Swedish krona bid on fears that the company could soon go bankrupt, the May 7 edition of AFX News reported. The company further said its board is proposing two share issues totaling 325 million Swedish krona, an indication on how bad the situation is for Framfab. Brokers expect the Internet consultancy group will be either bankrupt or taken over by the autumn. FRAMFAB AB: Withdraws Proposed Non-cash Issue in Framfab Labs ------------------------------------------------------------- The Board of Directors of global Internet consultancy Framfab decided to withdraw the proposal for a non-cash issue of shares in its subsidiary, Framfab Labs AB, its May 4 press release said. The reason for the withdrawal is that there appears to be very limited opportunities for obtaining external financing for Framfab Labs. Framfab, which delivers digital services based on Internet technology, has offices in Austria, Bulgaria, Denmark, France, Germany, Italy, the Netherlands, Norway, Spain, Switzerland, Sweden, the UK and the US. ===================== S W I T Z E R L A N D ===================== ACTELION AG: Widens Losses to CHF9.1 Million in First Quarter ------------------------------------------------------------- Biochemical company Actelion AG widened its first-quarter loss to CHF9.1 million, compared with the CHF2.2 million a year ago, Dow Jones in its May 8 edition said. Its operating losses were CHF14.6 million, also wider than CHF4.3 million a year ago. The company recently said the launch of its acute heart failure drug tezosentan, or Veletri, would be delayed by 18 months. SWISSAIR GROUP: Lends AUA Stake to Raise Cash --------------------------------------------- Swissair Group has lent its 10% stake in Austrian Airlines to investment bank Credit Suisse First Boston in return for cash, according to Reuters in its May 7 edition. The Swiss airline and aviation services group declined to say how much money it was raising in the transaction. It intended to return the money and take back the stake owned by SAirLines in due course, and then sell the shares. Lufthansa has expressed an interest in the Austrian Airlines stake. =========================== U N I T E D K I N G D O M =========================== BRITISH TELECOM: Transfers French Business to Italian I.NET ----------------------------------------------------------- British Telecommunications PLC plans to transfer its French Web- hosting business Fluxus SA to Italian I.NET SpA, in which it has a majority share, according to the May 8 edition of Dow Jones. In exchange, BT will get an additional shareholding in the Italian Web-hosting operation. CAMMELL LAIRD: 35 Companies to Buy Shipbuilder ---------------------------------------------- As many as 35 companies are thought to line up to swoop on cash- strapped shipbuilder Cammell Laird, the May 7 edition of The Scotsman newspaper siad. The Merseyside yard, which has been in the hands of receivers PriceWaterhouseCoopers since losing an Italian contract, is being fought over by firms including old rival Swan Hunter and Appledore Shipbuilders. Cammell Laird, founded in 1824 and built such well-known ships as the Mauretania, went into receivership on April 11. LASTMINUTE.COM: Forecasts Profit Within a Year ---------------------------------------------- Lastminute.com expects its British and French operations to be profitable within a year as it narrows its second-quarter net loss, the May 8 edition of CNN reported. The company reported a net loss of 10.6 million pounds ($15 million), 3% less than the same quarter a year ago, and about 9% less than for the last three months of 2000. The Internet travel and services retailer warned that it will shed around 15% of its workforce in the process. According to Chairman Allan Leighton, around 50 jobs, mainly in the firm's offices overseas, will face the axe. NTL INCORPORATED: Shares Tumble on Bond Issue --------------------------------------------- Shares in the cash-strapped cable operator NTL dropped 10% on Tuesday when the firm confirmed it planned to raise $500 million to fund its needs during the next three years, according to The Irish Times' report yesterday. NTL has built up high levels of debt after pursuing an aggressive acquisition campaign that included the 8.2 billion-pound purchase of Cable & Wireless's UK interests. There is considerable speculation NTL will announce major cuts this week, the Times added. NTL INCORPORATED: To Cut 3,000 Jobs ----------------------------------- Cash-strapped cable operator NTL is poised to axe up to 3,000 jobs, with most coming from its 22,000 workforce in the UK, the May 6 edition of Birmingham Post said. NTL, whose debts are believed to total more than 9 billion pounds, owns nearly 10% of Aston Villa Football Club and has three retail stores in the Coventry, Stafford and Tamworth regions. The total redundancies will be confirmed later this week when the firm unveils its quarterly figures. Last week, NTL confirmed it was involved in early talks with media company AOL Time Warner about a possible marketing partnership in Europe. NTL INCORPORATED: Unit to Commence Private Placement ---------------------------------------------------- NTL Incorporated announced that its wholly-owned subsidiary, NTL Communications Corp., intends to commence a private placement of Convertible Senior Notes Due 2008, Business Wire in its May 8 report said. The Convertible Notes will be convertible into NTL Incorporated common stock. NTL Communications Corp. intends to raise approximately $500 million of gross proceeds from the sale of the Convertible Notes, a portion of which will be used partially to fund the businesses' needs during the next three years. The Convertible Notes will not have been registered under the Securities Act of 1933, as amended, or any state securities laws, and unless so registered, may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Accordingly, the Convertible Notes will be offered and sold within the United States under Rule 144A only to qualified institutional buyers. WILLIAM BAIRD: Rebels Fail to Oust CEO -------------------------------------- An attempt to unseat the chief executive of William Baird failed when David Suddens received overwhelming support from shareholders at the annual meeting, the May 3 edition of The Independent said. Suddens received 63 million votes in favor of his re-election with only 2 million against. Venture capital group Alchemy, which owns 29% of Baird, backed Suddens. Rebel shareholder John Jackson wanted a management shake-up at the textile group. ********************** 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 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 * * *