/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010524.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 24, 2001, Vol. 2, No. 102 Headlines * B E L G I U M * CUSTOM SILICON: Opts to Restructure LERNOUT & HAUSPIE: Forms Strategic Partnership With EteX LERNOUT & HAUSPIE: Confirms Restructuring Plan LERNOUT & HAUSPIE: Shareholders Sue KPMG * G E R M A N Y * BANKGESELLSCHAFT BERLIN: Seeks 2 Billion Euros From Investor EM.TV: In Talks to Sell Part of SLEC Stake HAGENUK CPS: Anticipates Break-Even Month in June INTERSHOP COMMUNICATIONS: Names Schaaf as US Operations President MAN AG: Truck Maker Issues Profit Warning MET@BOX AG: Files for Insolvency PHILIPP HOLZMANN: Seeks for Foreign Partner * I T A L Y * E.PLANET: Seeks 100-Million-Euro Cash Injection * N O R W A Y * BRAATHENS ASA: SAS Group Bids for Braathens * P O L A N D * ELEKTRIM SA: May Favor Vivendi Offer ELEKTRIM SA: Vivendi Proposes Merger of Elektrim and Telco Unit HUTA KATOWICE: To Change Debt Structure * S W E D E N * FRAMFAB AB: Approves New Stock Issues FRAMFAB AB: Secures 158 Million Swedish Krona for New Share Issue LM ERICSSON: To Sell UK Factories * U N I T E D K I N G D O M * DOLPHIN TELECOM: S&P Cuts Rating to Single-C EQUITABLE LIFE: Insurer Faces Angry Protests MARKS & SPENCER: Drops Profit to 14% Amid Restructuring Plans MARKS & SPENCER: Reshuffles Boardroom ============= B E L G I U M ============= CUSTOM SILICON: Opts to Restructure ----------------------------------- Custom Silicon Configuration Servives NV, which specializes in advanced packaging and test services for semiconductors, decided to restructure due to continuing weak markets, especially in the mobile sector, Nasdaq Europe in its Tuesday Press Release said. The company will maintain its excellent service level to customers, while decreasing its fixed costs by closing down redundant capacity. This means that Custom Silicon plans to establish working in three shifts during five days to reduce the number of employees to 150. At present, 201 people are working for the company. Custom Silicon will propose a debt-restructuring plan to its shareholders during the June 15 extraordinary general meeting. LERNOUT & HAUSPIE: Forms Strategic Partnership With EteX -------------------------------------------------------- Lernout & Hauspie Speech Products NV, a world leader in speech and language technology, products and services, announced on Tuesday that it has formed a strategic partnership with German- based IT systems integrator ETeX Sprachsynthese AG, specializing in speech technology solutions for corporations and healthcare providers. As part of the partnership agreement between the parties, ETeX will promote and license core L&H speech technologies. ETeX plans to integrate L&HT Automatic Speech Recognition software, text to speech technologies L&HT TTS 3000 and L&HT RealSpeakT and Intelligent Content Management technology into its speech solutions offerings for targeted vertical markets in Germany such as computer telephony integration (CTI), healthcare, automotive, and Internet Service Providers (ISP). Also, under the terms of the agreement, ETeX has been appointed as L&H's preferred partner for the German healthcare rehabilitation market, specifically speech aid products. Among the ETeX speech solutions that will initially employ L&H speech technologies is Speak&WinT. The product will utilize the text-to-speech technology L&HT RealSpeakTM for the high-end market space, such as telecommunications. LERNOUT & HAUSPIE: Confirms Restructuring Plan ---------------------------------------------- Lernout & Hauspie Speech Products NV confirmed plans to sell off all the other parts of the company to repay its creditors, the Wall Street Journal reported yesterday. In a 53-page report released on Tuesday, the company said it is considering selling the medical division of Dictaphone Corp. It also stated that L&H could sell or form a new company out of its speech and language unit. Chief executive Philippe Bodson declined to give a target price for its technology, nor would he speculate how much the assets are worth. Furthermore, Bodson will submit a restructuring plan to a U.S. court in August or September, after Belgian creditors vote on the plan on June 5. If the creditors reject the plan, the Belgian bankruptcy court could appoint a curator to liquidate the company. L&H's biggest creditors are KBC NV, Fortis NV and Belgium's Artesia Banking Corp., and Germany's Deutsche Bank AG and Dresdner Bank AG of Germany. Most of the money was borrowed to finance the acquisition of Dictaphone. L&H also owes nearly $1 million (1.1 million euros) to 170 smaller creditors. L&H filed for bankruptcy protection late last year amid an accounting scandal that prompted government investigations in the United States and Belgium, a management shakeup and widespread departure of top staff. LERNOUT & HAUSPIE: Shareholders Sue KPMG ---------------------------------------- About 100 shareholders of Lernout & Hauspie Speech Products NV are suing KPMG, the auditors for the company, the Echo reported on Tuesday. The shareholders claim that KPMG should have uncovered fraud at the company and prevented shareholders' losses. ============= G E R M A N Y ============= BANKGESELLSCHAFT BERLIN: Seeks 2 Billion Euros From Investor ------------------------------------------------------------ The Berlin state government, which owns 57% of Bankgesellschaft Berlin, said it needs more than two billion euros ($1.74 billion) from an outside investor to prop up the bank's capital base, Reuters on Tuesday reported. Last month, Bankgesellschaft Chief Executive Wolfgang Rupf admitted that his bank could not solve the problems alone when it was hit by real estate losses and inquiries from banking regulator BAKred. EM.TV: In Talks to Sell Part of SLEC Stake ------------------------------------------ EM.TV & Merchandising AG and KirchGruppe, which jointly own a 75% stake in SLEC, are in talks to sell part of their stake to carmakers that participate in Formula One motor racing, AFX News reported on Tuesday. The names of the companies were not disclosed. The news came following a threat by the European Automobile Manufacturers Association (ACEA) at the weekend that it still intends to set up an alternative Formula One motor racing championship from 2008. HAGENUK CPS: Anticipates Break-Even Month in June ------------------------------------------------- After facing insolvency twice, telecom company Hagenuk CPS GmbH forecasts that it will break even in June 2001, Die Welt & World Reporter in its May 21 edition said. The company has received a large order from electronics company Grundig AG and will sign contracts with Swedish, South African and Greek companies. Turnover has been estimated of about DM50 million this year. INTERSHOP COMMUNICATIONS: Names Schaaf as US Operations President ----------------------------------------------------------------- Intershop Communications AG, a leading provider of e-business solutions, has appointed Ray Schaaf as its president of U.S. operations, the company's Tuesday press release said. Previously working as president and CEO of software infrastructure provider Xmarc, Schaaf will begin his new duties on May 29. He will report to global COO, Wilfried Beeck, and will have full U.S. P&L and operational responsibilities. He will also be a member of the worldwide executive management team. Current president, Phil Oreste, will move to his new role as senior vice president of strategic alliances, where he will focus on the continuing development of strategic alliances with U.S. companies. With a long history of working with high tech companies, Schaaf brings to Intershop extensive international and domestic experience in sales, operations, and marketing. MAN AG: Truck Maker Issues Profit Warning ----------------------------------------- MAN issued its second warning this year, indicating that pre-tax profit may fall by more than 10% in 2001 from 1999/2000's level of 668 million euros ($585.4 million), the May 22 edition of Reuters said. The trucks and engineering group cited higher interest costs and slowing activity in the industrial equipment and facilities and trucks units. MAN also said first-quarter pre-tax profit fell 19% to 91 million euros from the same period last year and earnings before interest and tax fell 6% to 138 million euros. MET@BOX AG: Files for Insolvency -------------------------------- Metabox AG has filed for insolvency proceedings at the Hildesheim district court on Tuesday due to insufficient liquidity, Dow Jones reported. The manufacturer of processor cards for computers and online broadcast systems intends to work out an insolvency plan and presents to its creditors to ensure the company's continued operation. Shares in Metabox were suspended from trade from 1250 GMT to 1350 GMT on Frankfurt's Neuer Markt. PHILIPP HOLZMANN: Seeks for Foreign Partner ------------------------------------------- As agreed with creditor banks, construction group Philip Holzmann AG is on the lookout for a strategic partner abroad and no longer rules out a merger, Handelsblatt on Tuesday reported. Chief executive Konrad Hinrichs Hinrichs hopes to find the right partner by the end of the year. He said that a partner should come ideally from Europe and most importantly offer a strong presence in the Asia-Pacific region or South America. Hinrichs added that the group, which booked a loss of 50 million euros last year, would continue its strategy to reduce capacity. Over the past 15 months, it has slashed 60% of its capacity and cut 5,500 jobs. ========= I T A L Y ========= E.PLANET: Seeks 100-Million-Euro Cash Injection ----------------------------------------------- ePlanet SpA said that there weren't any new developments in its search to find a partner to inject up to 100 million euro to save the cash-strapped company, Dow Jones on Tuesday reported. The telecommunications and broadband company said that if it doesn't find cash injection from its own shareholders or a white knight, the company might not approve the 2000 accounts since it lacks the financial resources to pay operating expenses. If that happens, ePlanet would call an extraordinary shareholders meeting, which could agree to a recapitalization via a capital increase or opt for temporary receivership. Last week, ePlanet said that a series of negotiations are in an advanced phase and that its board believed it was reasonable these could be concluded in the next few weeks. =========== N O R W A Y =========== BRAATHENS ASA: SAS Group Bids for Braathens ------------------------------------------- Scandinavian Air System has agreed to take over Norwegian airline Braathens ASA for 1.1 billion kroner ($1=NOK9.0763), or NOK35 a share, the company's press release on Monday said. The take-over is expected to happen in the autumn of this year after SAS has obtained consent from minimum 90% of the shares and necessary approval from the Norwegian competition authorities. SAS will however not take over the Swedish activities of Braathens. Before SAS completes the purchase, the Swedish companies will be re-capitalized by Braathens and thereafter sold. The Swedish subsidiaries will be sold to a third party for the highest price possible. If no buyer can be identified, the largest shareholder Braganza AS/Bramora AS, will then buy the Swedish companies for a nominal amount and assume such guarantees. Braathens' board concluded that the company would be better served by a link up with SAS following disappointing results in the first quarter and over the past year. =========== P O L A N D =========== ELEKTRIM SA: May Favor Vivendi Offer ------------------------------------ The supervisory board of telecom conglomerate Elektrim SA has heard rival proposals from Deutsche Telekom and Vivendi Universal SA for a reorganization of its mobile phone assets and may favor the plan of Vivendi, Dow Jones Newswires reported on Tuesday. Vivendi plans to merge subsidiary Elektrim Telekomunikacja and parent company Elektrim, converting Vivendi's 49% stake in the venture into slightly more than a 50% stake in Elektrim, to ensure Elektrim maintains control of mobile telephone operator Polska Telefonia Cyfrowa. Deutsche Telekom, on the other hand, is proposing to pay Elektrim $400 million for the right to acquire an additional 3.45% stake in PTC via a capital increase. Elektrim's supervisory board intends to make a final decision on which offer to accept within one week, the news agency added. ELEKTRIM SA: Vivendi Proposes Merger of Elektrim and Telco Unit --------------------------------------------------------------- French media giant Vivendi Universal has submitted to the supervisory board of Elektrim SA a plan to merge Elektrim and subsidiary Elektrim Telekomunikacja, Dow Jones in its May 22 edition said. Vivendi proposes to swap its Elektrim Telekomunikacja shares for new shares in Elektrim priced between 49 zloty and 55 zloty. After the completion of a share swap, Vivendi would receive slightly more than 50% of Elektrim's capital. The merger plan is Vivendi's latest effort to counter Deutsche Telekom's $400 million bid to take an additional 3.45% stake in Polska Telefonia Cyfrowa, or PTC, and gain control of the unit. Deutsche Telekom already holds a 45% stake in PTC, while Elektrim holds 51% and Holdco, a holding company with financial ties to Deutsche Telekom, owns 4%. HUTA KATOWICE: To Change Debt Structure --------------------------------------- Huta Katowice has initiated steps to lower its debt of ZL2.4 billion, Polish News Bulletin & World Reporter in its Monday's edition said. The steel mill will hold talks with a consortium of six banks to repay ZL400 million loan received in 1998. HK will soon begin negotiations with the Polish state railways PKP to restructure its debt of ZL400 million. By the end of 2001, HK plans to liquidate its debt to the gmina of Dabrowa Gornicza. A consortium of potential foreign investors, including Luxembourg's Arbed, France's Usinor, Germany's Thyssen Krupp and Salz Gitter, is performing due diligence in the company. =========== S W E D E N =========== FRAMFAB AB: Approves New Stock Issues ------------------------------------- Swedish Internet consultant Framfab has approved the Board's decision concerning a new stock issue comprising 175 million new shares for existing shareholders, the May 22 press release said. Should this directed stock issue be fully subscribed, it will generate SEK175 million through the subscription to 175 million new shares, and will raise the company's share capital by SEK17.5 million. This new stock issue is directed at strategic and institutional investors. The issue price for the new shares will be SEK1 per share. Framfab also approved the new stock issue with preferential rights for existing shareholders, in which each old share will entitle the holder to subscribe for one new share. Should this stock issue be fully subscribed, it will generate SEK150 million through the subscription to no more than 149,841,219 new shares, and will raise the company's share capital by approximately SEK15 million. The issue price for the new shares will be SEK1 per share. The preferential stock issue is conditional upon at least 100 million of the shares issued being initially subscribed by shareholders exercising their preferential rights, or, secondly, by others without preferential rights. In addition, the stock issue is conditional upon all 175 million of the shares in the directed stock issue being subscribed by strategic and institutional investors. FRAMFAB AB: Secures 158 Million Swedish Krona for New Share Issue ----------------------------------------------------------------- Framtidsfabriken AB has secured commitments of SEK158 million from institutional and strategic investors toward a SEK175 million new share issue, the company's May 22 press release said. The share issuance is designed to generate fresh capital and improve the company's cash position. After the completion of the directed issue of new shares, Framfab also plans a new share issue with pre-emption rights for existing shareholders amounting to a maximum of SEK 150 million. A number of major private shareholders of Framfab have already announced their intention to subscribe in this issue of new shares. These shareholders include CEO Johan Wall, Chairman Sven Skarendahl, Ken Ceder, Peter Svanfeldt, Mattias Soderhielm, among others. LM ERICSSON: To Sell UK Factories --------------------------------- Telecom equipment group Ericsson is in advanced talks to sell two UK mobile phone factories to save more than 1,000 jobs, the Financial Times reported on Wednesday. Trade and industry secretary Stephen Byers has been closely involved in the effort to find buyers for the Carlton plant in Nottinghamshire and Scunthorpe in the north. The closures are part of a wide-ranging restructuring by the Swedish group, which last year suffered losses of more than $2 billion (1.3 billion pounds) on its mobile phones, the Times added. =========================== U N I T E D K I N G D O M =========================== DOLPHIN TELECOM: S&P Cuts Rating to Single-C -------------------------------------------- Standard & Poor's on Tuesday lowered its corporate credit rating on Dolphin Telecom PLC, an operator of mobile communication networks for business customers in Western Europe, to triple-'C'- minus from triple-'C'-plus and lowered its senior unsecured debt rating to single-'C' from triple-'C'-minus. The ratings on Dolphin remain on CreditWatch with negative implications, where they were placed March 8. The ability of Dolphin to continue as a going concern is dependent on the company obtaining additional funding in the short-term as well as refinancing or extending the maturity of its current credit facilities. Given Dolphin's extremely weak competitive position and difficult capital market conditions, Standard & Poor's believes there is a strong possibility that Dolphin will not be successful in securing additional capital, and, as such, there is a significant risk that the company will be unable to meet its obligations over the next 12 months. Furthermore, the ability of Dolphin to renegotiate its credit facilities remains uncertain and presents a further short-term threat to Dolphin's future. If Dolphin were to be in default of its financial obligations, the repayment of its senior discount notes could be accelerated under cross default provisions. The failure by Dolphin to secure additional capital in the short term will likely result in a further downgrade of its ratings and could threaten the ratings on its parent company, Telesystem International Wireless Inc. EQUITABLE LIFE: Insurer Faces Angry Protests -------------------------------------------- Equitable Life is facing protests from angry customers who have lost money since it ran into financial difficulty last year, BBC News on Wednesday reported. In December, the troubled insurer stopped selling policies after the House of Lords ruled it must pay the full cost of special pension promises to more than 100,000 customers. The ruling forced the Equitable to deprive nearly a million other customers of a part of their savings. MARKS & SPENCER: Drops Profit to 14% Amid Restructuring Plans ------------------------------------------------------------- Marks & Spencer PLC reported a 14% slide in net profit before exceptional items to 328.2 million pounds (538.4 million euros) for the year ended March 31, from 379.4 million pounds a year earlier, according to a Wall Street Journal report yesterday. Pretax profit fell 14% to 480.9 million pounds from 557.2 million pounds. Shares in the British retailer dropped in the past week in anticipation of disappointing results, which came weeks after Marks & Spencer announced a reorganization that includes the sales of its continental European stores and of clothier Brooks Brothers in the U.S. Marks & Spencer announced last month that it was closing its European branches to restore profitability to the group. More than 4,000 jobs will be cut because of the shutdown. Three nonexecutive directors, including Sir David Sieff, will retire at July's annual general meeting. The departures represent a complete overhaul of the Marks & Spencer board. Marks & Spencer also said it will vacate its historic offices in London's Baker Street and move to a smaller building at Paddington Basin in West London in 2003. MARKS & SPENCER: Reshuffles Boardroom ------------------------------------- Marks & Spencer unveiled on Tuesday its third boardroom reshuffle in 12 months, the May 22 company press release said. Sir Michael Perry, Sir Ralph Robins and Sir David Sieff will retire from the board in July, leaving Dame Stella Rimington and finance director Robert Colvill as the only directors to have survived chairman and chief executive Luc Vandevelde's reign. Vandevelde hopes to announce at least two replacements in the summer. ************** 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 * * *