/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010530.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 30, 2001, Vol. 2, No. 105 Headlines * B E L G I U M * LERNOUT & HAUSPIE: Ex-CEO Arrested on Fraud SABENA SA: To Focus on Core Passenger Traffic * C Z E C H R E P U B L I C * CKD DOPRAVNI: May End Siemens Negotiations * F R A N C E * AIR LIBERTE: Flight Disruptions Ease After Strike * G E R M A N Y * BANKGESELLSCHAFT BERLIN: Savings Banks to Rescue Bankgesellschaft DAIMLERCHRYSLER: Replaces Head of US Truck Unit * G R E E C E * OLYMPIC AIRWAYS: Greece Extends Bids Review to June * H U N G A R Y * MALEV AIRLINES: Reaches Accord With Unions * I R E L A N D * IRISH ISPAT: Faces Strike Action Threat * N E T H E R L A N D S * MANAGEMENT SHARE: Files for Liquidation of Subsidiaries * P O L A N D * DAEWOO MOTORS: Agrees to Sell Van Unit ELEKTRIM SA: Board Dismisses CEO Lunderg ELEKTRIM SA: Board Seeks Improved Vivendi and DT Bids * S P A I N * SINTEL: Moves Ahead With Bankruptcy * S W E D E N * FRAMFAB AB: Says Directed Share Issue Oversubscribed * S W I T Z E R L A N D * ISSM GROUP: Denies FIFA Fraud Charge ISMM GROUP: FIFA Boss Estimates 50MM Euros in Secret Account * U N I T E D K I N G D O M * BRITISH TELECOM: Plans to Sell Gas and Power BRITISH TELECOM: Plans TV Broadcasting COMPASS GROUP: Sells Le Meridien Hotels for $2.68 Billion EIDOS PLC: Declines to Comment on Rights Issue Report EIDOS PLC: To Launch 50-Million-Pound Rights Issue MARKS & SPENCER: Hires Private Eyes MILLENNIUM DOME: Duke-Quintain Consortium on Verge of Deal QXL RICARDO: Loss Narrows to $23 Million SPORTAL LTD: Seeks New Funding to Keep Afloat ============= B E L G I U M ============= LERNOUT & HAUSPIE: Ex-CEO Arrested on Fraud ------------------------------------------- U.S. Marshals has on Saturday arrested former Lernout & Hauspie Speech Products N.V. chief executive Gaston Bastiaens near his home in the United States on fraud charges, the Associated Press reported. Bastiaens, on a Belgian warrant, was charged with insider trading, stock market manipulation, and violation of bookkeeping laws associated with the collapsed of the speech recognition software company. Last month, Belgian investigators also charged company co- founders Jo Lernout and Pol Hauspie and former board member Nico Willaert with falsification of documents and stock manipulation. The three have denied the charges. L & H, which has $495 million in total debt, forced the firm to seek bankruptcy protection in Belgium and the United States last year. Accounting scandals and fraud allegations also sent its stock crashing. SABENA SA: To Focus on Core Passenger Traffic --------------------------------------------- Sabena will present its business plan to shareholders SwissAir and the Belgian state at the end of this week or during the following week, the May 25 edition of Dow Jones Newswires reported. The plan, which is intended to reposition the national air carrier, is expected to focus on its core air transport business and its profitable routes in Europe and Africa. It could also divest its handling, catering, maintenance and cargo units. =========================== C Z E C H R E P U B L I C ============================ CKD DOPRAVNI: May End Siemens Negotiations ------------------------------------------ The board of creditors of CKD Dopravni Systemy, lead by state-run Konslidacni banka, will terminate negotiations with German company Siemens if it doesn't raise the sum offered for the purchase of the bankrupt Czech rail vehicles producer, Pravo & World Reporter in its May 25 edition said. Siemens was given until May 28 to raise an acceptable price of Kc750 millon. CKD Dopravni's trade unions claim that Siemens has not fulfilled the expectations of the creditors, bankruptcy managers and employees. =========== F R A N C E =========== AIR LIBERTE: Flight Disruptions Ease After Strike ------------------------------------------------- Air travelers in France faced less disruption on Friday as striking staff at AOM and Air Liberte began heading back to work after two days of strikes, according to Wall Street Journal. Nearly 80% of the flights were running on schedule, while routes between Paris and the cities of Bordeaux, Montpelier, and Marseille were still affected by the strike. International flights to Tahiti and French Guiana were canceled. Employees of both airlines walked off their job to protest plans to cut 1,300 jobs, representing more than 20% of the airlines' work force, as part of a restructuring plan. ============= G E R M A N Y ============= BANKGESELLSCHAFT BERLIN: Savings Banks to Rescue Bankgesellschaft ----------------------------------------------------------------- State-owned Sparkassen (savings banks) are in talks with the Berlin Senate to acquire the embattled Bankgesellschaft Berlin, after a third party has lost interest to save the bank, AFX News on May 25 reported. Berlin finance senator Peter Kurth said it is unlikely that the third party is not prepared to guarantee the estimated 2.0 billion euros in extra capital required for the bank's future survival. Norddeutsche Landesbank (Nord/LB), which holds 20% in Bankgesellschaft, declined to comment on a future deal with the crisis-ridden Berlin bank. Report from the Frankfurter Allgemeine Zeitung said that Nord/LB would only be interested in acquiring the bank on the condition that it is given the leadership of the bank as well. Sparkassen and Nord/LB are awaiting the June results of a special audit into the bank's finances by Germany's banking watchdog BAKred before they make a decision. DAIMLERCHRYSLER: Replaces Head of US Truck Unit ----------------------------------------------- DaimlerChrysler AG has replaced Jim Hebe, the head of its North American Freightliner unit on Friday, with Rainer Schmueckle, the Associated Press reported. The move suggests that Hebe is paying the price for growing losses at the truck maker. DaimlerChrysler spokesman Michael Pfister refused to comment on the reasons for Hebe's departure. Schmueckle, described by DaimlerChrysler as a proven turnaround expert, was Freightliner's chief financial officer from 1994-1997 and is a senior vice president of DaimlerChrysler. The company also appointed Roger Nielsen to be Freightliner's chief operating officer. =========== G R E E C E =========== OLYMPIC AIRWAYS: Greece Extends Bids Review to June --------------------------------------------------- Greece will extend the deadline for the outcome of evaluation of binding bids for cash-strapped airline Olympic Airways to mid- June as the offers were lacking clarifications, and fell short of the tender's requirements, Dow Jones Newswires reported on Friday. Only Cyprus Airways had submitted an integrated business plan for the Greek airline, despite the low price offer of around 25 billion drachmas (EUR1=GRD340.75) for a 51% stake. Cyprus Airways has also been in talks with Italy's Alitalia and Frankfurt Airport to form a consortium that will jointly bid for a controlling stake in Olympic. The other offers submitted were by small private Greek carrier Axon airlines and Restis shipping group. Credit Suisse First Boston is the sale's adviser for the 51% and 65% stake of Olympic, whose debt is estimated at around EUR117 million. ============= H U N G A R Y ============= MALEV AIRLINES: Reaches Accord With Unions ------------------------------------------ State-owned airline Malev has reached an agreement with labor unions on the carrier's new business and restructuring strategy, M2 Communications Ltd. in its May 25 edition said. The restructuring strategy includes a reduction in the carrier's work force, the termination of some long-distance flights and a reduction in the number of foreign representative offices. Under the agreement, Malev will give its employees a wage increase equivalent to 4.9% of the average inflation for 2000. The increase is retroactive to January 1, 2001. In 2002, wages will rise by 50% of the average inflation for 2001, and the year after, wages will increase by the rate of average inflation for 2002. Employees may also receive further benefits if certain corporate targets are met. ============= I R E L A N D ============= IRISH ISPAT: Faces Strike Action Threat --------------------------------------- The 350 workforce of Irish Ispat has threatened the steel mill with strike action over cost-cutting exercise, the Irish Independent on Sunday reported. However, SIPTU (Services, Industrial, Professional & Technical Union) official Cllr Dan Crowley confirmed that strike action would be expected if the firm insists on enforcing their plan without workforce agreement. Crowley also pointed out that the union will not accept 50 enforced lay-offs, an overtime ban, a 10% wage-cut and even the loss of discounted meals in the firm's canteen. Ispat, whose losses continue to mount at the plant on Haulbowline Island in Cork, is demanding a 60% hike in production output, a level which workers claim is impossible to achieve without new machinery. SIPTU and Irish Ispat management will meet this week to discuss the alternatives. ===================== N E T H E R L A N D S ===================== MANAGEMENT SHARE: Files for Liquidation of Subsidiaries ------------------------------------------------------- Management Share has filed for liquidation of subsidiaries Data Consult, iShare, EDCOSS and VAC Software Share, De Volkskrant & World Reporter in its May 25 edition said. The IT services provider filed for suspension of payment after its attempts to find new investors failed. In mid-May, the Amsterdam court granted Management Share a temporary suspension of payment. =========== P O L A N D =========== DAEWOO MOTORS: Agrees to Sell Van Unit -------------------------------------- South Korean auto maker Daewoo Motor Co. has agreed to sell a 75% stake in its Polish van plant in the eastern city of Lublin to local group Pol-Mot Holding SA for an undisclosed amount, the May 25 edition of Agence France-Presse reported. Under the deal, Pol-Mot would invest 20 million dollars (23.3 million euros) in Daewoo Motors Polska and buy shares worth 75% of the company. The deal is expected to conclude by the end of June to allow the launching the LD 100 model project by the end of the year. Earlier this year, the Lublin plant announced it would lay off 912 of its 4,000 employees due to the drop of sales on the Polish market. ELEKTRIM SA: Board Dismisses CEO Lunderg ---------------------------------------- The supervisory board of telecommunications conglomerate Elektrim voted on Friday to dismiss company president and chief executive officer Barbara Lundberg, Dow Jones reported. Supervisory Board Chairman Waldemar Siwak was named as acting president and chief executive of the company to replace Lundberg. He will head a four-member special committee to review the Deutsche Telekom and Vivendi offers. A board member said that Lundberg no longer served the best interests of the company by remaining in her post. ELEKTRIM SA: Board Seeks Improved Vivendi and DT Bids ----------------------------------------------------- The supervisory board of Elektrim SA wants Deutsche Telekom AG and French media giant Vivendi Universal to improve their bids for the control of Elektrim's mobile unit Polska Telefonia Cyfrowa, the Friday edition of Dow Jones Newswires said. Early last week, Vivendi unveiled a plan to merge joint-venture telecom subsidiary Elektrim Telekomunikacja back into parent company Elektrim to ensure that Elektrim maintains control of PTC, in which it holds a 51% stake via the Elektrim Telekomunikacja venture with Vivendi. Elektrim's management had previously endorsed a rival offer from Deutsche Telekom, which controls 49% of the mobile operator through mobile subsidiary DeTeMobil AG and an allied Polish- registered company, Holdco. The German group has proposed to pay Elektrim $400 million for the right to acquire an additional 3.45% stake in PTC via a capital increase. ========= S P A I N ========= SINTEL: Moves Ahead With Bankruptcy ----------------------------------- A Madrid court will now decide whether or not to accept the bankruptcy that telecom equipment manufacturer Sintel filed on May 14, El Pais in its May 25 edition said. The unions are in talks with the ministry of science and technology in a bid to find a solution for the company that owes 20,000 million pesetas. Sintel, which suspended its payments in June, has been involved in industrial dispute since February 2000 due to unpaid wages and threats of redundancies. =========== S W E D E N =========== FRAMFAB AB: Says Directed Share Issue Oversubscribed ---------------------------------------------------- Internet consultancy firm Framtidsfabriken AB on Friday said that its new SEK175 million share issue directed at strategic and institutional investors has been oversubscribed. No single investor has subscribed for shares for more than SEK 40 million. The directed share issue is conditional upon the subscription of shares in the rights issue amounting to at least SEK100 million. The directed issue will provide Framfab with SEK175 million before costs related to the issue. The subscription price is SEK1. The shares that were subscribed in the directed issue correspond to approximately 36,9 percent of the share capital and votes in Framfab, provided that the rights issue is fully subscribed. ===================== S W I T Z E R L A N D ===================== ISSM GROUP: Denies FIFA Fraud Charge ------------------------------------ Bankrupt sports rights firm ISMM Group denied embezzling 75 million Swiss francs ($42 million) from FIFA (International Football Association Federation), Bloomberg in its May 27 edition said. According to ISMM Chairman Christoph Malms, the money was a loan that was booked properly in the company's business accounts. In a press conference on Friday, FIFA President Sepp Blatter said the money was paid to ISMM by a Brazilian television company for rights to broadcast the World Cup. Blatter said the money was paid into accounts unrelated to soccer. ISMM GROUP: FIFA Boss Estimates 50MM Euros in Secret Account ------------------------------------------------------------ FIFA (International Football Association Federation) president Sepp Blatter admitted that around 75 million Swiss francs (50 millions euros) given by Brazilian television company O Globo to collapsed sports marketing company ISL-ISMM ended up in a secret bank account, Agence France-Presse in its May 25 edition said. Blatter said that the money that came from the sale of television rights contract were deposited in an account that wasn't set up for the television rights of the 2002 World Cup. If it is true, it's a secret account and FIFA will file a complaint. FIFA president also admitted earlier that FIFA could face losses of up to 100 million Swiss francs (56 million dollars) following the bankruptcy of International Sports Media and Marketing (ISMM) and its offshoot International Sport and Leisure (ISL). =========================== U N I T E D K I N G D O M =========================== BRITISH TELECOM: Plans to Sell Gas and Power -------------------------------------------- British Telecommunications PLC is considering plans to offer gas and electricity to its 19 million retail customers to reshape and focus on its domestic business, the Sunday Telegraph reported. The group is expected to set up a working party to look at the prospects for diversification once it has completed its 5.9 billion pound rights issue and multibillion pound disposal program to reduce its debt. BT is thought to have considered a move into other services in the past but chief executive Sir Peter Bonfield quashed this. Both chairman Sir Christopher Bland and finance director Philip Hampton are now keen on the idea, which they believe will extract more value from BT's enormous customers base. BRITISH TELECOM: Plans TV Broadcasting -------------------------------------- British Telecom chairman Sir Christopher Bland, who replaced Sir Iain Vallance on April, is looking into options to move into television broadcasting, putting itself in competition with cable operators NTL Incorporated and Telewest Communications PLC, the BBC News in its May 27 edition said. BT has already upgraded much of its network to make it possible to use the new ADSL technology for high-speed Internet access and for broadcasting sound and moving pictures. BT is currently undergoing a massive restructuring program that includes the demerger of its mobile phone division Cellnet and the sale of its online telephone directory Yell. It is also struggling to reduce its debts and asking its shareholders to inject more of their money through a near 6-billion-pound issue of discounted shares. COMPASS GROUP: Sells Le Meridien Hotels for $2.68 Billion --------------------------------------------------------- Food-service company Compass Group PLC on Friday agreed to sell its Le Meridien Hotels chain to a company formed by the Principal Finance Group arm of Japanese investment bank Nomura Corp. for 1.9 billion pounds ($2.68 billion) in cash, the Wall Street Journal reported. Completion of the sale is expected within approximately six weeks and is conditional upon regulatory consents. Proceeds will be used to strengthen the group's balance sheet and to fund strategic acquisitions. Earlier this month, U.S. hotel giant Marriot International Inc. withdrew its bid to acquire Le Meridien after Compass and its financial advisors told the company they preferred the Nomura bid since it was a more straightforward financial transaction. British financier Guy Hands coordinated Nomura's bid. EIDOS PLC: Declines to Comment on Rights Issue Report ----------------------------------------------------- Computer games company Eidos PLC on Sunday declined to comment on a report from The Sunday Times Newspaper that it is preparing to launch a GBP50 million discounted rights issue, Dow Jones Newswires reported. Market observers expect Eidos to announce details of the rights issue next month when it posts results for the year ended March 31. Since his appointment in November, Chief Executive Michael McGarvey has been cutting costs and is implementing further efficiency measures to restore the troubled company to profitability. EIDOS PLC: To Launch 50-Million-Pound Rights Issue -------------------------------------------------- Broker Dresdner Kleinwort Wasserstein has organized a 50-million- pound discounted rights issue for computer-games company Eidos Plc, The Sunday Times reported. The fundraising is likely to be priced at almost half the present share price of 300p. Chief executive Mike McGarvey, who replaced Charles Cornwall last year, has been cutting costs and will implement further efficiency measures to bring the company back into profitability. Eidos has seen its shares tumble from a peak of 10 pounds after a series of delayed product launches and a failed takeover bid last year by French rival Infogrames Entertainment. MARKS & SPENCER: Hires Private Eyes ----------------------------------- Retailer Marks & Spencer has hired a corporate security specialist to investigate the source of the firm's many leaks, which includes the 50-page board document to the press last month, The Sunday Times reported. Its investigators have been visiting all personnel who had access to the dossier to see what has happened to it. The company has also tightened up on security of weekly sales figures and other sensitive data. M&S said the mole was somebody who does not believe in what they are trying to achieve. MILLENNIUM DOME: Duke-Quintain Consortium on Verge of Deal ---------------------------------------------------------- Duke Grosvenor of Westminster's private company and property vehicle Quintain Estates & Development is in exclusive talks with English Partnerships on a deal that will give them control of the 350-million-pound worth Greenwich peninsula, including the Millennium Dome, according to a report from The Sunday Times. The consortium also includes Australian retail-development specialist Lend Lease and developer Stanhope. Quintain, which already owns 14 acres of land adjacent to the dome and has options to purchase a further four acres, formed its consortium while the Legacy deal was collapsing. QXL RICARDO: Loss Narrows to $23 Million ---------------------------------------- Pan-European Internet auctioneer QXL Ricardo said on Friday its fourth-quarter loss narrowed from acquisitions, cost cuts and fees to 16.1 million pounds ($23 million), or 2.7 pence a share, from 23.7 million pounds, or 6.7 p a share, a year ago, CNN reported. The company said its cash pile now stands at 24.3 million pounds and expects its cash burn to fall on a quarterly basis over the next year. SPORTAL LTD: Seeks New Funding to Keep Afloat --------------------------------------------- Investors in Sportal Ltd. agreed to give the pan-European sports- Internet firm one month's worth of operating cash to keep the company afloat as it seeks new funding, the Monday edition of Wall Street Journal said. A Sportal spokesman declined to give the amount of the interim funding, but said the company hopes to raise 5 million pounds to reach profitability. Sportal, backed by Italy's Fininvest SpA in addition to British Sky Broadcasting PLC, has received a preliminary offer from one new suitor and is undergoing due diligence by another. The names of the parties involved were not disclosed. A few weeks ago, Sportal's investors and even senior managers, have considered liquidating the cash-strapped company. Founder and Chief Executive Rob Hersov and his team have recently been scrambling to find investors and meeting with suppliers to cut costs by renegotiating terms. ************** 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 * * *