/raid1/www/Hosts/bankrupt/TCREUR_Public/010606.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, June 06, 2001, Vol. 2, No. 110


                            Headlines

* F R A N C E *

AIR LIBERTE: Air France Considers Code-Sharing
AIR LIBERTE: UK Firm Awaits Airline Plan

* G E R M A N Y *

DAIMLERCHRYSLER: Names New Marketing Partners

* G R E E C E *

OLYMPIC AIRWAYS: Government Launches Phase 2 of Privatization

* H U N G A R Y *

MALEV AIRLINES: Widens After-Tax Loss to Ft9.3BB

* I R E L A N D *

EIRCOM PLC: Surges as Valentia Talks Continue
EIRCOM PLC: Valentia Leads Eircom Race

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

KPN NV: Shares Nosedive on Rights Issue
LETSBUYIT.COM: Unveils Marketing Drive to Increase Sales

* P O L A N D *

DAEWOO MOTOR: To Get $20MM Financing From Pol-Mot Holding

* R U S S I A *

MEDIA-MOST: Russia Drops One Warrant for Gusinsky

* U N I T E D   K I N G D O M *

BRITISH TELECOM: Confirms Syntegra Is Not for Sale
BRITISH TELECOM: Pays Auditors 9.8MM Pounds for Demerger Reports
GLOBAL TELESYSTEMS: NYSE Suspends Trading of GTS Shares
MARKS & SPENCER: To Avoid Court Action in Belgium
MILLENIUM DOME: At Center of Regeneration Plans
ONE.TEL: Foreign Operations Up for Sale
RAILTRACK GROUP: To Fall Out of FTSE
UNIQ PLC: Widens Loss to 116.7MM Pounds


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


AIR LIBERTE: Air France Considers Code-Sharing
----------------------------------------------

Groupe Air France SA would soon decide whether to accept a
proposal by AOM and Air Liberte chief Marc Rochet to code share
for certain routes, AFX News on Sunday reported.

"We have not ruled this out. I will give Rochet my answer in the
next few days," Air France CEO Jean-Cyril Spinetta said.


AIR LIBERTE: UK Firm Awaits Airline Plan
----------------------------------------

Following the FFR3 billion initial offer for AOM and Air Liberte,
the UK consulting firm AITI Holding said it is waiting for a
business plan from the troubled airlines, the Monday edition of
AFX News reported.

AITI chairman Robert Palmerini said the management of AOM and Air
Liberte failed to show much determination to sell their business.

According to AOM and Air Liberte, they had no tangible proof of
AITI's funds. The airlines would continue to pursue the
evaluation of real and serious offers that have been made by
other parties.


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


DAIMLERCHRYSLER: Names New Marketing Partners
---------------------------------------------

DaimlerChrysler AG named US-based Fusion 5 and Arnell Group to
the company's marketing and advertising team, the Monday edition
of Dow Jones Newswires reported.

The two new partners will work closely with the company's lead
advertising and marketing agency PentaMark to develop new
business opportunities for the Chrysler, Jeep and Dodge brands.

DaimlerChrysler's sales and marketing chief James Schroer
announced strategies to boost Chrysler's sagging image. Aside
from advertising campaigns, the company will have to focus its
co-marketing efforts with its dealers so they can tailor
incentives to customers in their region. Chrysler will also make
ads that people remember, from lapel buttons to television
commercials.

Chrysler reported a $1.2 billion loss for the first quarter. It
expects a $2.5 billion operating loss this year before breaking
even next year.


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


OLYMPIC AIRWAYS: Government Launches Phase 2 of Privatization
-------------------------------------------------------------

The Greek government has launched the next stage of the
privatization process for national carrier Olympic Airways, M2
Communications Ltd. in its June 1 edition said.

The government plans to sell a stake of 51 to 65% in the ailing
carrier. Credit Suisse First Boston (CSFB), which is managing the
process, has indicated that it has not selected a preferred
bidder because none of the bids met the Greek government's terms
of sale.

Furthermore, the government has asked Axon Airlines, Golden
Aviation Services, Cyprus Airways and Integrated Airline
Solutions to submit new bids by June 18.


=============
H U N G A R Y
=============


MALEV AIRLINES: Widens After-Tax Loss to Ft9.3BB
------------------------------------------------

Mal,v Hungarian Airlines Rt reported last week an after-tax loss
of Ft9.35 billion ($31 million) on net sales revenue of Ft108.6
billion in 2000, compared with the Ft4.98 billion after-tax
profit on Ft87.6 billion on net sales revenue in 1999, the
Budapest Business Journal's June 4 edition said.

The loss was attributed to a price increase of fuel, the
weakening of the euro and heavy losses on long-haul flights.

The operating loss in 2000 was Ft 3.8 billion. The number of
passengers grew 6.5% to 2.15 million, while income from scheduled
flights increased 21% last year.

Meanwhile, Mal,v continued its effort to cut costs related to
manpower, maintenance and ground services.


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


EIRCOM PLC: Surges as Valentia Talks Continue
---------------------------------------------

Almost 4.5 million shares in Eircom were traded on the London
market as talks between Eircom management and Sir Anthony
O'Reilly's Valentia consortium continues, according to The Irish
Times' report yesterday.

Valentia has secured the backing of the Employee Share Ownership
Trust, which owns 14.9% of Eircom, and can increase this to
29.9%. Provident Equity, Warburg Pincus and Goldman Sachs and
Soros back the consortium.

Meanwhile, Kohlberg Kravis Roberts, along with Blackstone, Denis
O'Brien's eIsland consortium and financier Dermot Desmond, had
direct discussions with Eircom management to bid for the control
of the company.


EIRCOM PLC: Valentia Leads Eircom Race
--------------------------------------

Sir Anthony O'Reilly's Valentia consortium appears to be the
frontrunner to buy telephone monopoly Eircom after agreeing to
offer the employee share ownership trust (Esot) a 29.9% stake in
the bid in return for its support, the Financial Times reported
on Monday.

Valentia has not disclosed its cash offer for Eircom's fixed-line
business. However, bankers indicate that Sir Anthony's offer is
lower than E1.22 a share.

Last week, Denis O'Brien's e-Island consortium said it increased
its cash offer from E1.20 to E1.22 a share. It also promised to
offer Esot a 24.9% stake.

Irish financier Dermot Desmond also expressed interest to bid for
Eircom. Kravis Kohlberg Roberts has been in contact with the
company but has not made a formal bid. US finance company
Blackstone Group is considering entering the race, too.


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


KPN NV: Shares Nosedive on Rights Issue
---------------------------------------

Shares in telecom firm KPN NV nosedived as much as 21% to 8.76
euros on Friday morning, after rumors of an imminent rights
issue, BBC News in its June 3 edition said.

The latest drop was caused by a report in the Financial Times
newspaper saying that the firm was about to issue a 5 billion to
5.5 billion euro rights issue in order to reduce its debt, which
has now risen to 23.2 billion euros.

The drop in the share price came before the firm reported a net
loss of 539 million euros for the first quarter of the year.

KPN shares slightly recovered in the early afternoon. They closed
down 18.5% lower at 8.99 euros.


LETSBUYIT.COM: Unveils Marketing Drive to Increase Sales
--------------------------------------------------------

LetsBuyIt.com in its May 31 press release announced the launch of
a new marketing drive, commencing with two significant new
strategic partnerships and the launch of a pan-European
promotional campaign.

The company's leading travel site Priceline will provide
LetsBuyIt.com members with instant access to its unique Name Your
Own PriceT buying system for flights, hotel rooms and car hire.

Under the terms of agreement, Priceline will promote
LetsBuyIt.com in its mass mailings distributed to members on an
ongoing basis. The partnership also offers LetsBuyIt.com's UK
members the chance to Name Your Own PriceT for Priceline's
bargain flights with world class airlines, hotels and car hire
partners, direct from the co-buying site.

The second partnership is with pan-European online auction
community QXL ricardo plc.

The deal with QXL will involve a joint marketing campaign,
initially consisting of banner swaps and newsletter marketing in
UK, Germany, Sweden and France, where QXL is equally present.

Both deals will involve joint marketing campaigns through which
LetsBuyIt.com plans to reach a wide audience of European Internet
users, helping to significantly expand its member community.

LetsBuyIt.com's promotional campaign will run from May 28 to June
24. It will offer members a new range of summer products and
services such as the latest model of Sony Minidisc RZ700 and
Digital cameras. The company will also feature a new promotion
each week, such as the chance to win a Gucci Fashion makeover or
a Home Entertainment system.


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


DAEWOO MOTOR: To Get $20MM Financing From Pol-Mot Holding
---------------------------------------------------------

Pol-Mot Holding on Friday agreed to inject $20 million into
Daewoo Motor Polska (DMP) and take over part of DMP's shares,
Poland A.M. on Monday reported.

The agreement will be imposed by the end of July only if DMP's
eight creditor banks sign a contract on the restructuring of the
company's liabilities.

DMP also agreed to hand over to Pol-Mot Holding its shares in
several other companies, including a majority stake in engine
producer Andoria, and 50% of UK-based van producer LDV.


===========
R U S S I A
===========


MEDIA-MOST: Russia Drops One Warrant for Gusinsky
-------------------------------------------------

Following complaints that issuing two warrants is illegal, the
Russian prosecutor-general's office canceled one of its two
warrants for the arrest of Media-Most founder Vladimir Gusinsky,
the Associated Press reported on Monday.

In November, Gusinsky was charged with fraud, arrested in Spain
on the Moscow-issued warrant, but was later freed. A Spanish
court in April rejected Russia's demand to extradite him. Days
after the ruling, the Russian prosecutor-general's office issued
a second warrant for Gusinsky's arrest, on charges of money
laundering.

According to Media-Most lawyers, the prosecutors have no right to
do that since Russian law forbids issuing two warrants at a time
on different charges for the arrest of the same person.

Government officials, who canceled the second warrant, insist
they are only trying to end alleged financial misdeeds by
powerful tycoons.


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


BRITISH TELECOM: Confirms Syntegra Is Not for Sale
--------------------------------------------------

A British Telecom spokesman has confirmed that Syntegra is
presently not for sale, following reports that BT was looking for
a buyer of the IT services operation to reduce its alleged 30-
billion-pound debt, BBC News on Sunday reported.

The telecom giant decided to do a U-turn after the sale of
directory business Yell raised 2.1 billion pounds.

The spokesman added the company was keeping all options open as
they look forward. BT recently asked its shareholders to inject
more of their money through a near 6-billion-pound share issue.
It is also preparing to de-merge BT Wireless later in the year,
sell its share in Concert, in the French telecom group Cegetel,
and Italian mobile group Blu.


BRITISH TELECOM: Pays Auditors 9.8MM Pounds for Demerger Reports
----------------------------------------------------------------

As reflected in British Telecom's annual report, the telecom
giant paid its auditor PricewaterhouseCoopers 9.8 million pounds
last year for reports on demerger and restructuring projects,
according to The Times' report yesterday.

In total, PwC made 18.3 million pounds from BT, up 24% on fees
last year, with lower income from work on the ailing Concert
joint venture with AT&T. BT also plans to demerge its BT Wireless
mobiles arm.

The report reveals that more than 21,000 BT investors have
deserted the company in the past year, taking shareholder numbers
down to 1.79 million at March 31. BT has now lost 595,000
shareholders in the past five years, the Times added.


GLOBAL TELESYSTEMS: NYSE Suspends Trading of GTS Shares
-------------------------------------------------------

Trading of the Global TeleSystems, Inc. shares has been suspended
on the New York Stock Exchange (NYSE) due to indications of an
abnormally low selling price for GTS's common stock, Business
Wire in its June 4 edition said. The NYSE also intends to delist
the company's shares with the Securities and Exchange Commission.

GTS does not believe that the NYSE's decision is well founded in
the Exchange's rules and is thus immediately appealing the
decision. Under NYSE rules, any prospective delisting would be
stayed pending resolution of the company's appeal.

In the meantime, the company will apply for immediate quotation
of its shares on the OTC bulletin board.

Upon completion of the restructuring program, GTS may consider
listing their shares on a major bourse in Europe.


MARKS & SPENCER: To Avoid Court Action in Belgium
-------------------------------------------------

Authorities in Belgium said it was unlikely that retail group
Marks and Spencer would be prosecuted over plans to close stores
in the country, according to Namnews' Monday edition.

"Up to now, we have not found any evidence that Marks and Spencer
have broken the relevant law," Michel Aseglio, the civil servant
in charge of the investigation, said.

Under Belgian law, a report has to be sent to the labor
authorities before a criminal prosecution can begin. M&S said it
had not received formal notification of any ruling in Belgium,
but said it had always believed it had complied with labor laws
in its plans to close 38 stores in Europe with the loss of almost
3,400 jobs.


MILLENIUM DOME: At Center of Regeneration Plans
-----------------------------------------------

Millennium Dome will be at the center of a regeneration of the
entire Greenwich area if plans being drawn up by a consortium
will be completed, the Guardian reported yesterday.

The Grosvenor Estates is part of a group of property developers
working with BBC Worldwide to keep the Dome open as a visitor
attraction. Quintain Estates & Development, a member of the
consortium, is now working with English Partnerships and
Greenwich council on devising a development plan for the
Greenwich peninsula.

Quintain chief executive Adrian Wyatt said he was thrilled that
Greenwich council and English Partnerships asked the company to
formally consider a plan for the whole of the peninsula.


ONE.TEL: Foreign Operations Up for Sale
---------------------------------------

The UK operation of Australian group One.Tel, as well as its
operation in Hong Kong and continental Europe, will be sold, CIT
Online in its June 4 edition said.

The move to sell off the telecom group's international interests
is seen by analysts as the precursor to it being placed in
liquidation.

Meanwhile, shareholders News Corp and Kerry Packer's PBL have
accused One.Tel, claiming they were misled over the company's
financial position. The Australian Securities and Investment
Commission are also examining allegations of insider trading and
the possibility that the company had been operating while
insolvent.


RAILTRACK GROUP: To Fall Out of FTSE
------------------------------------

Railtrack, whose shares have more than halved since the Hatfield
rail crash in October, is expected to fall out of the FTSE 100
this week, the Financial Times on Sunday reported.

FTSE International said that based on Friday's closing price at
435p, valuing the company at 2.24 billion pounds, Railtrack was
ranked as the 114th largest company by market capitalization.
This is technically below the point at which it could drop
outside the FTSE 100 index.

The FT added that if a company is lower than 110th in the
rankings, it is thrown out, if it is higher than 90th it moves
in.


UNIQ PLC: Widens Loss to 116.7MM Pounds
---------------------------------------

Food company Uniq Plc lost 116.7 million pounds ($165.8 million)
for the year to March 31, compared with a 15.7 million pounds a
year earlier, the June 4 edition of Bloomberg said.

Uniq said it was unprofitable in fiscal 2001 because of the foot-
and-mouth disease-related losses at its pig-meat processing
business Malton Foods.

Bloomberg further reported that Uniq has closed factories and cut
jobs in an effort to turn around Malton, which also lost 11.4
million pounds.

                                  *************

        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
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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.


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