/raid1/www/Hosts/bankrupt/TCREUR_Public/010711.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, July 11, 2001, Vol. 2, No. 134


                            Headlines

* B E L G I U M *

REAL SOFTWARE: Banks Agree on Debt Restructuring

* F I N L A N D *

SONERA CORP.: S&P Cuts Rating to BBB

* F R A N C E *

MANGOOSTA: Placed Under Court Jurisdiction

* G E R M A N Y *

BANKGESELLSCHAFT BERLIN: Confirms NORD/LB Share in Capitalization
DAIMLERCHRYSLER AG: U.S. Authorities Investigate Cherokee Jeeps
METRO: To Cut Jobs at Praktiker

* G R E E C E *

OLYMPIC AIRWAYS: Cyprus Air Bids for Olympic

* H U N G A R Y *

MALEV AIRLINES: CEO Removal to Delay Global Alliance

* I T A L Y *

ALITALIA-LINEE: Close to Sealing New Alliances

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

KPN NV: Political Opposition Mounts Against Merger

* P O L A N D *

ELEKTRIM SA: Inks $38MM Deal With Eastbridge
STATE RAILWAYS: To Receive 500MM Zloty Loan

* R U S S I A *

NTV: Court Interrupts Consideration of Priza Case

* S W I T Z E R L A N D *

ISMM GROUP: FIFA Boss Faces Pressure

* U N I T E D   K I N G D O M *

ARC INTERNATIONAL: Warns of Deeper Loss for Second Quarter
BRITISH TELECOM: Posts First Decline in Mobile Phone Subscribers
BRITISH TELECOM: To Invest in Spain
CLAIMS DIRECT: Shareholders to Reject Founder's Bid
INDEPENDENT INSURANCE: PcW Issues Warning on Claims
INDEPENDENT INSURANCE: Reinsurance Is Independent's Main Asset
INDEPENDENT INSURANCE: Royal & Sun Buys Part of Independent
RAILTRACK GROUP: Chief's Pay Raise Angers Groups
RAILTRACK GROUP: Chief Marshall Waives Bonus
RAILTRACK GROUP: Robinson Maintains Directorships
WARNACO GROUP: Court Approves $600MM DIP Financing


=============
B E L G I U M
=============


REAL SOFTWARE: Banks Agree on Debt Restructuring
------------------------------------------------

Real Software SA said Monday that it has agreed with its
creditors about how its outstanding debts should be restructured.

The deal is subject to the condition that Real Software buys out
the shareholdings in the group's subsidiaries, held by minority
shareholders.

The agreement includes the restructuring of 4.0 billion Belgian
francs of debt into a loan repayable on the 10th anniversary of
the restructuring. The loan is interest free in the first five
years.

Another 3.8 billion Belgian francs of a debt will be restructured
into a loan repayable over 12 years with a 2-year capital
repayment holiday.

Finally, the 1 billion Belgian francs of debt will be written off
but may be reinstated if the group substantially exceeds growth
forecasts.

A failed U.S. acquisition and huge outstanding debts brought Real
Software to the verge of bankruptcy last year. The group's fate
has largely been in the hands of a consortium of five banks.


=============
F I N L A N D
=============


SONERA CORP.: S&P Cuts Rating to BBB
------------------------------------

Credit ratings agency Standard & Poor on Friday said it had
lowered the debt rating of the Finnish telco Sonera from single A
minus to triple B.

The downgrade places considerable pressure on the company to
restructure its operations.

Standard & Poor said Sonera's debt, which stood at 5.66 billion
euros at the end of March, was too high, relative to its ability
to generate sustainable cash flows.

Its investment in costly third-generation licenses was cited as
fuelling its rocketing debt. Though Standard and Poor expect
Sonera to reduce its liabilities by 3.2 to 3.6 billion euros
through the sale of Deutsche Telekom shares, it still considers
that a further 1 billion euro reduction is desirable.


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


MANGOOSTA: Placed Under Court Jurisdiction
------------------------------------------

Mangoosta has been placed under the jurisdiction of a court for a
four-month observation period, La Tribune & World Reporter in its
July 9 edition said.

The decision allows the Internet ADSL company, which has 35
million French francs liabilities, to suspend the repayment of
its debts and put together a relaunch plan.


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


BANKGESELLSCHAFT BERLIN: Confirms NORD/LB Share in Capitalization
-----------------------------------------------------------------

NORD/LB is not denying its participation in the planned
capitalization of Bankgesellschaft Berlin, but instead wishes to
have a say in the structural changes, Bankgesellschaft said on
Monday, citing economics and politics information service Platow
Brief.

The Berlin media reports there is discussion of new potential
investors in Bankgesellschaft.

Recently, Bankgesellschaft has bought about $3.46 million worth
of its own shares on the market for use in the capital increase,
per BAKred's order to raise $1.69 billion in new capital, partly
to cover property losses.


DAIMLERCHRYSLER AG: U.S. Authorities Investigate Cherokee Jeeps
-------------------------------------------------------------

The U.S. National Highway Traffic authorities has informed
DaimlerChrysler AG unit Chrysler that a preliminary investigation
begun on two complaints involving Grand Cherokee jeeps which had
allegedly shifted out of parking, the Monday edition of AFX News
said.

A Chrysler spokesman said it is still too early to say whether
the investigation will result in the recall of about 1.4 million
Grand Cherokees built between 1995 and 1999.

The preliminary investigation would normally last up to six
months and if warranted, a second phase would take place.


METRO: To Cut Jobs at Praktiker
-------------------------------

Retailer Metro plans to cut between 120 and 150 jobs at the
headquarters of its Praktiker do-it-yourself chain store unit in
Saarland in Germany, the July 6 edition of Namnews said.

The job cut plan is part of Metro's efforts to streamline the
loss-making Praktiker.


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


OLYMPIC AIRWAYS: Cyprus Air Bids for Olympic
--------------------------------------------

Italian airline Alitalia and Greek American businessman John
Katsimatidis are included in a Cyprus Airways consortium bidding
for the troubled Olympic Airways, the Monday edition of Reuters
said.

Both Alitalia and Katsimatidis were said to be part of the group
seeking 51% of the Greek carrier.

Cyprus Airways Consortium is seeking an option to buy a majority
stake in the Greek company, with an option to acquire an
additional 16% in the future.

Last week, Greek government officials said the state would
continue talks with Axon Airlines and runner ups Cyprus Airways
and Australian-based Integrated Airline Solutions.


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


MALEV AIRLINES: CEO Removal to Delay Global Alliance
----------------------------------------------------

The unexpected dismissal of Malev Hungarian Airlines' CEO
Erzsebet Antal last week could slow the process of finding a
global alliance partner for the national carrier, the Monday
edition of Budapest Business Journal said.

Antal said in an interview that Malev was in the final stages of
a decision on forming a partnership with a global airline
alliance. A decision could be expected as early as this month.
Sources said that the partner could be the Star Alliance, which
includes Lufthansa, SAS Scandinavian Airlines and United
Airlines.

According to Ferenc Turi, managing director of consulting company
Roland Berger & Partner, the removal of Antal, who came from the
CFO position, could slow down or disrupt the process of finding
an alliance partner since the airline's current management is
short of people with sufficient knowledge about the airline
industry.

Antal had worked at the airline since 1984. She was the only CEO
who overcame the liquidity crisis, drew up a detailed cost-
cutting program, and managed to agree with the labor unions over
wage increases.

The reason believed to be behind the CEO's dismissal on July 1 by
the State Privatization and Holding Rt, which holds 97% of Malev,
was personal disagreement between her and the APV's management.
Antal declined to comment on her removal.


=========
I T A L Y
=========


ALITALIA-LINEE: Close to Sealing New Alliances
----------------------------------------------

The board of Italian air carrier Alitalia has on Monday approved
the signing of commercial partnership with Air France and the US
carrier Delta Air Lines.

According to a BBC News report on Monday, Alitalia hopes to wrap
up talks with the two airlines by the end of July or in October
at the latest. The deal could bring Alitalia savings of $87
million a year.

Alitalia has already signed two memoranda of understanding with
the two airlines and would join them in the SkyTeam global
alliance. The SkyTeam alliance includes Aeromexico, Korean Air
and CSA Czech Airlines.

The airline has suffered financial problems and has reported a
net loss of $200 million in 2000. It has been seeking a new
partner since KLM Royal Dutch Airlines pulled out of an alliance
last year.


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


KPN NV: Political Opposition Mounts Against Merger
--------------------------------------------------

Political obstacles are growing in Belgium to the proposed merger
between Belgian telecommunications company Belgacom and Dutch
group KPN, according to the Financial Times' Monday report.

Although other advisers support the deal because it would give
Belgacom more advantageous terms than its was offered in previous
talks last year, the Belgian government advisers were swayed
against another link-up with a debt-ridden foreign group with the
plight of loss-making Sabena airline.

Some of the advisers to Belgium's privatization minister Rik
Daems are worried that public opinion would turn against a
Belgacom merger with KPN.


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


ELEKTRIM SA: Inks $38MM Deal With Eastbridge
--------------------------------------------

Telecommunications conglomerate Elektrim has signed an agreement
with Dutch group Eastbridge to purchase all shares of virtual
retailer EasyNet and e-commerce software firm AGS New Media for
$38 million, the Warsaw Business Journal reported on Monday.

French conglomerate Vivendi Universal financed the deal under a
loan agreement.

Elektrim and Eastbridge agreed to drop legal proceedings on a
dispute over the terms of a previous agreement for Elektrim to
purchase stakes in the two companies.


STATE RAILWAYS: To Receive 500MM Zloty Loan
-------------------------------------------

The European Bank for Reconstruction and Development (EBRD) is
set to offer Polish State Railways (PKP) a 500 million zloty loan
to help with its restructuring, the Poland A.M. reported
yesterday.

The loan would be guaranteed by the State Treasury and would
allow the company to fulfill its financial obligations until a
planned bond issue could take place at a later date.

By providing the loan, the EBRD would be responsible for the PKP
bond issue. This would mean a reduction in the issue from 2
billion zloty to an estimated 1 billion zloty.


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


NTV: Court Interrupts Consideration of Priza Case
-------------------------------------------------

A local court in Moscow has interrupted the consideration of a
suit brought by Media-MOST subsidiary Priza against NTV and its
general director Boris Jordan, the Monday edition of RosBusiness
Consulting said.

Priza wants NTV to pay off its promissory notes of about $2.26
million as their term of repayment has already expired.

This decision was made as another Moscow local began considering
a suit brought by NTV against Priza and former NTV general
director Yevgeny Kiselyov to declare the promissory notes
invalid.


=====================
S W I T Z E R L A N D
=====================


ISMM GROUP: FIFA Boss Faces Pressure
------------------------------------

Sepp Blatter, president of soccer's world governing body FIFA
(International Football Association Federation), has been under
increasing pressure for his handling of the collapse of FIFA's
marketing partner ISL/ISMM, Africa News Service in its July 9
edition said.

The congress were worried that the millions of dollars promised
to them was in jeopardy because of the collapse, but Blatter
convinced the delegates that their money was safe and that FIFA's
deficit would be reduced by the end of 2002.

He also promised that the money given to national federations and
confederations would not be affected by the fall of FIFA's
marketing partner.

Blatter added that a special audit for FIFA's financial state
would be carried out and would be released by the end of October.


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


ARC INTERNATIONAL: Warns of Deeper Loss for Second Quarter
----------------------------------------------------------

Shares in microchips designer ARC International dropped 25% as it
warned that losses would increase to 6.5 million pounds in the
second quarter of the year, compared with a 4.4-million-pound
loss in the first three months, according to The Guardian's July
7 edition.

Finance director Simon Poulton said several of the group's
customers decided to hold off from signing new contracts at the
end of last month.

ARC warned that the global slowdown in sales of hi-tech equipment
would push the company further into the red.


BRITISH TELECOM: Posts First Decline in Mobile Phone Subscribers
----------------------------------------------------------------

British Telecommunications in its quarterly mobile phone
subscriber report on Monday show that Cellnet, the UK arm of BT
Wireless, has fallen behind Orange and Vodafone to become the
third-largest operator in the country, the Financial Times said.

BT Cellnet subscribers fell to 10.9 million at the end of June,
down from 11.2 million three months ago.

This was partly due to a decision to discount customers who have
not used their phones for more than three months. Vodafone
recently promised to adopt this policy in future and Orange
already uses a similar reporting standard.

BT Wireless, due to be demerged from BT this autumn, also
suffered a slower growth in Germany, where it added only 124,000
customers compared with 744,000 by Vodafone.


BRITISH TELECOM: To Invest in Spain
-----------------------------------

British Telecommunications plans to invest 110 million pounds in
its Spanish fixed-line business and may seek a deal with its
former joint venture Airtel to offer a mobile service, the Monday
edition of Reuters said.

The Spanish business, known as BT Tel, is part of BT's corporate
data division Ignite and had revenues of 24 billion pesetas last
year.

British Telecom sold its Airtel stake last month to cut debt, and
part of the profit BT got from Airtel will be reinvested in BT
Tel.


CLAIMS DIRECT: Shareholders to Reject Founder's Bid
---------------------------------------------------

Shareholders in personal injury group Claims Direct have been
advised to reject a bid by the founder Tony Sullman and former
chief executive Colin Poole, according to the Financial Times'
report on Monday. Sullman and Poole offered to pay 11.1 million
pounds for the shares they do not already control.

The company, which sank to a pre-tax loss of 20.2 million pounds
for the financial year to March 31, received a cut-price
management buyout offer last month of just 10 pence per share.

Claims Direct independent directors David Hankinson and David
Hickey believe that the offer should not be accepted as the price
of 10p per share was below the closing price of 16p on June 20
and 180p a year ago.

The official offer document said the 10p-a-share bid reflects the
prospects for Claims Direct's business and the possibility that a
profitable business may not be achievable going forward.

The document also warns that repositioning the group's operation
would involve attempting to reduce its cost base significantly by
accepting a lower level of cases each month in order to restore
the group to profitability.


INDEPENDENT INSURANCE: PcW Issues Warning on Claims
---------------------------------------------------

Independent Insurance liquidator PricewaterhouseCoopers warned
that British businesses caught up in the collapse of the insurer
could receive less than one third of the value of their claims,
the Tuesday edition of The Times said.

PwC said that analysis of insolvencies in the London insurance
market shows that the majority of failed insurance companies pay
substantially less than 40% of the value of claims.

The liquidator said that of 17 companies in run-off, just two are
paying more than 40% of the value of claims.

While individual policyholders will receive 90% of the value of
their claims through the Policyholders Protection Board,
corporate customers will receive no such compensation.


INDEPENDENT INSURANCE: Reinsurance Is Independent's Main Asset
--------------------------------------------------------------

Independent Insurance's liquidators PriceWaterhouseCoopers said
the company's biggest asset was its reinsurance contracts, the
Financial Times reported on Monday.

The reinsurance contracts allow insurers to pass on some of their
risk to other parties. Its scale, scope and the circumstances
under which they were written are a key part of the investigation
into Independent's collapse.

Independent, subject of investigations by the Serious Fraud
Office, the Financial Services Authority and PwC, went into
liquidation after a rescue share issue was aborted following the
discovery that four further reinsurance contracts written on
terms were highly unfavorable to Independent.


INDEPENDENT INSURANCE: Royal & Sun Buys Part of Independent
-----------------------------------------------------------

Insurance giant Royal & Sun Alliance confirmed it would buy the
loss adjusting arm of Independent Insurance Group, the commercial
insurer that collapsed into liquidation last month, the Financial
Times reported on Monday.

RSA is paying 2.5 million pounds for the assets and around
500,000 pounds for goodwill and to process future claims.

The deal, agreed with liquidators PricewaterhouseCoopers, will
allow Royal & Sun to take control of Property & Casualty
Services' 300 employees.

Last month, RSA took over insuring 250,000 council tenants that
were previously covered by Independent. It also took on 100
million pounds of former Independent policies, including cover
for commercial and private clients.

Independent Insurance called in the liquidators after uncovering
unquantifiable losses. PcW has already cut 1,044 jobs from
Independent's 2,000 workforce.

Britain's Financial Services Authority is looking into
allegations that some claims were not entered into the firm's
accounts, while the Serious Fraud Office is investigating complex
frauds that involve more than 1 million pounds.


RAILTRACK GROUP: Chief's Pay Raise Angers Groups
------------------------------------------------

The decision to give Railtrack chief executive Steve Marshall a
12.5% pay rise, from 400,000 to 450,000 pounds as of July 1, has
been dubbed obscene by a survivor of the Southall train crash,
the Monday edition of BBC News said.

Passenger groups and rail unions were also angered with the
revelation that Railtrack directors, including Marshall, were
offered increased share options. Marshall was offered 127,014
shares.

The train drivers' union Aslef called the share options
repugnant.

Carol Bell, co-chairman of Safe Trains Action Group was outraged
by the news saying, "I am stunned and very angry about this. This
has added insult to injury again."

Labor MP Gwyneth Dunwoody condemned the rise. She said it was an
indication that when it comes down to it, Railtrack is concerned
about the views of its big investors, the city and its
shareholders, but is not actually interested in any sensitivity
in terms of either the way it responds to the public interest, or
even its own passengers.


RAILTRACK GROUP: Chief Marshall Waives Bonus
--------------------------------------------

Railtrack chief executive Steve Marshall has given up his bonus
worth up to 225,000 pounds and his share options worth 450,000
pounds, the Monday edition of the Financial Times said.

However, the Railtrack chief will retain a special performance
bonus incentive as disclosed in the company's latest annual
report and accounts. This is worth up to one year's salary of
450,000 pounds and is subject to the achievement of stringent
performance criteria.

With the move, Marshall hopes to assuage passenger and government
anger over the company's failure to improve the rail network.


RAILTRACK GROUP: Robinson Maintains Directorships
-------------------------------------------------

Railtrack chairman John Robinson has backed down on a commitment
to quit two out of three of his existing directorships in order
to focus on putting the rail network to rights, according to The
Times' report yesterday.

At the time of Robinson's Railtrack appointment in May, he was
chairman of George Wimpey, RJB Mining and Low & Bonar. Robinson
was expected to quit RJB Mining and Low & Bonar to give him more
time at Railtrack.

Robinson said he intended to give up his position at either
Wimpey or RJB Mining but declined to say which.


WARNACO GROUP: Court Approves $600MM DIP Financing
--------------------------------------------------

The Warnaco Group on Monday said that the U.S. Bankruptcy Court
for the Southern District of New York has entered a final order
approving the full amount of the company's $600 million Debtor-
in-Possession (DIP) financing agreement from a consortium of
banks led by Citibank, J.P. Morgan Chase and The Bank of Nova
Scotia.

The company has received interim approval permitting $375 million
of the $600 million DIP facility to be made available. The court
on Monday approved the remaining balance of $225 million.

US-based Warnaco Group is a leading manufacturer of intimate
apparel, menswear, jeanswear, swimwear, sportswear, dresses,
fragrances and accessories sold under Warner's, OIga, Van Raalte,
Lejaby, Weight Watchers, Bodyslimmers, Izka, Chaps by Ralph
Lauren, Calvin Klein, Speedo, Polo by Ralph Lauren, Oscar de la
Renta, Anne Cole Collection, Cole of California, Catalina
swimwear, A.B.S. and Penhaligon's brands.

Warnaco operates 101 stores in the United States, nine in Canada,
12 in the United Kingdom, one in France and one in Spain.

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

       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.

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