/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010712.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, July 12, 2001, Vol. 2, No. 135 Headlines * B E L G I U M * SABENA SA: Court Favors Sabena Over Ryanair Ads * C Z E C H R E P U B L I C * KOMERCNI BANKA: Takes New Staff to Recover Loans * G E R M A N Y * ADAM OPEL: Drops Sales by 4% DAIMLERCHRYSLER AG: Chrysler Announces New Appointments DAIMLERCHRYSLER AG: US Unit Narrows Second-Quarter Operating Loss KINOWELT MEDIA: Offloads Progress Film Stake *G R E E C E * OLYMPIC AIRWAYS: Techs Call Off Strike * I T A L Y * ALITALIA-LINEE: Sees Widened Debt for 2001 ALITALIA-LINEE: Will Not Exclude Share Swap With Air France FREEDOMLAND-ITN: Police Sequesters 65% of Freedomland * L U X E M B O U R G * CLEARSTREAM: Court Actions to Continue * N E T H E R L A N D S * KPN NV: Misleading Accounting Practices Alleged NEWCONOMY NV: Macropolis Declared Insolvent UNITED-PAN EUROPE: Future Uncertain, but Outlook Is Negative VERSATEL TELECOM: Belgique's Mathuis Resigns * P O L A N D * ELEKTRIM SA: Shareholders Satisfied With Vivendi Deal * S W I T Z E R L A N D * SWISSAIR GROUP: To Disclose Overhaul Plans Today * U N I T E D K I N G D O M * BALTIMORE TECHNOLOGIES: Announces New Board Appointments BALTIMORE TECHNOLOGIES: CEO Quits BALTIMORE TECHNOLOGIES: Sees Early Takeover on Rooney's Departure BALTIMORE TECHNOLOGIES: To Adopt Major Restructuring Program BARINGS: Negligence Claim Cut to 143MM Pounds DANKA BUSINESS: S&P Cuts Ratings to D MARCONI PLC: Confirms Job Cuts in UK MARCONI PLC: Faces US Lawsuits MARKS & SPENCER: Negative Quarterly Figures Expected SSL INTERNATIONAL: Appoints New Chairman SSL INTERNATIONAL: SFO to Examine Healthcare Group ============= B E L G I U M ============= SABENA SA: Court Favors Sabena Over Ryanair Ads ----------------------------------------------- A Brussels commercial court on Tuesday decided that advertising campaigns by Irish discount airline Ryanair Holdings PLC against Belgian national airline Sabena were misleading and demeaning, and should therefore be ceased. "We welcome comparative publicity, but this has to be within the boundaries of the Belgian law. Strategies that mislead the public at large or offend our passengers and our personnel are not to be allowed," Patrick du Bois, Sabena's EVP Secretary General said. The court has ordered Ryanair to immediately stop the airing of the ads. The judge ordered a full-page publication of the court order in four national newspapers and on Ryanair's website. Ryanair was unavailable for comment. =========================== C Z E C H R E P U B L I C =========================== KOMERCNI BANKA: Takes New Staff to Recover Loans ------------------------------------------------ Komercni banka, which the government is selling to France's Societe Generale, is taking on new staff who will be recovering loans from debtors who have problems with repayment, the Monday edition of Czech News Agency said. According to KB board member and deputy CEO Tomas Spurny, the bank has created a sort of bank in a bank with 300 staff to work on the agenda concerning problem loans. KB currently carries 6,600 problem loans. ============= G E R M A N Y ============= ADAM OPEL: Drops Sales by 4% ---------------------------- General Motors unit Adam Opel AG sold 212,400 new cars in Germany in the first half of 2001, 4.2% less than the same period last year. Adam Opel head Carl-Peter Forster, however, claims the carmaker was able to maintain its share of a declining market at 12.2% and to hang on to its position as the German number two in terms of unit sales, behind Volkswagen. Forster plans to present in September Opel's Olympia program, a catalogue of measures aimed at restoring the company to profit. Opel booked a record loss of DM835 million last year. DAIMLERCHRYSLER AG: Chrysler Announces New Appointments ------------------------------------------------------- The Chrysler Group on Monday has appointed Lawrence Achram as vice president for Advance Vehicle Engineering, Michael Evans as vice president for Product Planning and Eric Ridenour as vice resident for Large Car Platform Engineering of the group's Product Development area effective immediately. All positions will report to Product Development and Quality's executive vice president Richard Schaum. The appointments will help position the Product Development organization to meet the challenges of an increasingly competitive automotive market by using the exceptional talents and skills of the three individuals. DAIMLERCHRYSLER AG: US Unit Narrows Second-Quarter Operating Loss ----------------------------------------------------------------- DaimlerChrysler AG unit Chrysler Group anticipates a narrowed second-quarter operating loss of about US$200 million, compared with the US$1.23 billion loss booked in the first quarter, the Tuesday edition of AFX News said. Industry analysts estimate Chrysler's second quarter operating loss at between US$300 million and US$700 million. The second-quarter performance will be announced on July 20. KINOWELT MEDIA: Offloads Progress Film Stake -------------------------------------------- Media company Kinowelt Media AG will continue to shed some of its portfolios as part of its restructuring program, Die Welt & World Reporter in its July 10 edition said. Their 40% stake in Progress Film Verleih was sold to the latter's majority shareholder Tellux Beteiligungsgesellschaft at an undisclosed price. The deal comes after Kinowelt disposed its 65% stake in the bankrupt fan shop chain Fanworld AG. =========== G R E E C E =========== OLYMPIC AIRWAYS: Techs Call Off Strike -------------------------------------- Technical support staff at Olympic Airways has called off a planned 24-hour strike yesterday, after an Athens court ruled the work stoppage would be illegal, the Associated Press' June 10 edition said. The strike had been called to protest government plans to sell a majority stake in the national carrier to Axon airlines. Technical workers are demanding that Olympic will not be sold and that more staff is hired. The technical staff union said they would decide on further action during today's meeting. ========= I T A L Y ========= ALITALIA-LINEE: Sees Widened Debt for 2001 ------------------------------------------ Alitalia chief executive Francesco Mengozzi said the Italian airline would post by the end of the year a total debt of 3.0 trillion lire, compared to its medium- to long-term debt of 1.5 trillion lire for 2000. Mengozzi added the airline last year made a loss of 500 billion lire, which may be only marginally smaller in 2001. On Monday, Alitalia's board approved for an alliance with Air France and Delta Air Lines. The deal would bring savings of about 200 billion lire a year and could eventually lead to a merger with Air France. Union representatives on the board of Alitalia were the only members to vote against the Air France and Delta deal. ALITALIA-LINEE: Will Not Exclude Share Swap With Air France ----------------------------------------------------------- Francesco Mengozzi, chief executive officer of Alitalia SpA, does not rule out the possibility of a share-swap leading to a merger of Air France SA and the Italian carrier, the Tuesday edition of Dow Jones Newswires said. Mengozzi said the share-swap is seen as a decision that the shareholders can make later, if they want. FREEDOMLAND-ITN: Police Sequesters 65% of Freedomland ----------------------------------------------------- Italian finance police have sequestered 65% of the capital of Freedomland, the Tuesday edition of Reuters said. According to Virgilio Degiovanni, the company's founder who stepped down as chairman earlier this year, the move was made in connection with an inquiry launched earlier this year on allegations of false accounting. Degiovanni has denied any wrongdoing. Shares in the Internet-via-TV company were suspended on the Milan bourse on Tuesday pending a statement. =================== L U X E M B O U R G =================== CLEARSTREAM: Court Actions to Continue -------------------------------------- Clearstream will continue to pursue up to seven separate court actions seeking damages, after regulators said they found no evidence of money laundering, the Wednesday edition of The Times said. In early May, regulators ordered the suspension of three senior executives while they investigated allegations that the group set up thousands of secret accounts to help its banking clients launder money. Andre Lussi has been temporarily suspended as chief executive and president, together with colleagues Carlos Salvatori and Robert Massol. They will remain suspended on full pay while the investigation continues. The allegations were contained in a book by former Clearstream employee Ernest Backes, and serialized in a French newspaper. Proceedings against Backes, the book's publisher and the newspaper are pending in three separate jurisdictions. ===================== N E T H E R L A N D S ===================== KPN NV: Faces Charges on Misleading Accounting ---------------------------------------------- A shareholder action group took telecom company KPN to a commercial court on Tuesday, alleging misleading accounting practices in its latest annual report, the Financial Times reported. Sobi, an Amsterdam-based foundation that researches company accounts, said KPN should have reported a loss of 426 million euros last year rather than the stated 1.87 billion euro profit. KPN was allegedly able to stay in the black only because of a doubtful profit. KPN rejected the accusations and said its accounts met all legal requirements. NEWCONOMY NV: Macropolis Declared Insolvent ------------------------------------------- Online store guide Macropolis was declared insolvent after Newconomy's unit file for suspension of payment last month, De Telegraaf & World Reporter in its July 7 edition said. Although Macropolis attracted a fair number of visitors, it generated virtually no income. The company attracted hardly any advertising income. Even the additional financing to the unit earlier this year had proven to be insufficient to solve Macropolis' liquidity problems. The receiver investigated whether external parties could do something with the high visitor numbers. Director Nederkoorn hopes that the stores featured on the site would pay subscription money. Newconomy has also held talks with various companies about a Macropolis takeover, but these had not been successful so far. UNITED-PAN EUROPE: Future Uncertain, but Outlook Is Negative ------------------------------------------------------------ Market observers remain negative about the outlook for the shareholders of heavily-indebted cable and media company United Pan-Europe Communications NV, whose shares have fallen more than 97% to below 2.50 euros from last year's 84.90 euros, the Tuesday edition of Dow Jones Newswires said. UPC has already incurred heavy losses from purchasing and upgrading cable networks around Europe. It posted a loss of 556 million euros in the first quarter on sales of 333 million euros, and forecasts a cash loss of more than 100 million euros per month for the next two years. At the end of the first quarter, the company's net debt was 7.6 billion euros, while its market capitalization has since dipped to 1 billion euros. The group will further need 500 million to 1 billion euros in funding to reach profitability sometime near the middle of this decade, Dow Jones added. VERSATEL TELECOM: Belgique's Mathuis Resigns -------------------------------------------- VersaTel Telecom International NV said that VersaTel Belgique managing director Philip Mathuis has resigned for personal reasons, according to the Tuesday edition of Wall Street Journal. VersaTel Telecom's chief financial officer, Philippe Santin, will run VersaTel Belgique until the group recruits Mathuis' replacement. In May, Versatel has revealed a loss before interest, tax, depreciation and amortization of 25.8 million euros for the first quarter of this year. Analysts believed that the loss-making telecom company needed as much as 300 million euros to see it through to profitability. =========== P O L A N D =========== ELEKTRIM SA: Shareholders Satisfied With Vivendi Deal ----------------------------------------------------- Minority shareholders of telecommunications conglomerate Elektrim were pleased with the company's deal with French group Vivendi Universal since it reduced uncertainty about Elektrim's future and improved its financial situation, the Warsaw Business Journal reported on Monday. However, the shareholders remain uncertain about the direction of the conglomerate due to a lack of information. The investors only received second-hand information from press reports, where some appeared to be contradictory. They are calling for more direct disclosure of the agreement's financial consequences from both parties. According to the shareholders, the Vivendi deal did not require their approval so details were not discussed at Elektrim's extraordinary general shareholders meeting on June 30. They added they have been left in the dark about what will happen next. ===================== S W I T Z E R L A N D ===================== SWISSAIR GROUP: To Disclose Overhaul Plans Today ------------------------------------------------ Swissair Group, according to M2 Communications' Tuesday report, is expected to unveil an overhaul plan today. Analysts are interested in debt reduction measures and the fate of the group's stake in foreign companies, including interests in Belgian carrier Sabena and the French AOM/Air Liberte group. =========================== U N I T E D K I N G D O M =========================== BALTIMORE TECHNOLOGIES: Announces New Board Appointments -------------------------------------------------------- Troubled Internet security firm Baltimore Technologies on Tuesday announced two new appointments to the Board, effective July 12, 2001. David Guyatt, founder and former CEO of Content Technologies, acquired by Baltimore Technologies last year, joins the board as a non-executive director. Bijan Khezri, a director of the group from 1998 to 2000, was also appointed as the board's non-executive director. BALTIMORE TECHNOLOGIES: CEO Quits --------------------------------- Baltimore Technologies, a global leader in e-security, on Tuesday said that Fran Rooney has resigned as chief executive officer and deputy chairman of the company to pursue other interests. Paul Sanders will act as interim chief executive officer with immediate effect until the company finds a permanent successor, and will continue to retain his responsibilities as chief financial officer. The change comes after Baltimore announced a staff overhaul to save about 14 million pounds. The company has already shed 250 jobs this year. BALTIMORE TECHNOLOGIES: Sees Early Takeover on Rooney's Departure ----------------------------------------------------------------- Market sources believe that an early takeover is now possible in Baltimore Technologies, following the sudden resignation of Fran Rooney, chairman and chief executive of the internet security firm, the Wednesday edition of The Irish Times said. Baltimore shares gained 6p to 25p sterling as investors took positions on a possible takeover later this year or early next year. The market believes that the new Baltimore management, under acting chief executive and current finance director Paul Sanders, will speed up the restructuring of the company by cutting costs and probably another 250 jobs, on top of the 250 already announces. This makes the company a more attractive prospect for a trade buyer like Entrust, RSA and Verisign, or a major technology company like IBM or Microsoft. The new management jobs may then initiate a rights issue that would provide Baltimore with enough cash through the third quarter of 2002. BALTIMORE TECHNOLOGIES: To Adopt Major Restructuring Program ------------------------------------------------------------ Baltimore Technologies on July 5 said that, following the completion of the operational review announced on May 15, it would undertake a major restructuring of its global business operations to manage the business within its current cash resources. Changes have already been implemented following the May review, which will generate savings of approximately 14 million pounds a year. The restructuring program, intended to achieve significant cost efficiencies whilst enhancing overall business performance, will include a reduction in headcount. Baltimore plans to announce further details of the program in August. BARINGS: Negligence Claim Cut to 143MM Pounds --------------------------------------------- A 1-billion-pound negligence claim against Deloitte & Touche over the auditing of Barings was cut to 143 million pounds, according to The Times' report yesterday. Barings liquidator Ernst & Young hopes to proceed with the trial against Deloitte in the absence of co-defendant Coopers & Lybrand, which audited Barings at the time of the bank's collapse. The liquidator told the court that the settlement is non-binding until the agreements are signed. If they are not signed, then the action must proceed against all the defendants. Details emerged at a case management conference in London. A further conference has been called for July 27. The trial, either with Deloitte alone, or with both auditors if settlement talks collapse, will possibly open at the High Court in October. DANKA BUSINESS: S&P Cuts Ratings to D ------------------------------------- Standard & Poor's on Tuesday lowered its corporate credit rating on Danka Business Systems PLC, the world's largest independent suppliers of office imaging equipment, to 'D' from double-'CC'. S&P has removed the company from CreditWatch, where it was originally placed on October of last year, with negative implications. The rating action reflects the recent completion of the exchange of Danka's convertible subordinated notes due April 1, 2002, for securities having a total value that is materially less than the original issue. Danka continues to focus on debt reduction and they will review all opportunities to reduce its debt. MARCONI PLC: Confirms Job Cuts in UK ------------------------------------ Telecom giant Marconi confirmed plans to lay off jobs at several sites in the UK as part of a cutback, Press Association reported yesterday. A total of 164 jobs will be cut in Liverpool, 322 in Coventry, 85 in Chelmsford, 20 in Nottingham and 10 in Cambridge. Marconi, which already shed 1,500 UK jobs this year, also announced 570 job cuts in Poole. The company's shares collapsed after it suspended trading in advance of a massive profits warning and announcement of 4,000 job losses worldwide. MARCONI PLC: Faces US Lawsuits ------------------------------ Two U.S. legal firms have filed class-action lawsuits against telecom group Marconi and its top directors on behalf of investors who bought Marconi's shares in the three months before last week's massive profits warning, the Wednesday edition of The Times said. Berger & Montague of Philadelphia, claims Marconi has falsely reassured investors that it saw no need to change its guidance. Albert G Yates of Pittsburg accused Marconi of making materially false and misleading statements. The suit named chief executive Lord Simpson of Dunkeld, his successor John Mayo, and senior vice-president Steve Hare as defendants. The company declined to comment on the lawsuits. MARKS & SPENCER: Negative Quarterly Figures Expected ---------------------------------------------------- Marks & Spencer will come under more pressure when it reports crucial first quarter sales figures, according to yesterday's Press Association report. The troubled retailer is expected to reveal an 8% decrease in clothing sales over the first three months of the current financial year. SSL INTERNATIONAL: Appoints New Chairman ---------------------------------------- Healthcare group SSL International PLC on Tuesday said it has appointed Ian Martin as non-executive chairman, effective September 1, 2001, to replace Stuart Wallis, who is stepping down following the conclusion of his agreed term. Martin is currently the chairman of Uniq PLC. He will step down from this post at the end of July. He is also non-executive chairman of telecom firm 365 Corporation plc, international insurance broker HLF Holdings Ltd and of Baxi Group Ltd, a supplier of heating, hot water and air quality products. He was also with Grand Metropolitan plc for 14 years as chief operating officer, group managing director and deputy chairman, chairman of Inter-Continental Hotels Corporation and non- executive director of Granada Group plc. SSL INTERNATIONAL: SFO to Examine Healthcare Group -------------------------------------------------- SSL International has passed the main findings of an investigation by accountancy firm KPMG and law firm DLA to the Serious Fraud Office, the Financial Times reported on Tuesday. The healthcare group was said to have overstated its results in 1999 and 2000. The KPMG investigation found that SSL, maker of Durex condoms and Scholl sandals, had overstated sales by 22 million pounds during the 25 months to March 31 in 2000. The investigators have interviewed members of SSL's board during the period, including former chief executive Iain Cater. Cater was ousted in February after the company issued its second profit warning in three months. The SFO will examine the findings of the investigation before deciding whether to launch a full-scale probe into the matter, and establish whether there is a case against any of the company's employees. ************* 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 * * *