/raid1/www/Hosts/bankrupt/TCREUR_Public/010718.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 18, 2001, Vol. 2, No. 139


                            Headlines

* A U S T R I A *

LIBRO AG: Internet Subsidiary May File for Insolvency

* B E L G I U M *

SABENA SA: Commission to Open State Aid Probe Next Week
SABENA SA: Daems Confident 100MM Euro Injection Not State Aid

* F R A N C E *

AIR LIBERTE: Unions Support Holco Bid
AIR LITTORAL: Reveals Restructuring Scheme
BATA: Court Places Shoemaker in Involuntary Liquidation
KALISTO: Continues Trading Suspension
SAMES SA: Bankruptcy Court Sells Assets to Exel

* G E R M A N Y *

BANKGESELLSCHAFT BERLIN: Sees Slower Restructuring
BANKGESELLSCHAFT BERLIN: Will Post Loss of 1.4BB Euros for 2000
EM.TV: Sells 65% Stake in Junior.Toys
SPAR-HANDELS AG: Dismisses Three Board Members

* I R E L A N D *

W & R MORROGH: Investors May Apply for Compensation

* I T A L Y *

ALITALIA-LINEE: Faces L52BB Fine From Antitrust Authorities

* R O M A N I A *

SIDEX: Closes Sale With ISPAT

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

PROGRESS WATCH: Bosses Announce Resignation

* U N I T E D   K I N G D O M *

BRUNNER MOND: Moody's Cuts Ratings to Ca
BRUNNER MOND: S&P Cuts Ratings to D
EQUITABLE LIFE: Cuts 16% Off Policy Bonuses
INDEPENDENT INSURANCE: Credit Firms Face Legal Action
MARKS & SPENCER: Spanish Authorities Approve Redundancy Plan
MARKS & SPENCER: Ends Consultation Period at Belgian Shops


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


LIBRO AG: Internet Subsidiary May File for Insolvency
-----------------------------------------------------

Lion.cc, the Internet subsidiary of the insolvent retail group
Libro, may file for insolvency this week, the Wirtschaftsblatt &
Financial Times reported on Monday.

German media group WAZ, which holds a 30% stake in Lion, is
believed to have issued a letter to former Libro head Andre
Rettberg and several others.

The letter claims that WAZ has pumped millions into Lion in an
attempt to save the business and that the money has flowed
directly from Lion to its major shareholder, making it liable to
court proceedings.

Early this month, Libro was said to be looking for a buyer for
Lion.


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


SABENA SA: Commission to Open State Aid Probe Next Week
-------------------------------------------------------

The European Commission could open an investigation next week
into the government's support for Sabena Belgian World Airlines,
as a result of the changed relationship between the airline and
shareholders Swissair Group AG and the Belgian government, AFX
News reported on Monday.

Since the Belgian government invested 100 million euros in Sabena
in March, Swissair has decided not to raise its stake from 49 to
85%.

The commission wants to determine whether the state acted as a
private investor when it made its capital injection.



SABENA SA: Daems Confident 100MM Euro Injection Not State Aid
-------------------------------------------------------------

Privatization minister Rik Daems, according to the Monday edition
AFX News, is confident that the 100-million-euro contribution by
the government into Sabena Belgian World Airlines SA does not
make up state aid.

"The minister remains confident that the capital contribution of
February 2001 implies no state aid. He is not aware of any new
element that would put this conclusion in doubt," Daems' ministry
said.

According to the European Commission, it could open a state aid
investigation next week into the government's support for Sabena
because of the changed relationship between Sabena and its
shareholders.


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


AIR LIBERTE: Unions Support Holco Bid
-------------------------------------

Staff representatives of AOM-Air Liberte have expressed their
support for the Holco acquisition bid led by Air France pilot
Jean-Charles Corbet, according to the Monday edition of Les Echos
& Financial Times.

The unions said Holco is offering the best guarantees for
employees, but property investment group Fidei plans to make
changes to its offer, which has reached a provisional agreement
with Swissair Group to make a financial contribution to the deal.

The courts will decide the fate of the company on Thursday.

AOM and Air Liberte were forced to file for bankruptcy last month
after shareholders Swissair Group and Marine-Wendel refused to
bail out the French carriers.


AIR LITTORAL: Reveals Restructuring Scheme
------------------------------------------

Regional airline Air Littoral has submitted restructuring
proposals that include the loss of 263 jobs from a total
workforce of 1,180, Les Echos & Financial Times reported on
Sunday.

The redundancy includes 103 ground staff, along with 80 cabin
crew and 80 pilots.


BATA: Court Places Shoemaker in Involuntary Liquidation
-------------------------------------------------------

The Metz commercial court in France has placed shoe manufacturer
Bata-Hellocourt in involuntary liquidation for six months, La
Tribune & World Reporter in its July 16 edition said. A hearing
has been scheduled for October 10 and appointed Pierre Bayle as
administrator.

Employee representatives have called for a meeting with Bayle for
next week in order to gain his assurance that no redundancies
will be announced.


KALISTO: Continues Trading Suspension
-------------------------------------

Shares of multimedia games producer Kalisto will continue its
suspension from trading as it did not intend to communicate its
response to France's stock market authorities until next week, La
Tribune & Financial Times reported on Sunday.

The regulator is demanding that Kalisto revise the terms of its
agreement with U.S. investment fund Global Emerging Markets,
which has offered to subscribe the full amount of a planned
capital increase.

Although the deal would save Kalisto from bankruptcy with a net
loss of 164 million French francs last year, it would also
interfere with the normal working of the stock market.


SAMES SA: Bankruptcy Court Sells Assets to Exel
-----------------------------------------------

Sames Corporation on Monday said that the assets of its French
subsidiary Sames, S.A. were sold to French industrial company
Exel Industries

On May 21, Sames, S.A. filed for bankruptcy under French law. On
June 29, 2001, the French bankruptcy court approved the sale of
the Sames' assets to Exel. Exel will pay 65 million French francs
for the assets that include all intangible, moveable and real
estate assets of Sames, as well as its existing inventory stock,
in-process inventory and other considerations.

The company believes that it is not likely that the sale of the
assets of Sames, S.A. will result in any cash distribution to the
company.

Sames' other operating subsidiaries include Sames Japan, which is
currently in the process of restructuring, and Sames North
America. The company is continuing to evaluate restructuring
alternatives for both companies.


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


BANKGESELLSCHAFT BERLIN: Sees Slower Restructuring
--------------------------------------------------

Bankgesellschaft Berlin, according to the Financial Times
Deutschland's Monday report, is experiencing slow progress in
terms of its restructuring.

The company's supervisory board was not set to deal with the
necessary capital measures on Monday as the board's agenda
contained the overdue annual financial statement for 2000, an
application to vote the chairman out of office, and a new
restructuring concept.


BANKGESELLSCHAFT BERLIN: Will Post Loss of 1.4BB Euros for 2000
---------------------------------------------------------------

Bankgesellschaft Berlin will report a 2000 loss of 1.471 billion
euros resulting from shock writedowns in its real estate
business, the Friday edition of Reuters said.

The bank has not been able to complete its 2000 accounts pending
the outcome of the probe by German banking regulator BAKred.

Bankgesellschaft is in need of two billion euros to prop up its
capital base, which is under threat from erosion as a result of
the real estate losses.

The city-state of Berlin owns 57% of the German bank, while the
other two main shareholders are state-owned Norddeutsche
Landesbank (NordLB) with 15% and insurer Parion with 7.5%.


EM.TV: Sells 65% Stake in Junior.Toys
-------------------------------------

Media company EM.TV & Merchandising AG has sold its 65% stake in
Junior.Toys AG as part of a management buy out, the Monday
edition of AFX News said. No financial details were provided.

The move is part of the company's aim to focus on merchandising
activities.

Junior.Toys will continue to run the merchandising of the Muppets
Show.

EM.TV piled up more than 2 billion euros in debt after buying
Muppets creator Jim Henson Co. and half of the Formula One auto-
racing series.


SPAR-HANDELS AG: Dismisses Three Board Members
----------------------------------------------

Food retail group Spar-Handels-AG has dismissed three of its key
management board members, the Monday edition of Handelsblatt
said.

Chief financial officer Bernd Bonnet, personnel director Bernhard
Wilken and marketing director Thomas Weiá will leave the company
as part of chairman Fritz Amman's bid to turn around the
financially troubled group. Staff from within the group will
replace the board members.

People close to Spar said that Amman and the three executives
must have failed to agree a new direction for Spar.

Earlier, Amman outlined plans to focus the group on independent
retail business, Eurospar and discount chain Netto. The remaining
four divisions, including the Kodi chain of stores, will be sold.

French major shareholder ITM Intermarche plans to raise DM400
million in fresh funds via a capital increase to reduce Spar's
growing external debt, which is set to reach more than DM1
billion if it posts a loss of more than DM350 million for last
year.


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


W & R MORROGH: Investors May Apply for Compensation
---------------------------------------------------

Investors who lost money in the collapse of stockbrokerage firm W
& R Morrogh can now apply for compensation through the Investor
Compensation Company Limited (ICCL), the Irish Independent
reported on Monday.

The ICCL have sent Morrogh's 9,300 clients forms and have until
December 20 to apply for compensation.

Under the compensation scheme, losses are covered to a maximum of
15,700 pounds. A large number of investors have reported losses
in excess of 50,000 pounds and up to 500,000 pounds.

W & R Morrogh was ordered to cease trading following the
discovery of financial irregularities on April. The company was
wound up by the High Court in May with total losses of 5.5
million pounds in spite of the 2.4 million pounds injection by
senior partner Alec Morrogh.

Clients of W & R Morrogh who have not received correspondence
from ICCL are asked to contact the compensation company
immediately.


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


ALITALIA-LINEE: Faces L52BB Fine From Antitrust Authorities
-----------------------------------------------------------

The Italian Antitrust has fined Alitalia airline L52 billion for
abuse of its dominant position in the air travel agency services
market, according to the Saturday report of La Stampa & Financial
Times.

The practice Alitalia uses of agreeing incentives with travel
agents to distribute its airline tickets, calculated according to
sales targets reached and not on the total volume of sales, is an
attempt to exclude competitors from the air transport market.

Alitalia will appeal against the fine.


=============
R O M A N I A
=============


SIDEX: Closes Sale With ISPAT
-----------------------------

Romania Privatisation Minister Ovidiu Musetescu said that the
sale contract for steel mill Sidex would be signed with ISPAT on
Friday, according to the Saturday edition of Reuters.

ISPAT is the sole bidder for the state's 74.33% stake in debt-
ridden Sidex. It began negotiations with privatization agency
APAPS in April.

Under the terms of the deal, the successful bidder would not be
able to dismiss any of the firm's 27,000 workers for the next
five years.

Local media reports estimated that the deal might be worth up to
$200 million for Sidex.


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


PROGRESS WATCH: Bosses Announce Resignation
-------------------------------------------

Peter Gschwind and Moritz Zuellig, co-founders of Progress Watch
Group and former members of the board of Progress Watch Corp.,
have resigned from their functions, the July 13 edition of
PrimeZone Media Network said.

Rudolf Hug was appointed chairman of the board of directors of
Progress Watch AG. The second member of the board of directors is
Hanspeter Thiel, a partner at PriceWaterhouseCoopers in Zurich
for more than 20 years and serving on the executive board for 15
years.

Investors and customers have made available the funds required to
solve the company's liquidity problems and ensure that it can
continue operations for the next few months. Investors have also
made commitments to finance the group's medium term growth.

Salaries for June and July have already been paid.

Meanwhile, the bankruptcy ruling for the company has been passed
on to the Supreme Court, and an appeal for a stay of bankruptcy
has been submitted.


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


BRUNNER MOND: Moody's Cuts Ratings to Ca
----------------------------------------

Moody's Investors Service on Monday lowered the ratings on the
senior subordinated notes of Brunner Mond, a soda ash and refined
sodium carbonate supplier, to Ca from Caa3. The senior implied
rating and the senior unsecured issuer ratings have also been
lowered to Ca.

The rating action follows the company's announcement that the
management would not be making interest payments on its senior
subordinated notes due on July 16, which for Moody's constitutes
an event of default.

Management has noted that it is currently in detailed
negotiations and discussions with an Ad Hoc Committee of its
Noteholders to conclude on a restructuring that should lead to a
more stable and sustainable capital structure for the group.

The company also expects to announce the detailed terms of its
proposed restructuring not later August 16, by when the non-
payment of interest constitutes an event of default under the
indenture agreement.

Debt securities lowered to Ca include the GBP50 million in senior
subordinated 12.5% notes of Brunner Mond Group PLC and the $125
million in senior subordinated 11% notes.


BRUNNER MOND: S&P Cuts Ratings to D
-----------------------------------

Standard & Poor's on Monday lowered its long-term corporate
credit and senior subordinated debt ratings on soda ash producer
Brunner Mond Group PLC to D from triple-C and double-C,
respectively.

The rating action followed a company's announcement that it would
not pay the interest coupon of its senior subordinated notes due
on Monday as a result of the capital restructuring program
initiated in March.

Brunner Mond came under financial pressure as a result of the
continued weakness of European soda ash markets, and its high
level of indebtedness following a leveraged buyout by CVC Capital
Partners Europe Ltd. and Citicorp Venture Capital Ltd. in 1998.


EQUITABLE LIFE: Cuts 16% Off Policy Bonuses
-------------------------------------------

Life assurer Equitable Life has reduced the value of the savings
of more than 400,000 policyholders to stabilize the company's
finances, according to The Times' report on Monday.

The value of with-profits pensions will be cut by 16%, while life
insurance investments, including endowment mortgage plans, will
fall 14%.

The move worsens the misery of policyholders who have already had
seven months' worth of investment growth removed from their
policies after the House of Lords told Equitable that cutting
pension bonuses to holders of guaranteed annuity rate policies
(GARs) was unlawful.

Equitable also suspended the payment of guaranteed bonuses this
year and imposed exit penalties on investors seeking to cash in
their savings early.


INDEPENDENT INSURANCE: Credit Firms Face Legal Action
-----------------------------------------------------

Finance companies working with collapsed insurer Independent
Insurance will be dragged into a legal action by angry
policyholders, the Monday edition of The Times reported.

City law firm Class Law, which will launch legal actions on
behalf of policyholders to recover claims for them, said that the
companies are jointly liable for claims under the Consumer Credit
Act.

The Policyholders Protection Board will pay individual
policyholders only 90% of any non-compulsory insurance claim,
resulting to some people still facing huge losses.

Meanwhile, Independent's liquidator PricewaterhouseCoopers seeks
to recover millions of pounds from directors' professional
indemnity insurance policies held by the insurer.


MARKS & SPENCER: Spanish Authorities Approve Redundancy Plan
------------------------------------------------------------

The Spanish general directorate of employment has approved Marks
& Spencer's redundancy plan, following the March announcement
that it will close all its Spanish stores, Expansion & Financial
Times reported on Friday.

The company has undertaken to prioritize the search for a
solution via the transfer of its Spanish business to another
company and maintain the jobs of its 786 employees in Spain. A
total of 54 have already found alternative employment.

Marks & Spencer in Spain posted a loss of 9.2 million euros in
2000.


MARKS & SPENCER: Ends Consultation Period at Belgian Shops
----------------------------------------------------------

The unions and management of clothing and food retailer Marks &
Spencer have ended the formal period of consultation on the
planned closure of four shops in Belgium, the L'Echo & Financial
Times reported on Saturday.

The four stores will remain open if a buyer can be found.
Otherwise, Marks & Spencer will close them for good at the end of
the year.

In March, the retailer announced it intends to close the
subsidiaries in Continental Europe, franchise the Hong Kong
stores and sell Brooks Brothers and Kings Super Markets.

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

     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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