/raid1/www/Hosts/bankrupt/TCREUR_Public/010731.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

             Tuesday, July 31, 2001, Vol. 2, No. 148


                            Headlines



B E L G I U M

SABENA SA: Swissair Not Sheltered From Sabena


F R A N C E

AIR LIBERTE: Court Approves Holco Buyout


G E R M A N Y

BROKAT AG: Explores Sources for Cash
BROKAT AG: In Talks Regarding Capital Injection
BROKAT AG: Projected 825MM-Euro Net Loss Sparks Share Drop
KINOWELT MEDIA: Search Is On For New Partner


H U N G A R Y

NETREND RT: Faces Liquidation
POSTABANK RT: Auditors Face Police Scrutiny


I R E L A N D

EIRCOM PLC: Valentia Nears Control of Eircom


I T A L Y

ALITALIA-LINEE:Forms Alliance With Sky Team, Delta, Air France
ALITALIA-LINEE: Shares Swap With Air France Possible


N E T H E R L A N D S

KPN NV: Atos Origin to Take Over KPN Datacenter


P O L A N D

NETIA: Shares Plunge to 16.55 Zloty


U N I T E D   K I N G D O M

360NETWORKS: Delisted From Nasdaq
BRITISH TELECOM: Rejects 8BB-Pound Offer
BRITISH TELECOM: Rejects Bid for Local Network
DOLPHIN TELECOM: Files for Bankruptcy Protection
INVENSYS PLC: Shareholders Reject Lifeline
SCOOT.COM: To Sell 50% Stake in Scoot Europe

     -  -  -  -  -  -  -  -  

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


SABENA SA: Swissair Not Sheltered From Sabena
---------------------------------------------

The agreement concluded between the Belgian government and
Swissair over the recapitalization of Sabena airlines does not
absolve Swissair of all future financial responsibility, L'Agefi
Suisse & Financial Times reported on Friday.

Swissair could still be held legally responsible in the event of
Sabena's closure. A judge could force the Swiss group to inject
further funds into Sabena.

The Belgian government and Swissair are majority shareholders of
the Belgian air operator.



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


AIR LIBERTE: Court Approves Holco Buyout
----------------------------------------

The Commercial Court of Creteil in France on Friday approved a
buyout proposal for AOM/Air Liberte from the French group Holco.

Under the offer, Holco will continue the French airline's
operations within a revised structure. Swissair Group, on the
other hand, will give AOM/Air Liberte 1.5 billion French francs
to help the ailing carrier restructure and will provide four
Airbus A340 wide-body jetliners on favorable terms through its
Flightlease leasing subsidiary. In return, Swissair and its
French partner Marine Wendel SA, will be released from further
obligations and liabilities for the French carriers.

The French commercial court placed AOM/Air Liberte in bankruptcy
protection June 15 after Swissair said it would fund only a
portion of the airline's financial needs, while Marine Wendel
said it wouldn't provide any further financing.

Marine Wendel holds 50.1% of the French airline and Swissair has
49.9% of the stake.



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


BROKAT AG: Explores Sources for Cash
------------------------------------

Brokat, according to the Financial Times on Sunday, has appointed
investment bank Robertson Stephens to explore ways for the
company to raise cash.

The revelation comes after shares in the software company fell
almost 20% on Friday after it released preliminary results for
the second quarter.

Brokat also said last week it had mandated Dresdner Kleinwort
Wasserstein to start negotiations with its bondholders on the
possible restructuring of the bond issued in March 2000.

Another likely event could be an auction of some of Brokat's past
acquisitions.


BROKAT AG: In Talks Regarding Capital Injection
-----------------------------------------------

Brokat AG is in talks with unnamed potential investors to secure
a capital injection for the financial software company by the end
of the third quarter, the Friday edition of Dow Jones Newswires
said.

Brokat reported on Friday a second-quarter net loss of 825
million euros, compared to a first-quarter net loss of 75.2
million euros. The loss was due to write-downs of goodwill at its
units Blaze Software and GemStone Systems.

Recent rumors were that IBM was interested in buying the company.
Both companies declined to comment.


BROKAT AG: Projected 825MM-Euro Net Loss Sparks Share Drop
----------------------------------------------------------

Shares in software company Brokat AG were down 15.73% to 2.25
euros on Friday after the company said it expected net losses in
the second quarter to be almost 30 times greater than sales,
Reuters reported Friday.

Brokat, which is undergoing a major restructuring, expects to
report a net loss of 825 million euro for the second-quarter due
to the losses on poor economic conditions and slow business.

The company, which makes software for financial transactions over
the Internet and mobile phones, said it expected to report a pro-
forma second-quarter loss before interest, tax, depreciation and
stock options (EBITDASO) of 40 million euros.

Brokat also said the CEO Angelo Maestrini would leave the company
on August 31.


KINOWELT MEDIA: Search Is On For New Partner
--------------------------------------------

Cash-strapped TV and film rights group Kinowelt is seeking new
investors in an attempt to overcome the current crisis in the
sector, the July 28 edition of Suddeutsche Zeitung & World
Reporter said.

Chairman Michael Kolmel has been negotiating with the banks over
a restructuring of the company's debt.

Kinowelt reported a first quarter Ebit loss of DM60 million due
to exceptional expenditure.



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


NETREND RT: Faces Liquidation
-----------------------------

AFI Liquidator and Asset Management Rt said that IT component
trader Netrend Rt will be liquidated, as it now owes Ft20
million, according to Hungary A.M. in its July 25 report.

Hardcomp Trading Kft initiated the liquidation process. The State
Tax Office (Apeh), the Budapest Municipality and Albacomp Rt are
also among the main creditors.

Netrend initially focused on manufacturing and servicing
appliances when it was founded in 1990. Since 1993, it has dealt
with the trading of IT components.


POSTABANK RT: Auditors Face Police Scrutiny
-------------------------------------------

Deloitte & Touche, Arthur Andersen and Prudentia, the auditing
companies of Postabank between 1994 and 1998, are being accused
of collective crime by the Hungarian Police, the Hungary A.M.
reported on Friday.

According to the police, the auditors forged several statements
in Postabank's annual reports, and are responsible for the
company's increasing debt, which totals Ft158 billion.

Police investigations started after the auditors were sued May 3
for Ft100 billion.



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


EIRCOM PLC: Valentia Nears Control of Eircom
--------------------------------------------

The Valentia consortium is close to a 1.8-billion-pound deal that
will give it control of telephone company Eircom, according to
the Sunday Times' report.

Valentia will announce as early as today that will increase its
offer from 1.27 euros to 1.36 euros a share and that it has
irrevocable acceptance from Comsource, which owns 35% of Eircom.

Valentia is fighting a rival bid from E-Island, which already
offered 1.36 euros a share.

Chaired by Sir Anthony O'Reilly, the Valentia consortium includes
Goldman Sachs, Providence Equity Partners, Soros Private Equity
and Warburg Pincus.



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


ALITALIA-LINEE:Forms Alliance With Sky Team, Delta, Air France
--------------------------------------------------------------

Italian airline Alitalia signed on Friday two separate commercial
alliance deals with Delta Airlines and Air France, as well as
agreeing to join the Sky Team Global Airlines Alliances, Dow
Jones Newswires reported.

The Sky Team Global Airlines Alliance is composed of Delta,
AeroMexico, Air France, Korean Airline and Czech carrier CSA.

The partnership deals with Air France and Delta Airlines cover
the sharing of flights and frequent flyer programs.
Alitalia has been looking for a partner since Royal Dutch KLM
dropped-out of an alliance with it in April last year.


Alitalia said that the tie-up with Air France would generate at
least 200 billion lira operating profit a year but has not said
how much it would save by cooperating with Delta Airlines.

Delta Airlines, on the other hand, said that the company's link-
up with Alitalia would reap $100 million in revenues on an
annualized basis.


ALITALIA-LINEE: Shares Swap With Air France Possible
----------------------------------------------------

Following a signed agreement to join the Sky Team alliance and
Alitalia also signed two separate partnership deals with Air
France and Delta Airlines. Alitalia SpA said on Friday it is not
ruling out a future share swap with Air France SA, Dow Jones
Newswires reported.

The French and Italian governments backed the deal between
Alitalia and Air France and said the partnership was an
opportunity for both companies to develop synergies in passenger
and cargo services.

Alitalia has said previously that the link with Air France is
expected to generate at least 200 billion lira in operating
profit annually.



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


KPN NV: Atos Origin to Take Over KPN Datacenter
-----------------------------------------------

Atos Origin, a leading European information technology services
provider, said Friday it has signed a long term services
agreement with KPN, under which it will take over the internal
data center activities.

The agreement establishes Atos Origin as the undisputed market
leader in high value-added data center services in the
Netherlands, and one of the major providers of such services in
Europe.

Both Atos Origin and KPN view this agreement as part of a long-
term strategic partnership.



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


NETIA: Shares Plunge to 16.55 Zloty
-----------------------------------

Shares in telecom company Netia closed at 16.55 zloty on the
Warsaw Stock Exchange last week amid investor concerns over the
company's financial results for the second quarter, Poland A.M.
said in its July 25 edition.

In the first quarter, Netia capital group recorded losses of 170
million zloty.

Rating agency Moody's also announced last week it might lower
Netia's credit worthiness index, which would reduce the company's
chances of obtaining new loans.



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


360NETWORKS: Delisted From Nasdaq
---------------------------------

The securities of optical network services provider 360networks
were delisted from the Nasdaq Stock Market at the opening of
business July 27.

The decision, made jointly by 360networks and Nasdaq, follows
360networks' voluntary filings June 28 for protection under the
Companies' Creditors Arrangement Act in Canada and its U.S.
subsidiaries under Chapter 11 of the U.S. Bankruptcy Code.

Nasdaq halted trading of 360networks' stock June 27. The last
trading price was U.S. $0.21. 360networks' stock continues to
trade on the Toronto Stock Exchange under the TSX trading symbol.


BRITISH TELECOM: Rejects 8BB-Pound Offer
-----------------------------------------

British Telecom is expected to come under pressure from investors
to reconsider an 8-billion-pound offer for its local loop
network, the Independent News reported yesterday.

The debt-laden telecom group rebuffed the offer from Earth Lease,
a consortium of finance houses. BT said it is not interested
right now because it is dealing with other strategic issues,
including the de-merger of its mobile arm.

The 8-billion-pound bid would help BT reduce its debt burden of
16.5 billion pounds, and to put the local loop in the hands of
neutral third party.


BRITISH TELECOM: Rejects Bid for Local Network
----------------------------------------------

British Telecommunications Plc has rejected an 8-billion-pound
offer for part of its local phone network led by Babcock & Brown,
a U.S. asset-finance company, and Chancery Lane Capital, a New
York investment bank, the Financial Times reported Sunday.

BT believes the proposed takeover plan has little chance of
success and has broken off talks with the consortium.

However, the consortium, called Earth Lease, insists it could
still complete a deal within 60 days and has the support of banks
including JP Morgan Chase. Other banks thought to have expressed
interest include Deutsche Bank, Goldman Sachs, UBS Warburg and
Credit Suisse First Boston.

Earth Lease insists it can complete the deal with some job cuts.

British Telecom has cut its debt by 37% since May by selling
assets. It raised 5.9 billion pounds in June by selling stock to
existing shareholders and selling stakes in some wireless
companies.


DOLPHIN TELECOM: Files for Bankruptcy Protection
------------------------------------------------

Radio communications provider Dolphin Telecom has filed for
bankruptcy protection in order to restructure its balance sheet
and make voluntary proposals to creditors and shareholders,
according to The Times' July 28 report.

Dolphin, which in May reported first-quarter losses of $325
million and gave warning that its ability to meet financial
obligations was uncertain, has been switching customers on to its
digital mobile network.

Dolphin has no immediate plans to lay off any of its 1,400 staff.
In March, the company said it would cut 600 jobs in an effort to
reduce costs.


INVENSYS PLC: Shareholders Reject Lifeline
------------------------------------------

Leading shareholders in Invensys are not be prepared to bail out
the troubled engineering company if it opts for a rights issue
for cash, fearing it would drive down the company's already
battered share price and dilute their holdings, the Independent
News reported Sunday.

One institutional investor said Invensys should sell assets,
which would fetch a reasonable price.

Invensys, which has issued three profits warnings this year and
has announced 11,000 redundancies, owes banks over 3 billion.

Last week, CEO Allen Yurko quit Invensys'. Yurko was blamed for a
disastrous acquisition spree that included Baan, a near- bankrupt
Dutch software company.

The City also blamed finance director Kathleen O'Donovan.


SCOOT.COM: To Sell 50% Stake in Scoot Europe
--------------------------------------------

Scoot.com PLC, according to Dow Jones Newswires' Friday report,
is selling its 50% shareholding in Scoot Europe NV to its partner
Vivendi Universal for 1 euro.

The online directories business said it is selling its interest
in the joint venture because it is unable to continue its funding
obligations due to its current financial position.

Under the terms of the sale, Scoot will pay any outstanding
invoices to Scoot Europe within an agreed period and a refund
payment of 1 million euros to Vivendi for services under the
joint venture.

Scoot will pay the 1 million euros to Vivendi on December 31 and
May 1 next year.

In June, Scoot said it had insufficient working capital for the
next twelve months. Chief Executive Robert Bonnier and Chief
Financial Officer Ronald Dorjee also resigned.






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. Lyndsey Resnick,
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
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Information contained herein is obtained from sources believed to
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