/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010813.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 Monday, August 13, 2001, Vol. 2, No. 157 Headlines * A U S T R I A * LIBRO AG: Posts Loss of 2BB Schilling * B E L G I U M * LERNOUT & HAUSPIE: Dictaphone Subsidiary Almost Out of Chapter 11 SABENA SA: Posts Wider Net Loss of 138.9MM Euros SABENA SA: Expects Profitability by 2005 * F I N L A N D * SONERA CORP.: Reassesses Norwegian Business * F R A N C E * AIR LIBERTE: Pilots Consider Legal Action Against Swissair AIR LIBERTE: To Announce New Name in September FRANCE SOIR: Board Threatens Newspaper With Bankruptcy LA CITY: Womenswear Brand Declares Bankruptcy ONE.TEL: Will Announce Buyer in September * G E R M A N Y * EM.TV: Shareholders Postpone Approval * G R E E C E * OLYMPIC AIRWAYS: Axon to Ink Deal to Buy Olympic Air in September * I T A L Y * ALITALIA-LINEE: To End Marketing Relationship With Northwest E.BISCOM: Second-Quarter Loss More Than Doubled * N E T H E R L A N D S * NTN GROEP: Granted Suspension of Payment * R U S S I A * MEDIA-MOST: Court to Enforce RUR291.5MM Debt Payment * S W E D E N * FRAMFAB AB: Announces Management Team Changes * U N I T E D K I N G D O M * CLAIMS DIRECT: Faces New Business Threat CLAIMS DIRECT: Wants Extension for Deal DANKA BUSINESS: Appoints Three New Executives DANKA BUSINESS: Completes Financial Restructuring EQUITABLE LIFE: FSA Defends Disclosure Policy MARKS & SPENCER: Will Dispose of Kings Super Markets in September SCOOT.COM: Sells Loot to Avoid Bankruptcy SSL INTERNATIONAL: To Replace Auditors * I N F O C U S * RAILTRACK GROUP: Hopes for a Speedy Recovery ============= A U S T R I A ============= LIBRO AG: Posts Loss of 2BB Schilling ------------------------------------- Insolvent retail group Libro AG said that its losses from ordinary activities for the 2000/01 financial year amounted to 2 billion schilling, compared with profits of 3 million schilling in the previous year, Die Presse & Financial Times reported on Thursday. The company is now searching for a strong partner, as it is unable to rescue itself. Internet book retailer Lion.cc and Libro's German operations also led to significant value write-downs. ============= B E L G I U M ============= LERNOUT & HAUSPIE: Dictaphone Subsidiary Almost Out of Chapter 11 ----------------------------------------------------------------- Belgian speech technology company Lernout & Hauspie hopes to close an agreement this month to remove Dictaphone from Chapter 11, the De Standaard & World Reporter reported on Thursday. This agreement would make Dictaphone the first L&H division to have its creditor protection lifted. Dictaphone is proposing that creditors transfer their claims into shares to create three large groups of shareholders - the Belgian banks, Lernout & Hauspie Ltd. and the Dictaphone bondholders. The Dictaphone management will have to find an exit financing to have Chapter 11 lifted and the creditors' committee would have to agree to the debt conversion plan. SABENA SA: Posts Wider Net Loss of 138.9MM Euros -------------------------------------------------- Sabena Belgian World Airlines, according to the Thursday edition of AFX News, posted a first-half net loss of 138.9 million euros against a loss of 83.6 million a year earlier. The company said that the market environment in which Sabena is operating has changed drastically over recent months. SABENA SA: Expects Profitability by 2005 ------------------------------------- Amidst the cancellation of 50 flights due to industrial action, Sabena managed to present a business plan on Thursday to ensure its survival, the Financial Times reported. The plan involves 1,421 job losses from Sabena's core activities and a reduction in fleet size by nine aircraft to 72. Sabena also plans to cut eight routes, including those from Brussels to Washington and Tokyo, and sell subsidiaries such as catering, cargo handling and maintenance to bring the company to profitability by 2005. Sabena chief executive Christoph Muller made it clear that the airline is close to bankruptcy. Muller said that the airline had lost more than 1.7 billion euros of capital over the past 25 years, principally because of its high costs. Swissair, which owns 49.5% of Sabena, and the Belgian government, which has the majority stake, came close to confrontation in courts last month over the 430-million-euro financing for the plan. ============= F I N L A N D ============= SONERA CORP.: Reassesses Norwegian Business ------------------------------------------- Sonera's Norwegian subsidiary Broadband Mobile ASA, 50% owned by Sonera and the other half by Enitel ASA, said on Thursday it has decided to take immediate measures to liquidate the joint venture. The move is based on Enitel's material change of strategy to focus on its core business and to divest its shares in 3G business. Enitel's change of strategy to focus on its core business and to divest its shares in 3G business and the lack of a buyer for Broadband Mobiles shares required Sonera to either to take possession of the whole company or place it into liquidation. The only option in accordance with the company's strategy was to immediately take measures to place it into liquidation. Broadband Mobile's external liabilities total approximately 28 million euros, for which the company's bankrupt estate will be liable in accordance with the laws of Norway. =========== F R A N C E =========== AIR LIBERTE: Pilots Consider Legal Action Against Swissair -------------------------------------------------------- The pilots of French airline AOM-Air Liberte may take legal action against former shareholder Swissair in an attempt to force it to assume its financial responsibility during the company's restructuring, the August 9 edition of Les Echos & Financial Times said. The Air 100 association, which includes 70 of the group's 94 pilots, will primarily appeal against the judgment that protects Swissair from all legal action. AIR LIBERTE: To Announce New Name in September ---------------------------------------------- The new operating name for the merged AOM and Air Liberte airlines will be announced in September, the August 9 edition of AFX News said, citing company board president Francois Bachelet. Bachelet added that potential investors would be interested in the French airline as soon as it demonstrates a potential for generating profits or higher valuations. FRANCE SOIR: Board Threatens Newspaper With Bankruptcy ------------------------------------------------------ The board of directors of France Soir newspaper has threatened the company with a declaration of bankruptcy, the La Tribune & Financial Times reported on Thursday. Italian publishing group Poligrafici Editoriale, which acquired the paper in December last year, is negotiating with staff representatives in an attempt to push forward an employment plan, which would involve 76 job cuts. LA CITY: Womenswear Brand Declares Bankruptcy --------------------------------------------- French womenswear brand La City has declared itself bankrupt on August 8 at the Bobigny commercial court in France, the Les Echos & Financial Times reported on Thursday. The company, which includes 44 self-owned outlets, 33 franchises and 20 corners, is expected to submit a recovery plan to the court. La City began to make losses in the financial year 2000-2001. ONE.TEL: Will Announce Buyer in September ----------------------------------------- After receiving three takeover offers in late July, the name of the acquirer of OneTel France will be announced in September, Les Echos & Financial Times reported on Thursday. Two of the bids suggest sale plans, while the third, from Iliad, owned by French Internet access provider Free, proposed a recovery plan. Free's plan, which would involve taking on nearly all the company's 129 staff, is currently the most favored by OneTel. OneTel France, which had a pre-tax loss of 17 million euros for sales of 12 million in the second half of 2000, has been in receivership since mid-June when parent company Australian telecom group OneTel failed. ============= G E R M A N Y ============= EM.TV: Shareholders Postpone Approval ------------------------------------- Shareholders in media group EM.TV & Merchandising AG have decided to postpone approval of the actions of the company's supervisory and management boards, the Borsen-Zeitung & Financial Times reported on Thursday. The shareholders want to allow legal investigations against former management board chairman Thomas Haffa to be completed before making a decision on whether to give approval. The company said it would sell off almost all participations in other companies, including TeleMunchen and Jim Henson Company, in order to secure liquidity. It also intends to withdraw from Formula One racing. =========== G R E E C E =========== OLYMPIC AIRWAYS: Axon to Ink Deal to Buy Olympic Air in September ----------------------------------------------------------------- Axon Airlines, a small Greek airline, expects to sign a preliminary deal or a memorandum of understanding (MOU) to purchase a majority stake in ailing national carrier Olympic Airways from the government in September, Reuters reported on Thursday According to Axon Airlines president Thomas Liakounakos, about 10 issues, including labor relations, would be pending after the preliminary agreement was signed and negotiations would then take another 60 to 90 days to finalize the deal. Axon is the leading bidder for Olympic. Other bidders are Cyprus Airways, which is cooperating with Italy's Alitalia and Australian venture capital group Integrated Airline Solutions (IAS). ========= I T A L Y ========= ALITALIA-LINEE: To End Marketing Relationship With Northwest ------------------------------------------------------------ Northwest Airlines and Alitalia said on Thursday they have reached a mutual agreement to discontinue their marketing relationship effective October 28, 2001. Cooperative activities have included code-share service and reciprocal frequent flyer and airport lounge programs. The two carriers are already taking steps to proactively accommodate customers holding reservations on Northwest/Alitalia code-share flights on or after October 28. Northwest and Alitalia code-share on U.S.-Italy flights and flights within the United States and Europe. E.BISCOM: Second-Quarter Loss More Than Doubled ----------------------------------------------- Broadband Internet group e.Biscom posted a wider second-quarter consolidated net loss of 30.5 million euros, compared with 12.9 million euros in the year-ago quarter, the August 8 edition of Reuters said. E.Biscom had negative earnings before interest, tax, depreciation and amortisation (EBITDA) of 31.1 million euros, compared with a 4.8 million euro loss in the year-ago period. The company's revenues rose to 29.8 million euros from 3.3 million euros last year, Reuters added. ===================== N E T H E R L A N D S ===================== NTN GROEP: Granted Suspension of Payment ---------------------------------------- NTN Groep, the largest commercial maternity care organization in the Netherlands, was granted suspension of payment on August 8 due to acute financial problems. According to the Thursday edition of De Volkskrant & Financial Times, NTN Groep will continue its activities during the suspension of payment. Salaries will still be paid. NTN Groep, set up in 1990 and employs about 2,000 people, supplies care with about 15,000 deliveries per year and provides home care to about 1,200 older people. =========== R U S S I A =========== MEDIA-MOST: Court to Enforce RUR291.5MM Debt Payment ---------------------------------------------------- The Moscow Arbitration Court, according to the August 9 edition of RosBusiness Consulting, ruled to enforce the payment of a 291.5-million-Russian ruble bill debt by Media-MOST in accordance with a suit filed by the committee on municipal loans and stock market development of the Moscow government. The court also sustained a similar claim worth 854 million Russian rubles against Media-MOST on August 8. The court ruling can be appealed within the next 30 days. Early this year, Media-MOST has issued four bills of 274.5 million Russian rubles to be settled in April and May of 2001. The Moscow government presented the bills for payment, but Media- MOST refused to pay. =========== S W E D E N =========== FRAMFAB AB: Announces Management Team Changes --------------------------------------------- Framfab on Thursday said that there would be changes in the Internet consultancy firm's management as the winding-up of its non-core activities is coming to end. Framfab Business Partners head Goran Westling will leave the company and will continue to devote himself to a range of board assignments. VP for Corporate Communications Leif Andersson has tendered his resignation, as Framfab has not continued its international expansion as was planned when he took up his duties in December 2000. Leif will be providing communication consultancy services out of his own company. VP for Mergers & Acquisitions Sofia Ericsson will leave the company once the winding-up of the non-core activities has been completed. In addition, head for international activities Ralf Pispers will be moving to a senior position as a partner in Framfab's German division. Framfab's new organization of is now focusing on activities in six countries, with the CEOs in each country reporting directly to Group CEO and President Johan Wall. Framfab has offices in Denmark, France, the United Kingdom, the Netherlands, Sweden and Germany. =========================== U N I T E D K I N G D O M =========================== CLAIMS DIRECT: Faces New Business Threat ---------------------------------------- Embattled personal injury claims company Claims Direct faces a new threat with the news that a major insurance company is offering free legal protection to its customers, the Thursday edition of BBC News said. The move by Co-operative Insurance Society is not only aimed at protecting their customers against negligence claims, but also against claims from personal injury companies following a legal judgment. Most insurance policies classed damages incurred due to negligence as uninsurable losses, and would offer legal protection for a fee to push up premiums. CLAIMS DIRECT: Wants Extension for Deal --------------------------------------- The independent directors of personal injury claims business Claims Direct sought more time to reach a deal with a private investor to prevent the company from being sold to its two co- founders, the Independent News reported on Friday. The directors said they asked Claims Direct co-fouders Tony Sullman and Colin Poole to push back the closing date. Poole and Sullman has set the first closing date of the offer to Monday. The directors are now looking for a two-week extension to further consider a proposal from a third party who is looking to buy some of the 43% stake in Claims Direct owned by the founders. The third party is understood to be investor Simon Ware-Lane, believed to be an associate of Sullman. DANKA BUSINESS: Appoints Three New Executives --------------------------------------------- Danka Business Systems, an independent supplier of office imaging equipment, announced on August 7 the appointment of three new key executives. Todd Mavis has been appointed President and Chief Operating Officer of the U.S. Office Imaging Business unit, David Berg as President and Chief Operating Officer for its Canada, Latin America and Asia Pacific Regions and Dr. Peter Williams has been assigned to lead the company's European organization as Chief Operating Officer, International. Mavis was the Executive Vice President of software developer Mitchell International. Berg, on the other hand, served as Danka's Executive Vice President, General Counsel from June 1997 to June 2000 and most recently was Senior Vice President with Comdial, Inc., while Williams was most recently Executive Vice President of document management and technical service provider Anacomp, Inc. Danka Business also announced the promotion of Senior Vice President for U.S. Service Mike Hawkins to President for U.S. Technical Services. Rick Davis, formerly Senior Vice President of Human Resources, was also promoted to Chief Administrative Officer. The recent appointment will considerably strengthen the organization and focus on the company's mission to continue improving its capital structure and reducing its debt. DANKA BUSINESS: Completes Financial Restructuring ------------------------------------------------- Danka Business on August 8 said it has completed on June a three part financial restructuring that resulted in a substantial reduction of debt and provided the company with financing through March 31, 2004. The three parts of the financial restructuring plan are an amended and restated bank facility, the sale of Danka Services International (DSI) for $290 million, and the exchange of $184 million of the company's convertible subordinated notes for new extended maturity notes and cash. The net proceeds from the sale of the DSI were used to reduce bank debt and to fund a $24 million cash component of the note exchange. Danka Business has now reduced its debt from approximately $1.2 billion at December 31, 1998 to $375 million at June 30, 2001. EQUITABLE LIFE: FSA Defends Disclosure Policy --------------------------------------------- The Financial Services Authority, the City of London regulator, has defended the decision of troubled insurer Equitable Life not to reveal earlier this year that it was conducting a review of its bonus policy, according to the Financial Times newspaper on Thursday. Equitable's with-profits policyholders were shocked to learn on July that as result of the secret review, the board decided to cut the value of their policies by up to 16%. Shadow paymaster general Richard Ottaway has questioned the role of the FSA after Equitable closed for business in December until the pension fund cuts were announced. Ottaway added the FSA have powers to intervene but did not consider it as appropriate to do. Managing director John Tiner of the FSA's Consumer, Investment and Insurance Directorate said that the FSA should have told policyholders about the fact that bonus policy was under review, until Equitable had completed the review and had some firm policy propositions to make. MARKS & SPENCER: Will Dispose of Kings Super Markets in September ---------------------------------------------------------------- Troubled retail giant Marks & Spencer PLC expects to dispose of its Kings Super Market chain in September and of menswear retailer Brooks Brothers in October, the August 9 edition of AFX News said. Marks & Spencer put its US operations for sale in March to raise cash and refocus the group on its UK business. Both sales are crucial for M&S, because it needs the cash to pay the 2 billion sterling pounds it has promised to return to shareholders by March 2002. Analysts anticipate Kings will raise between US$155 to US$165 million and US$400 million for Brooks. Possible buyers for Kings include a management buy-out led by its president and chief executive officer Alan Levitan, New York chain Gristede's Food Inc and distribution company C&S Wholesale Grocers Inc. US chain May Department Stores and Hong Kong-based Dickson Concepts International are seen as possible buyers of Brooks. SCOOT.COM: Sells Loot to Avoid Bankruptcy ----------------------------------------- Online directories business Scoot.com said that talks to sell Loot, its profitable classified advertising business and most valuable asset, are still continuing in a desperate attempt to stave off bankruptcy. The Friday edition of Independent News said that those interested of Loot are strategic and financial buyers, including French publisher of classified-advertisement newspapers Trader.com. Scoot faces a two-pronged cash crunch at the end of the month unless it finds a buyer for Loot. The company was forced to sell its loss-making continental European operations last month to French entertainment company Vivendi Universal for just 1 euro. Scoot Europe had 92.5 million pounds in liabilities. SSL INTERNATIONAL: To Replace Auditors -------------------------------------- SSL International, which makes Durex condoms and Scholl sandals, will replace its auditors Arthur Andersen, the Financial Times reported on Thursday. Private investors attacked the auditors last month for failing to detect that SSL had overstated sales by 22 million pounds and profits before tax and exceptionals by 19 million pounds in 1999 and 2000. The healthcare group has put the audit contract up for tender and Arthur Andersen has not been invited to reapply. People close to the company said Andersen had not put its name forward, but even if it had, it would have been extremely unlikely that it would have been selected. The Serious Fraud Office recently launched an investigation by professional services firm KPMG and law firm DLA, into whether SSL employees or former employees might have committed criminal offences. The inquiry found the results were overstated through the use of fake invoices, goods that never reached customers, and inflated exceptional costs. ============== I N F O C U S ============== RAILTRACK GROUP: Hopes for a Speedy Recovery -------------------------------------------- Four people died and 34 were seriously injured when a high-speed train came off the tracks just north of London on October 2000. This disaster has brought Railtrack Group to what it is now -- an embattled train network operator. Railtrack has a growing hole in its finances from rail maintenance and replacement costs. It is expected to rise 700 million pounds a year, or 2 million pounds a day. Railtrack also has a list of potential project overruns and claims risks, estimated at as high as 2 billion pounds, caused by the fatal train crash. The company needs another 4.3 billion pounds over the next five years. That is on top of a rising debt mountain, forecast to hit 8 billion pounds in 2003. Gerald Corbett resigned as chief executive of Railtrack a month after the accident, although finance director Steve Marshall immediately replaced him. Early this year, Railtrack asked the U.K. government for early payment of 1.5 billion pounds in grants and subsidies. Then in April, the company got its badly needed cash advance. Under the funding arrangement, Railtrack has been forced to drop plans to build the second stage of the Channel Tunnel rail link. Furthermore, train operators have demanded up to 330 million pounds from Railtrack to compensate for disruption to services caused by speed restrictions and safety checks after the Hatfield derailment. Virgin Trains has claimed Railtrack owed 100 million pounds for lost business, while National Express and GNER have also threatened legal action and want compensation for long-term losses because passengers have been scared off by the poor service. Railtrack in May wanted another two billion pounds over the next five years to help pay for repairs and inspections, then faced a 3.6 billion pound funding gap as it plunged into the red with pretax losses of 534 million pounds at the full-year to March because of the Hatfield crash. As a result, the government will strip Railtrack of its responsibility for running the national rail network and hand the job instead to the train operating companies because of the continued deterioration in its performance. The move comes amid the removal of chief operating officer Jonson Cox from office and the transfer of direct control of operations to CEO Steve Marshall. Railtrack chairman John Robinson has warned that the network will likely take another year to recover. *********** 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 * * *