/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010815.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, August 15, 2001, Vol. 2, No. 159 Headlines * A U S T R I A * LIBRO AG: Board Okays Lion.cc Sale RED-STARS.COM: Internet Firm Considers Liquidation * B E L G I U M * FIRSTMARK COMMUNICATIONS: German Unit Files for Insolvency LERNOUT & HAUSPIE: Can Survive Until October REAL SOFTWARE: Bondholders to Meet in September SABENA SA: Staff Resumes Work SABENA SA: Strike Action Costs 120MM Belgian Francs * C Z E C H R E P U B L I C * MAVEL: Court Declares Credit Union Bankrupt * F R A N C E * LORINFO SA: Computer Sales Specialist Enters Liquidation RSL COM: Kaptech Takes Over French Assets * G E R M A N Y * ADAM OPEL: Plans Heavy Job Cuts ADAM OPEL: Works Council Demands Export of Models in US * I T A L Y * ALITALIA-LINEE: To Announce Redundancies * N E T H E R L A N D S * LETSBUYIT.COM: Announces Negotiations With New Investors PHARMING GROUP: Rejects Joint Venture Bid From Genzyme * N O R W A Y * BRAATHENS ASA: Finnish Air Prefers Liquidation BROADBAND MOBILE: Will Apply for Bankruptcy MAGCOM: Board Declares Phone Manufacturer Insolvent * S W I T Z E R L A N D * 4M TECHNOLOGIES: May Face Insolvency 4M TECHNOLOGIES: Shares Plunge More Than 50% * U N I T E D K I N G D O M * CAMMELL LAIRD: Unions Demand DTI Action CLAIMS DIRECT: Directors Refuse to Accept Founders' Bid CLAIMS DIRECT: Founders Face Legal Action From Franchisees DANKA BUSINESS: Auditor Revises Financial Report INDEPENDENT INSURANCE: Remaining Staff to Receive Bonuses MARCONI PLC: Fears of New Warning MARKS & SPENCER: Chief Jaggard Leaves Group in Shake-Up ============= A U S T R I A ============= LIBRO AG: Board Okays Lion.cc Sale ---------------------------------- The supervisory board of retail group Libro AG has given a green light to sell its troubled Internet subsidiary Lion.cc, Wirtschaftsblatt & Financial Times reported on Monday. The supervisory board also gave the management board permission to implement the restructuring plan. Lion.cc had suffered capital depreciation of 570 million Austrian schilling for the financial year 2000/01, while Libro Entertainment burned 220 million Austrian schilling and CeDe.ch with 70 million Austrian schilling. RED-STARS.COM: Internet Firm Considers Liquidation -------------------------------------------------- Internet and regional venture capital firm red-stars.com data AG is about to go into liquidation after its shareholders refused to increase funds, the Budapest Business Journal reported on Monday. According to Peter Schonhofer, in charge of liquidation at red- stars, they are making moves to sell existing investments and find new partners for the company. Further reports say that red-stars had been in discussion with the European Bank for Reconstruction and Development (EBRD) about a possible investment to save the Internet firm. However, it declined to invest because the company changed its business model too many times during negotiations and it did not focus sufficiently on Eastern Europe. ============= B E L G I U M ============= FIRSTMARK COMMUNICATIONS: German Unit Files for Insolvency ---------------------------------------------------------- Telecoms service provider Firstmark Communications GmbH, founded by American investors Lynn Forrester and Michael Price to provide local-network connections using directional radio, filed for insolvency last week, Handelsblatt in its August 9 edition said. Firstmark Europe in Belgium decided the closure of Firstmark in Germany. Its chairman Bernie Smedley decided to stop investments in the German unit with its 179 employees. Few months ago, Firstmark Communications changed its strategy and started marketing DSL connections on the basis of telephone lines rented from Deutsche Telekom AG. LERNOUT & HAUSPIE: Can Survive Until October -------------------------------------------- Lernout & Hauspie Speech Products may be able to survive until the end of October, provided that things go the way chairman Philippe Bodson hopes, De Financieel Ekonomische Tijd & Financial Times reported on Monday. The Belgian speech and language technology company has reached an agreement with creditors of US subsidiary Dictaphone that the debts will be paid back in shares. Dictaphone will take over Lernout & Hauspie's Power-Scribe technology and continue as a separate, debt-free entity. Bodson also hopes to sell its transcript division by early September through a management buy-out. REAL SOFTWARE: Bondholders to Meet in September ----------------------------------------------- Real Software Group NV said on Monday it has scheduled a general meeting of its bondholders on September 10. The Belgian software company will attempt to get holders of its convertible bonds to approve a revised debt-restructuring plan after mounting debts pushed the company to the verge of bankruptcy last year. Real Software also plans to extend the expiration date of the convertible bond's interest to July 23, 2002. SABENA SA: Staff Resumes Work ----------------------------- Employees of Belgian airline Sabena returned to work on Friday afternoon after unions asked their members not to hold any more demonstrations, the Monday edition of the De Financieel Ekonomische Tijd & Financial Times said. The judge threatened to impose a 250,000 Belgian francs fine on those who try to block the access roads to Zaventem Airport again. The ground workers went on strike last week because of fears of planned layoffs by the troubled Belgian airline. SABENA SA: Strike Action Costs 120MM Belgian Francs --------------------------------------------------- The cancellation of Sabena Belgian World Airlines SA flights due to strike action that lasted two days last week has cost the company 120 million Belgian francs, AFX News reported on Monday. The cost accounts for 62 flights cancelled on Thursday and 13 on Friday. The two-day strike was a response to fears of job losses and cost cutting measures outlined in a rescue plan presented to personnel on Thursday. =========================== C Z E C H R E P U B L I C =========================== MAVEL: Court Declares Credit Union Bankrupt ------------------------------------------- The Brno regional court in Czech Republic has declared credit union Mavel bankrupt, the Czech News Agency & World Reporter in its August 10 edition said. According to Judge Jan Kozak, Mavel forced administrator Bohumil Petras filed the bankruptcy petition. Milan Picka was named the credit union's bankruptcy administrator. Mavel had been under forced administration since August 22 and its activities had been limited since December 1999. Mavel had 1,462 members and Kc134.5 million in deposits when forced administration was imposed. =========== F R A N C E =========== LORINFO SA: Computer Sales Specialist Enters Liquidation -------------------------------------------------------- The Nanterre commercial court said that computer sales specialist Lorinfo SA has entered voluntary liquidation on August 7, according to the Monday edition of Le Figaro & Financial Times. The company that was created 14 years ago has around 60 employees at Maxeville, 35 in Metz, 15 in Dijon, ten in Saint-Die, seven in Epinal and six in Nevers. RSL COM: Kaptech Takes Over French Assets ----------------------------------------- Kaptech has taken over the clients, 44 of the staff and assets of RSL Com France, the Monday edition of Les Echos & Financial Times said. The partial sale plan was preferred to offers from LD Com and Nets. RSL France, which has been in voluntary liquidation since April following the meltdown of its US parent company, has around 20 million euros turnover. RSL Communications provides a broad range of voice, data/Internet and value-added product and service solutions primarily to small and medium-sized businesses and residential customers in selected markets around the globe. It currently has revenue-producing operations and provides services in the Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Portugal, Spain, Sweden, Switzerland, Mexico, the United Kingdom, the United States and Venezuela. ============= G E R M A N Y ============= ADAM OPEL: Plans Heavy Job Cuts ------------------------------- Adam Opel AG, the German unit of General Motors, is working on a plan that will involve heavy job cuts aimed at returning the carmaker to the black by 2003, Reuters reported on Monday. The turnaround plan is named Project Olympia. An Opel spokesman said that figures are pure speculation at the moment, but there will have to be massive layoffs. ADAM OPEL: Works Council Demands Export of Models in US ------------------------------------------------------- The works council of carmaker Adam Opel AG will sell its models in the US to boost sales, the August 12 edition of Die Welt & Financial Times said. The models most likely to be exported to the new market are the Astra, Corsa and Zafira. Opel has always been denied permission to sell in the US because it would enter into competition directly with parent company General Motors. AFX News added that Adam Opel expects its full year losses to be half of the 1 million deutsche mark loss posted in 2000. ========= I T A L Y ========= ALITALIA-LINEE: To Announce Redundancies ---------------------------------------- Italian airline Alitalia is expected to cut at least 1,500 jobs as a result of the current slowdown in the economy and air traffic, Il Sole 24 Ore & Financial Times reported on Monday. In recent months, managing director Francesco Mengozzi has not commented on questions concerning redundancies as a means of cutting costs. The job cuts was part of Alitalias business plan, which also includes a government injection of more than 2 trillion lire in capital to cover some of the airline's losses, fleet expansion and office closure. ===================== N E T H E R L A N D S ===================== LETSBUYIT.COM: Announces Negotiations With New Investors -------------------------------------------------------- Online retailer LetsBuyIt.com N.V. said on Monday it has entered into negotiations with new investors and has already signed a Letter of Intent regarding further negotiations with one potential new strategic investor. The names of the investors were not disclosed. Last month, Letsbuyit.com announced that the negotiations with Shmulik Stein International Investors had ended as the UK company refused to transfer the money. LetsBuyIt.com added it has received 2.5 million euros from a trade sale of non-core assets to secure further liquidity. PHARMING GROUP: Rejects Joint Venture Bid From Genzyme ------------------------------------------------------ Cash-strapped biotechnology company Pharming NV has rejected a bid from US-based Genzyme General for its share of a joint venture that makes Pharming's flagship product, Dow Jones Newswires reported on Monday. Pharming representative Rein Strijker said the bid was insufficient to such an extent the company did not take it to shareholders. Genzyme General spokesman Bo Piela declined to say how much the company offered, or whether it's still interested after the bid was rejected. Pharming, which has 24 million euros in cash to fund future operations, filed for receivership on Friday to prevent the company from being taken over. A Dutch court granted the receivership on Monday. =========== N O R W A Y =========== BRAATHENS ASA: Finnish Air Prefers Liquidation ---------------------------------------------- Finnair of Finland prefers a liquidation of Braathens as customers of the Norwegian airline would be the largest losers if Scandinavian Airline System acquires Braathens, Dagens Naeringsliv & Financial Times reported on Monday. The Finnish airline added that it would be easier for other companies to enter the market if Braathens were to be liquidated. The company also stated that if an international company will start domestic flights in Norway, international flights would have to be increased in order for the company to compete with SAS. SAS has in May agreed to take over Braathens for 1.1 billion krone. BROADBAND MOBILE: Will Apply for Bankruptcy ------------------------------------------- The mobile operator Broadband Mobile ASA will apply for bankruptcy after its owners, Finland's Sonera and Norway's Enitel ASA, decided to pull out of the Norwegian third generation (UMTS) mobile communications business, the August 10 edition of M2 Communications Ltd said. Broadband Mobile has won one of the Norwegian UMTS licenses. It has external liabilities of approximately 28 million euros. MAGCOM: Board Declares Phone Manufacturer Insolvent --------------------------------------------------- The board of MagCom has declared the mobile telephones manufacturer insolvent after US investment company Insight Capital and Telenor Venture managing director Rune Rinnan refused to invest further in the company, the Monday edition of Dagens Naeringsliv & Financial Times said. Sales and production of the company's mobile telephones were halted on Friday as MagCom revealed it needed new funding of 10 million Norwegian krone. Insight Capital and Telenor Venture were among the largest shareholders in the company and they had aimed to turn MagCom into a large international mobile telephone manufacturer. ===================== S W I T Z E R L A N D ===================== 4M TECHNOLOGIES: May Face Insolvency ------------------------------------ The Swiss CD and DVD production machinery company 4M Technologies may face insolvency as it has failed to obtain a fresh injection of capital from banks and investors, the Le Temps & Financial Times in its August 10 edition said. The company's problems began in November of last year, following a sharp drop in demand for production systems for recordable CDs. A banking consortium headed by the Swiss bank Julius Bar invested 20 million Swiss francs in its operations, while founder and leading shareholder Adel Michael opened a new credit line to cover its restructuring program. 4M claimed in June that it was experiencing a cash-flow problem. The company's share then lost 33% of its value. Trading of the share has been suspended on Thursday and Friday in order to avoid further losses. 4M TECHNOLOGIES: Shares Plunge More Than 50% -------------------------------------------- Shares of 4M Technologies were down CHF7.40, or 53%, at CHF6.60 on Friday when it resumed trading following the two days suspension, Dow Jones Newswires reported on Monday. The compact disc machinery maker was unable to find any financing help to alleviate its liquidity squeeze and analysts said 4M has a little chance of finding an investor, soon. 4M warned the market in June about a liquidity problem that threatened the future of the company and said it was in talks with banks and potential investors. A bank consortium, including Julius Baer, CS Group, UBS and Royal Bank Of Scotland, provided the group in November with CHF20 million to finance a restructuring program. 4M has a 2000 net loss of CHF72.5 million. It has a total liability of CHF92.7 million, compared with shareholders' equity of CHF47.8 million. =========================== U N I T E D K I N G D O M =========================== BRITISH TELECOM: Plans to Pull Out Concert Venture -------------------------------------------------- British Telecommunications hopes to reach an agreement to dismantle Concert, its joint venture with AT&T, within the next two to three weeks as it has been hit by a series of bad debts, the Financial Times reported on Monday. BT Chairman Sir Christopher Bland said Concert's future is vital before the company publishes a demerger prospectus of its mobile phone arm BT Wireless early next month. AT&T is less convinced that a final agreement could be reached within BT's self-imposed deadline. Negotiations between Concert's owners have been hampered by the lack of pre-nuptial agreements detailing how joint assets and customers should be divided in the event of separation. Reports say the write-downs could mean a major one-off loss for BT, along with hundreds of job losses. Concert employs about 6,000 staff worldwide. CAMMELL LAIRD: Unions Demand DTI Action --------------------------------------- Unions representing Cammell Laird workers has demanded a Department of Trade and Industry intervention in the proposed sale of the ailing ship repair company to privately owned ship repair group A&P because of fears that the deal will create a monopoly, according to The Times report yesterday. AEEU Ted Gilbertson wrote Patricia Hewitt, the Secretary of State for Trade and Industry, to voice strong concerns over a 10- million-pound bid by A&P. Gilbertson believes that A&P has plans to shut down the yards or to sell off much of the land around them. Gilbertson added that A&P already owns six UK shipyards and acquiring two more would give them a monopoly of the industry. A&P also has refused to discuss its Cammell Laird plans with either the AEEU or the GMB, another union that represents Cammell workers. A&P chief executive David Ring is still in negotiations with Cammell Laird receiver PricewaterhouseCoopers. The unions are more supportive of the management's two offers for the yards. CLAIMS DIRECT: Directors Refuse to Accept Founders' Bid ------------------------------------------------------- The independent directors of personal injury compensation specialist Claims Direct refused to accept a 10p-a-share bid of its two founders, the Daily Telegraph & Financial Times reported on Monday. The bargain offer of co-founders Tony Sullman and Colin Poole is well below the share's flotation price of 180p 13 months ago. The company is valued at 19.4 million pounds, based on the offer by Poole and Sullman, who both own 42.8% of Claims Direct. CLAIMS DIRECT: Founders Face Legal Action From Franchisees ---------------------------------------------------------- City law firm Class Law may issue legal proceedings against Claims Direct founders on behalf of employees who allege they were misled about the business' prospects, the Independent News reported yesterday. Tony Sullman, Colin Poole and Stephen Hyde set up the "no-win, no-fee" personal injury company and organized its flotation in July for 180p. Hyde left the company just before the float but Sullman and Poole became its chairman and chief executive, and launched a 10p a share offer for Claims Direct last month. Class Law has been instructed to investigate potential legal claims against the company and against its former directors. Claims Direct emerged last year that many successful clients received very little of their compensation in personal injury cases because they had to pay a hefty insurance premium out of their winnings. This left claims managers, known as franchisees, out of pocket because they had been forced to pay up to 30,000 pounds for their franchise. Poole denied allegations that franchisees were misled when they signed contracts. He said that franchisees were given a choice and the majority signed the agreement. DANKA BUSINESS: Auditor Revises Financial Report ------------------------------------------------ Danka Business Systems PLC, a leader in office imaging, said on Monday its independent auditors KPMG Audit PLC have revised their independent auditors' report for the company's fiscal year ended March 31, 2001 after the company successfully completed its three part financial restructuring plan. The auditors have removed any doubt as to the company's going concern status. Danka Business believes the revision will restore confidence from its customers, shareholders, employees, vendors and lenders in the company's financial stability. KPMG in its June report included an explanatory paragraph regarding the company's need to restructure indebtedness in order to meet obligations. 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 DSI sale were used to reduce bank debt and to fund a $24 million cash component of the note exchange. Danka Business is one of the world's largest independent suppliers of office imaging equipment and related services, parts and supplies. It provides office products and services in 30 countries around the world. INDEPENDENT INSURANCE: Remaining Staff to Receive Bonuses --------------------------------------------------------- Remaining staff at Independent Insurance Group PLC, which faces a widening black hole in its finances, will receive a bonus of 1,000 sterling pounds to stay loyal to the group, the Monday edition of AFX News said. Former Independent employees that were made redundant when the company collapsed two months ago have criticized the payment as insensitive. A total of 1,044 people were made redundant, while around 600 have been retained to handle existing claims. The Serious Fraud Office is investigating former chief executive Michael Bright for fraud and negligence. MARCONI PLC: Fears of New Warning --------------------------------- There have been rumors that Marconi could post another profit warning as the European and North American markets are extremely uncertain, the Independent News reported yesterday. Shares in the troubled telecoms equipment maker plunged to 5.5% at 81p in London with the speculation. Marconi's shares also collapsed in early July after it warned operating profits for the current year would be half last year's and announced plans to cut 4,000 jobs. A company spokesman refused to comment on the speculation. MARKS & SPENCER: Chief Jaggard Leaves Group in Shake-Up ------------------------------------------------------- Store design head Charles Jaggard has left Marks & Spencer as part of a marketing restructuring, the August 10 edition of Namnews said. Jaggard masterminded the group's rollout of 23 concept stores. He also hired retail design consultants Din Associates, 20-20 and Fitch earlier this year to come up with radical new plans to modernize the womenswear, menswear and footwear departments. Shopfloors of M&S have been criticized as old-fashioned, reminding customers of shops in the former Soviet Union. ************ 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. 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