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        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

            Friday, August 24, 2001, Vol. 2, No. 166


                            Headlines

* C Z E C H   R E P U B L I C *

LET KUNOVICE: Has New Owner

* F I N L A N D *

SONERA CORP.: May Pick Dresdner Bank for Telekom Sale

* G E R M A N Y *

BANKGESELLSCHAFT BERLIN: Flowers Prepares Bankgesellschaft Bid
HERZOG TELECOM: Will Lay Off Staff on August 31
MAN AG: Considers Legal Action at ERF
MAN AG: Issues Third Warning

* I R E L A N D *

EIRCOM PLC: To Cut 50 More Jobs

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

AND INTERNATIONAL: Suspension of Payments Lifted
CRISTRON TELECOM: Crashes Into Receivership
KPN NV: Abandons Infonet Sale Plan

* N O R W A Y *

BROADBAND MOBILE: Goes Into Liquidation

* P O L A N D *

ELEKTRIM SA: Will Go to Court Over Iberdrola Bid

* S P A I N *

JAZZTEL PLC: Considers Debt Buyback

* U N I T E D   K I N G D O M *

AEA TECHNOLOGY: Sells Consulting Arm for 69.8MM Pounds
BALTIMORE TECHNOLOGIES: Plans to Sell Content
BALTIMORE TECHNOLOGIES: Will Cut 220 Jobs
EQUITABLE LIFE: Calls for Backing of Compromise Deal
EXCITE@HOME: Gets New Auditor
INEOS ACRYLICS: S&P Revises Rating to Negative
MARCONI PLC: Chief Agrees to Union Talks
NTL INCORPORATED: Moody's Downgrades Ratings to Caa1
UNITED ENGINEERING: Unions Fear Over Job Losses


===========================
C Z E C H   R E P U B L I C
===========================


LET KUNOVICE: Has New Owner
---------------------------

Administrator Zlatava Davidova has agreed to sell bankrupt Let
Kunovice to Moravan Aeroplanes, the August 17 edition of World
News Connection said.

According to Milan Tomanek of Ceskoslovenska Obchodni Banka
(CSOB), which submitted the proposal, the Investicni a Postovni
Banka, which the CSOB took over last June, had already prepared a
request for Moravan's bankruptcy. Moravan owes the CSOB 1.27
billion korunas.

The state-owned Konsolidacni Banka, the second biggest creditor
with an outstanding claim of 55 million korunas, also backed the
proposal.

Tomanek added the CSOB has received one specific offer to
purchase its outstanding claim for approximately 240 million
korunas. It needed to have a market assessment of its value,
which was impossible owing to the alleged unwillingness on the
part of Moravan's management.


=============
F I N L A N D
=============


SONERA CORP.: May Pick Dresdner Bank for Telekom Sale
-----------------------------------------------------

Phone company Sonera may ask Dresdner Bank to handle the sale of
its 72 million Deutsche Telekom AG shares, Bloomberg reported on
Wednesday.

The Finnish group in May received 84 million shares in Deutsche
Telekom in exchange for its stakes in mobile phone operators
VoiceStream and PowerTel. It sold 12 million shares that month as
it did not see Deutsche Telekom as a strategic investment.

On Tuesday, Deutsche Telekom stepped up efforts to curb sales of
its shares after an unidentified investor sold $910 million worth
of stock, wiping a third off the company's market value in two
weeks.

Cash-strapped Sonera has so far been selling assets to pay its
debt.


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


BANKGESELLSCHAFT BERLIN: Flowers Prepares Bankgesellschaft Bid
--------------------------------------------------------------

Private equity firm JC Flowers has confirmed on Tuesday that it
is preparing a bid for Bankgesellschaft Berlin AG, the Daily Deal
reported.

New York-based JC Flowers, advised by Credit Suisse First Boston
and Deutsche Bank AG, wants to acquire at least 75% of the bank.
In has lined up co-investors and is conducting due diligence.

No formal proposal has been made yet.


HERZOG TELECOM: Will Lay Off Staff on August 31
-----------------------------------------------

Herzog Telecom AG, the direct marketer of mobile phone contracts
that is undergoing liquidation, will lay off its entire staff on
August 31, the Frankfurter Allgemeine Zeitung reported on
Tuesday.

Viag Interkom, one of the companies whose mobile phones and
contracts were sold via Herzog, has said that it would no longer
finance direct sales.
   
Company administrator Hermann Schmitt says none of the
prospective investors, which emerged when insolvency was filed
for, has taken the bait.


MAN AG: Considers Legal Action at ERF
-------------------------------------

MAN is considering a legal action over accounting irregularities
at its UK truck subsidiary ERF, the Daily Telegraph reported
yesterday.

The German automotive group has suspended ERF chief executive
John Bryant and chief financial officer Klaus Wagner last week,
following the discovery of accounting irregularities. The matter
is being examined by accountants and will also be the subject of
litigation.


MAN AG: Issues Third Warning
----------------------------

Shares in German truckmaker MAN plummeted on Wednesday after the
company warned that pre-tax profit for 2001 could fall to 400
million euros from last year's 600 million euros, the Financial
Times reported.

The group's earnings have been hit by intense competition in the
truck market, costs related to the introduction of a new
generation of trucks and unexpected losses at its British
subsidiary ERF.

Last week, MAN has suspended ERF chief executive John Bryant and
chief financial officer Klaus Wagner over accounting
irregularities.

MAN has already announced jobs cuts at the unit in an effort to
boost profitability.


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


EIRCOM PLC: To Cut 50 More Jobs
-------------------------------
  
Eircom will further cut 50 jobs from its Northern Irish
operations as part of a scaling back of its business, the
Wednesday edition of The Irish Times said.

The telecoms company already said it was reducing staff in
Northern Ireland from 180 to 140 as part its decision to
concentrate on core operations. This figure will now be reduced
to 90 over the coming weeks.

In April, Eircom said it was scaling back the operations of its
UK subsidiary, Eircom UK, which involved a reduction in staffing
levels from almost 100 people to a maximum of 20. The UK business
now centers on servicing the communications requirements of
corporate customers and managing Eircom's international traffic
flows.


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


AND INTERNATIONAL: Suspension of Payments Lifted
------------------------------------------------

The suspension of payments of publisher AND International
Publishers was lifted last week, the August 18 edition of Het
Financieele Dagblad & World Reporter said.

Trade of new AND shares has been launched for a nominal value of
0.01 euro. As a result of the conversion, 510 million new shares
will come onto the market.

AND was granted suspension of payments on February 22 due to a
high debt level. Jeroen Princen was appointed receiver on
February 26.


CRISTRON TELECOM: Crashes Into Receivership
-------------------------------------------

Dutch telecoms company Cistron Telecom has gone into
receivership, Het Financieele Dagblad & World Reporter in its
Tuesday edition said.

KPN has claimed large sums of money from Cistron for the work
done on local exchanges. Cistron has paid part of the bill, but
refused to pay the rest, saying that the bill is much too high.

KPN now wants to stop providing services to Cistron.


KPN NV: Abandons Infonet Sale Plan
----------------------------------

Telecommunications group KPN ignored the fact that US-based data
telecoms operator Infonet Services had abandoned its sale plans,
the Wednesday edition of the Financial Times said.

According to Infonet chief executive Jose Collazo, they are
terminating the sale process since they did not receive any
proposals.

KPN, which earlier this year flagged the sale of its 17.7% stake
in Infonet to reduce its debt of more than 20 billion euros,
however said it had always thought the sale would take time.

Infonet's failure to find a buyer is likely to intensify pressure
for KPN to outline an alternative debt-reduction strategy.

KPN continues to be in merger talks with Belgian operator
Belgacom. While the parties are understood to have agreed on a
merger of equals, they have yet to agree on valuations.


===========
N O R W A Y
===========


BROADBAND MOBILE: Goes Into Liquidation
---------------------------------------

Telecommunications company Broadband Mobile recently went
into liquidation after its owners Enitel and Sonera failed
to find an acquirer, Dagens Naeringsliv reported on
Wednesday.

An unknown investor has acquired Broadband Mobile last week. It
has to present its identification to the Norwegian ministry of
transport and communications today.

Eva Hildrum, deputy secretary of the Norwegian ministry of
transport and communications, declined to comment on whether the
ministry already knows the identity of the investor.


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


ELEKTRIM SA: Will Go to Court Over Iberdrola Bid
------------------------------------------------

Polish company Elektrim said it would take court action against
the Polish Treasury Ministry if it finds proof that Spain's
Iberdrola was allowed to increase its bid for a 25% stake in the
'Group of Eight' power distributors after the official closing
date, Dow Jones Newswires reported on Wednesday.

Elektrim is in final talks to sell control of its valuable
telecoms assets, including eastern Europe's top mobile phone
operator Polska Telefonia Cyfrowa, to Vivendi Universal in
exchange for much-needed funding.


=========
S P A I N
=========


JAZZTEL PLC: Considers Debt Buyback
-----------------------------------

Jazztel PLC is studying the repurchase of part of its 840-
million-euro in debt in high-yield bonds, the Wednesday edition
of Dow Jones Newswires said.

Last month, the telecommunication company posted a second quarter
net loss of 68.08 million euros, compared with a loss of 62.38
million euros in the first quarter of this year and a loss of
50.97 million euros in the second quarter of 2000.

The 25% fall in the share price of Jazztel has put the company on
the rocks.

Standard & Poor's in June lowered its ratings on the company's
senior unsecured notes to triple-'C'.


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


AEA TECHNOLOGY: Sells Consulting Arm for 69.8MM Pounds
------------------------------------------------------

The Board of AEA Technology plc said on Tuesday it has agreed to
sell its Nuclear Consulting Business to Serco Limited for 69.8
million pounds.

The deal allows the company to retain an estimated 6.0 million
pounds of trade debtors, bringing its gross cash to 75.8 million
pounds. The company also intends to use the proceeds to pay back
its shareholders before the end of the financial year, while
retaining sufficient funds for investment in its core businesses.

Furthermore, the proposed disposal will strengthen the financial
position of the group by reducing the level of outstanding net
debt and will help to improve its future prospects by increasing
the focus of management on its Rail and Environment Businesses.


BALTIMORE TECHNOLOGIES: Plans to Sell Content
---------------------------------------------

Internet security group Baltimore Technologies plans to sell
Content Technologies, the e-mail security group it bought in
October for 692 million pounds, as part of its restructuring
plan, the Financial Times reported on Wednesday.

Baltimore said there had not yet been any formal approach for
Content, but expects to complete the entire restructuring program
by the end of the first quarter of next year, including the sale
of Content.

Other aspects of the restructuring include a further 220 job cuts
to save 72 million pounds annually. Baltimore said the savings
would help it become positive in terms of earnings before
interest, taxation, depreciation and amortization by the end of
the first half of 2002, and cashflow positive by the fourth
quarter of 2002.

In the six months to June 30, Baltimore recorded a pre-tax loss
of 550.3 million pounds, compared with a loss of 25.5 million
pounds in the same period of 2000.


BALTIMORE TECHNOLOGIES: Will Cut 220 Jobs
-----------------------------------------

One time Internet star Baltimore Technologies said on Wednesday
it would further reduce 220 positions in its workforce as part of
the company's restructuring and cost reduction program.

Baltimore is targeting a staffing level of approximately 470
employees, which will be achieved by the second quarter of next
year, primarily through divestment.

The struggling company also announced the sale of its e-mail
security business, a voluntary delisting from the US Nasdaq stock
market and a move to the OTC Bulletin Board on 30 September.

"Baltimore earned its reputation as a dynamic company producing
innovative products and solutions. This restructuring ensures
that the company is now fully focused on its core competencies in
providing security and trust for e-business and will ensure that
all activities are closely targeted at building a strong viable
company for the future and delivering enhanced shareholder
value," Chairman Peter Morgan commented.


EQUITABLE LIFE: Calls for Backing of Compromise Deal
----------------------------------------------------

Equitable Life has urged policyholder action groups during its
board meeting to back a compromise deal aimed at stabilizing its
troubled finances, the Thursday edition of The Times said.

The meeting came as MP Mark Field confirmed that he would forward
a complaint into government handling of the affair to the
Parliamentary Ombudsman.

The pension provider said that it would pay due regard to holders
of non-guaranteed policies.

Equitable Life was forced to close business after the House of
Lords ruled that its decision to cut pension bonuses to holders
of guaranteed pension policies was illegal. The company needs to
agree a compromise deal with guaranteed annuity rates (GAR)
policyholders in order to cap its liabilities.


EXCITE@HOME: Gets New Auditor
-----------------------------

Excite@Home has dismissed Ernst & Young days after the auditing
firm expressed doubts over the company's ability to continue
trading, the Thursday edition of The Times said.

The Internet company said that it had replaced Ernst & Young with
the rival auditing firm PricewaterhouseCoopers.

Excite@Home, whose UK division is 42% owned by British Telecom,
said it had no disagreements with Ernst & Young on any matter of
accounting principles or practices.

The company's shares have lost more than 99% of their value over
the past two years of trading. On Wednesday, it jumped 35% to 54
cents on news of the dismissal, valuing the company at $220
million.


INEOS ACRYLICS: S&P Revises Rating to Negative
----------------------------------------------

Standard & Poor's on Tuesday has revised its outlook on methyl
methacrylate producer Ineos Acrylics PLC from stable to negative.

The negative outlook reflects the delay in the forecast
improvement of Ineos Acrylics' financial measures due to a
weakening demand worldwide for methyl methacrylate and persisting
high key raw materials prices, particularly in the U.S. market.

Standard & Poor's does not expect any major improvement in the
company's financial profile before 2002.


MARCONI PLC: Chief Agrees to Union Talks
----------------------------------------

Marconi chief executive Lord Simpson of Dunkeld has agreed to
meet the company's key unions on September 14 before he completes
his two-month comprehensive operational review of the troubled
telecoms equipment group, yesterday's edition of The Times said.

Previously, Marconi had insisted it would confine details of the
review to its top management team.

Unions, including the MSF and the AEEU, were assured that Marconi
was not planning further job losses.

The company's shares have collapsed after it suspended trading in
advance of a massive profits warning and announcement of 4,000
job losses worldwide.


NTL INCORPORATED: Moody's Downgrades Ratings to Caa1
----------------------------------------------------
  
Moody's Investors Service on Tuesday downgraded the Ba3 senior
implied of NTL Inc. to B1 and the B3 senior unsecured issuer
ratings to Caa1.

The senior unsecured bond ratings of NTL Communications Corp.,
Diamond Holdings plc, Diamond Cable Communications Ltd., and NTL
(Triangle) LLC's to B3. Furthermore, Moody's also downgraded to
Ba3 the senior bank facilities rating of NTL Business Ltd. and
downgraded to B1 the senior bank facilities rating of Cablecom
(Ostschweiz) AG.

The downgrades reflect on-going concerns related to NTL's
significant debt levels, which have grown meaningfully beyond
Moody's expectations, the substantial challenges facing the
company as it attempts to realize the considerable revenue growth
and cost reductions required to offer the prospect of adequate
debt serviceability over the next several years, and heightened
liquidity concerns resulting from the absolute magnitude of the
company's requisite growth requirements and the uncertainty
regarding likely funding sources for potential shortfalls in the
company's business plan.

For the quarter ended June 30, NTL's long-term debt amounted to
approximately US$16.4 billion and interest expense amounted to
approximately 37% of revenues.

While the company has successfully raised capital and materially
improved it's liquidity position over the past several months
through debt and convertible debt issuances, the transactions
have also put additional strain on the company's already
leveraged balance sheet.


UNITED ENGINEERING: Unions Fear Over Job Losses
-----------------------------------------------

Union bosses fear more jobs could be lost in north Worcestershire
if the factories of United Engineering Forgings, the largest
independent forging business in the UK, are sold, the August 20
edition of the Evening Mail said.

The crashed forgings company, which has a turnover of 120 million
pounds a year, went into administration in June.

Administrators KPMG moved in to run the operation, which has six
sites around the country, and shed a total of 168 jobs.

A number of potential customers had expressed interest in buying
the operation, but there were fears that the sites could be sold
off individually.
   
The group has about 1,600 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. Lourdes Reyes, Editors.

Copyright 2001.  All rights reserved.  ISSN 1529-2754.

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