/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010828.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, August 28, 2001, Vol. 2, No. 168 Headlines * A U S T R I A * LIBRO AG: PBS Austria Considers Bid for Libro * F I N L A N D * SONERA CORP.: Sells DT Shares for 565MM * F R A N C E * CONNECTIC METALLO: Enters Insolvency Proceeding * G E R M A N Y * 4CONTENT: Will Cease Operations This Week BROKAT AG: CEO Roever Resigns * H U N G A R Y * HUNGARIAN RAILWAYS: Yugoslav Railways Restarts Payment * N E T H E R L A N D S * NEWCONOMY NV: Shares Plunges 99.7% * S W E D E N * ADCORE AB: Directors Agree on Bridge Financing ADCORE AB: Divests German Operations ADCORE AB: Posts SEK1.46BB Loss for Second Quarter LM ERICSSON: Finds Buyer for UK Office * U N I T E D K I N G D O M * ATLANTIC TELECOM: Bondholders Seek to Wind Up Company BRITISH TELECOM: Denies Reports of Job Cuts BRITISH TELECOM: Dismisses Reports of CEO Quitting CHRONOPOST: To Be Liquidated INDEPENDENT INSURANCE: Bankrupt Chief Will Keep His Pension J2C PLC: Directors to Profit as Company Fails HATFIELD COAL: U.S. Group to Rescue Colliery MARKS & SPENCER: To Open in India PPL THERAPEUTICS: Biotech Firm Is Short of Cash PSD GROUP: Shares Fall 14% After Third Warning SAVE GROUP: E&Y Sells Assets to Anglo Petroleum VIATEL INC: Sells Transatlantic Network Assets to Level 3 I N F O C U S EQUITABLE LIFE: After 239 Years, Why Such Trouble? ============= A U S T R I A ============= LIBRO AG: PBS Austria Considers Bid for Libro --------------------------------------------- Anton Stahrlinger, the owner of paper wholesaler PBS Austria, has remained interested to bid for insolvent book, audio and video retailer Libro, the Die Presse reported on Friday. Stahrlinger originally attempted to acquire the store chain before it applied for protection from creditors. The supervisory board of Libro AG has already agreed to sell its troubled Internet subsidiary Lion.cc, which had suffered capital depreciation of 570 million Austrian schilling for the financial year 2000/01. ============= F I N L A N D ============= SONERA CORP.: Sells DT Shares for 565MM --------------------------------------- Finnish telecommunications firm Sonera Corp. said on Sunday it has sold about 21.9 million shares of Deutsche Telekom AG since early July. The total proceeds from the share sales amount to approximately 565 million euros. Sonera sold the shares through Dresdner Kleinwort Wasserstein at an average price of 25.75 euros per share. According to Sonera's CFO Kim Ignatius, the sale has covered the repayment of its existing short-term UMTS loan portion, all due on October 25. Sonera previously announced the company would use the proceeds from the sale of the shares to reduce its debt. After the sale, Sonera's net debt is approximately 4.7 billion euros. Sonera still owns approximately 50 million Deutsche Telekom shares, of which 12 million can be sold between September 1 and November 30 this year. =========== F R A N C E =========== CONNECTIC METALLO: Enters Insolvency Proceeding ----------------------------------------------- Connectic Metallo SA, according to AFX News' August 23 edition, has entered into a Procedure de Redressement Judiciaire on July 26. The French insolvency procedure, which has the effect of freezing the companies' outstanding liabilities, will allow the company to collect its receivables and to continue trading. Connectic Metallo is a wholly owned subsidiary of UK-based Buckland Investments PLC. ============= G E R M A N Y ============= 4CONTENT: Will Cease Operations This Week ----------------------------------------- Independent web content broker 4content will probably cease operations by the end of this week, as it has filed for bankruptcy, Newsbytes News Network in its August 23 edition said. Co-CEO and a co-founder Volker Binder is in discussions with other content brokers, which he declined to identify, for second- rounds financing. However, he was not able to close a deal. 4content received first-round financing in early 2000. Binder blamed the broker's demise on the Internet meltdown. Founded in late 1999, 4content was the first German-language content broker. It delivered German language news and information from more than 100 media companies, including German Press Agency and Gruner+Jahr. 4Content - The Content Broker AG is based in Hamburg, Germany. Tel. +49 40 - 328 706-0 Fax +49 40 - 328 706-99 http://www.4content.de/en/ BROKAT AG: CEO Roever Resigns ----------------------------- Brokat Technologies AG founder and chief executive Stefan Rover resigned Friday, as the troubled software company sold off the last of its U.S. assets, the August 24 edition of the Wall Street Journal said. Chief financial officer Michael Janssen will replace Roever. Brokat, the leader in delivering critical technologies that unleash the power of user-centric business, snapped up U.S. software makers Blaze Software Inc. and GemStone Systems Inc. last year in order to expand into financial-transaction software for mobile phones. These acquisitions led to a net loss of 825 million euros for the second quarter. In order to help solve its liquidity crisis, the company agreed to sell its mobile business to US-based eONE Global Inc. for 42 million euros. Brokat also agreed to sell another business unit to Metavante Corp. for 21.3 million euros. Despite the sell-off, analyst Maximilian Schoeller of Merck Finck & Co. said that Brokat is still in trouble, since a lot of operating problems are not solved yet. In June, Brokat cut about 300 jobs, or 20% of its worldwide work force. The company, which has dual headquarters in San Jose, California and Stuttgart, Germany, said it would reduce its staff to about 1,100 and close offices in the Netherlands, Belgium and Israel. ============= H U N G A R Y ============= HUNGARIAN RAILWAYS: Yugoslav Railways Restarts Payment ------------------------------------------------------ Yugoslavian railways (JZ) will start paying CHF63.5 million in debt, amassed since the start of 1996, to Hungarian State Railways Rt (MAV), the Hungarian News Agency & World Reporter in its August 25 edition said. JZ suspended payments on its debt on February 19, 1992, and its current debt totals CHF118.5 million. MAV said that JZ has begun paying off the debt in monthly installments of CHF 150,000 and has already completed two monthly installments. The deal ceases JZ's ballooning debt payments to MAV. The Troubled Company Reporter Europe said in April that MAV has posted losses of Ft22.2 billion for 2000. The company expects further losses of Ft33.4 billion this year. ===================== N E T H E R L A N D S ===================== NEWCONOMY NV: Shares Plunges 99.7% ---------------------------------- Shares of Dutch Internet incubator Newconomy registered to a decline of 99.7% last week, according to the Financial News & World Reporter yesterday. The stock's decline has been so acute that it places it in the top bracket of the exclusive 90% club of companies that have lost that much or more of their value. With the decline, Newconomy easily outstrips other star contenders like Baltimore Technologies, which has fallen a mere 96.5%, or Scoot.com, which has wiped off 97.9% of its market cap. Earlier, online store guide Macropolis was declared insolvent after Newconomy's unit file for suspension of payment in June. Newconomy's Internet firm BuyOnline was also declared bankrupt. =========== S W E D E N =========== ADCORE AB: Directors Agree on Bridge Financing ---------------------------------------------- The Board of Directors of Adcore AB, a leading digital business development consultancy, on Friday reached an agreement to issue a debenture of SEK 25 million that runs from September 11 to November 1, 2001. The board also proposed that it would secure 4,000,000 warrants to the lender, a consortium consisting of Christer Jacobsson and former Connecta CFO Anders Swensson, to secure new financing. The warrants can be exercised from February 1, 2002 to August 29, 2003 for SEK 1,44. ADCORE AB: Divests German Operations ------------------------------------ Adcore AB on August 20 said it has agreed to divest its German IT services operations to Adcore Germany CEO Holger Lueke. The German branch currently employs 100 people and will operate under the name DBC Digital Business Creators GmbH from its locations in D《seldorf/ Neuss and Hannover. This transaction marks a further step towards Adcore fulfilling the Board's decision to concentrate the group's operations in Sweden. ADCORE AB: Posts SEK1.46BB Loss for Second Quarter -------------------------------------------------- Swedish consultancy firm Adcore AB said on Sunday its net loss for the second quarter widened to SEK1.46 billion from SEK89 million in the year-earlier period. The result included SEK1.34 billion in restructuring and liquidation costs. Sales rose to SEK322 million from SEK296 million in 2000. LM ERICSSON: Finds Buyer for UK Office -------------------------------------- Telecommunications equipment company Telefon AB LM Ericsson has found a buyer for its spacious corporate head office in London's St. James's Square, Dow Jones Newswires reported on Friday. The sale could bring in more than SEK2 billion. Ericsson is moving to smaller offices on Wigmore Street in December. Ericsson disclosed last month it was reviewing non-core operations for possible divestment to bolster its balance sheet and help it maintain profitability. =========================== U N I T E D K I N G D O M =========================== ATLANTIC TELECOM: Bondholders Seek to Wind Up Company ----------------------------------------------------- A group of bondholders, who claim to represent more than 25% of Atlantic Telecom's bonds, has called on the company to seek a voluntary winding up and stem its cash burn because they are concerned about the company's ability to meet future debt payments. In a report dated August 23, the Financial Times said that the bondholders have hired lawyers and written to the telecommunications company to outline their concerns. Atlantic Telecom has set aside 26.6 million pounds in escrow to cover interest payments on its high-yield debt until July, but the bondholder group fears that without a fresh injection of funds, the company may then be unable to meet its debt obligations as they due. The bondholders believe they can possibly recover more of their investment if the company voluntarily winds itself up and sells its assets. Atlantic Telecom is based in Aberdeen City in Scotland. It operates telecoms networks aimed at business markets in the UK, the Netherlands and Germany. It is 19%-owned by telecommunication company Marconi. BRITISH TELECOM: Denies Reports of Job Cuts ------------------------------------------- British Telecommunications denied reports that BT Wireless, the company's mobile phone operator unit, has put together plans to shed up to 1,500 jobs once it is demerged from the parent company this year, the Sunday edition of Dow Jones Newswires said. A company spokesman said that no compulsory redundancies had been planned and it was too early to comment on the situation. "No plans have been finalized as to exactly how the demerger will work. We're still some way from demerger," he said. BRITISH TELECOM: Dismisses Reports of CEO Quitting ------------------------------------------------- British Telecommunications PLC has dismissed a report from the Financial Mail that Chief Executive Peter Bonfield is ready to step down within the next few months, Dow Jones Newswires reported on Sunday. The newspaper report also said that Bonfield identified Pierre Danon, head of BT's retail division, is a strong candidate for the job. A spokesman for BT dismissed the story as complete speculation. He said they have signed a contract in June, designed to encourage Bonfield to stay throughout the restructuring of BT, that is through the end of 2002. CHRONOPOST: To Be Liquidated ---------------------------- Parcel carrier firm Chronopost, located at the north west of Leicestershire in England, is now being liquidated, Leicester Mercury & World Reporter in its August 21 edition said. Around 200 jobs were lost when Chronopost, formerly Panic Link, went into administrative receivership last month. Administrative receivers KPMG is now selling off the company's assets separately and it will not be sold as a going concern. Birmingham estate agents GVA Grimleys are handling the sale of the site, including offices and several buildings. Creditors will have a meeting on August 31, by Liquidators Bates Weston, in Canal Street, Derby. INDEPENDENT INSURANCE: Bankrupt Chief Will Keep His Pension ----------------------------------------------------------- Michael Bright, the former chief executive of collapsed Independent Insurance, will retain his pension even though he declared bankruptcy earlier last week, according to The Financial News & World Reporter yesterday. Bright also expects to retain his house in Spain after selling his converted home in Kent and his flat in Wapping, East London. Davenport Lyons lawyer Trevor Sears, who is acting for Bright, said it was likely that Bright will be allowed to keep his AGBP3 million pension because such assets are usually excluded from bankruptcy proceedings. Bright's debts are believed to total some AGBP5 million. J2C PLC: Directors to Profit as Company Fails --------------------------------------------- Directors of Internet company Just2clicks.com, which has ceased trading following heavy losses, are ready to make profits of up to 300 times their original investments, according to the Daily Telegraph yesterday. Chief executive Karl Watkin will make 3.6 million pounds on his 30,000-pound investment, while Luke Johnson will receive around 710,000 pounds on an investment of around 2,000 pounds. Alan Donnelly will receive more than 400,000 pounds, having invested just 1,250 pounds. Other big winners include former BT Cellnet chairman Sir Michael Bett, who will receive 355,000 pounds, having spent just 10,000 pounds. Former operations director Graeme Lowdon can also look forward to a 3.5-million-pound check in return for his 11pc stake. On the contrary, ordinary investors will lose at least a third of their stakes. Directors will still profit, however, because they were allowed to invest up to seven months before the flotation at a minuscule fraction of the eventual offer price. Following the flotation, the shares soared to a peak of 244p last year, valuing the business at more than 220 million pounds. J2C put itself up for sale in February and decided to wind up its affairs after getting no serious offers by June. HATFIELD COAL: U.S. Group to Rescue Colliery -------------------------------------------- US energy giant Enron is understood to be in talks to find a buyer in an attempt to save the 220 mining jobs of Hatfield colliery, the South Yorkshire coal mine which went into liquidation earlier this month, the Independent News reported yesterday. A winding-up petition was issued against the pit operator Hatfield Coal Company. Labour MP Kevin Hughes said Hatfield had a bright future if someone was willing to back it. The company has up to 100 million tons of reserves, and the coal is very desirable with low sulphur and ash. MARKS & SPENCER: To Open in India --------------------------------- Despite scaling back in Europe, Marks & Spencer will open two new branches in India as part of the troubled retailer's attempt to reverse its lagging fortunes, the Independent News reported yesterday. The shops, which will be run on a franchise basis, will open in Delhi and Bombay in October. Indian-owned clothing company Planet Sports will be responsible for running the stores. The move comes six months after M&S announced plans to close its 38 stores in mainland Europe after they lost more than 100 million pounds in two years. How much M&S will receive from the deal has not been confirmed, but the figure is reported to be about 350 million pounds. M&S is also selling its American subsidiary's clothing chain, Brooks Brothers, and supermarket chain Kings, to raise about 500 million pounds. PPL THERAPEUTICS: Biotech Firm Is Short of Cash ----------------------------------------------- Scottish biotechnology company PPL Therapeutics, according to the Sunday Times, has little more than six months' cash available and any new share issue will possibly be at a discounted price. The company, based in Cannon Street in London, had a pre-tax loss of 12.0 million pounds from December 31 to March 16, 2001. Net loss for 2000 was 11.2 million pounds. PSD GROUP: Shares Fall 14% After Third Warning ---------------------------------------------- Shares of PSD Group plc fell 14% to close at 350p after it warned that its profits have halved in the first half of this year as the economic slowdown continues to punish employment agencies, the Independent News reported on Saturday. The profit alert, PSD's third this year, follows earnings warnings from recruitment rivals Michael Page, Robert Walters and Harvey Nash. PSD said that its pre-tax profits would be not less than 5.5 million pounds for the six months to 30 June, compared with 10 million pounds last year. It will report interim results on September 10. The company added that there was no sign of a recovery and it could not forecast when one might emerge. PSD Group is a leading international recruitment services organization listed on the London Stock Exchange and operating throughout Europe, Asia Pacific and North America. SAVE GROUP: E&Y Sells Assets to Anglo Petroleum ----------------------------------------------- Joint Administrators, Alan Bloom, Trevor Frid and Alan Lovett of Ernst & Young has sold the entire business and assets of the Save Group of Companies to Anglo Oil Trading Limited at an undisclosed amount, Business Credit Management reported on Sunday. Completion of sale will be on or before September 27 2001, the interval between exchange and completion being required to finalize all necessary completion formalities. Before going into administration on February 28, Save was the largest independent petrol station operator in the UK, with a full listing on the London Stock Exchange. VIATEL INC: Sells Transatlantic Network Assets to Level 3 --------------------------------------------------------- Communications and information services company Level 3 Communications, Inc. has acquired the transatlantic network of Viatel, Inc. after a federal judge overseeing Viatel's Chapter 11 bankruptcy proceedings approved the purchase on Tuesday last week, and closed the transaction on Wednesday, the August 23 edition of M2 Communications said. Level 3 has purchased from Viatel two fibers on the "Yellow" submarine cable connecting London and New York. This is the same fiber pair that Level 3 sold to Viatel in April 2000. Level 3 now owns and controls 50% of the fibers on the Yellow cable. Under the terms of the transaction, Level 3 retains all cash payments already made by Viatel under the April 2000 contract, including $94 million paid to Level 3 at the end of last year. In return, Level 3 has released Viatel from debts of approximately $9 million. Before running into financial trouble, Viatel succeeded in laying a fiber-optic network linking cities in the U.K., France, Germany, Switzerland, Belgium and the Netherlands. ============== I N F O C U S ============== EQUITABLE LIFE: After 239 Years, Why Such Trouble? -------------------------------------------------- Founded in 1762, the Equitable Life Assurance Society is the world's oldest mutual life insurance company. It provided life insurance, annuities, pensions and permanent health insurance to customers in the UK, Germany and Ireland. Last year, however, Equitable Life ceased writing new business when the House of Lords ruled that the company underpaid some 90,000 guaranteed annuity rate policyholders, leaving it with at least 1.5 billion pounds in liabilities. To salvage the situation, Equitable was forced to sell its operations to make up for the loss. A number of banks and insurers from the UK, Europe and the US have expressed interest in Equitable. This included mortgage bank Abbey National, life assurer Prudential, CGNU, Eureko, Aegon UK, Australian insurer AMP and America's GE Capital. However, they withdrew from the talks to buy the company. In February, UK mortgage bank Halifax offered to take over the operating assets and salesforce of Equitable for 500 million pounds. A further 500 million pounds, payable upon the outcome of two conditions: (1) A settlement between guaranteed and non- guaranteed annuity rate policyholders. (2) The achievement of new business sales and profitability targets in 2003 and 2004 by the Halifax Equitable salesforce. So whose fault was all that? Equitable has refused to point the finger of blame. The Financial Services Authority, Britain's financial regulator, is investigating whether Equitable mis-sold policies to its customers. Equitable has appointed Herbert Smith, one of London's most- feared firms of solicitors, to sue its former board, professional advisers, including law firm Denton Wilde Saple for their part in bringing it to the brink of collapse. Accounting watchdog Institute of Chartered Accountants has also launched a formal investigation into the role of Ernst & Young, when the firm acted as auditors for Equitable Life in 1999. Now what hope is there for Equitable and its members? The company is trying to strike a compromise agreement with policyholder action groups, as well as court approval, to stabilize its troubled finances. *********** 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. 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 * * *