/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/010912.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, September 12, 2001, Vol. 2, No. 178 Headlines * B E L G I U M * LERNOUT & HAUSPIE: Awaits Offer for Rump Company * C Z E C H R E P U B L I C * KOMERCNI BANKA: Board Revokes Treasurer Formanek's Power to Sign * G E R M A N Y * ADAM OPEL: Generates Savings With Fiat Venture ADAM OPEL: Needs Until October to Finalize Olympia Plans BANKGESELLSCHAFT BERLIN: Flowers Submits Takeover Bid BAYER AG: Finance Chief Wenning to Take Top Post DEUTSCHE TELEKOM: Goldman Sachs Sells Shares to Holders DEUTSCHE TELEKOM: Liberty Deal May Collapse DEUTSCHE TELEKOM: Shares Tumble to E14.16 * I R E L A N D * EIRCOM PLC: O'Brien Will Extend Bid GATEWAY INCORPORATED: To Fire Irish Workers * N E T H E R L A N D S * KPN NV: Appoints TPG's Scheepbouwer as New KPN Chief PHARMING GROUP: In Discussion With Possible Buyers UNITED PAN-EUROPE: Appoints John Riordan as New CEO * R U S S I A * MEDIA-MOST: Holders Agree on Liquidation * S W I T Z E R L A N D * CARRIER1 INTERNATIONAL: Michael McTighe Holds Top Post SWISSAIR GROUP: Discussing Debt Waiver With Banks SWISSAIR GROUP: Shares Tumble to SFr78.90 Over Debt Fears * U N I T E D K I N G D O M * ATLANTIC TELECOM: Up for Auction CORUS GROUP: New Chief Faces Toughest Challenge CORUS GROUP: Posts 200-MM-Pound Loss LASTMINUTE.COM: Ties Up With Stakeholderpensions.com MARCONI PLC: Barclays Organizes Hedging Plan to Protect Marconi MARCONI PLC: Finance Chief's Disclosure Irks Investors MARKS & SPENCER: Reduces Brooks Brothers Bidders List ============= B E L G I U M ============= LERNOUT & HAUSPIE: Awaits Offer for Rump Company ------------------------------------------------ Lernout & Hauspie Speech Products NV must have a firm offer by the end of September for the rump company that will be left after its units are sold, according to the Monday edition of AFX News. "If we don't receive an offer before the end of September, and my preference would be before the 17th, then we're dead," chief executive officer Philippe Bodson said. Bodson estimates that the company has enough money to survive until the end of October. On September 18, creditors and the Belgian court providing bankruptcy protection will vote on a new restructuring plan, after the court rejected the original plan as too vague. Under the new plan, which also has to be approved by a US bankruptcy court, the rump company would cut 200 jobs, with annual sales of US$66 million. The technology transfer necessary for the survival of L&H unit Dictaphone has been completed, and discussions are in the final stage for a management buyout at Apptek and Kurzweil. =========================== C Z E C H R E P U B L I C ============================ KOMERCNI BANKA: Board Revokes Treasurer Formanek's Power to Sign ---------------------------------------------------------------- The board of directors of Komercni Banka revoked chief treasurer Petr Formanek's power to sign trades on behalf of the Czech bank in behalf of the collateralized debt obligations (CDOs) investment, the Prague Business Journal reported on Monday. The suspension comes as KB new owners French Societe Generale (Socgen) appear to be taking a closer look at the controversial purchase of CDOs worth up to Kc20 billion. SocGen is in the process of determining whether the Kc40 billion it pledged to pay for the 60% stake in the bank will stand. The bank's supervisory board is scheduled to meet this week and will discuss the issue of CDOs, as it is expected to refute findings from the probe recently concluded by the Czech National Bank (CNB). Earlier this year, asset management director Martin Zikes resigned following the bank's Kc30 million misstep in foreign exchange markets. ============= G E R M A N Y ============= ADAM OPEL: Generates Savings With Fiat Venture ---------------------------------------------- General Motors' European arm Adam Opel is generating higher-than- expected savings from the powertrain joint venture of GM and its Italian alliance partner Fiat Auto, according to the Financial Times' Monday edition. "Savings so far from the joint venture with Fiat have exceeded anything we hoped we could achieve," Opel chairman Carl-Peter Forster said. He indicated that benefits from the Fiat joint venture, formed last year, would help the German carmaker achieve significant economies of scale as part of its restructuring. Officials declined to reveal what proportion of the savings had been passed on to Opel, which is conducting the Olympia restructuring plan to wipe out operating losses and rebuild market share in Europe. ADAM OPEL: Needs Until October to Finalize Olympia Plans -------------------------------------------------------- Adam Opel AG new chief executive Carl-Peter Forster said that the company would need until October to finalize the details of its Olympia restructuring plan, according to the Sunday edition of Advanced Financial Network. Forster added more time is still needed since the management is in the middle of talks with employee representatives. As part of the plan, the General Motor Corp unit intends to cut 15% of car production capacity by 2003 and will probably shed at least 1,000 jobs in its production operations. BANKGESELLSCHAFT BERLIN: Flowers Submits Takeover Bid ----------------------------------------------------- Bankgesellschaft Berlin AG said on Monday that American banker Christopher Flowers has submitted a concrete bid to take over the troubled German bank. Christiane Krajewski, the finance senator of the city of Berlin, will study the bid of Flowers. Talks are also continuing with other interested parties, including Norddeutsche Landesbank (NordLB), which currently holds 20% of Bankgesellschaft. BAYER AG: Finance Chief Wenning to Take Top Post ------------------------------------------------ Troubled German pharmaceuticals and chemicals company Bayer AG expects to name on Thursday finance head Werner Wenning as the successor to Manfred Schneider as chairman, according to the Sunday edition of the Financial Times. Wenning, who joined the group as a commercial trainee in 1966, will become chairman in April next year if the supervisory board approves the appointment when it meets on Thursday. The recent withdrawal of the $1-billion cholesterol treatment Baycol, after it was linked to more than 50 deaths, and problems with another medicine Kogenate, have dealt a blow to Bayer's ambition to be a major player in pharmaceuticals. Bayer is facing compensation claims from the families of those who died after taking the drug. Last week, the Cologne state prosecutor's office launched a probe into possible negligence over the drug's withdrawal. DEUTSCHE TELEKOM: Goldman Sachs Sells Shares to Holders ------------------------------------------------------- Goldman Sachs has transferred around 8.6 million shares it previously held in Deutsche Telekom to unit trust holders, Handelsblatt reported on Sunday. The U.S. investment bank held some 29.9 million Telekom shares, 60% of which was transferred to its customers while retaining the remaining shares. The allocation of shares to unit trust holders is mostly common in the United States and Britain. The holders can now decide for themselves whether they will sell or hold on to their Telekom shares. DEUTSCHE TELEKOM: Liberty Deal May Collapse ------------------------------------------- The acquisition of Deutsche Telekom AG's six remaining regional cable television companies by Liberty Media could collapse if German politicians and the cartel office block the American group's expansion plans, according to the Sunday edition of the Interactive Investor International. Liberty Media head John Malone said that if their expansion would fail at the hands of regulators and difficult conditions, they would pull out of the deal. Early this month, the Troubled Company Reporter Europe said that Deutsche Telekom agreed to the 5.5-billion-euro sale of its cable assets to Liberty Media after two months of tense negotiations. The sale is part of Telekom's aim to cut its net debt level from 65.5 billion euros to 50 billion by the end of next year. DEUTSCHE TELEKOM: Shares Tumble to E14.16 ----------------------------------------- Deutsche Telekom's share price dipped to as low as E14.16 in early trading on Monday, the Financial Times reported. The recent fall in the shares is partly the result of investors' worries about the impending sale of large holdings of Deutsche Telekom shares, which the company issued to fund most of its $28 billion purchase of VoiceStream in the US last year. The company's shares have also been hit by overcapacity, falling profits and high levels of debt in the telecommunications sector. ============= I R E L A N D ============= EIRCOM PLC: O'Brien Will Extend Bid ----------------------------------- The e-Island consortium, led by entrepreneur Denis O'Brien, will extend its bid for Irish fixed-line telecommunications company Eircom PLC, the Wall Street Journal reported on Monday. If e-Island allowed its bid to lapse, as had widely been expected, it would be barred under Irish Takeover Panel rules from bidding anew for Eircom for a year. E-Island already extended its offer in August, after receiving acceptances for only 1.3% of Eircom shares. Rival bidder Valentia, led by Irish businessman Tony O'Reilly, has offered a 3.0-billion-euro (EUR1.365 a share) cash bid for Eircom. GATEWAY INCORPORATED: To Fire Irish Workers ------------------------------------------- Gateway Incorporated, the second-largest direct seller of personal computers, will fire all 1,050 employees in Ireland and the U.K. as part of a plan to revive profit by concentrating on sales in the U.S., the Monday edition of Bloomberg said. According to company spokeswoman Noeleen Murray, Gateway will sack 900 workers at its Dublin plant in Ireland, which also served as European headquarters, and a further 150 workers in the U.K. where Gateway has 14 retail stores. Gateway has not only stopped selling computers in the Middle East, Africa, Ireland and the U.K., but also pulled out of the Spanish, German and Swedish markets. ===================== N E T H E R L A N D S ===================== KPN NV: Appoints TPG's Scheepbouwer as New KPN Chief ---------------------------------------------------- The Supervisory Board of Dutch telecommunications company Royal KPN N.V. on Monday confirmed the appointment of A.J. (Ad) Scheepbouwer as the new chief executive officer. Ad Scheepbouwer, currently chairman of postal and logistics company TPG NV, will officially replace Paul Smits by January 1 at the latest, but is hoping to negotiate his exit from TPG sooner. Paul Smits will remain on the Management Board as a member, holding the mobile communication portfolio. According to Ton Risseeuw, the new chairman of KPN's Supervisory Board, Scheepbouwer's main focus will be to continue to manage the existing business whilst working to achieve solutions to long-term business challenges. KPN is looking for ways to reduce its debt load of 22.8 billion euros. It recently posted a widened net loss for the first half of 2001 of 1.038 billion euros, compared to a net loss of 19 million euros for the same period in 2000. PHARMING GROUP: In Discussion With Possible Buyers -------------------------------------------------- Pharming Group, according to the Monday edition of Reuters, is in talks with several parties interested in buying the cash-strapped Dutch biotechnology company. Potential buyers include several international biopharmaceutical organizations. Fortis Bank was appointed adviser for the transaction. Pharming has also started talks with financial institutions to refinance the company or parts of the company after restructuring. The Hague District Court in Netherlands has granted Pharming Group a receivership status on August 10 after failing to secure needed financing. The commercial court of Turnhout city has also granted suspension of payment to the company's unit in the Belgian town of Geel. Aside from the Netherlands and Belgium, Pharming has operations in Finland and the USA. UNITED PAN-EUROPE: Appoints John Riordan as New CEO --------------------------------------------------- Troubled Dutch cable group United Pan-Europe Communications NV has appointed company president John Riordan as its chief executive officer, following the announcement by Mark Schneider that he would step down as CEO for personal reasons, the September 7 edition of AFX Europe said. Amsterdam-based John Riordan has been a member of the UPC management board since September 1998 and was appointed president in June 1999. =========== R U S S I A =========== MEDIA-MOST: Holders Agree on Liquidation ---------------------------------------- Media-Most spokesman Dmitri Ostalsky said the company's shareholders have agreed to liquidate the media empire, but have to wait for the approval of Russian legal authorities to proceed, Reuters reported on Monday. On May 29, a Moscow court ordered that the company be liquidated because several companies in the group, most notably the television station NTV, were unable to pay their debts. The Troubled Company Reporter Europe last month said that the Moscow Arbitration Court 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. ===================== S W I T Z E R L A N D ===================== CARRIER1 INTERNATIONAL: Michael McTighe Holds Top Post ------------------------------------------------------ Carrier1 International S.A., one of Europe's top providers of end-to-end Internet, broadband, voice, data center and dialup access communications, yesterday named Mike McTighe as its news chief executive officer effective October 1. McTighe will also join the Carrier1 Board of Directors. McTighe, a 25-year veteran of the telecommunications and technology sectors, was CEO of Global Operations and Director of Cable & Wireless PLC. He also served as President and CEO of Philips Consumer Communications LLP, and worked in a variety of senior level roles at Motorola and GE. "Our first priority will be to align the cost base of the business with today's market reality to establish a solid platform for future profitable growth," McTighe said. Standard & Poor's early this month lowered to triple-'C' from single-'B'-minus the long-term corporate credit and senior unsecured debt ratings of Carrier1. The rating action reflects the company's third consecutive quarter of weakening operating performance, higher-than-expected cash burn rate, limited financial flexibility, and strong strategic uncertainties following the departure of the company's former chief executive officer. SWISSAIR GROUP: Discussing Debt Waiver With Banks ------------------------------------------------- Swiss airline Swissair Group, struggling under a debt burden of around 15 billion Swiss francs, is believed to be negotiating a debt waiver with banks to ensure its survival, the Monday edition of The Times said. The aviation group, which reported a first-half net loss of 234 million Swiss francs (see http://bankrupt.com/misc/swissair1.pdf for the group's consolidated income statement), is shedding hundreds of jobs and selling non-core assets as it attempts to stay afloat. Swissair chairman Mario Corti has pledged to reduce debts by 4.1 billion Swiss francs over 12 months and has already announced the loss of 1,300 jobs. However, there is speculation that the airline, has asked banks to consider a proposal to waive debts to ensure its survival. SWISSAIR GROUP: Shares Tumble to SFr78.90 Over Debt Fears --------------------------------------------------------- Shares in the heavily indebted Swissair fell to SFr78.90 on Monday after it strongly denied press reports that it was negotiating debt waivers with some of its banks, the Financial Times reported. Swissair said it was in full compliance with all covenants relating to its borrowings and will continue to make all payments of interest and principal as they fall due. Swissair's denial comes little more than a year after the previous discredited management team said there was "absolutely no foundation" to rumors of a financial or management crisis. =========================== U N I T E D K I N G D O M =========================== ATLANTIC TELECOM: Up for Auction -------------------------------- Scotland-based Atlantic Telecom Group PLC has put itself up for sale and admitted that its shares might be worthless, the Monday edition of the Wall Street Journal said. Chairman Graham Duncan has revealed the company, which operates business-telecom networks in the U.K., Germany and the Netherlands, is in discussions with investors and potential buyers of the company and its key subsidiaries. Atlantic will meet its debtholders on Friday amid reports that some were pushing it to close shop rather than continuing burning cash. The telecom group said it would continue to operate the business, maintain very tight control over cash and reduce costs further wherever possible. Troubled telecom-equipment maker Marconi PLC owns about 19% of Atlantic. CORUS GROUP: New Chief Faces Toughest Challenge ----------------------------------------------- Tony Pedder, who took over as chief executive of Anglo-Dutch steel company Corus on September 1, is facing an exciting challenge to boost the prospects of a company that made announced 10,000 redundancies and a loss of 1.1 billion pounds last year, the Monday edition of the Financial Times said. "My focus will be to keep in command of the factors over which the management has control and to improve our general competitiveness." His priority now will be to stop the possibility that Corus will be forced to cut 22,000 more into its UK steelmaking capacity, and about 1,500 jobs at a steel plant in the Netherlands. Pedder also refuted suggestions that the Corus' plant at Llanwern in south Wales, where 1,300 jobs at the site were cut earlier this year, might have to shut down. CORUS GROUP: Posts 200-MM-Pound Loss ------------------------------------ Anglo-Dutch steel manufacturer Corus Group plc on Monday said it incurred a pre-tax loss of 230 million pounds in the first half of this year (see http://bankrupt.com/misc/corus.pdffor the company's interim report). The company, which lost 1.1 billion pounds last year and has announced 10,000 redundancies in the UK since the middle of 2000, is not paying a dividend in the first half. It made a small profit in this period on its aluminum production operations and in its Dutch steel plant. The steel maker added it now has a total of 54,900 employees, compared to 64,900 on December 2000. Some 3,400 jobs were lost as a result of continuing manpower productivity and efficiency improvement measures. Corus, which has been hit by the global economic slowdown, oversupply in the steel industry and the high rate of sterling against the euro, added it has an operating cash inflow of 36 million pounds. The company's net borrowings amounted to 1.639 million pounds. LASTMINUTE.COM: Ties Up With Stakeholderpensions.com ---------------------------------------------------- Online travel agent and retailer Lastminute.com has signed a deal with Internet-based independent financial adviser Stakeholderpensions.com to offer stakeholder pension schemes on- line, according to the Sunday edition of the Financial Times. Under the deal, Lastminute will share in the commissions generated by employees who take out pensions via their employer, in just four minutes. Both companies refused to declare how much commission sales would generate, but some pension companies are known to pay commissions to introducers equivalent of up to 20% of investors' first year contributions. "With this deadline coming up there is a definite last minute opportunity for us," Lastminute.com's UK managing director Helen Baker said. "The profile of our subscriber base shows we have a strong influence among smaller businesses." In the three months to June 30, Lastminute has recorded a pre-tax loss of 12.9 million pounds, compared with a 9.3-million-pound loss in the same period last year, and 14.3 million pounds in the preceding quarter. MARCONI PLC: Barclays Organizes Hedging Plan to Protect Marconi --------------------------------------------------------------- Barclays Bank division Barclays Capital is believed to have organized a hedging program that protected Marconi if its share price rose above 8 pounds, the Monday edition of the Daily Telegraph said. Barclays Capital declined to comment on the hedging program, described as a private deal. It also rejected reports that Marconi's banks were looking to refinance its 4.6-billion-pound debt. Earlier this year, Barclays helped Marconi protect itself against a rising stock price when the now beleaguered telecommunications company ironically worried that it faced a massive bill from expiring share options. Chairman Sir Roger Hurn and chief executive Lord Simpson were forced out of the company early last week on warning that losses could reach 5 billion pounds this year and that Marconi would further axe 2,000 jobs. MARCONI PLC: Finance Chief's Disclosure Irks Investors ------------------------------------------------------ The admission last week from Marconi finance director Steve Hare that he had known about the deterioration in first-quarter trading almost two months before issuing a profits warning has irked investors, according to the Financial Times' Monday edition. "I have to say I was pretty upset when I heard what Steve Hare had said. They should have told us much earlier," attests one institutional shareholder. Hare's remark has also prompted the City watchdog Financial Services Authority to look even closer at the actions of the telecommunication equipment maker. "A company must notify the Company Announcements Office without delay of all relevant information which is not public knowledge concerning a change in the company's financial condition; in the performance of its business; or in the company's expectation as to its performance." Marconi is taking legal advice from Freshfields, Slaughter and May and Allen & Overy. It declined to comment on Monday. MARKS & SPENCER: Reduces Brooks Brothers Bidders List ----------------------------------------------------- UK retailer Marks & Spencer, according to the Financial Times' Sunday report, has cut down the list of bidders for its US Brooks Brothers clothing chain to four, from 25 interested parties at first and a dozen initial bids. The remaining bidders are understood to be US-based May Department Stores, Hong Kong-based retailer Dickson Concepts, US designer Tommy Hilfiger, and US private equity firm Texas Pacific Group. A final announcement is expected by the middle of October, after M&S opens the data room to two of the bidders, then move to preferred bidder status with one party. M&S put Brooks up for sale at the end of March, together with its other US business Kings Super Markets, to allow it to focus on its core UK stores that remain stubbornly under-performing. The retailer also planned to close its stores in continental Europe as part of a plan to return 2 billion pounds to shareholders by March next year. The move will cost almost 3,400 jobs in seven countries and has led to legal action against M&S executives in France. *********** 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 * * *