/raid1/www/Hosts/bankrupt/TCREUR_Public/011010.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, October 10, 2001, Vol. 2, No. 198
Headlines
* B E L G I U M *
CITY BIRD: Government Withdraws City Bird License
SABENA SA: Cuts Tokyo, Beirut, Belfast Flights
* F R A N C E *
MOULINEX SA: Unions Meet With Government Advisers
* G E R M A N Y *
BROKAT TECHNOLOGIES: Company Profile
EM.TV: Completes Formula One Convertible Loan Deal With Kirch
MAN AG: Will Cut 370 Jobs From U.K. Subsidiary
* I T A L Y *
ALITALIA-LINEE: Cancels Flights With Milan Plane Crash
* N E T H E R L A N D S *
KPN NV: Diederik Karsten Quits KPN Mobile
* S L O V A K R E P U B L I C *
IRB BANK: Slovakia Okays OTP Bid
* S W I T Z E R L A N D *
SWISSAIR GROUP: Cargo Units File for Creditor Protection
SWISSAIR GROUP: Swiss Catering Unit Cuts 420 Jobs
SWISSAIR GROUP: Will Cut 9,000 Jobs Worldwide
ZURICH FINANCIAL: Issues Profit Warning
* U N I T E D K I N G D O M *
ATLANTIC TELECOM: Cuts Half of U.K. Workers
ATLANTIC TELECOM: Shares Delisted From Indexes
BRITISH TELECOM: On Track With Cost-Cutting Target
DELTEX MEDICAL: De-lists Shares in Nasdaq Europe
INVENSYS PLC: Henderson Steps Down as Software Systems Unit Chief
INVENSYS PLC: Meets Interim Target
MARCONI PLC: Shares Tumble on Hedging Loss News
MARCONI PLC: To Meet With Industry Secretary
MARKS & SPENCER: PPR Pulls Out of Race for M&S French Stores
RAILTRACK GROUP: Chief Marshall Quits Post
RAILTRACK GROUP: Directors Considers Suing the Government
RAILTRACK GROUP: S&P Puts Ratings on Negative Watch
SNACKHOUSE PLC: Goes Into Administration
XEROX CORPORATION: Replaces Auditors
* I N F O C U S *
RAILTRACK GROUP: The Rise and Fall
=============
B E L G I U M
=============
CITY BIRD: Government Withdraws City Bird License
-------------------------------------------------
The civil aviation division of the Belgian ministry of transport
has withdrawn the license of Belgian air services company City
Bird.
According to the recent issue of L'Echo/FT Information, the move
came after the Brussels Commercial Court declared City Bird
Holding SA bankrupt early this month.
City Bird would file for a new license if there are new economic
developments, the report added.
SABENA SA: Cuts Tokyo, Beirut, Belfast Flights
----------------------------------------------
Troubled Belgian airline Sabena SA, according to Dow Jones
Newswires' report, will cut its flights to Beirut, Belfast, Tokyo
and Verona as of Monday due to the low number of passengers on
these flights.
The airline was recently granted provisional protection from
creditors until November 30.
===========
F R A N C E
===========
MOULINEX SA: Unions Meet With Government Advisers
-------------------------------------------------
The union representatives of bankrupt home appliance manufacturer
Moulinex met the prime minister's advisory team in relation to
financial negotiations, Le Figaro and FT Informantion reports.
The union focused to negotiate a 300 million French francs
package and 400 million French francs request to support
Moulinex's continued operations.
In addition, the union demanded that banks discontinue blockage
on stock worth 1.5 billion French francs. The amount could be
sold to repay an eventual loan.
The Nantes commercial court has received 13 offers for a partial
or complete takeover of the group, including that of competitor
SEB, French finance company Fidei and Canadian diversified group
Euroland.
The works council will have the final say on the offers by
October 15 and the court will rule the next day.
=============
G E R M A N Y
=============
BROKAT TECHNOLOGIES: Company Profile
------------------------------------
Name : BROKAT TECHNOLOGIES AG
Address : IndustriestraBe 3
70565 Stuttgart
Germany
Phone : +49 711-788-44-0
Fax : +49 711-788-44-777
Website: http://www.brokat.com/
SIC : Computer Software Development (7372)
Employees: 1,304 (06/30/01)
Revenues: 28.2M Euros (1H 2001)
Net Loss: 899.618M Euros (06/30/01)
Total Assets: 169.375M Euros (1H 2001)
Total Liabilities: 201.4M Euros (1H 2001)
Trigger Event: Brokat Technologies boldly broke into the US
banking software market through numerous acquisitions that later
lead to its own downfall. Increased cost has led the company to
announce a restructuring plan that involves the sale of its US-
based assets and operations and workforce reduction.
President/CEO : Stefan Rover
CFO : Michael Janssen
Auditor: Arthur Andersen
Wirtschaftsprfungsgesellschaft, Steuerberatungsgesellschaft mbH
Securities: 80.2 million euros (June 2001)
Last published in TCR-EUR : October 9, 2001
EM.TV: Completes Formula One Convertible Loan Deal With Kirch
-------------------------------------------------------------
German media groups KirchGruppe AG and EM.TV & Merchandising AG
have completed a convertible loan agreement that gave Kirch a
58.3% stake in the Formula One racing circuit, Dow Jones
Newswires reported Monday.
The loan totaled $1.07 billion, including interest.
EM.TV's own share in Formula One racing dropped to 16.7% after
the move, the news agency added.
Earlier, EM.TV chairman Werner Klatten, who took over founder
Thomas Haffa at the end of July, made it no secret that Formula
One no longer counts among EM.TV's core activities.
The company, weighed down with enormous interest payments after
making several acquisitions when prices were at their height,
said that the sale of Formula One would be aimed at reducing this
burden.
MAN AG: Will Cut 370 Jobs From U.K. Subsidiary
----------------------------------------------
Truck and engineering group MAN AG will cut 370 of the 770-strong
workforce of its ailing British truck business ERF Holdings PLC
in a bid to reach break-even point by 2002/2003, Dow Jones
Newswires reported Monday.
The restructure comes after ERF reported a 36 million euro loss
in the second quarter, partly due to accounting irregularities.
Chief Executive Hakan Samuelsson said a lot of senior managers,
including chief executive John Bryant and chief financial officer
Klaus Wagner of ERF, had been suspended as a result of the
discrepancies.
An internal investigation is continuing to find out exactly what
had happened.
=========
I T A L Y
=========
ALITALIA-LINEE: Cancels Flights With Milan Plane Crash
------------------------------------------------------
Italy's flag carrier Alitalia faced another setback Monday when
Scandinavian airlines SAS AB collided with a private jet on the
runway of Linate airport in Milan, one of Alitalia's main
thoroughfares, Dow Jones Newswires reported.
Alitalia said it was forced to cancel five domestic and four
international flights, and rerouted its flights to Malpensa,
Milan's main hub, and nearby Bergamo airport due to the crash.
Costs from one day's worth of flight cancellations and rerouting
could cost Alitalia about 0.5% of its annual sales, which totaled
5.47 billion euros in 2000, one analyst estimated.
The carrier was already losing money before the terrorist attacks
in the U.S. and the subsequent air strikes in Afghanistan.
=====================
N E T H E R L A N D S
=====================
KPN NV: Diederik Karsten Quits KPN Mobile
-----------------------------------------
Debt-laden Dutch telecoms group KPN said Monday that Diederik
Karsten would resign as Chief Executive Officer of mobile phone
division KPN Mobile N.V.
KPN declined to comment on the reasons for Karsten's departure on
Monday.
Karsten will leave on November 1, and will be replaced by Paul
Smits, a board director who recently stepped down as group chief
executive.
KPN Mobile's rapid expansion in Germany, the Netherlands and
Belgium has caused an increase in debt across the group.
In March, Joop Drechsel, another board member who was regarded as
a major figure behind the expansion plan, resigned in unexplained
circumstances.
=============================
S L O V A K R E P U B L I C
=============================
IRB BANK: Slovakia Okays OTP Bid
--------------------------------
Hungary's OTP Bank Rt is expected to ink the contract to purchase
Slovakia's 69.56% stake in the Slovak Investicsna a Rozvojova
Banka (IRB) in the near future after the stake's owner, the
Slovak Privatization Ministry, approved OTP's offer last week,
Budapest Business Journal reported Monday.
OTP submitted an improved bid to the Slovak government last
month, believed to include a purchase price close to $40 million
and intention to increase IRB's capital after the sale is
completed.
IRB posted a pre-tax profit of 4.5 million Slovak crowns in the
first nine months of last year, following a 6.4 billion-crown
state bailout of its bad debts.
=====================
S W I T Z E R L A N D
=====================
SWISSAIR GROUP: Cargo Units File for Creditor Protection
--------------------------------------------------------
The two cargo units of Swiss aviation company Swissair Group AG,
Swisscargo AG and Cargologic AG, filed for protection from
creditors at the district court of Buelach.
This follows last week's filing for protection from creditors by
Swissair Group's SAirLines and Flightlease divisions.
SWISSAIR GROUP: Swiss Catering Unit Cuts 420 Jobs
-------------------------------------------------
Swissair Group AG said Monday that its Swiss catering unit, Gate
Gourmet Zurich, will cut 250 permanent and 170 temporary jobs.
Swissair added that reduction should be completed by the end of
March next year.
According to Gate Gourmet Zurich Managing Director Beat Gehrig,
the move is essential to secure the future of the company and is
part of an already-announced 10% reduction in the 30,000-strong
worldwide workforce of the Gate Gourmet Group.
SWISSAIR GROUP: Will Cut 9,000 Jobs Worldwide
---------------------------------------------
Swissair Group AG will cut 9,000 jobs worldwide as the carrier
struggles to come back from a financial collapse, reports the
Wall Street Journal.
Swissair spokesman Rainer Maier said that of the 9,000 layoffs,
2,560 would affect the flight operations of the group's Swissair
subsidiary.
Swissair has been struggling financially this year following a
failed international expansion. Its collapse was hastened by the
sharp fall in air traffic following last month's terrorist attack
in the U.S.
Last week, a Zurich commercial court has put Swissair Group,
including its airline division SairLines, flagship carrier
Swissair AG and its leasing unit Flightlease, under creditor
protection until December 5 to avert bankruptcy.
ZURICH FINANCIAL: Issues Profit Warning
---------------------------------------
Zurich Financial Services announced Monday a profit warning after
revising its forecast losses following last month's terrorist
attacks in America.
According to the Daily Telegraph's report, the Swiss insurer
originally expected pre-tax losses of less than $400 million but
increased the projection to between $700 million and $900
million.
The company added that its income will also be affected by the
current economic climate, including lower capital gains and
reduced earnings from its businesses connected with equity
investment.
===========================
U N I T E D K I N G D O M
===========================
ATLANTIC TELECOM: Cuts Half of U.K. Workers
-------------------------------------------
The troubled Atlantic Telecom will axe 245 jobs, or more than
half of its U.K. workforce, to give administrators more time to
find a buyer, reports the Financial Times.
Atlantic's headquarters in Aberdeen will make 64 redundancies, 98
in Glasgow and the rest in Manchester and London.
PwC, appointed as administrators on Friday, added the latest cuts
were necessary to reduce cash burn at Atlantic.
Meanwhile, the future of employees at the German and Dutch
subsidiaries still hang in the balance as both companies is
considering whether they should follow their parent and seek
insolvency.
Atlantic, which provides telecoms services for corporate clients
in the UK, Germany and the Netherlands, has been hit badly by the
economic slowdown. It has put itself up for sale last month and
began talks on restructuring its debt with bondholders.
Atlantic employed 435 staff before the redundancy announcement.
ATLANTIC TELECOM: Shares Delisted From Indexes
----------------------------------------------
Telecommunications developer and operator Atlantic Telecom Group
PLC, according to the recent issue of Dow Jones Newswires, will
be removed from various indexes today.
The shares will be delisted from the FTSE All-Share, CAP All-
Share, All-Share Ex-Multinationals, All-Small, SmallCap and
techMARK All-Share indexes, with a value of 0 pence.
Earlier, Atlantic has appointed PriceWaterhouseCoopers as
administrators after talks on selling the company or
restructuring its debt had failed.
BRITISH TELECOM: On Track With Cost-Cutting Target
--------------------------------------------------
British Telecom is ahead of its cost-reduction targets and
expects to beat performance goals set in the prospectus for the
mmO2 demerger, reports The Times newspaper.
According to Pierre Danon, chief executive of the company's BT
Retail division, he had identified 268 million pounds of savings
this year, compared with earlier targets of 240 million pounds.
Danon plans to cut 850 million pounds out of the BT Retail cost
base in the coming years, the Times added.
DELTEX MEDICAL: De-lists Shares in Nasdaq Europe
------------------------------------------------
The Market Authority of Nasdaq Europe has approved Deltex Medical
Group plc's request to de-list its shares from Nasdaq Europe.
The de-listing will take place on November 7, 2001.
Deltex Medical Group is a U.K.-based company that develops,
assembles and markets a non-invasive device for assessing cardiac
function.
At present, the company has a market capitalization that does not
comply with Rule 53.0.2.(c) of The Continuing Obligations of
Nasdaq Europe.
The de-listing also means that it is of a size that could be
considered too small to justify being traded on an exchange such
as Nasdaq Europe.
INVENSYS PLC: Henderson Steps Down as Software Systems Unit Chief
-----------------------------------------------------------------
Debt-ridden engineering group Invensys said that Bruce Henderson,
chief executive of its struggling Software Systems unit, had
resigned with immediate effect by mutual consent.
According to the Daily Telegraph, the unit will now report
directly to Invensys chief executive Rick Haythornthwaite until a
replacement is found.
Haythornthwaite will reveal the company's restructuring plan when
he reports first-half results on November 15.
INVENSYS PLC: Meets Interim Target
----------------------------------
Invensys, according to the recent report from the Financial
Times, would be able to meets its earlier forecast of 280 million
pounds of interim operating profits before exceptional and other
charges for the six months to September 30 despite the impact of
the recent terrorist attacks.
The company's shares jumped 23%, or 10¬p, to 54¬p as the group
also gave re-assurance about its debt position.
Invensys has issued three profit warnings in less than a year,
most recently in July, when it said interim profits would fall
30%.
The group has net debt of 3.2 billion pounds and 4.5 billion
pounds in committed facilities.
MARCONI PLC: Shares Tumble on Hedging Loss News
-----------------------------------------------
Shares in Marconi fell 11% at 16p on Monday after it emerged that
the heavily indebted telecommunications equipment company could
lose more than 200 million pounds from a hedging scheme, reports
the Financial Times.
The scheme is related to Marconi's November 1999 decision to
award its 38,000 employees 1,000 shares each if the share price
doubled from 800p to 16 pounds.
Marconi disclosed it funded a 210-million-pound collateral with
banks last month to cover possible losses related to the hedging
deal.
The shares had been rising fast when the scheme was set up and
Marconi opted to hedge the cost of its potential liability with
banks, including Barclays Capital and HSBC.
The initial share option scheme has been made redundant by the
collapse in the value of the shares.
Marconi is seeking to reduce its debt burden of about 4.4 billion
pounds.
MARCONI PLC: To Meet With Industry Secretary
--------------------------------------------
Embattled telecoms equipment group Marconi plans to meet again
with Trade and Industry Secretary Patricia Hewitt as part of a
series of briefings with stakeholders, including its banks and
bondholders.
According to the Financial Times, there is speculation that
Marconi will ask the government to guarantee its debt.
MARKS & SPENCER: PPR Pulls Out of Race for M&S French Stores
------------------------------------------------------------
French retail giant Pinault-Printemps-Redoute has pulled out of
the race for the 18 stores Marks & Spencer PLC is selling in
France, Dow Jones Newswires reported Monday.
The move leaves French department store chain Galeries Lafayette
as the clear front-runner to take over the stores by the year-
end, the news agency added.
Marks & Spencer wants to achieve the sale as soon as possible
with a single buyer for all the French stores.
PPR's interest had centered on six to eight locations, mainly in
France, while Galeries Lafayette's offer was for all 18 M&S
stores in France.
RAILTRACK GROUP: Chief Marshall Quits Post
------------------------------------------
Railtrack said Monday that Steven Marshall resigned as chief
executive of the company.
"Government's treatment of my company and its shareholders has
been shoddy and unacceptable," Marshall said.
He said the government had broken its word by promising 1.5
billion pounds of grants in April, and then suddenly withdrawing
them Friday night.
Meanwhile, Railtrack expressed disappointment at Marshall's
decision to resign after recent events.
"Steve has done a sterling job for the company in the face of
very difficult and challenging circumstances. Some of the changes
in the business Steve has implemented have begun to clearly show
through in recent months and demonstrate his capabilities,"
chairman John Robinson commented.
RAILTRACK GROUP: Directors Considers Suing the Government
---------------------------------------------------------
Railtrack's directors are understood to have met with its legal
advisers, Simmons & Simmons, to discuss launching a legal action
against the government for failing to protect shareholders, the
Financial Times reported Monday.
Small investors have accused the government and the board of
betrayal, and directors have attacked ministers for breaking a
promise on financial commitments.
The government denies such charges.
Hilary Cook, director of investment strategy at Barclays
Stockbrokers, described the government's decision to put
Railtrack into administration as "apparently immoral".
RAILTRACK GROUP: S&P Puts Ratings on Negative Watch
---------------------------------------------------
Standard & Poor's placed the A long-term and A-1 short-term
credit ratings of Railtrack PLC on CreditWatch with negative
implications, following the decision to put the U.K. rail
infrastructure company into administration.
Railtrack was moved into Railway Administration under the 1993
Railways Act, with the consequent appointment of special railway
administrators to take operational and financial control of the
company.
The U.K. government has stated that its aim is for the new
company to secure a rating of at least BBB, which is lower than
the current A rating on Railtrack.
Standard & Poor's added that regulatory statements in the next
few days could lead to further changes to the current credit
ratings and/or CreditWatch status of the company and its debt
obligations.
SNACKHOUSE PLC: Goes Into Administration
----------------------------------------
Snackhouse plc, according to the recent report from Daily
Telegraph, has appointed accountant Ernst & Young as
administrative receiver after suffering tough trading and severe
cashflow difficulties.
The Lancashire group, one of the largest snack food manufacturers
in the U.K., includes Bensons Crisps in Kirkham, Country Harvest
Natural Foods in Shropshire and K Snack Foods in London. It has a
combined turnover of around 39 million pounds and employs just
under 470 people.
E&Y could not say whether the staff members would keep their jobs
as it would depend on who bought them.
XEROX CORPORATION: Replaces Auditors
------------------------------------
American photocopier group Xeros has replaced its auditors KPMG
with PriceWaterhouseCoopers, as an investigation into alleged
accounting irregularities continues, the Daily Telegraph reported
yesterday.
Xerox denied it had any disagreements with KPMG.
The company admitted in June that it had misapplied various
accounting rules, including the use of $100 million in reserves
to offset expenses.
Earlier, Xerox said it would close its U.K. factory in
Mitcheldean in order to return to profitability.
==============
I N F O C U S
==============
RAILTRACK GROUP: The Rise and Fall
----------------------------------
1996: Privatized, with shares costing 3.80 pounds
September 1997: Southall crash kills seven
October 1998: Shares hit highs of 17 pounds
October 1999: Ladbroke Grove crash kills 31
November 1999: Announces 1-million-pound a day profits
October 2000: Hatfield crash kills four
November 2000: Chief Executive Gerald Corbett resigns
April 2001: Wins 1.5 billion pound lifeline from government
May 2001: Posts pretax loss of 534 million pounds
June 2001: Harshly criticized in Ladbroke Grove report
July 2001: New boss John Robinson apologizes for appalling year
: Railtrack funding under threat
August 2001: Chief Operating Officer Jonson Cox dismissed
October 2001: Placed into administration
************
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 Maria 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 240/629-3300.
* * * End of Transmission * * *