/raid1/www/Hosts/bankrupt/TCREUR_Public/011011.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

            Thursday, October 11, 2001, Vol. 2, No. 199


                            Headlines

* B E L G I U M *

CITY BIRD: Receivers Abandon Daily Fine But Will File New Claim
CITY BIRD: Survival Depends on Boeing's Nod on Recovery Plan
FLV FUND: To Liquidate Assets Gradually Until End of 2004
REAL SOFTWARE: Bondholders to Receive Interests This Year

* F I N L A N D *

SONERA CORPORATION: Moviles Rejects German Sonera 3G Offer

* G E R M A N Y *

KINOWELT MEDIEN: To Return $500MM Stake in Warner Brothers
MAN AG: To Restructure UK Subsidiary, Cut Close to 400 Jobs

* I R E L A N D *

AER LINGUS: To Slice 40% of Workforce, Slash Tickets by 70%

* N O R W A Y *

BRAATHENS ASA: Liquidate Rather Than Operate -- Best Option
KVAERNER ASA: May Violate Covenants Before End of 3Q

* S W E D E N *

UNWIRE: Heading for Insolvency If No Takers Within the Week

* S W I T Z E R L A N D *

SWISSAIR GROUP: UBS Points to Oil Firms for Flight Suspension

* U N I T E D   K I N G D O M *

ATLANTIC TELECOM: German Unit Faces Insolvency
ATLANTIC TELECOM: German Subsidiary May Also Go Under Protection
BARINGS BANK: Coopers & Lybrand Agree to Settle
BRITISH TELECOMMUNICATIONS: Divide and Conquer Plan Ends
HUNTINGDON LIFE: Folds to Pressure From Activists, Sells Stakes
MARCONI PLC: Reshuffles Advisers as Investor Confidence Drops
MARKS & SPENCER: On the Road to Recovery
NTL INC.: To Sell Cablecom to John Malone With Huge Bargain
RAILTRACK PLC: Demands Return of 350 MM Pounds
RAILTRACK PLC: Property Projects Worth 2BB Pounds


=============
B E L G I U M
=============


CITY BIRD: Receivers Abandon Daily Fine But Will File New Claim
---------------------------------------------------------------

The 25 million Belgian francs daily penalty earlier contemplated
against Thomas Cook has been abandoned by the receivers of City
Bird as it turned out that it cannot be enforced, reports De
Standaard/FT Information.

The penalty was reached earlier in a summary proceeding.

The receivers are planning to start the procedure for mass
redundancies, instead. An attempt will be made to find candidate
acquirers, although chances of finding any are said to be slim.

The Belgian airline, nevertheless, maintains that Thomas Cook was
the primary cause for its financial dive.

It is considering a new claim, which will reportedly cost the
travel group billions of Belgian francs.


CITY BIRD: Survival Depends on Boeing's Nod on Recovery Plan
------------------------------------------------------------

It's "make or break" with Boeing.

This appears to be the situation City Bird is in right now, whose
fate lies on Boeing's approval or disapproval of the airline's
recovery plan.

The American aircraft maker is the main creditor of the Belgian
airline.

Until recently, German travel agency Thomas Cook had planned to
acquire the ailing airline on condition that its financial
recovery plan is first approved by Boeing.

Last Tuesday, Thomas Cook withdrew its offer, although a court
order has obliged it to respect its engagement, reports Le
Soir/FT Information.

Now, what is needed is the verdict of Boeing, which is uncertain
and could go either way.


FLV FUND: To Liquidate Assets Gradually Until End of 2004
--------------------------------------------------------

After failing to get satisfactory bids, Flemish investment fund
FLV has decided to liquidate its assets in a gradual process that
will last until December 31, 2004.

The plan will be presented to the Company's shareholders in an
Extraordinary General Meeting set for October 26, reports
L'Echo/FT Information.

The decision to opt for a gradual liquidation is due to the
current conditions, says managing director Piet Vandermeersch.

Vandermeersch says the close association of FLV with troubled
vocal technology specialist Lernout & Hauspie Speech Products NV
has made it difficult to continue operations.


REAL SOFTWARE: Bondholders to Receive Interests This Year
---------------------------------------------------------

Subordinated convertible bondholders of Real Software are
guaranteed to receive their interests this year and the next in
shares, De Financieel Ekonomische Tijd /FT Information reports.

In a meeting last week, bondholders firmed up this assurance,
which is the final part of the Company's debt restructuring plan.

Bonds will be convertible into shares during the whole of July,
instead of the last week of July only, the report says.

The main part of the restructuring plan was finalized at the
start of the month, which involved an agreement with the banks on
a 218 million euro ($199 million) debt.


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


SONERA CORPORATION: Moviles Rejects German Sonera 3G Offer
----------------------------------------------------------

Finnish telecom operator Sonera has offered to its sell third
generation stake in its German UMTS venture Group 3G to partner
Telefonica Moviles of Spain, but Moviles rejected the offer, the
Spanish company said.

"(Sonera) has asked us if, within their divestment plan, we would
be interested (in buying the 3G stake), and we prefer to continue
as we are," Telefonica Moviles Chairman Luis Lada told reporters
in southern Spain.

According to Reuters, a Sonera spokesman in Helsinki said the
company was not trying to sell out to Telefonica and that it was
standing by its policy of seeking to cut its Group 3G stake to
20%.

Telefonica Moviles, a unit of the multinational telecom
Telefonica, owns 57.2 percent of the Group 3G venture in Germany
and Sonera owns the rest.


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


KINOWELT MEDIEN: To Return $500MM Stake in Warner Brothers
----------------------------------------------------------

Kinowelt Medien AG is planning to return the shares it bought
from Warner two years ago in a move to arrest its further slide
to bankruptcy, reports Frankfurter Allgemeine Zeitung and FT
Information.

The German film rights company bought $500 million (542.5 Euros)
in stakes from Warner, but is now heavily in debt.

Earlier, Kinowelt had planned to sell the said shares to another
German broadcasting company, but Warner Brothers blocked the
transaction.

Kinowelt will now retain only the rights to films that it can
sell in Germany.

The company is reported to have repaid 150 million euros in debt
this year.


MAN AG: To Restructure UK Subsidiary, Cut Close to 400 Jobs
-----------------------------------------------------------

German truck maker MAN AG is planning to restructure its
operation in the United Kingdom, with job cuts to go along with
it, reports The Times.

About 370 out of the 770 workforce at its ERF subsidiary based in
Cheshire will be chopped off.

According to the report, the move is part of an effort to hinder
further deterioration in the subsidiary's finances stemming from
irregularities.

MAN acquired ERF from Canadian company Weston Star last year.
The new owner claims the subsidiary's assets had been inflated
and some of its debts were hidden.


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


AER LINGUS: To Slice 40% of Workforce, Slash Tickets by 70%
-----------------------------------------------------------

The fallout from the September 11 attacks continues to take its
toll on the European airline industry.

Ireland's flag carrier Aer Lingus is rumored to cut 40% of its
workforce and plans to slash ticket prices by as much as 70%, all
in a bid to attract customers, BBC News reported Wednesday.

Accordingly, bookings for the airline have dropped dramatically
in the weeks following the U.S. terrorist bombing.

It is estimated that the airline is currently losing 2.5 million
euros a day.

Already, the airline has suspended a quarter of its flights to
transatlantic routes, which account for half of its revenues.

An announcement of job lay-offs of up to 2,500 staff is expected
this week, according to the report.


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


BRAATHENS ASA: Liquidate Rather Than Operate -- Best Option
-----------------------------------------------------------

Better liquidate than scale down operations.

This is the view of many analysts on what option will benefit
ailing Norwegian airline Braathens ASA, reports Dagens
Naeringsliv/FT Information.

Many of them favor liquidation, as they do not believe the
airline will ever become profitable despite a new strategy and an
infusion of capital.

Scaling down operations will result in poorer service.

In addition, it is likely that rival Scandinavian Airlines will
offer more flights on the same routes, says aviation analyst
Peter Qvist.

Ultimately, Braathens would not survive in the long term, says
Lars Heindorf of Den Danske Bank.

A liquidation is more favorable at this stage than doing it
later, as the Company's estate will become cheaper the longer it
stays in the market ailing, view most analysts.


KVAERNER ASA: May Violate Covenants Before End of 3Q
----------------------------------------------------

Troubled engineering and construction firm Kvaerner ASA announced
Tuesday that it might break some of its financial covenants
before the end of the third quarter, says the Nordic Business
Report.

Results published by the Company on the same day hinted that its
third quarter finances could be weaker than had been projected
earlier.

Accordingly, this is due to the conflicts in connection with two
projects in Asia and Australia, particularly within its Pulp &
Paper business.

In addition, the weakening performance of its Engineering &
Construction division is said to be weighing heavily on its
results.

The Anglo-Norwegian company expects its full-year operating
result to be NOK918 million, including profit from divestitures
amounting to NOK150 million.

The Company is optimistic, though, of its 2002 and 2003
performance, expecting results between NOK1.7 billion and NOK2.2
billion during the span.


===========
S W E D E N
===========


UNWIRE: Heading for Insolvency If No Takers Within the Week
-----------------------------------------------------------

Wireless communications solutions company Unwire is setting a
date with insolvency if its mother company Cellpoint fails to
find a buyer within the week, reports Dagens Industri /FT
Information.

What is making it a particularly tough choice for Cellpoint to
sell Unwire is the fact that it acquired the latter in February
last year for over SKr700 million worth of shares.

Now, it could not be sold for as little as 1 Swedish krone, says
Peter Henricsson, Cellpoint's largest shareholder and managing
director.

Unwire was acquired from Swedish venture capital company
Ledstiernan.

Cellpoint is a Swedish IT and telecommunications company.


=====================
S W I T Z E R L A N D
=====================


SWISSAIR GROUP: UBS Points to Oil Firms for Flight Suspension
-------------------------------------------------------------

UBS denies that it was responsible for Swissair's flight
suspension last Monday, pointing the blame instead to the oil
companies, reports L'Agefi Suisse/FT Information.

The bank said it responded to the flag carrier's needs, but it
was the oil companies that refused to accept its guarantees, even
at the highest level.

Swissair grounded its planes anew Tuesday after oil companies
refused to deliver fuel without cash.


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


ATLANTIC TELECOM: German Unit Faces Insolvency
----------------------------------------------

Talks are rife that Atlantic Telecom executive chairman will try
to buy its UK business from administrators, the Financial Times
reports.

He is allegedly in the process of getting financial backing from
an unnamed equity investor to sustain his plans of reviving the
company weeks from now.

But bondholders are said to be favoring the voluntary winding up
of the Company to conserve its cash.

Up until now, though, Duncan has not yet offered a bid, says
Steven Pearson, joint administrator at PricewaterhouseCoopers.


ATLANTIC TELECOM: German Subsidiary May Also Go Under Protection
----------------------------------------------------------------

The German subsidiary of Atlantic Telecom is reportedly
considering the option of insolvency protection, reports the
Financial Times.

This after Atlantic Telecom itself went under administration last
week as a result of the crunch in the telecommunication market.

It is presumed that since the German business depends heavily on
Atlantic for funding, its present predicament will likely affect
the subsidiary.


BARINGS BANK: Coopers & Lybrand Agree to Settle
-----------------------------------------------

THE High Court action against the auditors of Barings ended when
one of the defendant firms said it had agreed to settle the case.

Coopers & Lybrand, which bore the burden of the one billion pound
negligence claim, will pay Barings liquidators KPMG an
undisclosed amount in settlement.

Barings Bank liquidators are negotiating similar claims of 150
million pound against another defendant, Deloitte & Touche.

KPMG have claimed that auditors Coopers & Lybrand, now part of
PricewaterhouseCoopers, and the Singapore office of Deloitte &
Touche failed to do their job and should be blamed for the bank's
collapse.

Demands against former auditors were made in order to recover the
one billion pounds ($2 billion) lost on Singapore dealings done
by former Barings Bank investment officer Nick Leeson.


BRITISH TELECOMMUNICATIONS: Divide and Conquer Plan Ends
--------------------------------------------------------

Troubled telecom giant British Telecommunications has shelved the
split-up of its retail and network operations, the Financial
Times reports.

Last year, BT initially tried to spinoff Wholesale into a company
called NetCo intending to arouse separate interests of its retail
and network businesses.

Over the said move, tentative offers were drawn from two
financial groups, Earthlease and German Bank WestLB Panmure.

However, BR Retail Chief Pierre Danon, according to the paper,
said that "When we had 30 billion pounds of debt, this was the
sort of thing we had to look at, but following our rights issue
it no longer looks so desperate."


HUNTINGDON LIFE: Folds to Pressure From Activists, Sells Stakes
---------------------------------------------------------------

Pressure from animal rights activists has forced the sale of UK
animal testing company Huntingdon Life Sciences to an American
company, reports the Financial Times.

Accordingly, the move was largely due to the prolonged campaigns
by animal rights activists that have grown intense and sometimes
violent.

HLS chairman Andrew Baker says the move has been contemplated for
a while now, especially after several company executives were
attacked at their homes.

Shareholders have also been receiving threatening mails, says
Baker.

In the United Kingdom, companies are required to publish the
addresses of directors, while the owners' details are included in
the register of shareholders.

Maryland-based Life Science Research, which was formed specially
for the purpose of launching a bid, will acquire the Company.

The Company expects that future confrontations with activists
will be minimized upon its transfer to Maryland, as no
publication similar to that in the UK is required in said State.

Company shares were at its peak two years ago, recording 27-3/4p.
Now, that figure is a lowly 3-1/4p after protestors forced their
banks and brokers to drop the Company.


MARCONI PLC: Reshuffles Advisers as Investor Confidence Drops
-------------------------------------------------------------

Troubled Marconi Corporation plc has reshuffled its financial
team following the erosion of investor confidence in the Company,
reports The Times.

In a move indicating it had seen enough, Marconi has called on
Lazard to take over as its lead financial adviser, along with
Morgan Stanley.

Cazenove will become the house broker, while Bell Pottinger was
also hired to replace Brunswick as its communications adviser,
reports The Times.

The new set of advisers will replace UBS Warburg and Credit
Suisse First Boston, although the two will retain mandates to
sell Marconi assets to cut Company's 4.4 billion pound debt.


MARKS & SPENCER: On the Road to Recovery
----------------------------------------

Marks & Spencer suggested on Tuesday that the retail giant might
at last be heading to recovery after three years of plunging
sales and profits and costly operations.

The Times, citing M&S chief executive Luc Vandevelde, reported
Tuesday that sales had normalized towards the end of the quarter.

Vandevelde's optimism was evident on M&S' share price, which
surged 27®p to 307p, making M&S the best-performing blue chip
stock this year.

Sales of clothing, footwear and gifts for the September quarter
were 0.8 % ahead, while sales for the three months to September
29 rose 2.8%.

Analysts raised full-year forecasts from 530 million pounds
($772.2 million) to around 570 million pounds ($830.4 million).


NTL INC.: To Sell Cablecom to John Malone With Huge Bargain
-----------------------------------------------------------

US media magnate John Malone is set to get a huge bargain in
Cablecom should a deal materialize between him and NTL Inc.,
reports AFX News.

NTL is reportedly offering its Swiss unit for less than one-fifth
of the $3.8 billion price to acquire it, the report says.

Malone has been firming up his cable interest in the European
market.  He already controls UPC and acquired recently six
regional cable networks from Deutsche Telekom.


RAILTRACK PLC: Demands Return of 350 MM Pounds
-----------------------------------------------------------

Railtrack Group plc launched yesterday a High Court suit
demanding the return of 350 million pounds ($510.5 million) of
cash in frozen accounts held by HSBC.

In contrast to its Railtrack plc unit, Railtrack Group plc is not
in administration and is taking action after HSBC Holdings plc
and Transport Secretary Stephen Byers, ignored their demand
yesterday.

If the move succeeds, Railtrack's 300,000 shareholders would be
paid about 103p each in return for the loss of their investments.

The transport operator claims 990 million pounds ($1.4 billion)
additional funding from the Government as earlier promised, two
days before the order was made to force Railtrack into
administration.

Byers declares that the state has not breached any funding
negotiations with Railtrack.


RAILTRACK PLC: Property Projects Worth 2BB Pounds
-------------------------------------------------

Railtrack administrators consider the possible sale of over 2
billion pounds ($2.9 billion) in development projects to release
funds for shareholders.

The transport group stands as UK's third largest owning
properties worth between o2.9 billion and o4.8 billion, over and
above the tracks and stations, the Times reports.

Transport Secretary Stephen Byers will have the final decision
over which assets to sell for the Railtrack's continued
operations.

Certain assets sale and rentals brought in 135 million pounds to
the transport group. However, the recent turmoil have caused
delay in realizing said expectations.

Railtrack's biggest projects involve the development of a
shopping centre and appartments at Cricklewood, North London, and
a venture with British Land in the construction of offices over
tracks at London's Liverpool Street station.

Cricklewood, with Pillar Property as partner, could be worth more
than 1 billion pounds ($1.5 billion).

                                  ************

       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 L. 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.


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