/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/011015.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 Monday, October 15, 2001, Vol. 2, No. 201 Headlines * B E L G I U M * CITY BIRD: De-lists Shares in Nasdaq Europe CITY BIRD: German Firm to Buy Belgian Airline SABENA SA: Investigates Solutions for Customers SABENA SA: Virgin Express in Talks to Acquire Sabena Assets * F R A N C E * MAJORETTE: Confirms Plant Closure * G E R M A N Y * BIODATA INFORMATION: Announces New Board Members DAIMLERCHRYSLER: EU Hands 72-MM-Euro Fine for Breaching Rules DAIMLERCHRYSLER: Freightliner Downsizing Appears Unavoidable NEUE MAXHUTTE: Considers Company Involvement on Condition TELESENSKSCL AG: In Talks With Creditors Re Financing Plan * N O R W A Y * KVAERNER ASA: Aker Won't Help Issue KVAERNER ASA: Shares Soar Over Yukos Stake * S W E D E N * ICON MEDIALAB: Cuts 70 Staff Members UNWIRE: Declares Bankruptcy * U N I T E D K I N G D O M * BRITISH TELECOM: Attacks Exchange Access Plans BRITISH TELECOM: Bonfield to Quit Early as De-merger Looms BRITISH TELECOM: Concert Venture to Break Up This Week BRITISH TELECOM: Shares Down 9% Over Customer Figures MARCONI PLC: Simpson Gets 1.5MM-Pound Payoff RAILTRACK GROUP: German Bank Looks to Buy Rail Network Operator RAILTRACK GROUP: Moody's Cuts Ratings to Baa1 RAILTRACK GROUP: S&P Cuts Ratings to CC ============= B E L G I U M ============= CITY BIRD: De-lists Shares in Nasdaq Europe ------------------------------------------- Shares of City Bird Holding S.A. were de-listed from Nasdaq Europe at the close of business on October 11, after the Market Authority approved the company's request to withdraw its financial instruments. The move came after the Commercial Court of Brussels declared City Bird Holding S.A. and its subsidiary City Bird S.A. bankrupt on October 4. The court appointed August De Ridder, Roland Dupont and Jean Michel-Derick as judicial trustees to manage and supervise the liquidation of the assets of both companies. CITY BIRD: German Firm to Buy Belgian Airline --------------------------------------------- A German investment group, according to the De Financieel Ekonomische Tijd/FT Information, has expressed interest in part of the activities of Belgian airline City Bird. The group would also take over part of the City Bird staff. The unknown candidate acquirer is faced with the difficult task of obtaining a new airline operations certificate for City Bird or its divisions. The government earlier withdrew the license of City Bird after the Brussels Commercial Court declared the company bankrupt. SABENA SA: Investigates Solutions for Customers ----------------------------------------------- The Belgian Government and Sabena Management are currently investigating possible solutions that guarantee continuity for the customer, after Swissair announced its inability to fund the business plan and the judicial composition given by the Brussels Trade Court last Friday. Both parties are looking at the best global solutions for Sabena and its employees, customers, suppliers, creditors and the airport community. Sabena said Thursday it envisaged a new Sabena to guarantee a smooth continuity of activities for the customers, while looking for investors for the new company. The Belgian carrier will then concentrate on finding industrial partners for the subsidiaries maintaining a maximum level of employment, and set up a social fund to accompany the entire scenario. Main priority of Sabena remains to secure operations and to manage carefully the liquidities at the disposal of the company. The planned sale of assets and of activities should give the company the additional cash needed to meet its further financial obligations. SABENA SA: Virgin Express in Talks to Acquire Sabena Assets ----------------------------------------------------------- Low-fare airline Virgin Express Holdings plc has formally indicated interest in assisting with the resolution of the deepening problems surrounding Sabena by registering interest in acquiring certain assets of the company and its operations. If negotiations will be successful, a large number of jobs would be saved amongst Sabena staff and within dependent companies. Discussions are still at an early stage between the Sabena management and the court-appointed administrators. =========== F R A N C E =========== MAJORETTE: Confirms Plant Closure --------------------------------- French toy car maker Majorette has confirmed the closure of the company's historic production site at Rillieux-la-Pape, in the Lyon suburbs, the Le Figaro reported. Around 237 staff members risk losing their jobs. Majorette filed for bankruptcy in 1992, acquired by Ideal Loisirs a year after, and taken over by Germany's Triumph Adler in 1996. Some of its production was relocated to Thailand in the mid- 1980s. According to chairman Richard Mamez, French production now accounts for only 30% of turnover. ============= G E R M A N Y ============= BIODATA INFORMATION: Announces New Board Members ------------------------------------------------ IT security provider Biodata Information Technology AG has made the first step to start the restructuring process of the group with the appointment of Harald Gluck and Christian Kanja in its board, according to the Frankfurt Stock Exchange. Gluck will direct the company's organization as Biodata's new chief operations officer, while Kanja is the group's new chief technical officer. Biodata's previous CTO, Andre Munch, leaves the board to become vice president, concentrating on R&D of encryption products in the important telecommunications segment. The newly assigned board will introduce a plan to restructure the group. The federal supervisory office for securities trading, is investigating whether Biodata Information is guilty of having misled its own shareholders. BAWe is also looking into suspicions of share-price manipulation and insider trading. DAIMLERCHRYSLER: EU Hands 72-MM-Euro Fine for Breaching Rules ------------------------------------------------------------- For unduly restricting competition in low-priced countries, the European Commission imposed Wednesday close to 72 million euros in fines against DaimlerChrysler, reports Reuters. The Commission says its investigation reveals that the carmaker prevented its dealers from having enough cars to meet demand in low-priced countries, in effect disrupting competition. "A new car is an expensive purchase and consumers pay attention to prices. The Commission is determined to ensure that they benefit from competition at retail level and get a good deal," says EU Competition Commissioner Mario Monti in a statement. "Our investigation has also shown once more that the car manufacturers can largely control their distributors and punish those whose commercial behavior they dislike," adds Monti. DaimlerChrysler called the fine inappropriate, saying the amount is out of proportion to the accusations. The company plans to take legal actions. The fine is the third largest dealt on an individual company. DAIMLERCHRYSLER: Freightliner Downsizings Appear Unavoidable ------------------------------------------------------------ Layoffs, plant closures, and other downsizing measures likely await the truck unit of DaimlerChrysler in the United States, according to analysts. The news comes even as the company plans to revive Freightliner, which is set to absorb $1 billion in losses by the end of the year, reports Reuters. One German analyst believes about 15 to 20% of Freightliner's workforce will be chopped off from its payroll. "I don't see how job cuts and plant closures will be avoided," says the analyst. Freightliner currently has 14,700 employees and 10 plants. "I think we will see a downsizing of the company to a more profitable level, and that would be sensible," says Himanshu Patel, a JP Morgan analyst who still rates DaimlerChrysler a "buy". The US truck unit is the latest "headache" of the company, which has seen a considerable drop in its sales following the September 11 terrorist attacks, says Reuters. Its trouble began at the end of the first quarter, when its losses dragged DaimlerChrysler's whole truck division into the red, the report adds. NEUE MAXHUTTE: Considers Company Involvement on Condition --------------------------------------------------------- Max Aicher, the former partner of insolvent German steel company Neue Maxhutte, stated he would again consider involvement in the company if staff members were reduced from 900 to 560, according to the recent report from the Suddeutsche Zeitung & World Reporter. Aicher believes the company cannot be saved with a large number of staff, and that it would cease to exist in three or four years. Insolvency administrator Jobst Wellensiek thinks the consortium of German steel dealer Berndt-Ulrich Scholz and Italian steel company Acciaierie Venete has the best chances of acquiring Neue Maxhutte out of all interested parties. Aicher believes otherwise. Aicher called for the layoff of 600 staff members when he was the main partner from 1994 to 1999. TELESENSKSCL AG: In Talks With Creditors Re Financing Plan ---------------------------------------------------------- Software company TelesensKSCL is in negotiations with investors and creditors to agree on a financing plan and payment schedule in order to secure the company's liquidity and avoid the need for insolvency proceedings, according to the Frankfurt Stock Exchange. Ernst & Young is advising the company in these negotiations. Furthermore, the TelesensKSCL Executive Board and a leading international management consultancy is producing an extended restructuring plan that contains forecast revenues and earnings substantially below the expectations as communicated in June. These were 120 to 125 million euros revenues with a break-even EBITDA for this year. For further information, contact Nina von Moltke at investor@telesenskscl.com =========== N O R W A Y =========== KVAERNER ASA: Aker Won't Help Issue ----------------------------------- Norwegian oil and gas services firm Aker Maritime refused to help underwrite a planned share issue to avert the collapse of rival Kvaerner, Reuters reported. Aker, Kvaerner's main shareholder with almost 18%, said Kvaerner was solely to be blamed for financial troubles, including liquidity problems, too high debts, leadership problems and a lack of market confidence. It said the problems had deepened in recent weeks and could not be solved by fresh cash alone. Kvaerner is planning an issue of up to 2.0 billion crowns to help stave off collapse. KVAERNER ASA: Shares Soar Over Yukos Stake ------------------------------------------ Shares in Kvaerner rose 25% on Thursday, closing 2.6 Norwegian krone higher at 13 Norwegian krone, after Russian oil company Yukos revealed it had bought a 10% stake in the toubled Anglo- Norwegian engineering and construction firm, the Financial Times reported. Kvaerner needs to raise at least 1 billion Norwegian krone in capital to avert bankruptcy. So far, Kvaerner has raised 500 million Norwegian krone from an underwriting syndicate. Kvaerner said it had not yet sought Yukos's support for its rights issue. Earlier, Aker Maritime announced it would not be a guarantor for Kvaerner's capital raising program. =========== S W E D E N =========== ICON MEDIALAB: Cuts 70 Staff Members ------------------------------------ Interactive digital communication services provider IconMedialab said Thursday it would reduce 70 of its staff members in Sweden due to the current difficult market situation. "We are continuously managing the cost base of the company, and the market situation in Sweden has forced us to do this reduction of the work force," Rens Buchwaldt, interim CEO of IconMedialab International, said. IconMedialab will employ 300 staff in Sweden after the reductions and about 1,300 in 15 countries. For questions, contact Katarina Bergegard at telephone +46 70 375 90 20 or + 46 8 58 89 90 55 UNWIRE: Declares Bankruptcy --------------------------- Stockholm-based Unwire, a company whose products let wireless devices talk to one another, declared bankruptcy last Tuesday after its troubled parent company, US-based Cellpoint, was unable to find a buyer for its subsidiary, reports the Tornado Insider. "Cellpoint decided instead to use the money they had for themselves, and abandoned us," Unwire CEO David Ericksson said in a statement. The closure of both Unwire and the South African subsidiary will save Cellpoint over $600,000 per month. =========================== U N I T E D K I N G D O M =========================== BRITISH TELECOM: Attacks Exchange Access Plans ---------------------------------------------- Telecommunications giant British Telecom has attacked plans by industry regulator Oftel to allow rival operators to install their equipment alongside BT's telephone exchanges, according to The Times' report. Oftel said the proposals should lead to a reduction in start-up costs and installation time for operators. However, BT claimed the proposal would compromise the security of customers' phone services. BT's rivals welcomed the proposal. Bulldog Communications chief executive Richard Greco said the co-mingling would cut the cost and time of getting access to a BT exchange. BRITISH TELECOM: Bonfield to Quit Early as De-merger Looms --------------------------------------------------------- British Telecommunications chief executive Sir Peter Bonfield is expected to quit post early following the completion of the company's restructuring process. According to the Financial Times' report, the BT board has not yet ratified Bonfield's decision, although it is almost certain the chief will leave before the expiry of his contract in December 2002. The matter will probably be discussed next month, coinciding with the de-merger of BT's mobile phone business. A potential successor is Pierre Danon, the well-respected head of BT's Retail division. BRITISH TELECOM: Concert Venture to Break Up This Week ------------------------------------------------------ Concert, the joint venture between AT&T and British Telecommunications, will finally be disbanded by the middle of this week after months of negotiations, bringing both companies a step closer to completing their respective restructuring plans, the Financial Times reported Thursday. Losses at the venture have been running at an annualized rate of more than $1 billion this year, adding to the urgency to wind it up. The British and U.S. companies are now understood to have agreed to the main outlines of a break-up of the venture, with only minor details still be worked out. BRITISH TELECOM: Shares Down 9% Over Customer Figures ----------------------------------------------------- Shares of British Telecom sank 9% Thursday as investors were disappointed by the subscriber figures, dragging valuations of the mobiles business to the bottom end of a 7 billion to 10 billion-pound range. In MmO2, to be demerged next month, 643,000 customers were added in the September quarter across its operations in the U.K., Germany, The Netherlands and Republic of Ireland, but pre-pay customers generated the bulk of the 4% growth. Contract customers fell for the second consecutive quarter at Cellnet. Investors were most disappointed by the meager 15,000 customers signed by its loss-making Viag Interkom subsidiary in Germany. Subscriber growth at Telfort in The Netherlands was also below targets in the demerger prospectus. MARCONI PLC: Simpson Gets 1.5MM-Pound Payoff -------------------------------------------- Lord George Simpson, the ousted Marconi chief executive, will walk away with a final payoff of about 1.5 million pounds in cash after agreeing to forgo 700,000 pounds in entitlements, the Times reported Thursday. Marconi said Lord Simpson agreed to a compromise and would receive 300,000 pounds as compensation for loss of office in September. The company added the ousted chief would also receive pension entitlements of 1.2 million pounds. Unions have attacked Lord Simpson's payoff as "a slap in the face for the workforce and shareholders alike" especially that the company is fighting to stave off collapse. RAILTRACK GROUP: German Bank Looks to Buy Rail Network Operator --------------------------------------------------------------- Government sources said that transport secretary Stephen Byers and chancellor Gordon Brown have received a letter from German state-owned bank WestLB setting out financial options for the troubled Railtrack, the Financial Times reported Thursday. The government is looking at how it will raise the amount needed to finance the not-for-profit company it plans to run the rail network following Railtrack's collapse. Railtrack is also believed to be in preliminary talks with several other banks, including Barclays and Citigroup. Ernst & Young was appointed administrator to the company. RAILTRACK GROUP: Moody's Cuts Ratings to Baa1 --------------------------------------------- Moody's Investors Service last week downgraded the long-term debt rating of Railtrack PLC from A2 to Baa1 and kept the rating under review for possible further downgrade. At the same time, it downgraded the company's short-term rating from Prime-1 to Prime-2 and also kept that rating under review for possible further downgrade. The rating actions follow the announcement that the government has placed the company in administration. The downgrades reflect the withdrawal of government support from Railtrack, uncertainty over the ultimate financial profile of the successor company that will take over Railtrack's assets and liabilities. The rating further reflects the terms of its exit from administration, the future absence of a shareholder equity buffer, and the company's expected ongoing dependence on government financial support. The reviews for further possible downgrade will focus on these issues as they become clearer over the coming weeks and on the position of the existing debt in the successor company's financial structure. Early this month, the U.K. government placed the company in Railway Administration, following the government's decision to reject a further request from the company for additional funding. The London-based Railtrack owns and operates most of Great Britain's heavy rail infrastructure. It generated revenues of 2.5 billion pounds in the year ending March 31 and had total assets of 9.4 billion pounds. RAILTRACK GROUP: S&P Cuts Ratings to CC --------------------------------------- Standard & Poor's last week lowered its long-term corporate credit ratings on U.K. rail infrastructure company Railtrack PLC to CC from A. At the same time, the senior unsecured ratings on Railtrack were lowered to C from A, and the short-term corporate credit and commercial paper ratings to C from A-1. The ratings were placed on CreditWatch with developing implications to reflect the ongoing development of the proposals on the treatment of the company's financial creditors. The rating actions reflect the current proposed terms of the standstill agreement and transfer arrangements into a new not- for-profit company. Standard & Poor's added that the government and regulatory statements could lead to further changes to the ratings and/or the CreditWatch status of Railtrack and its debt obligations. *********** 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 * * *