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        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 18, 2001, Vol. 2, No. 204


                            Headlines

* A U S T R I A *

WIENER VERLAG: Folds up, Files for Insolvency

* B E L G I U M *

SABENA SA: EU to Approve E125MM Bridge Loan

* F R A N C E *

LVMH: Issues Third Profit Warning
MOULINEX SA: Works Council Fears Court Liquidation

* G E R M A N Y *

ADAM OPEL: Job Cuts to Affect Bochum Plant
ALLI LOGISTIK: Files for Insolvency
PRODACTA AG: Gains 500% in Neuer Markt
REFUGIUM HOLDING: Dussmann Buys Seven Homes

* N E T H E R L A N D S *

VERSATEL TELECOM: Plans 1.7BB Euro Exchange Offer

* N O R W A Y *

KVAERNER ASA: To Reshuffle Board in November

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

GRETAG IMAGING: Faces Bankruptcy Threat
SWISSAIR GROUP: New Airline to Cost CHF4BB

* U N I T E D   K I N G D O M *

ATLANTIC TELECOM: Active Value Looks at Atlantic
HUNTINGDON LIFE: US Market Maker Withdraws
JAZZTEL PLC: Moody's Places Rating on Downgrade Review
JOHN LAING: Future in Doubt Despite Sale
MARCONI PLC: Medical Unit Sale Awaits EU Approval
MARKS & SPENCER: To Sell French Stores to Galeries Lafayette
PHOTOBITION GROUP: Buyout Talks Fail as Steven Smith Resigns
POLAROID CORPORATION: S&P Cuts Rating to D
RAILTRACK GROUP: Expresses Concern Over Byers' Statement
RAILTRACK GROUP: May Sell Assets to Pay Shareholders
RAILTRACK GROUP: Welcomes Byers Confirmation of CTRL Ownership


=============
A U S T R I A
=============


WIENER VERLAG: Folds up, Files for Insolvency
---------------------------------------------

With net liabilities amounting to 140 million schilling, Wiener
Verland GesmbH and its two other businesses filed for insolvency
early this month, reports Wirtschaftsblatt/FT Information.

The company has liabilities totaling 330 million schilling,
while its assets amount to only 190 million schilling.

The two other subsidiaries that also filed for insolvency were
Buchbinderei Frauenberger & Co GmbH and Buchbinderei Gerald
Frauenberger.  

The two companies are engaged in book publishing in Austria.

Each of the companies has offered the minimum 40% as a settlement
of their debts.


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


SABENA SA: EU to Approve E125MM Bridge Loan
-------------------------------------------

The European Commission is set to approve a 125-million-euro
($113.5 million) bridge loan for Sabena to keep the struggling
Belgian airline flying, Reuters reported Tuesday.

Twenty EU commissioners decided on the approval early this
week.

A Belgian court granted the debt-laden flag carrier two months
creditors protection after its co-parent Swissair Group backed
out from its promise of a capital injection for Sabena.


===========
F R A N C E
===========


LVMH: Issues Third Profit Warning
---------------------------------

French luxury goods company LVMH lowered its profits projections
for the third time this year after last month's attacks on the
U.S. pushed third-quarter sales below market forecasts, BBC News
reported Tuesday.

LVMH released the latest warning with third-quarter turnover
figures that showed a lower-than-expected 3.9% rise.

The figures revealed slowing sales of champagne and leather goods
and losses at the company's upscale retail branch.

LVMH said they are now focusing efforts to match last year's
operating profit, but denied plan to sell its perfume chain
Sephora to German group Douglas.

LVMH's 50 brands include Louis Vuitton leather goods, Dior
perfumes and the Givenchy couture label.


MOULINEX SA: Works Council Fears Court Liquidation
--------------------------------------------------

Part of Moulinex's central works council delegates, CGT and
Sydis, left Monday's meeting without giving their opinion about
the plans presented, the Le Figaro and FT Information reported.

CGT delegate Thierry Lepaon said that the receivers are not doing
their job. The creditors' demands about details on the lifting of
guarantees were not discussed and the receivers are unable to
provide solutions.

Sydis representative Dominique Jonquet said that the receivers are
acting for the banks and Moulinex competitor SEB.

Lepaon added that the receivers might be depending on a possible
liquidation since the banks have willing buyers.


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


ADAM OPEL: Job Cuts to Affect Bochum Plant
------------------------------------------

Adam Opel, the German subsidiary of General Motors, will shed
2,500 jobs over the next two years, affecting mainly the group's
Bochum plant in Germany, the Financial Times reported Tuesday.

Opel chairman Carl-Peter Forster said an unspecified number of
job losses are also expected at Opel's Astra plant in Belgium.

Forster added that the cuts, part of the company's on-going
"Project Olympia" restructuring, were needed to restore
profitability in Opel.

Of the job losses, about 900 would be achieved by natural
attrition, while the remainder is likely to be achieved by
switching to single shift production at Bochum.

Some 1,200 assembly workers are expected to take voluntary
redundancy or early retirement over the next two years, along
with 400 salaried staff.

The German carmaker lost 982 million deutsche marks last year.


ALLI LOGISTIK: Files for Insolvency
-----------------------------------

German logistics company Alli Logistik GmbH & Co has filed for
insolvency following the cancellation of contracts from major
customers Metro and Tengelmann, according to Frankfurter
Allgemeine Zeitung's recent report.

The house bank further withdrew credit lines with Alli.
   
The Alli subsidiary SLS GmbH is not affected by the insolvency
application, the report added.


PRODACTA AG: Gains 500% in Neuer Markt
--------------------------------------

Shares of software maker Prodacta gained nearly 500% at Germany's
Neuer Markt last week, Die Welt & World Reporter in its October
13 edition said.

It closed the day up 275% at 0.30 euros.

In August, Prodacta filed for insolvency proceedings, following
the failure of negotiations with its shareholders and potential
investors.


REFUGIUM HOLDING: Dussmann Buys Seven Homes
-------------------------------------------

German services group Dussmann AG will acquire seven homes for
the elderly from troubled Koenigswinter-based retirement home
operator Refugium Holding AG, Suddeutsche Zeitung and FT
Information reported Tuesday.

Dussmann subsidiary Kursana has concluded a deal with Refugium
owners and insolvency administrator Andreas Ringstmeister over a
long-term operation agreement.

Refugium, which operates 32 retirement homes, entered into
insolvency in the middle of this year after Pako Immobilien AG
announced it is not willing to support the company.


=====================
N E T H E R L A N D S
=====================


VERSATEL TELECOM: Plans 1.7BB Euro Exchange Offer
-------------------------------------------------

Data communications network company Versatel Telecom
International NV plans to swap 1.7 billion euros of debt for cash
and equity to ease debt pressure, lower interest charges and
improve the company's funding outlook

According to Reuters's report, the company will buy back all its
outstanding high-yield bonds worth one billion euros and
convertible notes worth 660 million euros.

Versatel said the deal would decrease long-term debt to
around 170 million euros and would lower its annual cash
interest charge from 150 million to 15 million euros. The deal
will also increase net equity from 100 million to more than one
billion euros.

After completion of the transaction, Versatel will have enough
cash flow to fund its operations for 30 to 36 months.


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


KVAERNER ASA: To Reshuffle Board in November
--------------------------------------------

The Board of Kvaerner ASA, the troubled Anglo-Norwegian
engineering and construction group, said Tuesday it has agreed to
place the election of a new Board of Directors on the agenda for
its Extraordinary General Meeting on November 2.

The board announced in September it asked the Nomination
Committee, appointed by shareholders, to consider changes to the
board and to present a proposal to an Extraordinary General
Meeting.

Yukos Oil, which recently acquired approximately 10% of the
Kvaerner shares, requested the company to reshuffle its directors
in the coming EGM. It also demanded board representation.

A board reshuffle was expected after Kvaerner revealed last month
that it would have to raise 1 billion Norwegian krone in capital
to avoid bankruptcy.


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


GRETAG IMAGING: Faces Bankruptcy Threat
---------------------------------------

Swiss photographic imaging group Gretag Imaging is on the verge
of bankruptcy, the Le Temps/FT Information reported.

The stagnant low-level sales in July and August, and a collapse
in September, have led to the use of almost all the funds from
bridging loans.

The company's 800 job cuts this year is not even enough, thereby
needing further restructuring measures. It did not give precise
details.

Analysts expect a 2001 turnover of between 410 million and 440
million Swiss francs.


SWISSAIR GROUP: New Airline to Cost CHF4BB
------------------------------------------

The building of a new Swiss airline, consisting of Crossair's 82
aircraft and Swissair Group AG's 26 long-haul and 26 short-haul
aircraft, could cost around 4 billion Swiss francs, Dow Jones
Newswires reported Tuesday, citing Crossair chief executive Andre
Dose.

The plan foresees Swissair's aircraft being incorporated into
Crossair's regional fleet at the end of March and will require
around 1 billion Swiss francs.

The new airline will also need a 2.2 billion Swiss francs
capital.

The planned 9,400 job cuts at Swissair Group would produce
additional costs of around 650 million Swiss francs, the report
added.

The Swiss government is already taking the lead in finding fresh
capital to rebuild an international airline from the remnants of
Swissair.

Swissair, which filed for bankruptcy, has enough liquidity to
stay airborne until October 28. Its Swisscargo, Atraxis,
GateGourmet, Swissport and Avireal units are also facing
difficulties.


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


ATLANTIC TELECOM: Active Value Looks at Atlantic
------------------------------------------------

Investment group Active Value, according to the Financial Times,
is believed to want to buy the U.K. operations of
telecommunications company Atlantic Telecom.
   
The Aberdeen-based telecoms company recently called in
administrators from PriceWaterhouseCoopers, after failing to
persuade bondholders to agree to a restructuring and refinancing
of the company.
   
Part of a rescue package proposed prior to insolvency involved
Active Value injecting fresh funds to alleviate bondholder
concerns that it would be unable to meet debt payments.

However, bondholders rejected the deal because they felt it was
too late and wanted to secure the company's 40 million pound cash
pile before any more was used up.

Joint administrator Steven Pearson said more than 30 parties have
expressed their interest in Atlantic, and the deadline for offers
is this Friday.
   
The administrators also plan to sell the group's operations in
Germany, which followed its parent into insolvency, and the
Netherlands, understood to have enough cash to last about nine
months.


HUNTINGDON LIFE: US Market Maker Withdraws
------------------------------------------

US market maker Fleet Securities confirmed it would no longer be
making a market in Huntingdon Life Sciences, the Financial Times
reported Tuesday.

The withdrawal decision came as Fleet Securities, targeted by
Shac USA, the US arm of animal rights protest group Stop
Huntingdon Animal Cruelty, has not been doing volume in HLS.

Customer complaints also gave Fleet "no income and a lot of
hassle."

The scenario is a repeat of HLS's experience earlier in the year
when marketmakers and private client stockbrokers withdrew from
trading the company's shares.

The resulting constraint on trading liquidity was one of the main
reasons behind HLS's decision to delist its shares in the UK and
focus on the Nasdaq OTC market, and restructure itself under a
new US parent, Life Sciences Research.

The protestors spent the past two months sending letters, emails
and videos to traders and executives at the marketmaking firms
and their clients with the aim of shocking them into pulling out
of HLS trading.

Market makers include Herzog, Heine, Geduld Inc; Wein Securities;
GVR Co; Hill Thompson Magid & Co; Ladenburg, Thalmann & Co; and
WMV Frankel & Co.


JAZZTEL PLC: Moody's Places Rating on Downgrade Review
------------------------------------------------------

Moody's Investors Service has on Tuesday placed the ratings of
Jazztel p.l.c. on review for possible downgrade.

The ratings affected are the senior implied rating at B3, the 400
million euros 13.25% senior unsecured notes due 2009 at Caa1, the
110 million euros and $100.0 million 14.0% senior unsecured notes
due 2009 at Caa1, and the 225.0 million euros 14.0% senior notes
(and warrants) due 2010 at Caal.

The review is prompted by heightened concerns regarding Jazztel's
ability to ultimately grow cash flow to a level sufficient to
adequately service the company's large debt burden.

The sizeable funding requirement and the prospect of material
losses to bondholders also prompts the downgrade review.

Jazztel p.l.c. is a holding company headquartered in London, UK.
It's wholly-owned subsidiary, Jazztel Telecom SA, is
headquartered in Madrid, Spain.


JOHN LAING: Future in Doubt Despite Sale
----------------------------------------

City analysts are unconvinced on the future of UK developer John
Laing despite the sale of its construction division to
subcontractor Ray O'Rourke, the Financial Times reported Tuesday.

The city is still taking in the full impact of Laing's
construction losses that were bigger than expected. Analysts are
concerned about the effects on the parent company.

Laing's construction arm posted an operating loss of 82.1 million
pounds for the first half of 2001, which resulted in a 50% fall
in the firm's share price to 112p. The figure also forced the
company to restructure its finances.

Laing, however, believes the sale will allow it to concentrate on
its housing operation and PFI projects, and to implement a rescue
package to raise funds.


MARCONI PLC: Medical Unit Sale Awaits EU Approval
-------------------------------------------------

Relevant to its debt-reduction plan, Marconi will find out this
week if the 750-million-pound ($1.1 billion) sale of its Medical
Systems unit to Philips Electronics will be approved by the
European Commission, reports the Times.

There is a concern that the EU could demand another assessment
that has already approved by US regulators, thereby potentially
delaying the deal for several months.

Marconi shares on Tuesday rose at 8.8p to 37.19p despite a recent
cut in the company's junk-rated bonds by Moody's Investors
Service from Ba1 to Ba3.


MARKS & SPENCER: To Sell French Stores to Galeries Lafayette
------------------------------------------------------------

Retailer Marks & Spencer PLC plans to sell its 18 French stores
to French retailer SA des Galeries Lafayette for an undisclosed
amount, Dow Jones Newswires reported Tuesday.

Under the deal, all 1,650 jobs in the stores will be saved. The
company also wants the stores to cease trading under the M&S
brand by the end of the year.

Marks & Spencer's proposal is subject to consultation with its
staff in France and its European Works Council, Dow Jones added.

Galeries Lafayette in June showed interest in several Marks &
Spencer outlets, along with their French staff that has a
reputation of being very well trained.


PHOTOBITION GROUP: Buyout Talks Fail as Steven Smith Resigns
------------------------------------------------------------

Troubled display graphics group Photobition said that management
buyout talks has ended with the resignation of finance director
Steven Smith, the Daily Telegraph and FT Information reported
Tuesday.

The company is now studying the possibility of asking a debt-for-
equity swap and two-year deferral of interest payments scheme
from its creditors.

Shares in the company plunged by 40% to 3p following the
announcement.

Photobition, which has issued profit warnings, is on the brink of
bankruptcy with 110 million pounds in debt.


POLAROID CORPORATION: S&P Cuts Rating to D
------------------------------------------

Polaroid Corporation suffered another ratings downgrade from
Standard & Poor's, barely two months since the last ratings
action.

The Company's $350 million senior secured bank loan was lowered
by the ratings agency to D from CC, and removed it from
CreditWatch.

According to the rating agency, the downgrade was due to the
company's voluntary filing for bankruptcy under Chapter 11 of the
U.S. Bankruptcy Code.

In August, the other ratings of the company were also lowered to
D levels after it failed to make a schedule interest payment.

Polaroid, the biggest maker of instant cameras and film, is based
in the United Kingdom. It has other sites in France, Germany and
the Netherlands.


RAILTRACK GROUP: Expresses Concern Over Byers' Statement
--------------------------------------------------------

The Board of Railtrack Group said Tuesday it is concerned over
transport secretary Stephen Byers' statement, saying it lacked
substance in many crucial respects.

Although Byers confirmed Railtrack's continuing ownership of
Channel Tunnel Rail Link (CTRL), the board pointed out that the
group had not been seeking prior to October 5 an "effectively
open ended funding requirement," but rather, a measured and
fundamental overhaul of its finances, that would have increased
the transparency, predictability and stability of its affairs to
deliver a better railway for the traveling public.

The board added that Railtrack was not guilty of presenting
government with "a begging bowl month after month," but had
concentrated since July on negotiating a broad and coherent
package of structural reforms.

Another issue the board wanted to point out was that Railtrack
collapsed into receivership because the government decided to put
it there.

"What we need are some straight answers to the simple questions
regarding the future of CTRL," chairman John Robinson said.

Alan Bloom, Chris Hill, Scott Martin and Mike Rollings were
appointed as Joint Special Railway Administrators of Railtrack
PLC on October 7. They act as agents of the company and without
personal liability.


RAILTRACK GROUP: May Sell Assets to Pay Shareholders
----------------------------------------------------

Railtrack Group Plc, according to the Financial Times' report,
may sell some of its property to raise cash to reimburse
shareholders.

Railtrack has at least 100 million pounds worth of land and
interest in property developments, Commerzbank analyst Dominic
Edridge said.

German state bank West LB is among those looking at the
possibility of taking over the network.

Legal advisers Slaughter & May established that under the terms
of the Railways Act, accountancy firm Ernst & Young is obliged to
take the lead in finding a buyer for the company.

The company's shares were suspended October 8 after the U.K.
government halted subsidies to the company and won a High Court
order declaring Railtrack insolvent.


RAILTRACK GROUP: Welcomes Byers Confirmation of CTRL Ownership
--------------------------------------------------------------

Railtrack Group said Tuesday it expressed a cautious welcome for
the letter of transport secretary, Stephen Byers.

The statement affirms Railtrack's ownership of a 400 million-
pound rail line linking London and the Channel Tunnel Rail Link
(CTRL) on behalf of its shareholders, if the company cooperates
with government plans for the future operation of the line.

"Following the administration order, the executive directors had
two immediate objectives: to ensure that the group secured
control of its cash position of 370 million pounds, and to
protect the group's stake in CTRL," chairman John Robinson said.

"Now we will be concentrating on our two other main tasks -
realizing the value of the group's other assets, especially its
property portfolio, and winning a fair price for our shareholders
for the loss of the railway network."

                                      ***********

          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
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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.


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