/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/011106.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 Tuesday, November 6, 2001, Vol. 2, No. 217 Headlines * B E L G I U M * SABENA SA: To Declare Bankruptcy This Week * G E R M A N Y * INTERSHOP COMMUNICATIONS: Posts Third-Quarter Loss LTU GROUP: Loses 50MM Euros MEDIANTIS AG: Reduces EBIT Loss by 28% MET@BOX AG: Reaches License Agreement With African Firm POPNET INTERNET: To Change Segment * N E T H E R L A N D S * KPN NV: Government Grants Alliance for KPN PHARMING GROUP: Will Delay Posting of Third-Quarter Results UNITED PAN-EUROPE: Seen Expelled From Dutch AEX Index * N O R W A Y * KVAERNER ASA: Shareholders Disapprove Court Probe KVAERNER ASA: Will Vote on Right Issue on Nov. 30 STEPSTONE ASA: Pushes U.K. Business to Liquidation * S P A I N * IBERIA SA: Ends Bitter Pay Dispute * S W I T Z E R L A N D * SWISSAIR GROUP: Administrator Okays Gate Gourmet Credit SWISSAIR GROUP: Talks on Units Liquidity in Advanced Stage * U N I T E D K I N G D O M * BOOKHAM TECHNOLOGY: Suffers Declining Revenue BRITISH NUCLEAR: LMA Will Take Over Clean-up Cost BRITISH TELECOM: Director Revamp May Lead to Hampton Departure BRTISH TELECOM: Sees More Restructuring After Demerger BRITISH TELECOM: Will Float BT Retail MARCONI PLC: To Grant Banks Security Over Assets MARKS & SPENCER: Sales Slump Anew RAITRACK GROUP: S&P Raises Ratings to BB+ ============= B E L G I U M ============= SABENA SA: To Declare Bankruptcy This Week ------------------------------------------ Union officials said that Sabena airline, under temporary protection from creditors, is preparing to file for bankruptcy this week, the Wall Street Journal reported Friday. "It is clear we are working on a bankruptcy plan for Sabena," union leader Inge Vervotte said. Union officials added that the bankruptcy would only cover the airline and would exclude airline operations by subsidiaries Delta Air Transport (DAT), and Sobelair. Unions said the rescue plan is aimed at saving and transferring as many jobs to DAT. ============= G E R M A N Y ============= INTERSHOP COMMUNICATIONS: Posts Third-Quarter Loss -------------------------------------------------- Intershop Communications AG, a global provider of e-business software, posted a net loss of 23.1 million euros, or 0.26 euros per share, for the third quarter of 2001. The figure is compared to a net loss of 24.7 million euros, or a net loss of 0.28 euros per share, in the second quarter of 2001, excluding one-time charges of 3.6 million euros. Frankfurt Stock Exchange added the company decreased its revenue of 14.7 million euros during the third quarter, compared with revenue of 22.0 million euros in the second quarter of 2001. The decline in revenue was primarily related to the weak corporate IT spending environment and seasonal effects in Europe. Continued cost reduction reduced Intershop's quarterly cash burn to 10.4 million euros in the third quarter. The software company ended the quarter with total liquidity including cash, cash equivalents, marketable securities, and restricted cash at 45.2 million euros, compared with 55.6 million euros as of June 30. LTU GROUP: Loses 50MM Euros --------------------------- Troubled charter airline LTU Group is posting a higher-than- expected 50 million euros ($44.9 million) in losses, the German magazine Focus reports. Overall, LTU will incur in 2001 an estimated loss of 170.5 million euro ($152.6 million), accounting firm C&L Deutsche Revision reported. The accounting firm's report foresees a 75 million euro ($67.3 million) requirement at the end of this year and 300 million euros ($269.2 million) in total financing needs. Earlier, pilots' union Vereinigung Cockpit offered LTU a pilot wage freeze from 2002 to 2004 to contribute to save the airline. SwissAir Group AG owns 49.9% of LTU. MEDIANTIS AG: Reduces EBIT Loss by 28% -------------------------------------- German Internet bookstore mediantis AG achieved a substantial improvement in its operating results in the first nine months of 2001. According to the Frankfurt Stock Exchange, the EBIT operating loss was reduced by 28% to 14.2 million deutsche marks, compared with a loss of 19.8 million last year. The improvement is primarily attributable to the radical 60% reduction in marketing expenses, down to 5.7 million deutsche marks, and to the substantial increase in gross margin from 25% to 34%. A 3% sales growth rate amounting to 26.2 million deutsche marks, however, was considerably less than expected. A negative financial result had a corresponding impact on the overall result. Despite the positive financial result of just under 50,000 deutsche marks achieved in the third quarter, the total figure for the first three quarters came in at -7.2 million deutsche marks. The overall result from the first to the third quarter was therefore -21.4 million deutsche marks. Earlier, mediantis said it would wind up the company and sell its online bookselling business. For further information, contact Julia Hofmann at telephone +49 (0)89-724414128, fax +49 (0)89-724414119, or email at pr@mediantis.de MET@BOX AG: Reaches License Agreement With African Firm ------------------------------------------------------- Hildesheim-based Met@box AG has decided to change its business from being a manufacturer and distributor of Set-Top-Boxes for interactive digital television to the business of licensing its technology to others. Met@box, according to the Frankfurt Stock Exchange, has entered into the first Technology License Agreement with Dragon Electronics cc of South Africa, with a first term of three years. After having intensively tested the box, Dragon will have exclusive rights to manufacture the technologies for interactive digital television. The initial license fee will exceed 1 million deutsche marks, plus royalties per unit. Before the first payment, Dragon will finalize its relationship with a fixed-line and satellite operator. Dragon plans to deploy first units in approximately six months. At this time, Met@box will receive the remainder to the full amount of the license fee. The contract is effective as of November 1st, but becomes valid only once Met@box has withdrawn its filing for insolvency. For further information, contact Melanie Hoffmann at telephone +49 (0) 5121/75 33-116, fax +49 (0) 5121/75 33 75 or email hoffmann@metabox.de POPNET INTERNET: To Change Market Segments ----------------------------------------- Internet services group Popnet Internet AG plans to shift segments to the regulated market to be free from some of its costlier obligations connected with staff consultation and information disclosure. According to a Borsen-Zeitung/FT Information report, the company will be under threat of enforced de-listing with the introduction of new regulations on penny stocks. Popnet filed for bankruptcy at the end of September. ===================== N E T H E R L A N D S ===================== KPN NV: Government Grants Alliance for KPN ------------------------------------------ The Dutch parliament's upper house has amended a law that would give KPN NV more room to go into alliances, Reuters reported. The amendment means that the Dutch telecom group is free of the restrictions that prevented foreign buyers from taking control of the company, even if a buyer acquired a majority of shares and most employees worked abroad. The legal change is the first step towards KPN's full privatization, but the government has still not provided a date for selling its 35% stake in the company. PHARMING GROUP: Will Delay Posting of Third-Quarter Results ----------------------------------------------------------- Pharming Group N.V. will delay the publication of its third quarter results on November 30 due to uncertainties regarding its planned sale of certain fixed assets, particularly its manufacturing facilities in Geel, Belgium. Last month, the Belgain court in Turnhout approved a sale of these facilities to Genzyme Corp. However, Pharming Group will appeal on the decision. The final outcome of the proceedings may have a significant impact on the balance sheet of the company. Pharming Group, which focuses on the development, production and commercialization of human therapeutic proteins to be used in highly innovative therapies, has operations in Belgium, Finland, the Netherlands and the USA. For more information, contact Rein Strijker at telephone +31 (0)71 5247 406 UNITED PAN-EUROPE: Seen Expelled From Dutch AEX Index ----------------------------------------------------- In the annual reshuffle next March, European cable TV operator UPC could be expelled from the blue-chip AEX index, reports Reuters, quoting investment bank Kempen & Co. Analyst Peter van Doesburg in a research note said that market maker Van der Moolen and Anglo-Dutch information technology services firm CMG, which are currently in the midcap AMX index, will most likely be the replacement, based on data for the first 10 months of the year. UPC would likely be forced out because of negative equity, according to Van Doesburg. =========== N O R W A Y =========== KVAERNER ASA: Shareholders Disapprove Court Probe ------------------------------------------------- During an extraordinary meeting, shareholders of Kvaerner's Engineering & Construction group voted against Aker Maritime ASA's request for a formal court probe on the oil and gas group's near collapse, Reuters reports. "This means that the proposal for an investigation was not approved, but individual shareholders can go to the bankruptcy court to request a probe," said Kvaerner's board of directors' chairman, Harald Arnkvaern. Kvaerner's new chief executive Kristian Siem also declared his opposition to any probe of the company under his predecessor Kjell Almskog. Aker Maritime lawyer Anders Eckhoff argued for the investigation even though other major shareholders, including Yukos and the state pension fund, voted against the move. Aker Maritime controls about 18% of Kvaerner, second to 22% ownership of Russian oil firm Yukos OAO. KVAERNER ASA: Will Vote on Right Issue on Nov. 30 ------------------------------------------------- Troubled Anglo-Norwegian engineering group Kvaerner will vote on a 3 billion Norwegian krone rights issue on November 30, the Financial Times reported. The rights issue is a precondition for the company's creditor banks to refinance its debt. If approved by a two-thirds majority, shareholders would have the right to subscribe to the offer from December 4 to 17. The company may also use its 17.8% stake to overturn Kvaerner's rescue rights issue, if it can get support from other shareholders on November 30. STEPSTONE ASA: Pushes U.K. Business to Liquidation -------------------------------------------------- Scandinavian online recruitment group Stepstone has appointed BDO Stoy Hayward to liquidate its business in the U.K. as part of a desperate cost-saving strategy, the Times newspaper reported. The move meant that more than half of the group's 876 staff across Europe would lose their jobs. StepStone, which employed about 135 people at its London office in Hammersmith, will now focus on its German, Danish and Belgian operations. Cash balances or cash equivalents at the end of September stood at 22.5 million euros, compared with 46.9 million euros in the second quarter. ========= S P A I N ========= IBERIA SA: Ends Bitter Pay Dispute ---------------------------------- Troubled Spanish airline Iberia on Friday announced that it had ironed out a four-year performance-related pay deal with on-board passenger crew and technicians, Reuters reports. The agreement, signed in October, will raise crews' wages this year by the rate of inflation, plus 0.5%. Pay will increase with the rate of inflation from 2002 to 2004. Any salary increase above the deal would depend on productivity and company profits. The official inflation target for Spain is the 2.0% according to the European Central Bank, but many economists consider this aim optimistic because inflation is rising at 3.4%. Earlier this year, the state assigned a mediator over a bitter pay dispute between Iberia and its pilots, who ruled that wage increases should also be linked to profits and productivity. ===================== S W I T Z E R L A N D ===================== SWISSAIR GROUP: Administrator Okays Gate Gourmet Credit ------------------------------------------------------- The provisional administrator of collapsed Swissair Group has approved fresh credit for catering unit Gate Gourmet, Reuters reported. "The liquidity problems at Gate Gourmet should be overcome by a credit of 30 million Swiss francs from SAirGroup," Karl Wuetrich said. The credit would be secured by pledging a 70% stake in Turkish catering company USAS Ucak Servisi AS. SWISSAIR GROUP: Talks on Units Liquidity in Advanced Stage ---------------------------------------------------------- Talks to resolve a liquidity crisis at Swissair Group's flight- related subsidiaries are at an advanced stage, reports Dow Jones Newswires, citing estate administrator Karl Wuethrich. Some of the flight-related businesses, such as software services and plane maintenance, are considered key to the creation of a new Swiss airline. Swissair Group and the Swiss government are trying to find investors for flight-related units such as software company Atraxis, plane maintenance group SR Technics, and groundhandling unit Swissport. Other flight-related businesses, such as caterer Gate Gourmet or duty-free company Nuance Group, also need fresh funds. Wuethrich added he would inform the public at the end of November about whether to grant a definitive debt-restructuring moratorium to Swissair Group. =========================== U N I T E D K I N G D O M =========================== BOOKHAM TECHNOLOGY: Suffers Declining Revenue --------------------------------------------- Bookham Technology plc, a leading supplier of silicon integrated optical components for fiber optic communication networks, recorded a revenue loss of 2.4 million pounds for the third quarter ended 30 September 2001, down 69% from the previous year. Restructuring efforts have significantly reduced the company's expense base, excluding research and development expenses, by 19% from 8.4 million pounds to 6.8 million pounds sequentially. The cash burn for the quarter was reduced to 15.5 million pounds from 24.3 million pounds in the second quarter of 2001. For further information, please contact Giorgio Anania, President and CEO, at telephone +44 (0) 1235 837000 BRITISH NUCLEAR: LMA Will Take Over Clean-up Cost ------------------------------------------------- Plans for a new public authority to lead the decommissioning of nuclear power plants, according to the Financial Times, are being mulled as British Nuclear Fuels intends to pursue its part- privatization. The Treasury and the Department of Trade and Industry, government insiders confirm, are working on plans for a Liabilities Management Authority (LMA) to relieve BNFL an estimated 34 billion pounds ($49.5 million) in decommissioning costs. Ministers and officials at the DTI believe transferring BNFL's liabilities to a separate state body is the only way that the planned partial privatization can take place. The DTI is expected to decide plans over a liabilities management authority by the end of December. Last month, BNFL it was "technically insolvent" because its liabilities is going to hit 34 billion pounds, while its balance sheet only held about 235 million ($342 million) of shareholders funds. Shouldering BNFL's liabilities for the clean-up would leave the nuclear group free for sale. Privatization is unlikely to take place before 2004 at the earliest. BRITISH TELECOM: Director Revamp May Lead to Hampton Departure -------------------------------------------------------------- The expected director reorganization at British Telecommunications plc's board may lead to the exit of finance director Philip Hampton. The Times quotes sources close to BT as saying that because Hampton's restructuring project over the past year will be concluding, he is considering the step-down a possibility. Earlier, the telecommunications giant said that Chief Executive Peter Bonfield would step down in January, a year ahead of schedule. Rupert Gavin, head of BBC's commercial arm BBC Worldwide, stands among the line-up to become BT's new chief executive. BRTISH TELECOM: Sees More Restructuring After Demerger ------------------------------------------------------ British Telecommunications plc has officially confirmed their plans to split the company further, the Telegraph newspaper revealed Monday. Senior directors are looking into further restructuring plans in the company next year after completing the demerger of its mobile arm this month. BT plans more restructuring that involves the demerging of its network and retail activities, securitizing its wires interests, and the selling of all or part of its network operations. Last week, the company announced the early departure of Sir Peter Bonfield after six years in service as CEO because the demerger project he spearheaded was "almost complete". Bonfield lead BT to global restructures that lead to its downfall. The company has yet to find a successor to take his place. BRITISH TELECOM: Will Float BT Retail ------------------------------------- British telecommunication will offer its retail business BT Retail for public trading after the completion of the MMO2 demerger, the Financial Mail on Sunday reported. The telecoms group is preparing for the spin-off of its BT Retail, which provides telecom services to 21 million households and businesses, sought to be listed as a separate entity. Aside from the floatation move, a further shake-up of BT's non- executive directors is also expected to come before the company finds a successor to outgoing CEO Peter Bonfield. MARCONI PLC: To Grant Banks Security Over Assets ------------------------------------------------ Debt-laden telecoms group Marconi PLC will possibly grant its principal banks security over the company's operating assets, reports the Sunday Business. The company's creditor banks are likely to make seniority a condition of the plan to extend the life of the manufacturer's loan facilities. MARKS & SPENCER: Sales Slump Anew --------------------------------- Sales appear to have slumped again in men's and women's wear, and in the children's clothing of Marks & Spencer, the Sunday Times reported. Insiders say that trading deteriorated rapidly in recent weeks. Women's wear is said to have fallen 4% in the past two weeks, while men's clothing sales may have slumped 8%. Lingerie, nightwear and food were also hit. But it is in children's clothing that the retailer has suffered most. The inside figures suggest sales in the division have fallen 24% in the past two weeks. Marks & Spencer is currently raising money from a property sell- off, issuing bonds and disposing of its European stores. RAITRACK GROUP: S&P Raises Ratings to BB+ ----------------------------------------- Credit ratings agency Standard & Poor's on Friday raised Railtrack's long-term corporate credit rating to double-'B'-plus from double-'C'. At the same time, the senior unsecured debt ratings on Railtrack were raised to double-'B'-plus from single-'C', and the short- term corporate credit and debt ratings to single-'B' from single- 'C'. The ratings remain on CreditWatch with developing implications, reflecting both the operational procedures of the railway administration process and the ongoing development of proposals for the successor organization to Railtrack. The upgrade reflects the recent parliamentary presentation of guidelines by the U.K. government on the principle issues, which will be considered before approving a scheme of transfer of Railtrack out of administration. These include satisfaction on the treatment of existing creditors and the ability to obtain a sufficiently high investment-grade credit rating. The upgrade also takes account of additional public statements by the U.K. government outlining its intention to achieve its target of at least a long-term credit rating of A for New Railtrack. *********** 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 * * *