/raid1/www/Hosts/bankrupt/TCREUR_Public/011108.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, November 08, 2001, Vol. 2, No. 219


                            Headlines

* B E L G I U M *

LERNOUT & HAUSPIE: U.S. Bankruptcy Court Approves Bid Procedure
SABENA SA: Files for Bankruptcy
SABENA SA: Grounds All Flights
SABENA SA: Unions in Talks With Government on Redundancy Plan

* C Z E C H   R E P U B L I C *

ENERGOMONTAZE LIBEREC: On Its Way to Liquidation
INVESTICNI A POSTOVNI: CKA Buys IPB Assets
TCHECOMALT GROUP: Malt Maker Threatens to Seek Arbitration Abroad
TEXTILANA: Court Declares Textile Maker Bankrupt
VITKOVICE: Shareholders Approve Debt Relief Plan
VLARSKE STROJIRNY: Hokinka Buys Engineering Firm

* F R A N C E *

MOULINEX SA: Turkish Group Shows Interest in Brandt

* G E R M A N Y *

EM.TV: Haffa Brothers Face Criminal Charges
MANAGEMENT DATA: De-listed From Neuer Markt

* I R E L A N D *

AER LINGUS: Sells Art Collection to Raise Funds
AER LINGUS: Withdraws Earlier Request for Outsourcing

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

KPN NV: Reassesses E-Plus Stake

* N O R W A Y *

KVAERNER ASA: Secures Contracts in Canada and Venezuela
STEPSTONE ASA: Needs NKr280MM to Avoid Insolvency

* P O L A N D *

DAEWOO-FSO: Heads Off Bankruptcy
DAEWOO-FSO: Hyundai Is "The Most Serious" Potential Buyer

* S W E D E N *

SONG NETWORKS: Designates New Chief

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

CARRIER1 INTERNATIONAL: Plans Buy Back of High-Yield Bonds
SWISSAIR GROUP: Gate Gourmet Continues Talks With Bidders
SWISSAIR GROUP: To Finalize Swissport Sale by Nov. 15
SWISSAIR GROUP: To Sell LTU Stake

* U N I T E D   K I N G D O M *

KINGFISHER PLC: Will Pack Up Business in Germany
MARKS & SPENCER: Shows Signs of Recovery
PPL THERAPEUTICS: Completes 32MM Pound Rights Issue
RAILTRACK GROUP: Railtrack Chairman Calls for Independent Probe


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


LERNOUT & HAUSPIE: U.S. Bankruptcy Court Approves Bid Procedure
---------------------------------------------------------------

The United States Bankruptcy Court for the District of Delaware
on October 29 approved the bidding procedures for the assets of
speech and language technology company Lernout & Hauspie Speech
Products N.V., L&H Holdings USA, Inc. and their affiliates.

The deadline for the submission of bids for the Speech and
Language Technologies Business assets is November 19.  The
auction is scheduled for November 26 in New York City, and the
minimum bidding price is $21 million.


SABENA SA: Files for Bankruptcy
-------------------------------

Sabena became the first EU flagship airline to file for
bankruptcy on Tuesday. The airline has suffered from continuing
operating losses, with debt mounting to 2.2 billion euros.

The bankruptcy move came after Virgin Express dismissed Sabena's
rescue proposal as unworkable.

Sabena chairman Fred Chaffart said, however, that plans are being
developed with Belgian investors, financial institutions and Sir
Richard Branson's airline to start a smaller, more adequate
proposal.

The Belgians would like to spin off as many of Sabena's
activities as possible to its regional airline DAT and merge it
with Virgin Express.


SABENA SA: Grounds All Flights
------------------------------

Belgian flag-carrier Sabena grounded all its flights on Tuesday
after it failed to reach agreement with rival carrier Virgin
Express over a rescue package and unresolved issues, reports the
Financial Times.

The flight suspension was preceded by strike action as the entire
12,000-strong workforce could lose their jobs.

Virgin Express said that discussions with Sabena management are
continuing although the British company had dismissed Sabena's
plan as unworkable.

The Belgian government accuses Virgin of only wanting to cherry-
pick routes. Virgin believes the Belgians want to preserve an
operation that will be so costly that it "could put the future of
our staff at risk".


SABENA SA: Unions in Talks With Government on Redundancy Plan
-------------------------------------------------------------

The unions of Belgian airline Sabena meet with Prime Minister Guy
Verhofstadt and Minister of Public Companies, Rik Daems, on
Monday to discuss redundancy conditions.

According to the De Standaard/FT Information report, unions hope
that a redundancy plan will include supportive measures for the
6,000 staff members, whose jobs are threatened by the airline's
insolvency.


===========================
C Z E C H   R E P U B L I C
============================


ENERGOMONTAZE LIBEREC: On Its Way to Liquidation
------------------------------------------------

Cetus has proposed the liquidation of Energomontaze Liberec on
account of its poor performance, according to the Monday edition
of Czech News Agency & World Reporter.

Cetus controls 92.45% of North Bohemian-based Energomontaze
Liberec, a manufacturer of coal combustion boilers.


INVESTICNI A POSTOVNI: CKA Buys IPB Assets
------------------------------------------

The first tranche of problem assets of the failed Czech bank
Investicni a Postovni banka (IPB), worth 4.4 billion Czech
koruna, will be transferred from Ceskoslovenska obchodni banka
(CSOB) to the bailout agency Ceska konsolidacni agentura (CKA)
today.

According to the Monday edition of the Czech News Agency & World
Reporter, CKA will pay CSOB for the assets, using its own
resources.

Investicni a Postovni Banka collapsed in June 2000.


TCHECOMALT GROUP: Malt Maker Threatens to Seek Arbitration Abroad
-----------------------------------------------------------------

Tchecomalt Group shareholder Lento Investment B.V. plans to ask
an international tribunal to decide whether bankruptcy
proceedings in the country were justified and harmed the group's
shareholders.

According to a Tuesday report from the Prague Business Journal,
the shareholders are convinced that the imposition of bankruptcy
and the bankruptcy proceedings violated their rights under Czech
law and international agreements.

Tchecomalt board member Tomas Svoboda did not say when the
company would issue a final decision on whether to pursue
international arbitration.

The regional commercial court declared Tchecomalt Group bankrupt
last year due to excessive debts and lack of finances.

The company board blamed the bank for intentionally drying up its
credit lines after Ceskoslovenska Obchodni Banka (CSOB) inherited
IPB's assets.

Tchecomalt is an umbrella holding company that controls nearly
100% of the country's 17 top malt-making entities, as well as
other food processing and agricultural units.


TEXTILANA: Court Declares Textile Maker Bankrupt
------------------------------------------------

Judge Renata Zlamalova of the regional court in Usti nad Labem in
North Bohemia said that textile maker Textilana was declared
bankrupt on Monday.

Textilana produces fabrics for men and women, including clothing,
textile printing, knitted fabrics, wrappers and scarves.


VITKOVICE: Shareholders Approve Debt Relief Plan
------------------------------------------------

Shareholders of the Moravian steel and engineering company
Vitkovice has approved steps to cut the struggling company's debt
burden, the Prague Business Journal reported Monday.

Shareholders approved a share capital cut from 10.62 billion
Czech koruna to 132.8 million Czech koruna. This will be followed
by a 1.5 billion Czech koruna capital hike resulting from the
issuance of 150 million new shares at 10 Czech koruna each.

Current shareholders will be given the first chance to buy the
new shares.

The initial share capital cut will allow Vitkovice to settle two-
thirds of its 15.9 billion Czech koruna accumulated debts.

A separate plan for selling Vitkovice Steel, the newly created
steel subsidiary of Vitkovice, was also approved.

The sale plan is in line with a proposed court settlement with
creditors and will generate funds to pay creditors' claims.

Possible Vitkovice Steel buyers include Shiran, Swiss-based
Duferco, U.S.-based CMC, German steelmaker Salzgitter,
Luxembourg-based Arbed, and local steel producer Trinecke
Zelezarny.


VLARSKE STROJIRNY: Hokinka Buys Engineering Firm
------------------------------------------------

The Hokinka company won a closed tender for the purchase of
former engineering company Vlarske strojirny Slavicin

According to bankruptcy assets administrator Michal Brenko,
Hokinka already paid 15% of the bid.

The total purchase price was not disclosed.


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


MOULINEX SA: Turkish Group Shows Interest in Brandt
---------------------------------------------------

Turkish domestic appliances group Arcelik is interested in taking
over Brandt, reports La Tribune/FT Information.

Although discussions are in a preliminary stage, Arcelik's
spokesman Omer Kayali said that Arcelik is a serious candidate,

The deadline for submission of offers on Brandt, the domestic
appliances subsidiary of French group Moulinex-Brandt, is
November 9.


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


EM.TV: Haffa Brothers Face Criminal Charges
-------------------------------------------

The office of the state prosecutor in Munich has initiated
criminal proceedings against the founders of German media
company, EM.TV, the Financial Times reported Tuesday.

Thomas Haffa, founder and former chief executive, and his brother
Florian, formerly finance director, are suspected of share price
fraud and disseminating false half-year results in August 2000.

Lutz Dreesbach, spokesman for the brothers, denied the
allegations, insisting the two had always acted and spoken in
good faith.

The Haffa brothers could face a maximum sentence of three years'
imprisonment if proven guilty.


MANAGEMENT DATA: De-listed From Neuer Markt
------------------------------------------

Software provider Management Data Media Systems AG said Monday it
has transferred its listing from the Neuer Market segment to the
regulated market at the Frankfurt stock exchange as of November
4.

Due to the pending insolvency proceedings, the Deutsche Borse
concluded that the company's listing at the Neuer Markt can no
longer be sustained.

After extensive investigations, including legal steps to
challenge the decision, the administrator and executive board
finally accepted the straight change to the trading segment.

During recent weeks, the board, together with the administrator,
worked out a concept to continue the operation of the company.

The insolvency proceedings for the estate of Management Data
opened in August.


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


AER LINGUS: Sells Art Collection to Raise Funds
-----------------------------------------------

Debt-riddled airline Aer Lingus will auction 25 paintings from
its art collection in an attempt to generate 500,000 Irish pounds
and pay its debts.

The paintings include the work of prominent Irish artist Jack B.
Yeats "By Merrion Strand," which is expected to rake in between
250,000 and 300,000 Irish pounds.

The move is part of the airline's refinancing scheme to fund the
disposal of Aer Lingus travel stores and offices in Dun
Laoghaire, Limerick, Belfast, Dublin and London.

Aer Lingus also plans to sell two of its aircrafts to cover
expenses for a planned job redundancy of up to 2,000.


AER LINGUS: Withdraws Earlier Request for Outsourcing
-----------------------------------------------------

Aer Lingus has formally expressed a request from Services,
Industrial, Professional and Technical Union (SIPTU) to withdraw
all proposals to "outsource" part of its operations under the
company's working plan.

According to a report from the Irish Times, Aer Lingus confirmed
its agreement not pursue outsourcing in its viability plan due to
threats posed in areas such as catering, cleaning and baggage
handling.

SIPTU national industrial secretary Noel Dowling accepted the
decision, saying, "It paves the way for the opening of
negotiations."

Dowling added that since management and unions would be engaged
fully in talks to save the airline, the government would
ultimately be expected to ensure that resources were adequate to
facilitate the conclusion of an agreement to save the thousands
of jobs directly and indirectly affected.


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


KPN NV: Reassesses E-Plus Stake
-------------------------------

Troubled Dutch telecom operator KPN plans to revaluate its 77.5%
stake in its German mobile unit E-Plus, Het Financieele Dagblad
and Telecom Paper reported Tuesday.

The news came after a report that NTT Docomo, KPN's Japanese
partner, may take a $2.5 billion provision for the revaluation of
its stake in KPN Mobile.

Details of the possible revaluation of E-Plus will be provided on
November 26 when KPN releases its third quarter earnings.


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


KVAERNER ASA: Secures Contracts in Canada and Venezuela
-------------------------------------------------------

Troubled Anglo-Norwegian engineering and construction group
Kvaerner said Tuesday it has been awarded two contracts worth
more than US$36.5 million.

The larger contract is with Westcoast Energy Inc. of Vancouver,
Canada, valued at US$34 million, for the engineering, design,
fabrication, construction and commissioning of a gas processing
facility.

In addition, Kvaerner Process Systems has been awarded a CO2
Membrane Gas Removal unit to be installed in Venezuela by the
State Petroleum organization, PDVSA, for its Bitor field.

Construction, completion and commissioning are scheduled in June
of 2002.

Earlier, Kvaerner said it would vote on a 3 billion Norwegian
krone rights issue on November 30 as a precondition for the
company's creditor banks to refinance its debt.


STEPSTONE ASA: Needs NKr280MM to Avoid Insolvency
-------------------------------------------------

Scandinavian Internet recruitment group StepStone needs between
160 million and 280 million Norwegian krone of new capital in
November in order to stave off insolvency, reports Dagens
Naeringsliv/FT Information.

The company has called for an extraordinary general meeting on
November 20 in order to solve the crisis.

Earlier, Stepstone appointed BDO Stoy Hayward to liquidate its
business in the U.K. as part of a desperate cost-saving strategy.


===========
P O L A N D
===========


DAEWOO-FSO: Heads Off Bankruptcy
--------------------------------

A Warsaw commercial court rejected on Monday a motion for Daewoo-
FSO to be declared bankrupt.

According to a report from the Warsaw Business Journal, the
plaintiff, Centrum Kompozytow (CK), had failed to provide
adequate proof that the Polish-Korean carmaker owes them money.

CK chairman Franciszek Wysga said it would appeal the ruling in
the higher court.


DAEWOO-FSO: Hyundai Is "The Most Serious" Potential Buyer
---------------------------------------------------------

Hyundai is one of the most viable candidates to acquire the
troubled Daewoo-FSO plant in Poland, AFX News reported yesterday.

"We won't hide the fact that Hyundai is the most serious,"
Daewoo-FSO vice president Janusz Wozniak said.

Daewoo-FSO, Poland's second-largest car plant, has been
struggling to separate itself from the Korea-based Daewoo Motor
since it declared bankruptcy in late 1999.


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


SONG NETWORKS: Designates New Chief
-----------------------------------

Internet and telecom group Song Networks Holding AB, according to
a Tuesday report obtained from the Dow Jones Newswires, has named
Peter Loevgren as new chief executive of its Swedish unit.

Loevgren, 38, previously served as chief executive of the Swedish
company Iterium.net.

He succeeds former head of the Song Networks unit, Per Hjortblad,
who left office in August.


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


CARRIER1 INTERNATIONAL: Plans Buy Back of High-Yield Bonds
----------------------------------------------------------

Pan-European bandwidth provider Carrier1 International S.A. said
Tuesday that Carrier1 Finance Limited, a wholly owned subsidiary
of the company, plans to launch a cash tender offer and consent
solicitation for amendments to the indentures for all of the
company's outstanding high-yield notes.

The company is going to offer bondholders 18.5% of face value for
its 85-million-euro 13.25% bond due 2009 and its 176.68-million-
euro 13.25% bond due 2009.

Carrier1 International believes the tender offer is in the best
interests of the company and the holders of all of its
securities, as successful completion will significantly reduce
the company's indebtedness and interest expense.

The offer will also increase the company's chances of being able
to continue to fund its operations.

For further information, contact Carrier1 International CFO Alex
Schmid at telephone +44 207 001 6000, or email
Alex.Schmid@carrier1.com


SWISSAIR GROUP: Gate Gourmet Continues Talks With Bidders
---------------------------------------------------------

Negotiation is ongoing between Swissair unit Gate Gourmet and its
five to six viable bidders, reports Dow Jones Newswires.

Company spokesman Markus Seitz would not say whether the bidders
were Swiss or international investors. He added it would take
several months before a deal could be finalized.

The catering group currently has a workforce of 26,000 and has
achieved revenues of 3.7 billion Swiss francs in 2000.

Meanwhile, Swissair's maintenance unit SR Technics, which filed
for bankruptcy protection early last month, is also in talks with
possible bidders.

The group needs 100 million Swiss francs to maintain operations.


SWISSAIR GROUP: To Finalize Swissport Sale by Nov. 15
-----------------------------------------------------

The sale of ground handler Swissport, a unit of Swissair Group
AG, to U.K.-based private equity group Candover Investments PLC
will be finalized next week, reports to Dow Jones Newswires.

"We are very close to finalizing and signing the deal and
meet[ing] our deadline of November 15," Swissport executive vice
president of marketing and sales Stephan Beerli said.

The parties have not disclosed the purchase price.


SWISSAIR GROUP: To Sell LTU Stake
---------------------------------

Swissair Group AG has informed the state administrator that it
plans to sell its 49.5% stake in German airline LTU
Lufttransport-Unternehmen GmbH & Co. KG, Dow Jones Newswires
reported Tuesday.

The state administrator is overseeing Swissair's financial
activities after the group filed for bankruptcy protection in
October.

The interested party and the takeover price were not disclosed.


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


KINGFISHER PLC: Will Pack Up Business in Germany
------------------------------------------------

UK-French retail group Kingfisher plc is withdrawing from
Internet operations in Germany, the Financial Times Deutschland
and FT Information reported Tuesday.

Kingfisher acquired 22.5% of German online DIY shop heimwerker.de
for 15 million Deutsche marks ($6.9 million) last year.

Kingfisher attempted to become involved extensively on the German
DIY retail market, but takeover talks with the German companies
Obi and Praktiker to raise funds for heimwerker.de failed.

Kingfisher's withdrawal will force the German company to file for
insolvency.

Early this year, Kingfisher considered selling its loss-making
German electrical business Wegert after experiencing continued
poor performance and trading difficulties in the German market.


MARKS & SPENCER: Shows Signs of Recovery
----------------------------------------

British retailer Marks & Spencer reported Tuesday a 20% jump in
half-yearly profits, according to The Guardian newspaper.

Pre-tax profits at the chain rose to 220.3 million pounds before
one-off costs in the six months to September 29, compared with
183.4 million pounds a year ago.

The recent results indicate that M&S is beginning to respond to
the strategy of chairman and chief executive Luc Vandevelde to
revive the company.

In March, Vandevelde announced plans to close 38 stores in
Europe, sell off its two U.S. subsidiaries and shed 4,390 jobs.


PPL THERAPEUTICS: Completes 32MM Pound Rights Issue
---------------------------------------------------

The Board of biotechnology firm PPL Therapeutics plc, through a
press statement yesterday, announced that 19.4% of its recent 32-
million-pound rights issue had been taken up by investors.

The 20-for-17 rights issue of up to 64,029,452 new ordinary
shares at 50p per share, has been taken up as to 12,415,082 new
ordinary shares.

The balance of the new ordinary shares not taken up under the
rights issue has been subscribed for under the underwriting
agreement described in the prospectus in September.

The rights issue was fully underwritten by Deutsche Bank.

CREST Stock Accounts will be credited for New Ordinary Shares
taken up in uncertificated form.

It is expected that definitive share certificates will be
dispatched by November 13.

PPL's managing director Ron James believes that the recently
installed funding will lead PPL to "a clear route to the
commercial exploitation of its lead product, recAAT, and to
profitability."


RAILTRACK GROUP: Railtrack Chairman Calls for Independent Probe
---------------------------------------------------------------

Railtrack chairman John Robinson called on Monday for an
independent inquiry into the events leading up to the company's
administration last month.

In a statement, Robinson said he disagrees with Transport
Secretary Stephen Byers over his account of a meeting the pair
held in July this year: "We want to see an inquiry into whether a
false market was allowed to exist. What is there to hide?"

Railtrack will be submitting internal board papers and other
relevant documents and financial information to the Financial
Services Authority on November 9.

Railtrack chief executive Steve Marshall went on to say that it
appeared from the weekend press that Byers had failed to give a
full picture of events by quoting selectively from the statement
of principles published in April.

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

          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
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Christopher Beard at 240/629-3300.


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