/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/011109.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 Friday, November 09, 2001, Vol. 2, No. 220 Headlines * B E L G I U M * LERNOUT & HAUSPIE: Receivers Reject Dictaphone Recovery Plan SABENA SA: Reveals Plan for New Regional Airline SABENA SA: Three Banks Throw Lifeline * F I N L A N D * SONERA CORP.: Government Approves Rights Issue SONERA CORP.: Will Sell Directory Business to 3i * F R A N C E * INFO REALITE: Hit by Wave of Insolvencies * G E R M A N Y * ADAM OPEL: To Cut Jobs in Belgium BANKGESELLSCHAFT BERLIN: Will Be De-Listed From MDAX Next Month LTU GROUP: Rewe Favors Trust Fund for LTU LTU GROUP: Still Seeking for Buyer MET@BOX AG: Is Not Insolvent MET@BOX AG: Settles Long-term Financing With Telekom MET@BOX AG: State Promises Financial Aid PRODACTA AG: Insolvency Proceedings Begins at Karlsruhe Court * N E T H E R L A N D S * KPN NV: Seen to Write-Down Assets * N O R W A Y * KVAERNER ASA: B3 Rating Remains on Downgrade Review STEPSTONE ASA: Investment Companies Mum on Rescue Plan * P O L A N D * DAEWOO-FSO: Barely Avoids Bankruptcy DAEWOO-FSO: Hyundai Denies Takeover Bid NETIA HOLDINGS: Explores Options to Stave Off Collapse * R O M A N I A * SIDEX SA: State Inks $500MM Deal With LNM * S P A I N * TERRA LYCOS: Seen to Narrow Third-Quarter Loss * S W E D E N * ADCORE AB: Slightly Improves Profit Level * S W I T Z E R L A N D * SWISSAIR GROUP: Crossair Appoints New Chairman SWISSAIR GROUP: Swiss Financier May Rescue Airline * U N I T E D K I N G D O M ATLANTIC TELECOM: May Be Seized DANKA BUSINESS: Posts $4.2MM Earnings for Second Quarter RAILTRACK GROUP: Byers Threatens to Cut Off Funding ============= B E L G I U M ============= LERNOUT & HAUSPIE: Receivers Reject Dictaphone Recovery Plan ------------------------------------------------------------ The receivers of Lernout & Hauspie Speech Products disagree with the recovery plan submitted by the insolvent Belgian speech technology company for its U.S. subsidiary Dictaphone, reports De Financieel Ekonomische Tijd. The plan was created last summer to lift Dictaphone's creditor protection, where banks would convert their loans into shares of New Dictaphone, a new partnership to continue the activities of the old Dictaphone. New Dictaphone is valued at $150 million, of which the banks would take 67%. The receivers, as well as most observers, agree that the value is too low and that the banks will make a substantial capital gain in time. SABENA SA: Reveals Plan for New Regional Airline ------------------------------------------------ A new regional airline will be established from Sabena's Delta Air Transport subsidiary now that a court has declared the Belgian carrier bankrupt. According to Wall Street Journal's report, a deal has been reached among Belgian's three regional governments and 12 private investors to pump 200 million euros for the plan. Wednesday's bankruptcy ruling means that Sabena is insolvent and will come under the control of eight court administrators who are expected to sell off parts of the airline to raise money for awaiting creditors. The ruling would also mean the immediate loss of as many as 12,000 jobs, chairman Fred Chaffart said. Sabena, 50.5%-owned by the Belgian government and 49.5% owned by Swissair, has made a profit only twice since it was founded 79 years ago. A Belgian court granted Sabena two months' bankruptcy protection early last month after ailing parent Swissair failed to put up a promised cash injection when it went bankrupt. SABENA SA: Three Banks Throw Lifeline ------------------------------------- Three Belgian banks have pledged to invest in Belgium's bankrupt national carrier Sabena. According to a Reuters report Wednesday, Fortis Bank, KBC Bank, and ING Barings's BBL subsidiary have agreed in principle to invest in the new airline. The banks are also Sabena creditors, but they did not disclose the amount they would invest or the amount they were owed. Sabena's creditors are owed a total of $2.1 billion. The banks declined comment on whether they have taken write-downs on their outstanding loans to Sabena. ============= F I N L A N D ============= SONERA CORP.: Government Approves Rights Issue ---------------------------------------------- Finland's parliament has unanimously approved government participation in the one-billion-euro rights issue of Sonera, giving a cash boost to the debt-laden telecom operator, Reuters reported Wednesday. Analysts have said the issue, which could see Sonera double its share capital of 743.5 million shares, looks set to succeed given the backing of the government and the banks involved. Sonera is expected to set the price for the issue today. SONERA CORP.: Will Sell Directory Business to 3i ------------------------------------------------ Cash-strapped Sonera Corporation, an international forerunner in mobile communications and mobile-based services and applications, signed yesterday a Letter of Intent with 3i, Europe's leading venture capital company, to sell 100% of Sonera Info Communications Ltd. to further reduce the debt load. Price tag for its directory-service unit is 125 million euros. The transaction also includes Sonera's holdings in Conduit plc (10%) and 118 Ltd (45%), as well as Sonera Info Communications Ltd's holdings in Intra Call Center SA (100%), in Suomen Keltaiset Sivut Oy (30%) and in Suomen Numeropalvelu Oy (40%). The parties expect the definitive agreement to be signed by the end of the year 2001 and to be closed during first quarter of 2002. Sonera Info Communications Ltd is a directory solutions partner for mobile and fixed-line operators, content providers, mobile portals, Internet service providers and public corporations. It operates in European markets as well as in China. For further information, contact Juha Varelius, Executive Vice President, at telephone +358 2040 59510 or e-mail juha.varelius@sonera.com =========== F R A N C E =========== INFO REALITE: Hit by Wave of Insolvencies ----------------------------------------- French electronics group Info Realite is hit by a new wave of restructuring operations, reports Les Echos/FT Information. Subsidiaries of consumer electronics company EGP, Paris-based Irius Technologies and Silway Technologies, have filed for insolvency after Info Realite subsidiaries Point Pacific and Mobile Service Interactif were declared insolvent. Info Realite is attempting to speed up the disposal of various assets, including the Strasbourg-based video and tele- surveillance company CGV. Info Realite sustained a consolidated net loss of 30 million euros last year, for a turnover of 90.7 million euros. ============= G E R M A N Y ============= ADAM OPEL: To Cut Jobs in Belgium --------------------------------- The German unit of U.S. automobile giant General Motors, Adam Opel, may layoff over 10% of its Belgian plant workforce as part of a restructuring of its operations in Europe. According to Reuters' Tuesday report, the plant's management was in talks with union leaders regarding the 900 job cuts from its 6,500 employees at its plant in Antwerp city. Adam Opel also announced its plans to scale down production capacity to up to 20% by August next year, planning another 12% cut the year after next. BANKGESELLSCHAFT BERLIN: Will Be De-Listed From MDAX Next Month --------------------------------------------------------------- Germany's troubled Bankgesellschaft Berlin will be dropped from the mid-cap index MDAX on December 27, reports Reuters. According to Frankfurt stock exchange operator Deutsche Boerse AG, the bank would be excluded from the market segment because more than 80% of its shares are now held by the city-state of Berlin. Under the exchange's rules, at least 20% of the shares of index constituents must be held in freefloat. LTU GROUP: Rewe Favors Trust Fund for LTU ----------------------------------------- German retail group REWE Zentral AG & Co OHG, controlling 40% of troubled charter airline LTU Group Holding GmbH, has proposed to set up a trust fund through the public sector bank Westdeutsche Landesbank to avoid insolvency, reported Suddeutsche Zeitung/FT Information. REWE chairman Hans Reishcl emphasized LTU's urgent cash requirement. According to Reischl, the German bank sold its LTU stake in 1998 to the now insolvent Swissair AG when the Swiss carrier was showing signs of trouble. LTU GROUP: Still Seeking for Buyer ---------------------------------- The chance that troubled German charter airline LTU Group Holding will get a state guarantee from the North Rhine-Westphalia government is now slim, the Tuesday edition of Suddeutsche Zeitung & World Reporter said. "No investor has shown up to buy Swissair's stake in LTU," administrator Filipo Beck disclosed. Last week, the regional government announced that it would only consider a guarantee if it found an investor willing to acquire the 49.9% stake held by its insolvent parent, Swissair AG. Major shareholders of LTU, which entered financial trouble when Swissair was declared insolvent last month, have not yet expressed an interest in the stake. MET@BOX AG: Is Not Insolvent ---------------------------- The board of troubled German multimedia specialist Metabox AG has withdrawn its application for insolvency, Frankfurter Allgemeine Zeitung reported Wednesday. According to Metabox, it now has funds gained from financial markets and a sale of assets. Negotiations are also underway with previously interested parties and potential new investors. MET@BOX AG: Settles Long-term Financing With Telekom ---------------------------------------------------- Hildesheim-based Met@box AG and Deutsche Telekom AG have signed a deal Wednesday where an obligation on the development and delivery of a new generation of BOT-Inserters (Broadcast Online Television) has been changed into a long-term finance-agreement. According to the settlement, both parties have agreed that Met@box will pay its debt on a monthly installment term for a period of five years starting January next year. Dow Jones Newswires further reported that total project volume was agreed from 2.7 million Deutsch marks to 2.23 million Deutsch marks. Berlin-based Rohde und Schwarz has been entrusted with the production of the new line of BOT-Inserters. BOT inserters allow customers to transfer digital data with a standard television signal via cable or satellite. For further information, contact Melanie Hoffmann, Management Public & Investor Relations, at Daimlerring, 37 31135 Hildesheim, Germany, or through telephone +49 5121 7533-0, fax +49 5121 7533- 75, e-mail: hoffmann@metabox.de MET@BOX AG: State Promises Financial Aid ---------------------------------------- A regional German court announced Monday that the economics ministry of the German state of Lower Saxony had promised troubled German multimedia specialist Metabox AG a state guarantee and financial help, the recent edition from Die Welt & World Reporter said. Earlier, reports say that the company must secure an additional loan agreement with its creditors in order to avoid insolvency proceedings. The manufacturer of set-top boxes needs 17 million deutsche marks immediately. PRODACTA AG: Insolvency Proceedings Begins at Karlsruhe Court ------------------------------------------------------------- The Karlsruhe court began insolvency proceedings Tuesday against software developer Prodacta AG, a company listed on the German stock exchange, and against its subsidiary Prodacta Systemhaus GmbH. Martin Wiedemann was appointed as the German firm's insolvency trustee. The company, floated in March 1999, stopped operations the next year after generating losses of 27.6 million Deutsche marks on sales of 32.3 million Deutsche marks. ===================== N E T H E R L A N D S ===================== KPN NV: Seen to Write-Down Assets --------------------------------- Dutch telecoms company Royal KPN NV may be forced to write down the value of its wireless assets after Japanese partner NTT DoCoMo Inc. said that its investment in the KPN Mobile is now worth just 1.33 billion euros, Dow Jones Newswires reported Wednesday. A writedown to DoCoMo levels could mean an enormous paper loss for KPN as it could be enough to wipe out a substantial portion of the company's 13.7 billion euros in shareholder's equity. Simon Thorpe, London-based managing director of UBS Warburg's global telecoms research team, said the effect of a writedown announcement is to remind investors of the size of the fall in asset values, which can impact sentiment and therefore share prices. KPN is rated BBB- with a negative outlook by S&P, and Baa3 on review for possible downgrade by Moody's Investors Service. =========== N O R W A Y =========== KVAERNER ASA: B3 Rating Remains on Downgrade Review --------------------------------------------------- Moody's Investors Service will continue its review of the long- term debt ratings, the issuer and senior implied ratings for Kvaerner PLC, currently at B3, reports AFX News. The B3 rating was placed on review for potential downgrade on September 24. According to Moody's, it will seek to assess the implications for Kvaerner PLC bondholders of the conditional refinancing plan announced by Kvaerner ASA, Yukos Oil Company, and various financial investors. The proposal is related to the 9 billion Norwegian krone debt of Kvaerner ASA, Kvaerner PLC's parent company. STEPSTONE ASA: Investment Companies Mum on Rescue Plan ------------------------------------------------------ Investment company Orkla Enskilda Securities and ABG Sundal Collier told Internet recruitment company StepStone not to reveal that they have been commissioned to help carry out the share issue aimed at rescuing StepStone, the Dagens Naeringsliv/FT Information reported Wednesday. StepStone needs between 160 million and 280 million Norwegian krone of new equity capital in order to avoid insolvency and it has so far been kept a secret which companies have been commissioned to carry out the share issue. However, the Norwegian press has reported that Orkla Enskilda Securities and Sundal Collier have been commissioned to carry out the operation. Rumors say that two companies do not want its involvement announced in order to avoid criticism if the share issue fails. =========== P O L A N D =========== DAEWOO-FSO: Barely Avoids Bankruptcy ------------------------------------ Daewoo-FSO barely avoided bankruptcy as its creditor failed to prove that it has credit with the ailing automaker, according to a recent report from Asia Africa Intelligence Wire. Last month, the Polish plant agreed with six creditor banks to delay redemption of US$143 million in debt to maintain its operation. Daewoo-FSO, which suffered a net loss of 2.3 billion zloty last year, also borrowed massively from parent company Daewoo Motors, and Korea Exchange Bank. DAEWOO-FSO: Hyundai Denies Takeover Bid --------------------------------------- Korean automaker Hyundai Motor has strongly denied news reports about its possible takeover of the ailing Daewoo Motor's Daewoo- FSO plant in Poland, the Korea Herald reported yesterday. The statement followed reports from AFX News that Hyundai is being mentioned as the strongest candidate to take over the Polish plant. The Polish government has reportedly launched a desperate search for aspiring buyers for the Daewoo-FSO plant in Warsaw, with little success so far. NETIA HOLDINGS: Explores Options to Stave Off Collapse ------------------------------------------------------ Netia Holdings SA, Poland's largest independent fixed-line operator, is exploring "all possible options" to resolve its cash crunch while awaiting a decision by shareholders on whether it should continue operations, the company's chief financial officer told Dow Jones Newswires Wednesday. As part of the revised strategy, Netia plans to reduce planned capital expenditures next year to 188 million zlotys and reduce its workforce of 1,639 by 10%. Earlier, Netia posted for its nine-month results a huge net loss of 862.8 million zlotys, compared with a 415 million zlotys net loss for the same period of 2000. The company's net debt has spiraled to 2.78 billion zlotys, up from 1.79 billion zlotys a year ago. According to Netia CFO Avi Hochman, an estimated 643.8 million zlotys in cash equivalent on hand would not be enough to cover planned capital expenditures, license fee payments, and debt service until September 2002. Analysts said Netia's main chance to avoid bankruptcy is a bailout from Swedish shareholder Telia AB. ============= R O M A N I A ============= SIDEX SA: State Inks $500MM Deal With LNM ----------------------------------------- The Romanian government concluded late Tuesday the sale of a 90% stake in debt-ridden steel maker Sidex SA to U.K. steel group LNM Group for about $500 million, including future investments, reported Dow Jones Newswires. Under the deal, Sidex will pay no tax on profits for five years from January of next year. LNM, which includes Netherlands-based Ispat International N.V., Ispat Karmet JSC and P.T. Ispat Indo, will not only invest $351.1 million in Sidex in the first 10 years to upgrade the plant, but will also offer $100 million in working capital to ensure the steel maker functions normally. Small, private shareholders will own the remainder of the company. ========= S P A I N ========= TERRA LYCOS: Seen to Narrow Third-Quarter Loss ---------------------------------------------- Terra Lycos SA, one of Europe's biggest internet firms, is expected to narrow its third-quarter loss before interest, taxes, depreciation and amortization to 56.1 million euros from 65.5 million euros in the second quarter, reports Dow Jones Newswires. However, the weakness of the online advertising environment in the U.S. in the quarter ending September 30 will lead to a delay in its breakeven target for the second time in 2001. The numbers are expected to reflect weakness in media revenues because of the weak online advertising situation in the U.S, although access revenues should be a bit better, Banesto Bolsa's Sergio Gamez said. A number of upheavals at Terra Lycos have put the company under strain this year, including the resignation of three senior executives in April and a number of downgrades by investment houses. =========== S W E D E N =========== ADCORE AB: Slightly Improves Profit Level ----------------------------------------- Adcore, a Stockholm-based corporation focused on IT and management consulting services, said Wednesday that its profit before restructuring costs and goodwill amortization, as well as group-wide items, was -11.5 million Swedish krona. Including group-wide items, Adcore generated an operating loss of 91 million Swedish krona on sales of 516 million Swedish krona for the January to September period, and has improved slightly during the third quarter. In the third quarter, sales were 132 million Swedish krona; profit before restructuring costs and goodwill amortization was - 35.6 million Swedish krona, a quarter-on-quarter profit gain of 4.7 million Swedish krona. Adcore added in a statement that its cash flow from operations was -228 million Swedish krona from January to September. The third-quarter operating cash flow was -44.7 million Swedish krona, up 78.5 million Swedish krona quarter on quarter. For more information, contact Ole Oftedal, CEO, by Phone: +46 (0) 705 92 75 99 by E-mail: ole.oftedal@adcore.com or Frans Benson, Investor Relations, by Phone: +46 (0) 8 635 80 54 or by E-mail: frans.benson@adcore.com ===================== S W I T Z E R L A N D ===================== SWISSAIR GROUP: Crossair Appoints New Chairman ---------------------------------------------- Crossair, Switzerland's new intercontinental airline that is being formed from the remnants of the failed Swissair, has appointed Pieter Bouw as its new chairman. Bouw, a former chief executive of Dutch national airline KLM, is one of six new directors who have been found by Swiss banker Rainer Gut to oversee the formation of the new airline. The new directors, whose appointments have to be approved by the Crossair shareholders, include Swiss Re chief executive Jacques Aigrin, Kudelski chairman Andre Kudelski, and Swiss finance ministry officer Peter Siegenthaler. With the new job, Bouw has to justify the new business plan that involves the operation of 26 long-haul jets and 26 short-haul jets of the existing Swissair fleet. SWISSAIR GROUP: Swiss Financier May Rescue Airline -------------------------------------------------- Swiss financier Pascal Najadi could save the collapsed Swiss flag carrier Swissair if the Swiss government would let him, Reuters reported Wednesday. According to Najadi, who has worked with Kleinwort Benson, Merrill Lynch and UBS, he has been lobbying for the past few weeks for his plan but has so far been spurned by the Swiss government. The plan is based on a Swissair of 26 long-haul and 26 short- and medium-distance planes, matching the government-sponsored plan to transfer 52 jets to Swissair's former regional subsidiary Crossair. Najadi has now teamed up with an association of Swissair shareholders to try to convince politicians and the government to support his plans before it is really too late, Reuters added. Swissair Group and five of its subsidiaries won a provisional debt moratorium last month. A court-appointed administrator has until the end of the month to advise the bankruptcy court whether the companies can be restructured or should be declared bankrupt. =========================== U N I T E D K I N G D O M =========================== ATLANTIC TELECOM: May Be Seized ------------------------------- Atlantic Telecom, a provider of broadband services in the U.K., Germany and the Netherlands, is awaiting results on negotiations for the purchase of the company's entire business, reports the Aberdeen Press & Journal. Administrator Iain Bennet of PriceWaterhouseCoopers disclosed that he was in talks with interested purchasers. He added some of the buyers are only interested in elements of the Aberdeen-based telecommunications business. Bennet declined to say how many parties were interested in the whole operation. Atlantic went into administration last month after it failed to find a buyer or re-negotiate a financial deal with some bond owners. Its Aberdeen cable television company has already been liquidated. DANKA BUSINESS: Posts $4.2MM Earnings for Second Quarter -------------------------------------------------------- Danka Business Systems PLC reported Wednesday operating earnings from continuing operations before extraordinary items and discontinued operations of $4.2 million for the three months ending September 30, compared to an operating loss of $62.8 million in the same period last year. The prior year second quarter included non-cash charges of $22.4 million for the write-down of analog inventory, $10.5 million for the write-down of rental equipment and $18.8 million for the write-off of goodwill associated with the company's Australian subsidiary. Excluding these items, the operating loss from continuing operations before extraordinary items would have been $11.1 million in the prior year second quarter. See http://www.bankrupt.com/misc/danka.pdffor the company's second quarter report. Danka Business Systems has headquarters in London, England, and St. Petersburg, Florida. It is one of the world's largest independent suppliers of office imaging equipment and related services, parts and supplies. The company entered into Purchase and Sale Agreements to sell its real estate properties in New York and Las Vegas to reduce debt obligations to its lenders on the properties. RAILTRACK GROUP: Byers Threatens to Cut Off Funding --------------------------------------------------- Transport Secretary Stephen Byers threatened to cut off funding for Railtrack PLC with his plan to introduce emergency legislation. Based on Dow Jones Newswires' Wednesday report, rail regulator Tom Winsor revealed that Byers said the government would introduce emergency legislation to overrule the regulator's independence if Railtrack applied for an independent review of its funding situation. The transport secretary denied such threats. Meanwhile, Railtrack chairman John Robinson called for an independent inquiry into the events leading up to the company's administration last month. *********** 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 * * *