/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/011113.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 13, 2001, Vol. 2, No. 222 Headlines * B E L G I U M * LERNOUT & HAUSPIE: SLT Auction Set for Nov. 26 SABENA SA: DAT Funding Gets EU Approval SABENA SA: DAT Starts Own Operations XEIKON NV: Requests for Creditor Protection * F I N L A N D * SONERA CORP.: Shareholders Okay $893.6MM Rights Issue * F R A N C E * MOULINEX SA: Arcelik to Bid for Brandt * G E R M A N Y * CALLASONG.DE AG: Music Portal Files for Insolvency DAIMLERCHRYSLER: Reduces Stake in Indian Truck Maker DAIMLERCHRYSLER: Sets Up Long-Term Working Time LTU GROUP: Lufthansa Opposes Rescue Package LTU GROUP: Pilots Accept Wage Cuts MAN AG: Staff Members Face Redundancy Threats * H U N G A R Y * MOL RT: Appoints Unipetrol Advisors * N E T H E R L A N D S * KPN NV: Chief Warns of Lowered Revenue Targets * N O R W A Y * KVAERNER ASA: Secures Shell UK Contracts * P O L A N D * ELEKTRIM SA: Vivendi Seeks for Stake Buyer * S W I T Z E R L A N D * SULZER MEDICA: Threatens to File Chapter 11 in the U.S. SWISSAIR GROUP: Crossair Posts $2.7MM Profit in September SWISSAIR GROUP: In "Constructive Talks" With Flightlease * U N I T E D K I N G D O M * BRITISH NUCLEAR: Faces Lawsuit From Irish Government BRITISH TELECOM: Appoints Three Execs to BT Group Board BRITISH TELECOM: MM02 Valued at More Than 6BB Pounds BRITISH TELECOM: Posts 1.3BB-Pound Second-Quarter Loss CENES PHARMACEUTICALS: Closes U.S. Facility CENES PHARMACEUTICALS: Receives Cash Credit KATHERINE HAMNETT: Goes Into Liquidation RAILTRACK GROUP: Byers Wants Giordano as New Chief ============= B E L G I U M ============= LERNOUT & HAUSPIE: SLT Auction Set for Nov. 26 ---------------------------------------------- A U.S. court has set the auction of Lernout & Hauspie Speech Products NV's bankrupt speech and language technology (SLT) division on November 26, last week's edition of L'Echo/FT Information said. The petition for temporary protection from creditors that Lernout & Hauspie filed last month revealed that Critical Path has made a non-binding $25 million offer for the SLT unit. A similar offer from Mastervoice Technologies was allegedly "binding and subject to certain conditions." Candidates have until November 19 to make themselves known. SABENA SA: DAT Funding Gets EU Approval --------------------------------------- The EU Commission has approved the transfer of a 125-million-euro bridging loan to Delta Air Transport, successor of Belgian airline Sabena's DAT unit, Dow Jones Newswires reported Friday. The Commission originally authorized the Sabena aid in October, but the decision to allow continued use of that bridging loan was made Friday morning after being submitted for approval Thursday. Under rules governing the loan's disbursement, which runs to a maximum 125 million euros over three months, money must be paid back on a monthly basis, with the final repayment due in February 2002. The Commission noted that the bridging loan would allow the distressed company to survive for an additional few months, allowing it to pay current expenditures. SABENA SA: DAT Starts Own Operations ------------------------------------ Sabena airlines said that its subsidiary Delta Air Transport SA/NV launched independent operations Saturday as a new regional airline. More than 1,000 DAT pilots, cabin-crew members, technicians and other members of the personnel have launched their airline with the objective to serve 35 European destinations from Brussels International Airport (BIAC). Sabena also said in a statement that passengers with non-used Sabena tickets on a destination now served by DAT could use their tickets for the respective destination. Tickets for DAT flights can be bought on telephone +32 2 723 23 23. Last week's bankruptcy ruling in Sabena means that the Belgian airline 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. XEIKON NV: Requests for Creditor Protection ------------------------------------------- Digital color printer manufacturer Xeikon N.V. announced Friday that it has filed a request for creditor protection under applicable Belgian legislation. The company's subsidiary in France, Xeikon France S.A., entered into receivership in accord with applicable French legislation. The company has been working towards a private placement transaction, as announced in June. However, discussions with interested parties have not progressed sufficiently to allow near term closing. When approved by the courts, the requests would enable the company to prepare a restructuring plan for its business whilst temporarily being relieved from its obligation to service existing debts. ============= F I N L A N D ============= SONERA CORP.: Shareholders Okay $893.6MM Rights Issue ----------------------------------------------------- Shareholders of troubled telecom operator Sonera approved on Friday the firm's one-billion-euro ($893.6 million) rights issue to raise funds and to cut its debts, Reuters & Telecom Paper reported. Finland's parliament recently approved its participation in the rights issue. The government has a 53% stake in Sonera. =========== F R A N C E =========== MOULINEX SA: Arcelik to Bid for Brandt -------------------------------------- Turkish electrical appliance manufacturer Arcelik-Beko announced publicly that it would submit a takeover offer for Brandt, a subsidiary of bankrupt French home appliance manufacturer Moulinex, Le Monde/FT Information reported Saturday. According to administrator Francisque Gay, other potential buyers include U.S. group Whirlpool and Sweden's Electrolux. Italian groups Candy and Merloni have announced that they looked into a possible acquisition of Brandt. German group Bosch Siemens is also a likely candidate. ============= G E R M A N Y ============= CALLASONG.DE AG: Music Portal Files for Insolvency -------------------------------------------------- Callasong.de AG, according to a report from Die Welt & World Reporter, has filed for insolvency. The German music portal is currently negotiating with two potential investors to secure financing for its business activities in 2002. An unnamed music business, as well as an international telecom company, have agreed to cooperate if financing is provided. DAIMLERCHRYSLER: Reduces Stake in Indian Truck Maker ---------------------------------------------------- U.S.-German car manufacturer DaimlerChrysler AG will not participate in the capital increase of India's utility vehicles manufacturer Tata Engineering and Locomotive Co Ltd, Boersen- Zeitung's weekend edition reported. The move means that DaimlerChrysler will reduce its stake from 10% to 7%. DAIMLERCHRYSLER: Sets Up Long-Term Working Time ----------------------------------------------- DaimlerChrysler announced last week that it would establish long- term working-time accounts for its 150,000 automotive employees in Germany, beginning January 2002. The decision by company management and the General Works Council will create another attractive tool for adapting working times to individual needs. "By setting up the long-term working-time accounts, we are fulfilling a long-standing wish of our employees to have more opportunities to arrange their working times as needed, especially over a period of several years," said Gunther Fleig, a member of the Board of Management for Human Resources. General Works Council Chairman, Erich Klemm, added that the new system promotes dialog between employees and management when dealing with future tasks and the amount of time needed to accomplish them. "The working hours saved up in this manner can later be spent in various ways - for training, continuing education, leisure time, part-time work, or making a smooth transition to retirement, for example," he said. The new system can also be applied to a reduction in the number of working years needed until retirement. LTU GROUP: Lufthansa Opposes Rescue Package ------------------------------------------- German national carrier Deutsche Lufthansa AG intends to appeal in Brussels against plans to rescue ailing German charter airline LTU, reports Handelsblatt. People close to Lufthansa said the airline would not tolerate plans to provide a state guarantee for a million deutsche marks to save the charter airline from insolvency. The preliminary rescue package for LTU was agreed to at a meeting led by North Rhine-Westphalia's state premier, Wolfgang Clement, over the weekend. LTU shareholder Rewe will provide fresh capital of up to 100 million deutsche marks, while a third party will provide a loan of 240 million deutsche marks. LTU found itself in difficulties following the collapse of its major shareholder, Swissair. LTU GROUP: Pilots Accept Wage Cuts ---------------------------------- Pilots at the loss-making German tour operator and charter airline LTU have accepted a 10% wage cut in order to prevent the company from collapsing, reported the Agence France-Presse. According to pilots' union Cockpit spokesman Georg Fongern, LTU's 360 pilots have agreed to accept the wage cut with immediate effect. The pilots have also agreed to forego half of their Christmas bonus, which amounts to a month's salary in 2001, 2002 and 2003. LTU plunged deeper into financial difficulty when its main shareholder, the Swissair group, went bankrupt earlier this month. MAN AG: Staff Members Face Redundancy Threats --------------------------------------------- Works council head Hans Meister said that MAN AG is threatening to job more cuts than the 4,000 planned, Die Welt/FT Information reported Friday. Last month, the troubled German truck maker announced that it would speed up its planned job cuts, noting that orders for new trucks in the first nine months of this year dipped 16%. With the unexpected dip in new orders, analysts now doubt whether the company can still meet said targets. MAN AG has already issued four profit warnings during the year. ============= H U N G A R Y ============= MOL RT: Appoints Unipetrol Advisors ----------------------------------- Hungary's debt-laden oil and gas company MOL Magyar Olaj-es Gazipari Rt. said Friday that it has appointed Czech investment house Patria Finance and J.P. Morgan Chase & Co. as financial advisors in its bid for Czech Unipetrol AS. MOL, according to a Dow Jones Newswires report, is one of the four groups standing in line for a state-held 63% stake in Unipetrol. >From the Unipetrol sale, the Czech government expects to raise 16 billion Czech koruna ($428.9 million). MOL's communications director George Felkai said the company is interested on Unipetrol's refining capacities, petrochemical operations and its Benzina chain of retail gas stations, which is reported to be the Czech Republic's largest. MOL has reported a net loss of 78.4 billion forints in the first six months of the year. It sold its telecommunications arm, MolTelecom Rt., to Hungarian telecom company PanTel Rt. early in September. ===================== N E T H E R L A N D S ===================== KPN NV: Chief Warns of Lowered Revenue Targets ---------------------------------------------- Chief executive Ad Scheepbouwer of Dutch telecommunications operator KPN warned that the company would possibly lower its sales growth targets from 15% to 10% in the coming years, because of the downturn in the world economy. The news of lowered sales targets comes as KPN struggles to reduce its 22-billion-euro debt burden through a number of measures that includes 4,800 job cuts and the sale of non-core assets. The asset sales may, on their own, lower KPN's revenues. A report from the Financial Times said that KPN shares fell about 8% at E5.27 in early trade on Friday after the warning. =========== N O R W A Y =========== KVAERNER ASA: Secures Shell UK Contracts ------------------------------------------ Troubled Anglo-Norwegian engineering and construction group Kvaerner said Friday that it has been awarded a Frame Agreement from Shell UK Exploration and Production, for the supply of subsea umbilicals. The Frame Agreement, awarded to Kvaerner Oilfield Products, has an estimated value of approximately 400 million Norwegian krone over the next three years. The first call-off is expected in December 2001/January 2002. Additionally, Shell UK Exploration and Production has also awarded Kvaerner a contract for the supply of umbilicals for the Penguins Development. This contract is valued at 186 million Norwegian krone. The scope of work includes project management, engineering and the manufacture of steel tube umbilicals. The umbilicals will be manufactured at Kvaerner Oilfield Products' purpose-built manufacturing facility in Moss, Norway. Earlier, Kvaerner was awarded two contracts in Canada and Venezuela worth more than US$36.5 million. For further information Raymond Carlsen, President, Kvaerner Oilfield Products, +47 67 62 82 00 =========== P O L A N D =========== ELEKTRIM SA: Vivendi Seeks for Stake Buyer ------------------------------------------ French conglomerate Vivendi plans to sell its 10% stake in Elektrim within the next few months. According to a Friday report from the Warsaw Business Journal, potential investors are expected to be foreign investment funds with interests in the energy sector. Elektrim, which is said to be seeking support from the banks to survive, may soon face a liquidity crisis. In mid-December, holders of its convertible bonds worth 1.6 billion zlotys may demand early repurchase. With the company's current low share price, most investors are likely to decide to take cash rather than company stock. ===================== S W I T Z E R L A N D ===================== SULZER MEDICA: Threatens to File Chapter 11 in the U.S. ------------------------------------------------------- Sulzer Medica, Europe's leading manufacturer of artificial hips, has threatened to file for Chapter 11 for its troubled U.S. subsidiary, Sulzer Orthopaedics, the Financial Times reported Friday. The company warned that if its $780 million offer to settle more than 1,800 U.S. law suits related to patients fitted with its faulty hips is not accepted, then it would have no hesitation in filing for Chapter 11 protection. However, Sulzer remained optimistic that it could settle 300 cases from patients fitted with its faulty hips in US Federal courts and the 1,500 cases in state courts. Sulzer Medica chief executive Stephan Rietiker said he would have no hesitation putting the company's US subsidiary into Chapter 11 if it meant saving the rest of the group. SWISSAIR GROUP: Crossair Posts $2.7MM Profit in September --------------------------------------------------------- Crossair Ltd., which will take over two thirds of Swissair Group AG's flight business, reached a net profit of 4.4 million Swiss francs in September, Dow Jones Newswires reported Friday. Despite the slump in air traffic after the September 11 attacks on the U.S., Crossair's income rose by 9% to 130 million Swiss francs. The group cited the weak dollar, as well as lower costs for fuel, as factors which helped lead to the positive result. SWISSAIR GROUP: In "Constructive Talks" With Flightlease -------------------------------------------------------- The state administrator of Swissair Group AG is in "constructive" talks with Swissair's aircraft leasing company Flightlease and the airline's creditors about the airline's leasing obligations, Dow Jones Newswires reported Friday. The state administrator is overseeing Swissair's financial activities after the group filed for bankruptcy protection last month. Flightlease has outstanding debts of 9 billion Swiss francs. It has to make further leasing payments for the remaining aircraft under contract by Swissair. The new Swiss airline, to be built out of Crossair Ltd. and two- thirds of Swissair's flight business, expect to see some of its aircraft being grounded and retained as guarantees if U.S. creditors want to get payment for debts incurred by the Swiss aviation group. =========================== U N I T E D K I N G D O M =========================== BRITISH NUCLEAR: Faces Lawsuit From Irish Government ---------------------------------------------------- The Irish government on Friday filed its first case against the atomic fuel recycling plant owned by state-owned atomic energy group British Nuclear Fuels, the Financial Times reported. The case signals the start of legal attempts by Greenpeace and Friends of the Earth, the environmental campaign groups, to prevent the plant from opening. Dublin claims the atomic fuel recycling will pollute the seas around Ireland and will provide a target for terrorists trying to procure plutonium for nuclear weapons. Environmentalists further believe the UK government broke European law requiring economic justification for the fuel recycling project. 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. BRITISH TELECOM: Appoints Three Execs to BT Group Board ------------------------------------------------------- British Telecom announced Thursday the appointment to the BT Group plc Board on November 19 of Pierre Danon, chief executive of BT Retail, Paul Reynolds, chief executive of BT Wholesale and Andy Green, chief executive of BT Ignite. The leadership of the three executives, who have extensive and valuable experience of the communications industry in the UK and Europe, will be critical to the future success of BT Group and will strengthen the Board for the future. BRITISH TELECOM: MM02 Valued at More Than 6BB Pounds ---------------------------------------------------- MMO2, the mobile phone operations being spun off from British Telecommunications, is valued at more than 6 billion pounds ($9 billion) after shares enjoyed strong demand on Friday, the Financial Times reported. Shares were around the 73-1/2p mark in afternoon trade, above the previous day's grey market closing price of 63p. Analysts have expected the spun-off company to be worth as much as 15 billion pounds when BT announced the demerger of MMO2 earlier this year. Chairman David Varney said it was yet too early to say whether the market has correctly judged the company's value. Varney plans to wait until the demerger is completed on November 19, when BT shareholders will own one new BT share and one new mmO2 share for each BT one they now hold. BRITISH TELECOM: Posts 1.3BB-Pound Second-Quarter Loss ------------------------------------------------------ British Telecom posted Thursday a loss before taxation of 1.3 billion pounds in the second quarter ended September 30, or a loss per share of 17.3p, on turnover of 5.3 billion pounds. Cash inflow from operating activities amounted to 1.4 billion pounds in the quarter, bringing the total for the half year to 2.6 billion pounds. As of September, BT's net debt was 16.5 billion pounds, compared with 17.5 billion pounds in June and 27.9 billion pounds in March. The reduction in net debt in the second quarter was a further 952 million pounds after the 10.4 billion pound reduction in the first quarter that was realized through the rights issue and the sale of Japanese investments and directories business, Yell. The second quarter reduction was achieved through the sale of interest in Rogers Wireless and receipt of the final installment from the sale of the Japanese investments. Following the completion of the proposed demerger from BT, mmO2 a leading provider of mobile communications services in Europe, will have wholly owned operations serving the UK (BT Cellnet), Germany (Viag Interkom), Ireland (Digifone), The Netherlands (Telfort Mobiel) and the Isle of Man (Manx Telecom). CENES PHARMACEUTICALS: Closes U.S. Facility ------------------------------------------- CeNeS Pharmaceuticals plc, a biopharmaceutical company specializing in the development and commercialization of drugs for CNS disorders and pain control, said yesterday it has closed its US research facility based in Boston, Massachusetts with the loss of 17 jobs as part of the ongoing restructuring. The responsibility for the U.S.-based research and development assets has been transferred to CeNeS' main facilities in Cambridge, UK. CeNeS has also reduced its research and administration staff numbers at its Cambridge, UK head office with the loss of 17 jobs. As a result, CeNeS is looking to relocate to smaller premises and is in late stage talks to secure the assignment of its head office lease. "Since announcing the restructuring in October, we have focused on our core business and have streamlined operations. We have taken a number of difficult decisions to ensure that CeNeS is best placed to generate shareholder value going forward," CeNeS Chairman Alan Goodman said. Meanwhile, a number of options are being considered with regards to CeNeS Drug Delivery in Scotland. Discussions are ongoing with prospective buyers regarding a potential sale. CENES PHARMACEUTICALS: Receives Cash Credit ------------------------------------------- CeNeS Pharmaceuticals said yesterday that it has received a 700,000 pound research and development tax credit. The tax credit means that the pharmaceutical firm has made significant progress in reducing its cash burn and becoming self- funding into 2003. For more information, please contact Alan Goodman or Neil Clark at telephone +44 (0)1223 266466 or fax +44 (0)1223 266467 KATHERINE HAMNETT: Goes Into Liquidation ---------------------------------------- Fashion empire Katherine Hamnett Ltd went into liquidation last Wednesday after it suffered substantial losses from a licensing deal in Europe, the Independent Newspapers reported. Its sister company Katherine Hamnett Designs Ltd also suffered the same fate. Katherine Hamnett, the fashion designer famed for mixing haute couture with political sloganeering, was saddened by the situation and is slimming down her business to Katherine Hamnett Consultancies, Katherine Hamnett Online, Katherine Hamnett Home, and Katherine Hamnett London, a company spokeswoman said. Two years ago, the operations ran up a pre-tax deficit of nearly 1 million pounds, and shareholders were forced to cease trading. Industry experts pointed the fall as a result of a dwindling influence in the fashion world, with higher demand for Hamnett spin-offs such as sunglasses and jeans rather than her main collections. Katherine Hamnett Ltd was launched in 1979. It pioneered the Eighties with favorites such as distressed denim, condom pockets on boxer shorts and frock-coats for men. Other achievements included the use of parachute silk, tailored cotton, and campaigning for environmentally- friendly cotton production. RAILTRACK GROUP: Byers Wants Giordano as New Chief -------------------------------------------------- Transport secretary Stephen Byers is lining up BG Group chairman Dick Giordano to run Railtrack, which is currently in administration. According to a report from the Sunday Times, Byers has told advisers that he hopes to persuade Giordano to take on the part- time job. Byers further offered a number of other business people non- executive positions. ************ 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 * * *