/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/011114.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 Wednesday, November 14, 2001, Vol. 2, No. 223 Headlines * A U S T R I A * LIBRO AG: Creditors Receive First Payment RIEGERBANK: State Faces Complaint From Bank Customers * B E L G I U M * SABENA SA: Virgin Eyes Sabena Unit * C Z E C H R E P U B L I C * TEXTILANA: Administrator Seeks to Preserve Production * F I N L A N D * SONERA CORP.: Shares Dive 18% Before Rights Issue * F R A N C E * LVMH: Sales Slide 5% MOULINEX SA: Workers Set Fire to Normandy Factory * G E R M A N Y * BANKGESELLSCHAFT BERLIN: Withdraws Universal 1 BROKAT AG: Maintains CC Rating BROKAT AG: Net Loss Widens to 71MM Euro COMDIRECT BANK: Board Rules Out Merger With Consors * H U N G A R Y * MOL RT: Sells Stake in Storage Company SYNERGON INFORMATION: Narrows Third-Quarter Loss * N O R W A Y * BALTIC FOOD: Shuts Down 60 Branches * P O L A N D * ELEKTRIM SA: BRE Bank Buys Bonds ELEKTRIM SA: S&P Places BB- Rating on Watch Negative * S W E D E N * ABNW: May Face De-Listing * S W I T Z E R L A N D * GRETAG IMAGING: Rescue Plan Leads to Subsidiary Sell-off SWISSAIR GROUP: Cancels New York Flight SWISSAIR GROUP: EFD to Discuss Globus Project With Merrill Lynch * U N I T E D K I N G D O M * BRITISH TELECOM: May Buy Blu Stake CENES PHARMACEUTICALS: Company Profile COLT TELECOM: Faces Shareholders Dispute Over Share Issue CORUS GROUP: Faces Fine Over Explosion INVENSYS PLC: Shares Drop Before Results MARCONI PLC: Inks Deals in Brazil and Mexico RAILTRACK GROUP: Lists Bonds Under Default RAILTRACK GROUP: To Sue Government ============= A U S T R I A ============= LIBRO AG: Creditors Receive First Payment ----------------------------------------- More than 1,000 creditors of the insolvent Austrian retail group Libro AG will shortly receive 70 million schillings in an initial payment of 4% of the sum to be paid, reports Wirtschaftsblatt/FT Information. A further 3.5% payment will be paid out before the end of this year, and again in 2002 and 2003. Demands have been made for 4.6 billion schillings, but 3.4 billion schillings are being challenged. Libro has debts of 4 billion schillings. RIEGERBANK: State Faces Complaint From Bank Customers ----------------------------------------------------- Three years after Austrian bank Riegerbank became insolvent, a lawyer representing 70 of the bank's former customers filed a 205-million-schilling complaint against the Austrian state for failing in its supervisory duties. According to a report from the Die Presse/FT Information, former customers are reported to have not received repayment of their savings. Lawyer Harald Christandl, representing the plaintiffs, believes that if action had been taken some years ago, insolvency might have been avoided. ============= B E L G I U M ============= SABENA SA: Virgin Eyes Sabena Unit ---------------------------------- Virgin Express is negotating with Belgian investors in their bid to create a new airline out of the country's defunct Sabena. According to the Daily Telegraph Monday, Virgin Express wants to reach a code-sharing agreement with the new business before any merger. The group of investors is headed by Maurice Lippens and Etienne Davignon. Their plans are thought to encompass an airline flying to 47 destinations in 31 countries, with an eye to becoming profitable in late 2004. A Belgian judge declared Sabena bankrupt earlier this year when the company amassed debts of 1.5 billion pounds. Around 5,000 Sabena staff lost their jobs following the bankruptcy. =========================== C Z E C H R E P U B L I C =========================== TEXTILANA: Administrator Seeks to Preserve Production ----------------------------------------------------- Bankruptcy administrator Koppa is seeking to maintain production in Textilana for it to find a strategic partner for the textile company, reports Czech News Agency. According to the plan, production will be concentrated in Nove Mesto pod Smrkem, North Bohemia, with a turn out of 2.5 million meters of textiles a year and 700 employees. Textilana is one of the five largest Czech producers of woolen fabrics. It was declared bankrupt by the Regional Court in Usti nad Labem on November 5 after the firm's management filed for bankruptcy in late October due to an inability to meet obligations to creditors. Textilana got into trouble after it failed to complete its restructuring and as a result of a recession in the woolen fabric sector. The company's principal shareholder is PYRR, with a 49.91% stake, while the Prague-based firm Eggenberg is a minority owner, holding 33.39%. Textilana sustained a 156.3-million-Czech koruna loss last year. ============= F I N L A N D ============= SONERA CORP.: Shares Dive 18% Before Rights Issue ------------------------------------------------- Shares in troubled telecommunications operator Sonera were down 17.5% at 5.11 euros on Monday trading in Helsinki, over concerns of the company's rights issue, the Financial Times reported. Over the weekend, shareholders of Sonera approved the firm's one- billion-euro ($893.6 million) rights issue to raise funds and reduce its net debt to 2.5 billion euros by the end of the year. The company set a price of 2.70 euros for the issue, a 56% discount on the closing price of 6.20 euros on Friday. Goldman Sachs and Deutsche Bank are leading the issue at a global level, while Nordea Securities and Mandatum Bank are running the Nordic offering. =========== F R A N C E =========== LVMH: Sales Slide 5% -------------------- LVMH Moet Hennessy Louis Vuitton, the world's leading luxury goods group, announced Monday that its October sales dropped 5% to 1.113 billion euros, as the September 11 World Trade Center attacks in the U.S. continue to have a serious impact on the global luxury goods market. Consequently, the group will focus its efforts on strengthening its prestigious brands and accelerating initiatives, in an effort to reduce structural costs and improve profitability. LVMH lowered its profit projections for the third time this year in October, after last month's attacks on the U.S. pushed third- quarter sales below market forecasts, BBC News reported Tuesday. Shares of LVMH, which issued its third profit warning in October, fell 2.64 euro or 6.3% to 39.45 in response to the announcement. LVMH's 50 brands include Louis Vuitton leather goods, Dior perfumes and the Givenchy couture label. MOULINEX SA: Workers Set Fire to Normandy Factory ------------------------------------------------- Disgruntled employees of the bankrupt kitchen appliance-maker Moulinex SA have set fire to a microwave factory in northwestern France in a protest seeking financial compensation, the Monday edition of AFX News said. The company's Cormelles-le-Royal factory in Normandy is one of several plants due to be closed as part of a takeover plan by Moulinex's rival, Seb. Among the divisions to be liquidated are those that make microwave ovens, deep-fat fryers and vacuum cleaners. ============= G E R M A N Y ============= BANKGESELLSCHAFT BERLIN: Withdraws Universal 1 ---------------------------------------------- Bankgesellscahft Berlin AG is withdrawing the property fund Universal 1, offered by its subsidiary IBV, from the market, the Suddeutsche Zeitung/FT Information reported Monday. The struggling German bank has assured investors that they will be repaid. According to a press source, the original aim was for Universal 1 to reach a volume of 796 million euros. However, it appears that the fund did not attract a sufficient level of investment. BROKAT AG: Maintains CC Rating ------------------------------ Standard & Poor's is maintaining its double-'C' long-term corporate credit and senior unsecured debt ratings of German software producer Brokat AG on CreditWatch, with negative implications. The rating follows Brokat's publication of its third-quarter financial results. The ratings were kept on CreditWatch following the downgrade in July, reflecting the announcement by Brokat that it was seeking to restructure its 125 million euro 11.5% senior unsecured notes. Standard & Poor's will continue to monitor and examine Brokat's progress toward its debt restructuring. Brokat has been severely hit by the sharp downturn in the IT market, primarily due to significant delays in corporate IT spending. BROKAT AG: Net Loss Widens to 71MM Euro --------------------------------------- Troubled software firm Brokat Technologies AG reported Monday a net loss of 71 million euro for the third quarter of 2001, compared with a 28.9-million-euro loss in the previous year. Revenues also fell to 5.7 million euro, a sharp decline from the 23 million euro the company posted a year ago. The figures indicate that customers should currently postpone investments in Brokat software and await the completion of the company's restructuring activities. The generally weak economic environment also influenced the decline in revenues. The operating result of -39.9 million euro, compared with -18.3 million euro in the same quarter last year, reflects the considerable restructuring efforts of the company. Brokat recognized that it does not have sufficient funds to pay down its debt. As of September 30, it had available cash of 25.3 million euro. Brokat also indicated that it is still negotiating with its bondholders to restructure its debt. COMDIRECT BANK: Board Rules Out Merger With Consors --------------------------------------------------- The supervisory board of Comdirect Bank AG, Europe's largest online broker, has ruled out a merger with rival Consors Discount Brokerage AG. According to news obtained from Dow Jones Newswire, the decision concerned the future of Comdirect's non-German European units. Since July 2000 when it launched operations, Comdirect's European units has gained only 20,000 customer accounts in the first half of the year and posted a net loss of 32 million euro ($28.6 million) for its European activities. Comdirect's Italian unit, which started operations in May 2001, had 200 customer accounts for the first half of the year. Similarly, the brokerage firm's French unit, which started operations in July 2000, saw customer accounts grow from just 1,000 to 15,000 by the end of the second quarter. Analysts expect that Comdirect plans may now involve the closure of its Italian and French units, where business yielded slow net customer account growth turnover and high losses. Comdirect will publish its third-quarter results on November 16. ============= H U N G A R Y ============= MOL RT: Sells Stake in Storage Company -------------------------------------- Hungarian oil and gas company MOL Rt sold its 51% stake in crude oil storage firm Koolajtarolo Rt to the Crude Oil and Crude Oil Product Stockpiling Association (KKKSz) as part of a three-year divestment program begun in 1999, the Budapest Business Journal reported Monday. According to a report by OTP Securities Rt, the 6-billion-forints ($21.2 million) price tag is some 5.49 billion forints over the storage firm's book value. MOL CFO Michel-Marc Delcommune said that profit from the sale is not enough to compensate for the company's loss-making gas division and put the company in the black this year, but the sale will help put MOL's gearing ratio back on target. Around 70 more MOL companies remain to be sold. SYNERGON INFORMATION: Narrows Third-Quarter Loss ------------------------------------------------ Computer services company Synergon Information Technology Rt narrowed its third-quarter loss to 223.3 million forints ($790,000), compared with 334.7 million forints a year earlier, after it eliminated 17% of its staff members this year and reduced bonuses. According to a report from the Budapest Business Journal, the company has also stepped up collection of unpaid bills from customers and cut the number of company cars. Synergon Information was first shaken by tax fraud charges against former deputy CEO Zsolt Szaloczy. He was charged with accepting fictitious invoices of about 825 million forints. After posting its third-quarter results, Synergon shares closed at 568 forints last Thursday, up 2.3% from the previous closing price, valuing the company at 5.4 billion forints. =========== N O R W A Y =========== BALTIC FOOD: Shuts Down 60 Branches ----------------------------------- Supermarket group Baltic Food Holding will close down more than 60 Spar supermarkets in Lithuania, Estonia and Latvia as debt reaches to about 230 million Norwegian krone, the Dagens Naeringsliv/FT Information reported Monday. Investment company Selvaag Invest, which injected 14 million Norwegian krone in the company, lost 30 million Norwegian krone. It owns 25% of the Baltic food venture. Before this, Baltic Food's main shareholder was Axfood AB of Sweden. =========== P O L A N D =========== ELEKTRIM SA: BRE Bank Buys Bonds -------------------------------- BRE Bank bought 220.5 million zloty worth of bonds issued by Elektrim from insurer PZU Zycie, helping the power and telecoms conglomerate avoid a lengthy legal battle and possible bankruptcy, the Warsaw Business Journal reported Monday. In October, PZU Zycie demanded an immediate buy-back of the bonds after Elektrim signed a strategic agreement with Vivendi of France. The demand was a threat for the cash-strapped Elektrim at the time. Now, the group has some breathing space with the BRE Bank bond purchase. ELEKTRIM SA: S&P Places BB- Rating on Watch Negative ---------------------------------------------------- Standard & Poor's placed the double-'B'-minus long-term corporate credit ratings of telecommunications firm Elektrim on CreditWatch with negative implications. At the same time, the single-'B' senior unsecured debt rating on guaranteed related entity Elektrim B.V. was also placed on CreditWatch with negative implications. The CreditWatch placement reflects concern over possible short- term refinancing risk. Elektrim is currently negotiating a 330 million euro bank facility that would enable it to restructure its debt successfully and fully cover the potential liability of the put option. If the facility were not available, the company might not be in a position to fully redeem the bonds and pay the redemption premium based on its current liquidity position and limited financial flexibility. =========== S W E D E N =========== ABNW: May Face De-Listing ------------------------- IT company A Brand New World (ABNW) could be de-listed from the stock market if it is acquired by its subsidiary Wireless House, the Dagens Industri/FT Information reported Monday. ABNW managing director Pal Kruger admitted that continued financing for the company could be problematic owing to its financial situation, with outstanding convertible debenture loans of 80 million Swedish krona. Kruger added that ABNW's two options were either to enter liquidation or undergo a restructuring program. In the first nine months of 2001, ABNW recorded net losses of 122 million Swedish krona, compared with losses of 164 million Swedish krona in the same period last year. Net turnover rose from 26 million Swedish krona to 83 million Swedish krona. ===================== S W I T Z E R L A N D ===================== GRETAG IMAGING: Rescue Plan Leads to Subsidiary Sell-off -------------------------------------------------------- Troubled imaging technology manufacturer Gretag Imaging AG sold its Professional Imaging division to Dutch printing specialist Oce NV at an undisclosed price, the Neue Zurcher Zeitung and Financial Times reported. Management said that the funds raised from the selloff would be used to pay Gretag's debts, reported at 270 million Swiss francs ($163.4 million). Analysts estimate Oce has paid between 100 and 150 million Swiss francs ($60.5 and $90.7 million) for the division. Professional Imaging has a workforce of 450. Gretag's restructuring plan, which calls a reduction of its workforce to roughly 1,300 in the next few months, aims for the company to achieve about 400 million Swiss francs ($242.0 million) in sales by 2002. SWISSAIR GROUP: Cancels New York Flight --------------------------------------- Swiss airline Swissair Group AG on Monday cancelled an afternoon flight to New York after three main airports in the city were closed, Dow Jones Newswires reported. The crash of an AMR Corp. American Airlines A300 has caused the closure of John F. Kennedy International Airport, Laguardia, and Newark. Last month, the Swissair ran out of money and grounded its fleet for two days, leaving thousands of travelers stranded. SWISSAIR GROUP: EFD to Discuss Globus Project With Merrill Lynch ---------------------------------------------------------------- Eidgenosssische Finanzdepartment will take up contact with US investment bank Merrill Lynch to discuss the Globus project of bankrupt Swissair, the Monday edition of Neue Zurcher Zeitung/FT Information said. This is due to pressure from the country's parliament. EFD spokesman Dieter Leutwyler said the talks would reveal whether or not Merrill Lynch would take a role in the project. Globus is based on the concept of a debt swap with the help of newly issued debt securities backed by state guarantees. =========================== U N I T E D K I N G D O M =========================== BRITISH TELECOM: May Buy Blu Stake ---------------------------------- British Telecommunications has confirmed that it must buy a 9% stake in Italian mobile phone operator Blu if other shareholders in the company decide not to take up their option to purchase the shares, AFX News reported. The stake is estimated at 70 million sterling. However, including the fees for its share of the roll-out of Blu's second generation mobile network, the cost could increase to 200 million sterling. CENES PHARMACEUTICALS: Company Profile -------------------------------------- Name: CeNeS Pharmaceuticals plc Address: Compass House, Vision Park Chivers Way, Histon Cambridge CB4 9ZR United Kingdom Phone: +44 (0) 1223 266 466 Fax: +44 (0) 1223 266 467 Website http://www.cenes.com/ SIC: Drug Manufacturing (2833) Employees: 130 Net Loss: 18,328,000 pounds ($26,616,000) as of 06/30/01 Total Assets: 68,472,000 pounds ($99,467,000) Liabilities: 14,821,000 pounds ($21,525,000) Outstanding Shares: 152,969,449 shares Type of Business: Cenes is a biopharmaceutical company engaged in the development of drugs for Central Nervous System disorders and pain control. Trigger Event: CeNeS Pharmaceuticals's is in a funding crisis. The company is uncertain about its ability to raise additional capital for the next 12 months and the situation is worsened by difficult market conditions. As part of CeNeS Pharmaceuticals's restructuring plan announced in October, the company has closed its US research facility in Boston, MA and laid off employees at its Cambridge, UK head office. Cenes plans to divest and continue to scale down operations in order to reduce its cash burn and become self-funding in 2003. Chief Executive: Daniel Roach Chairman: Alan Goodman Finance Director: Neil Clark Auditors: Arthur Andersen Chartered Accountants 33 W. Monroe Chicago, IL 60603 USA Tel: 1 312 580 0033 Fax: 1 312 507 6748 Betjeman House 104 Hills Road Cambridge CB2 1LH UK Tel: 44 1223 353906 Fax: 44 1223 366287 COLT TELECOM: Faces Shareholders Dispute Over Share Issue --------------------------------------------------------- Cash-strapped Colt Telecom faces the prospect of shareholder objections to a 400 million pound share issue that would give control of the telecommunications company to US fund manager Fidelity, the Financial Times reported. The National Association of Pension Funds has supported the fundraising, but another institutional shareholder organization has advised investors to vote against it. It is expected that at least one large investor will reject the proposals following the recommendation from the Pensions & Investment Research Consultants. FT added that the fundraising would not only help bridge Colt's funding gap, but would also give Fidelity, the company's founding investor, up to 72% of the equity. Colt Telecom lost 54 million pounds in the second quarter. CORUS GROUP: Faces Fine Over Explosion -------------------------------------- A court has fined steel giant Corus 300,000 pounds over an explosion at its Port Talbot plant, where two steel workers were killed, 13 were injured and one was paralyzed. According to the Monday edition of This Is London, Corus ignored repeated warnings from employees and contractors over a dangerous water leak at the plant. Corus UK Ltd admitted two criminal charges under the Health and Safety at Work Act 1974 of endangering employees and endangering members of the public, including contractors. The Port Talbot plant, which employs around 3,000 people, is struggling against difficult market conditions. In February, Corus disclosed it will layoff 3,000 jobs in Wales, affecting about 200 jobs at the plant in Port Talbot. Corus posted a pre-tax loss of 230 million pounds in the first half of this year (see http://bankrupt.com/misc/corus.pdffor the company's interim report), and 1.1 billion pounds last year. INVENSYS PLC: Shares Drop Before Results ---------------------------------------- Shares in engineering group Invensys fell as the market anticipated a gloomy set of first-half figures from the firm. According to Reuters' Monday report, the stock was 5.4% weaker late morning at 74-1/2 pence, making it the FTSE 100's worst performer. Dealers said there were fears the company would not pay a dividend due to its high debts. Analysts said Invensys is expected to report a fall in first half operating profits of 280 million pounds. MARCONI PLC: Inks Deals in Brazil and Mexico -------------------------------------------- Debt-laden telecoms group Marconi has signed order deals in Latin America that are worth more than 20 million sterling, the Monday edition of Ananova and Telecom Paper said. Marconi has signed a 5.2-million-sterling order with Brazil's Embratel. In Mexico, Telcel will use Marconi's equipment to help expand its mobile phone business in the region. Alestra and Avantel have also selected Marconi as its supplier for fixed wireless access. RAILTRACK GROUP: Lists Bonds Under Default ------------------------------------------ Railtrack PLC has listed the bonds that are now in default following last month's High Court order placing the company administration. According to a report from AFX News, the bonds are 135.5 million sterling 9.125% bonds due 2006, 11.5 million euro Index Linked Notes due 2009, 350 million sterling 5.875% bonds due 2009, 100.7 million sterling 9.625% bonds due 2016 and 300 million sterling 7.375% bonds due 2022. Also listed were 250 million sterling 5.875% bonds due 2028 and 400 million sterling 3.5% exchangeable bonds due 2009. The court order, which is supposed to transfer Railtrack as a going concern to another company, has technically put the company's bonds in to default. RAILTRACK GROUP: To Sue Government ---------------------------------- Railtrack is considering a number of legal options against the government, after receiving a letter from David Rough, Chairman of the Institutional Shareholders Investment Committee. "The Secretary of State may have misused his power by stating his intention to introduce a Bill at the earliest opportunity giving him the power to direct the Rail Regulator," Railtrack Chief Executive Steve Marshall commented. "The evidence of the Rail Regulator to the Select Committee is beyond dispute." Earlier, 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 * * *