/raid1/www/Hosts/bankrupt/TCREUR_Public/011120.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 20, 2001, Vol. 2, No. 227


                            Headlines

* B E L G I U M *

CUSTOM SILICON: Company Profile
FLV FUND: Reveals $18.9MM Loss in Third Quarter
XEIKON NV: Operations in Belgium and France to Continue
XEIKON NV: Losses Widen in Third Quarter

* C Z E C H   R E P U B L I C *

KRAS-HAKA: Court Declares Kras-Haka Bankrupt

* G E R M A N Y *

BAYER AG: Posts Third-Quarter Loss
LTU GROUP: Thomas Cook Opposes State Guarantee
MAN AG: Analysts Foresee Profit Cut in 2001
SCHMIDTBANK: Rescued From Bankruptcy

* I T A L Y *

ALITALIA SPA: Targets Break Even in 2003

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

KPN NV: Gets 2.5BB Euro Credit From Banks
KPN NV: Reaches Layoff Agreement With Unions
KPN NV: Wanadoo Interested in KPN Directories Unit

* N O R W A Y *

KVAERNER ASA: Completes Sale of Units to Yukos

* P O L A N D *

NETIA HOLDINGS: Fitch Cuts Ratings to C

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

SWISSAIR GROUP: Agrees to Give Up LTU Stake

* U N I T E D   K I N G D O M *

ATLANTIC TELECOM: Company Profile
DANKA BUSINESS: Issues Participating Shares
HUNTINGDON LIFE: Directors Face Court Action
NTL INCORPORATED: France Telecom Hopes to Get Towers for Less
RAILTRACK GROUP: Shareholders Begin Legal Action
RAILTRACK GROUP: WestLB Wants Byers Out


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


CUSTOM SILICON: Company Profile
-------------------------------

Name:        Custom Silicon Configuraton Services n.v.
Address:     Hermesstraat 2a
             B-1930 Zaventem
             Belgium

Phone:       +32 (0) 2 720 00 00
Fax:         +32 (0) 2 713 05 85

Website:     http://www.cs2.be

SIC:                 Semiconductor Manufacturing
No. of Employees:    157
Net Loss:            25.8 million euro (as of third-quarter 2001)
Total Assets:        46.4 million euro
Liabilities:         43.5 million euro
Outstanding Shares:  16,011,273

Type of Business: Custom Silicon Configuraton Services n.v. (CS2)
is engaged in the manufacture and distribution of semiconductor
packaging and provides test services catering to the European
semiconductor market.

Trigger Event: Shrinking market demands in the wireless
communication segment drastically brought a sharp drop in revenue
for CS2 to the extent that its continued operations is
threatened.

At the end of June, CS2 was out of creditors's protection status
after presenting a bail out restructuring and repayment plan to
its creditors and to the Brussels Court.


President & CEO:        Yves De Poorter
Email:                  ydp@cs2.be

VP-Finance:             Robert Michel
Email:                  robert.michel@cs2.be

Auditor:                Gino Desmet
                        Arthur Andersen Bedrijfsrevisoren
                        Warandeberg 4 Montagne du Parc
                        B -1000 Brussels

Phone:                  32 2 545 30 00
Fax:                    32 2 545 30 99


FLV FUND: Reveals $18.9MM Loss in Third Quarter
-----------------------------------------------

Venture capitalist Flanders Language Valley Fund posted Friday a
net accounting loss of US$18.9 million during the third quarter
of 2001, while net operating loss amounted to US$ 17.9 million.

FLV Fund also said that its investments in the third quarter
totaled US$2.2 million, while the proceeds on the sale of venture
capital investments, financial assets held for trading and other
derivative rights amounted to US$0.2 million.

The company's net unrealized losses on debt securities and loans
amounted to US$1.7 million, while net unrealized losses on trade
and other receivables amounted to US$0.1 million.

As of September 30, the IAS-based fair market value of FLV Fund
amounted to US$5.75 per share, or a decrease of 7.85 % compared
to last quarter.

FLV Fund now has 20,604,495 shares outstanding.

FLV Fund further reported that its wholly owned subsidiary FLV
Seed Capital Fund Europe N.V. was liquidated during the third
quarter of 2001. The liquidation proceed included cash proceeds
for US$0.5 million and two non-listed venture capital investments
for US$0.4 million.


XEIKON NV: Operations in Belgium and France to Continue
-------------------------------------------------------

After its recent filing of creditor protection, Xeikon's
headquarters in Belgium and France will continue to operate as
usual.

The digital color printer manufacturer, its subsidiaries and
distributors have taken all necessary measures to ensure
continuity in manufacturing, service, consumables, spare parts
and other support to its installed base and distributors.

Xeikon's subsidiaries in Germany, the U.K., Japan and the U.S.
have not filed for creditor protection and, therefore, continue
to operate normally.


XEIKON NV: Losses Widen in Third Quarter
----------------------------------------

Xeikon N.V., the world's leading supplier of production digital
printing systems for a wide range of commercial and industrial
printing applications, revealed a third-quarter net loss of $18
million, compared with $12.2 million net loss in the third
quarter of 2000.

On a per-share basis, the loss amounts to -$0.59 per basic and
diluted share.  In contrast, during the third quarter of 2000,
the company sustained a loss of -$0.40 per basic and diluted
share.

The company's total revenues for the third quarter of 2001 were
$27 million, including $14.9 million from the color and $12.1
million from the black & white activities, compared with total
revenues of $41.0 million for the same quarter last year, which
included $27.9 million from the color and $13.1 million from the
black & white activities.

See http://www.bankrupt.com/misc/xeikon.pdffor the company's
third-quarter report.

"The results for the third quarter were negatively impacted by
the overall weak economic environment and slow progress of
discussions with interested parties to raise additional capital
through a previously announced private placement," Xeikon
Executive Chairman Gino Despeghel commented.

As disclosed early this month, Xeikon N.V. filed a request for
creditor protection under applicable Belgian legislation. On the
same date, its French subsidiary Xeikon France S.A. entered into
a receivership proceeding under applicable French legislation.


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


KRAS-HAKA: Court Declares Kras-Haka Bankrupt
--------------------------------------------

Judge Hana Hrstkova of the Regional Court in Brno declared KRAS-
HAKA s.r.o. bankrupt on November 15.

According to the Friday edition of Czech News Agency & World
Reporter, the ruling was based on the proposal of Komercni banka
and a report from the preliminary administrator.

KRAS-HAKA s.r.o. owns joint-stock company and clothing producer
KRAS-HAKA a.s.


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


BAYER AG: Posts Third-Quarter Loss
----------------------------------

Bayer AG posted a third-quarter loss as Germany's third-largest
drugmaker faced a declining demand and costs for withdrawing the
medicine Baycol, which was tied to 52 deaths.

According to AFX News, Bayer's pre-exceptional profit from
continuing operations came in at 66 million euros, compared to
711 million for the year-earlier period, and much lower than
expectations of 117-356 million euros.

Sales for continuing operations came in at 6.87 billion euros,
down from 7.30 billion.

The analyst's own sales projection was 7.2 billion.

Shares were down 0.14 euro or 0.40% at 34.79 after the company
released the worse-than-expected third quarter results.


LTU GROUP: Thomas Cook Opposes State Guarantee
----------------------------------------------

Tourism giant Thomas Cook has joined Deutsche Lufthansa AG in
calling on the EU Commission to reject the North Rhine-
Westphalian government's plan to issue state guarantees on loans
to charter airline LTU.

According to a Handelsblatt report, Thomas Cook chief executive
Stefan Pichler sees the guarantees creating a "subsidy
situation."

Pichler further argued against issuing state aid to give
"constantly unprofitable airlines" a unilateral advantage in
price competition.

LTU, which encountered liquidity problems after the collapse of
its shareholder Swissair, expects the EU Commission to give
official approval of the credit guarantee in December.

The airline hopes to receive the loan from a banking consortium,
including Westdeutsche Landesbank and Stadtsparkasse Dsseldorf.


MAN AG: Analysts Foresee Profit Cut in 2001 Profit
--------------------------------------------------

Analysts expect that troubled German truck maker MAN AG, which
has already issued four profit warnings during the year, will cut
its pretax profit forecast for 2001 some time this week.  The
profit forecast is likely to be reduced from 400 million euro to
as low as 250 million euro, reports AFX News.

According to analyst Erhard Schmitt of Hessische Landesbank, the
reason for the cut is the slump in commercial vehicles sales
since this summer.

Merrill Lynch analyst Mark Troman adds that a profit warning
"should be on the cards," as the group's truck unit is burdened
with costs and declining volume.

Analysts at Lehman Brothers also expects MAN's pretax forecast to
be reduced.


SCHMIDTBANK: Rescued From Bankruptcy
------------------------------------

Schmidtbank, the 170-year-old family-owned bank that controls
online broker Consors, was rescued from bankruptcy by a
consortium of commercial and public sector banks.

According to the Financial Times' report, Deutsche Bank, HVB
Group, Commerzbank, Dresdner Bank, and the Bavarian savings
banks, have agreed to bail out the struggling private bank after
German bank regulator the Bundesaufsichtsamt fur das Kreditwesen
(Bakred) insisted it should find new financial backers or file
for bankruptcy.

Schmidtbank is thought to have lost hundreds of millions of euros
on lending to medium-sized companies in southern and eastern
Germany.


=========
I T A L Y
=========


ALITALIA SPA: Targets Break Even in 2003
----------------------------------------

Italian flagship carrier Alitalia SpA, which suffered a loss of
149.2 million euros in the third-quarter of 2001 compared with a
141.1-million-euro loss in the same period last year, aims to
break even in 2003, reports Dow Jones Newswires.

Alitalia Chief Executive Francesco Mengozzi says layoffs and
alliances are included in his business plan.

"Maxi-loans were possible even if the credit world right now is
very rigid toward airlines," he said.


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


KPN NV: Gets 2.5BB Euro Credit From Banks
-----------------------------------------

Ten banks have agreed to extend a 2.5-billion-euro credit line to
Royal KPN NV.

According to a Bloomberg report, Bank of America Corp. and Credit
Suisse First Boston were among the eight banks that agreed to
arrange the financing after KPN chief executive Paul Smits, who
left KPN with debt almost eight times greater than its market
value, agreed to step down in September.

HVB Group and Bank of Nova Scotia later joined the group. So with
ABN Amro Holding NV, Citigroup Inc., Deutsche Bank AG, ING Groep
NV, J.P. Morgan Chase & Co. and Rabobank.

The banks, Bloomberg added, agreed to lend on condition that the
company's fixed line business remains fully owned by KPN.

The Dutch telecommunications company said the new credit provides
them with a liquidity backstop as management focuses on its debt
reduction strategy that includes firing staff, cutting salaries
and selling assets.


KPN NV: Reaches Layoff Agreement With Unions
--------------------------------------------

Troubled Dutch telephone company Royal KPN NV said Friday it has
reached an agreement with Dutch trade unions ABVAKABO FNV, Bond
van Telecom Personeel, CFO CNV, CMHF/vhp KPN & TPG and GMV/RMU
for reorganization of the company.

Based on the agreement, a number of compulsory redundancies will
be reduced by salary cuts.

The KPN Board of Management, other top management and staff who
retain their jobs, will all take a cut in pay. The extra money
released will be used to broaden the social plan. This will
enable about 2000 employees to leave the company voluntarily in
order to limit forced redundancies at the company to 2,800.

In addition, KPN and the unions agreed to a collectively
bargained wage and labor agreement for the Dutch employees. The
unions agreed to freeze wages for the period 2002 and 2003 in
exchange for a stock option program open to all personnel.

The redundancies will guarantee that KPN can meet its interest
and payment obligations until 2004 and beyond.


KPN NV: Wanadoo Interested in KPN Directories Unit
--------------------------------------------------

Internet service provider Wanadoo announced Thursday it is
interested in acquiring the telephone directories of the Dutch
telecoms operator KPN.

No final decision has been taken, however.

Earlier, KPN confirmed its directories business is on a list of
non-core assets it is putting up for sale, although a spokesman
declined to comment on a possible buyer.


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


KVAERNER ASA: Completes Sale of Units to Yukos
----------------------------------------------

Kvaerner, the troubled Anglo-Norwegian engineering and
construction Group, said yesterday it has completed the sale of
its Kvaerner Hydrocarbons and Kvaerner Process Technology
businesses to Russia's Yukos Oil Company for US$100 million.

"All necessary approvals having now been granted by Kvaerner's
lenders," Kvaerner said in a statement.

Kvaerner added that US$50 million has been paid in cash,
following an earlier deposit payment of US$5 million.

The balance of US$45 million will be paid to Kvaerner on November
30.


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


NETIA HOLDINGS: Fitch Cuts Ratings to C
---------------------------------------

International rating agency Fitch has downgraded the senior
unsecured corporate credit rating of Netia Holdings, Poland's
leading alternative local and long-distance fixed-line
telecommunications provider, to C from B-.

The rating action follows the recent announcement by Netia of a
tender offer to buy back up to 85% of each of all the outstanding
bond issues by Netia Holdings BV and Netia Holdings II BV. Netia
also announced the group's intention not to make interest
payments.

As of September 30, Netia had cash resources of US$150 million.

Netia, listed on the Warsaw Stock Exchange and NASDAQ, recently
got a Ca rating from Moody's Investors Service, attributed to the
company's failure to show more funds to pay its debt obligations.


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


SWISSAIR GROUP: Agrees to Give Up LTU Stake
-------------------------------------------

Swiss flag carrier Swissair has agreed to sell its 49.9% stake in
German charter airline LTU for a symbolic 1 euro, reports the
Financial Times.

By taking minority stakes in loss-making European Union carriers,
Swissair had hoped to build a pan-European aviation group that
could rival British Airways, Air France and Lufthansa.

Swissair had already cut off its minority ties with Belgian
carrier Sabena, and French airlines AOM and Air Liberte.

Meanwhile, the state savings bank of Dusseldorf said it would
take over Swissair's stake in LTU.


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


ATLANTIC TELECOM: Company Profile
---------------------------------

Name:      Atlantic Telecom Group PLC
Address:   475-485 Union Street
           Aberdeen, AB11 6DB
           United Kingdom

Phone:     +44-1224-454-000
Fax:       +44-1224-454-010

Website    http://www.atlantic-telecom.com/

SIC:                 Telecommunications equipment installation
(1731)
No. of Employees:    1,146
EBITDA loss:         12.5m pounds (06/30/01)
Current Assets:      129.01m pounds
Current Liabilities: 78.43m pounds
Outstanding Shares:  10,668,011

Type of Business: Integrated communications provider

Trigger Event: The group has generated operating and net losses
for each of the three years ended March 31, 1999, 2000 and 2001.

Bondholders have pressure Atlantic Telecom to consider a
voluntary winding up amid growing fears over its ability to meet
future debt repayments.

Executive Chairman:  Graham Duncan
Finance Director:    Alisdair McKenzie

Auditor:             Grant Thornton

Note: SA Pearson, NB Kahn and GI Bennet were appointed Joint
Administrators of Atlantic Group PLC on October 12, 2001 by order
of the court, to manage the affairs and business of the Company
without personal liability. The Joint Administrators are licensed
to act as insolvency practitioners by the Institute of Chartered
Accountants in England and Wales.


DANKA BUSINESS: Issues Participating Shares
-------------------------------------------

Danka Business Systems PLC announced last week that it has issued
an aggregate of 3,944 new 6.5% senior convertible participating
shares of $1.00 each to the existing participating shareholders
of the company.

The issuance is in satisfaction of the payment-in-kind dividend
due on Danka's participating shares for the period ended November
14, 2001.

The company recently 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.

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.


HUNTINGDON LIFE: Directors Face Court Action
--------------------------------------------

Animal rights protesters are planning to take the directors of
animal research company Huntingdon Life Sciences to court for
failing to hold an annual shareholders' meeting.

According to the Financial Times' report, managing director Brian
Cass and other board members could face the charges this week
from Stop Huntingdon Animal Cruelty.

HLS was earlier found guilty of failing to hold an AGM within 15
months of its last AGM.


NTL INCORPORATED: France Telecom Hopes to Get Towers for Less
-------------------------------------------------------------

France Telecom has emerged as the preferred bidder to buy the
broadcast business of NTL Incorporated but is seeking to cut its
bid price for the broadcast business by up to 500 million pounds.

According to a report from The Sunday Times, France Telecom,
which owns a large stake in NTL, is reluctant to pay more than
1.1 billion pounds for the business that transmits programs for
ITV and Channels 4 and 5.

The firms competing to provide equity backing for France Telecom
are Carlisle Partners, Hick Muse Tate & Furst, and DB Capital
Partners.

NTL hopes to raise more than 1.5 billion pounds from the sale of
its broadcast division to reduce its 12 billion pound debt
mountain.


RAILTRACK GROUP: Shareholders Begin Legal Action
------------------------------------------------

Stephen Byers and the U.K. government will face legal action from
Railtrack's biggest shareholders for abuse of power if the
transport secretary fails to make progress toward a suitable deal
this week.

According to a Financial Times' report, the Railtrack
Shareholders Action Group claims claim that if the government
allows Railtrack to become insolvent it will have misused its
powers to achieve a political aim.

The Railtrack Shareholders Actions Group represents 15
institutions, including Invesco fund management, CGNU-owned
Morley fund management, Hermes pension fund management, Franklin,
a U.S. mutual fund, and the U.S. State of Wisconsin Pension Fund.

Stephen Byers faced cross-examination by the Labor-dominated
transport committee last week. He is also set to face a National
Audit Office inquiry into the handling of the Railtrack affair.


RAILTRACK GROUP: WestLB Wants Byers Out
---------------------------------------

West Deutsche Landesbank (WestLB), the German group planning a
multibillion-pound bid for Railtrack, wants transport secretary
Stephen Byers to step back from the sale because of a raft of
conflicts of interest.

According to The Times' report, lawyers working for the German
bank have drawn up the demand and believe that another secretary
of state from the Department of Trade and Industry be forced to
oversee the bid process.

WestLB further believes that the appointment of US investment
bank Schroder Salomon Smith Barney as unofficial adjudicator by
the government creates conflict of interest.

Meanwhile, Railtrack administrator Ernst & Young is set to
appoint its own financial adviser to evaluate any bids made for
the company.

                                    ***********

       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.


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