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        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

            Monday, December 03, 2001, Vol. 2, No. 235


                            Headlines

* B E L G I U M *

LERNOUT & HAUSPIE: Discloses Buyers of Units
LERNOUT & HAUSPIE: Microsoft Sells L&H Stake at 0.019 Cents
LERNOUT & HAUSPIE: SpeechWorks Objects to ScanSoft Bid
SABENA SA: Retired Flying Staff Will Receive Less

* F I N L A N D *

SONERA CORP.: Rights Offering Reaps Strong Demand

* F R A N C E *

AIR LIB: To Open France-Algeria Route After 7 Years

* G E R M A N Y *

DAIMLERCHRYSLER: Appeals to New Jersey Verdict
DAIMLERCHRYSLER: To Raise Commercial Vehicle Costs
DEUTSCHE TELEKOM: Cartel Office Opposes Liberty Media Buy
DEUTSCHE TELEKOM: Seeks Protection on 3G Licenses
KINOWELT MEDIEN: Blames TV Companies on Financial Demise
SCHMIDTBANK GMBH: Financial Trouble Hits Consors

* I R E L A N D *

AER LINGUS: Seeks Clarification of Labor Commission Proposals
IRISH ISPAT: Commission Approves Redundancy Pay for Workers

* I T A L Y *

ALITALIA SPA: Sees 673MM-Euro Loss for 2001

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

KPN NV: Halts Share Issues, E-Plus Sale
KPN NV: Opta Will Be Powerless in the Event of Liquidation
LAURUS NV: Sells Spar Convenience Operations

* N O R W A Y *

KVAERNER ASA: Banks Concede to New Plan
KVAERNER ASA: Sells Pulp & Paper Business to Voith Paper
KVAERNER ASA: Shareholders Elect New Board Members

* S P A I N *

IBERIA SA: Invited to Air France Alliance

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

SULZER MEDICA: Injunction Stopping Suits Extended

* U N I T E D   K I N G D O M *

BRITISH TELECOM: Releases Virus to Customers
EQUITABLE LIFE: E&Y to Face Legal Action Over Equitable
EQUITABLE LIFE: Will Sue Ex-bosses
ICELAND GROUP: Will Change Name as Sales Steady
LETSBUYIT.COM: To Cut 50% of Workforce
MARCONI PLC: In Talks With Banks on Debt Restructure
NTL INCORPORATED: Disappointed With Moody's Action
NTL INCORPORATED: Moody's Downgrades Ratings to Caa2
RAILTRACK GROUP: To Offer "Golden Handcuffs"


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


LERNOUT & HAUSPIE: Discloses Buyers of Units
--------------------------------------------

Pennsylvania-based Multimodal Technologies agreed to acquire the
ASR technologies of Lernout & Hauspie's Interactive Systems unit
for $2 million in cash and the assumption of a $2 million earnout
during the bankruptcy auction of the Belgian speech technology
company's assets at a New York law office last week.

Pennsylvania-based Vantage Technology Holding will acquire L&H's
Intelligent Content Management (ICM) assets and its Knexys
division, which develops next-generation ICM technologies, for $2
million in cash.

L&H added that its Audiomining assets (audio search engine
technology pioneered by Dragon Systems Inc.) would be acquired
for $0.75 million in cash to Dragon Catalyst LLC, a newly formed
company headed by Dr. James Baker.

The auction was conducted under the supervision of a court-
appointed trustee and representatives of the Official Committee
of Unsecured Creditors. It intends to fully support the selection
of ScanSoft, Inc. as the highest or otherwise best bidder.

A hearing before the United States Bankruptcy Court for the
District of Delaware to approve the sale of Lernout's Speech and
Language Technologies business and L&H Holdings USA Inc.,
including all of the operating and technology assets to ScanSoft
is scheduled on December 4.

Lernout & Hauspie, which has a debt of a half-billion dollars,
filed for protection from creditors under Chapter 11 of the
Bankruptcy Code in the United States in 2000. The company is
subject to a bankruptcy proceeding in Belgium where the company
has one of its headquarters.


LERNOUT & HAUSPIE: Microsoft Sells L&H Stake at 0.019 Cents
-----------------------------------------------------------

Microsoft Corp. sold most of its stake in bankrupt Belgian firm
Lernout & Hauspie, reports Reuters.

The Washington-based software giant sold its 5.4 million shares
at 0.019 cents each, or about $102,600, lowering its stake to
1.3% from 8%.


LERNOUT & HAUSPIE: SpeechWorks Objects to ScanSoft Bid
------------------------------------------------------

Software products and professional services provider SpeechWorks
filed with the U.S. Bankruptcy Court an objection to the
selection of ScanSoft as the highest or otherwise best bidder for
the business and technology assets of Lernout & Hauspie Speech
Products N.V.

SpeechWorks offered to purchase for the L&H assets in October,
but was awarded to ScanSoft.

SpeechWorks asked the court not to accept the competitive bid
and, instead, require submission of final, sealed bids.


SABENA SA: Retired Flying Staff Will Receive Less
-------------------------------------------------

The pilots and air hosts and hostesses of Belgian airline Sabena
who were retired when the airline was declared insolvent will
receive a smaller pension, the De Financieel Ekonomische Tijd/FT
Information reports.

The flight employees were forced to retire upon reaching the age
of 55, but as a result of the airline's insolvency, the top-op
pension will be reduced.


=============
F I N L A N D
=============


SONERA CORP.: Rights Offering Reaps Strong Demand
-------------------------------------------------

Sonera Corporation, an international forerunner in mobile
communications and mobile-based services and applications, said
that demand has been strong in connection with the company's
rights offering that ended on November 28.

The number of shares subscribed for pursuant to primary
subscription rights represented 99.79% of shares available for
subscription in the rights offering.

Furthermore, demand for shares pursuant to secondary subscription
rights was approximately 81 million shares.

Following the registration of the total increase in Sonera's
share capital, Sonera's registered share capital will amount to
479.6 million euros, consisting of 1.115 million shares.

Proceeds from the rights offering to Sonera will amount to
approximately 1 billion euros.

"We are very pleased with the success of the rights offering. As
a result of its successful completion, Sonera's financial
position will be considerably strengthened," Chief Executive
Officer Harri Koponen said.

Sonera hopes to reduce its net debt to 2.5 billion euro by the
end of the year with the rights issue.


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


AIR LIB: To Open France-Algeria Route After 7 Years
---------------------------------------------------

French airline Air Lib, formerly AOM-Air Liberte, plans to open
two round-trip flights a day from Paris to Algeria next month,
reports Dow Jones Newswires.

It would be the first flight by a French airline to Algeria since
the nation's biggest airline, Air France, and most international
carriers halted service after the Armed Islamic Group's hijacking
on Christmas Eve seven years ago.

Air Lib plans to open the route on December 22, though it is
still awaiting clearance from French and Algerian authorities.

Air Lib changed its name from AOM-Air Liberte in September after
French holding company Holco won the right to try to rescue the
airline that posted a net loss of 2.4 billion francs last year.

Its former co-owners, Swissair Group and French investment group
Marine Wendel, refused to inject more money into the French
carrier, leading it to file for bankruptcy in June.


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


DAIMLERCHRYSLER: Appeals to New Jersey Verdict
----------------------------------------------

DaimlerChrysler is requesting a new trial in a New Jersey case
that found the German-American automaker liable for the death of
a 38-year-old woman in a freak accident, Dow Jones Newswires
reported.

Annette Boryszewski was killed in 1998 when a loose tire flew off
another vehicle and crushed the roof area directly in front of
the driver's seat of her Plymouth Voyager.

Police determined that human error caused the lugnuts to fall off
and the court did not allow the jury to assign fault to anyone
other than DaimlerChrysler.

In a press release, DaimlerChrysler said the jury awarded the
woman's estate $20 million.


DAIMLERCHRYSLER: To Raise Commercial Vehicle Costs
--------------------------------------------------

DaimlerChrysler AG plans to raise prices on commercial vehicles
while making fewer of them, especially at U.S. arm Freightliner,
Handelsblatt reports, citing company executive Eckhard Cordes.

"We can't get overcapacities and falling prices under control
with cost-cutting programs alone," Cordes explains.

Now, the company's priority is profitability, not market share.

Freightliner, in particular, has suffered from lower truck values
due to a program under which it had agreed to buy back used
trucks at a guaranteed price, regardless of market conditions at
the time.


DEUTSCHE TELEKOM: Cartel Office Opposes Liberty Media Buy
---------------------------------------------------------

The German Cartel Office is reluctant to approve Liberty Media's
5.5-billion-euro purchase of cable assets from Deutsche Telekom,
the Financial Times reports.

Officials from Germany's competition authorities say they are
still reviewing the offer of John Malone, but acknowledge that
there is concern about a deal that will leave Liberty with access
to more than half of the cable homes across 12 of the country's
16 Lander.

People involved in the deal, however, believe the German
officials gave a strong indication that they will not approve the
deal.

The Cartel Office is yet to complete the full review of the
proposed acquisition and will have to decide by January 7.

The competition authorities are likely to come under pressure to
approve the deal, as Deutsche Telekom needs to cut its debt load
of 65.2 billion euros.


DEUTSCHE TELEKOM: Seeks Protection on 3G Licenses
-------------------------------------------------

Deutsche Telekom's head of regulatory affairs Hans-Willi
Hefekaeuser urged the German government to consider changing its
rules on new generation mobile phone licenses to guarantee that
competitors cannot buy licenses at a lower cost from holders that
go out of business.

In the current market situation, industry is spending some 250
billion euros for licenses and infrastructure that easily lead
operators to exit the business.

Spokesman for the German regulator Harald Doerr explained that if
a licensee merged with another license holder, the license would
fall back to the German government without a refund of the 8.5-
billion-euro fee.

Doerr said that the regulator would not alter the rules.


KINOWELT MEDIEN: Blames TV Companies on Financial Demise
--------------------------------------------------------

Insolvency-threatened Kinowelt has been casting around for
culprits to blame for its financial demise.

Based on a report from Die Welt/FT Information, the German film
and TV rights company has charged television companies belonging
to Kirch and RTL with regularly sabotaging its business.

It is for this reason apparently that it was left sitting for two
years on a package of 270 films and 600 TV series, which it had
acquired from Warner Brothers.

Kinowelt was threatened with insolvency after one of its main
creditors, ABN Amro Bank NV, called in loans of about 51 million
euros.


SCHMIDTBANK GMBH: Financial Trouble Hits Consors
------------------------------------------------

The financial trouble at private bank Schmidtbank GmbH has
affected its subsidiary, Germany-based online brokerage Consors
Discount Broker AG.

According to Dow Jones Newswires' report, Consors is liable for
all of Schmidtbank's liabilities that stem from before June 1998,
when Consors became a separate unit of Schmidtbank.

Schmidtbank's valuation adjustment needs are estimated to be
around 400 million euros, adds Dow Jones.

Earlier this month, a consortium of banks, including HVB Group,
Commerzbank, Dresdner Bank and the Bavarian savings banks, agreed
to buy the shares of Schmidtbank.

Investors are increasingly worried that the loss-making online
broker will be shut down if the consortium succeeds in taking
control of Schmidtbank.


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


AER LINGUS: Seeks Clarification of Labor Commission Proposals
-------------------------------------------------------------

Irish national carrier Aer Lingus said its board is seeking
clarification of a number of core issues raised by a rescue
package put forward by the Labor Relations Commission, AFX News
reported.

Under LRC's proposals, the company would make about 2,000 people
redundant and implement major cost savings after passenger
numbers dropped in the wake of the September attacks in the US.

For the remaining 4,000 employees, the LRC proposals include a
pay freeze, one day less of holidays and lower overtime pay.

One of the issues Aer Lingus pointed out was the demand of union
for greater shareholdings in return for the cutbacks.


IRISH ISPAT: Commission Approves Redundancy Pay for Workers
-----------------------------------------------------------

Workers at steelmaker Irish Ispat will receive a payment of
2,362.69 Italian lire plus another similar amount from the Irish
government, Business Plus reported.

The Commission approved the maximum aid amount as reported to
apply to workers who have more than one-year service and who
would not have reached normal pensionable age at the time of
being made redundant.

Business Plus said that according to Irish Deputy Prime Minister
Mary Harney, the payment will take weeks to be processed and
payment will not be made until after Christmas.

The Deputy Prime Minister added its matching amount would be paid
before Christmas.

The state would pay all employees regardless their length of
service.

Early this year, parent firm Ispat International closed Irish
Ispat, a loss of 400 jobs. The Irish firm owed unsecured
creditors 18 million euros, with overall liabilities totaling
almost 59 million euros.


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


ALITALIA SPA: Sees 673MM-Euro Loss for 2001
-------------------------------------------

Alitalia SpA expects its loss this year to widen to 673 million
euros from a previously projected 313 million euros and an actual
loss of 256 million last year, Bloomberg reports.

The Italian carrier spent 257 million euros to slash 3,400 jobs
after the September 11 terrorist attacks led to a decline in
passengers on some routes.

Analysts say that Alitalia's new rescue plan that includes jobs
cuts and reduction of its fleet will not help the carrier to
break even in 2003 as balance sheet is too weak.

Adjusted for off-balance-sheet liabilities, Alitalia is balancing
roughly 2 billion euros of net debt on shareholder equity of just
1 billion euros.

The carrier aims to raise between 1.6 billion euros and 1.8
billion euros to plug the financing gap, but it has yet to
explain how this might be achieved.


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


KPN NV: Halts Share Issues, E-Plus Sale
---------------------------------------

Royal KPN NV will not sell its shares after its current 5-
billion-euro offering is complete, Dow Jones Newswires reports,
citing Dutch Finance Minister Gerrit Zalm.

The Dutch telecom company will not also sell its interest in
German mobile provider E-Plus Mobilfunk under any circumstances.

"We don't expect any further issues will be necessary," Zalm.

"E-Plus belongs to KPN's core business, and there are no plans to
sell it."

The Ministry of Finance earlier said it would purchase a
proportionate amount in the current issue, or 1.73-billion-euro
worth of new KPN shares.

Commission member Marja Wagenaar of the ruling Labor party points
out they, owning 34.69% of KPN, account for a majority of the
company's debt of 22.3 billion euros.

Zalm said the amount the state will spend on new KPN shares this
year will come out of planned reductions of the Dutch state debt.


KPN NV: Opta Will Be Powerless in the Event of Liquidation
----------------------------------------------------------

Dutch telecom watchdog Opta says it will no longer be able to
force KPN to meet its obligations under the Telecommunications
Act if the company goes bankrupt, the Het Financieele Dagblad/FT
Information reports.

Under the Act, KPN is obligated to supply telephone services at a
fair price and with a certain quality to everyone, including
normal fixed telephone services, pay phones and information
services.


LAURUS NV: Sells Spar Convenience Operations
--------------------------------------------

Dutch supermarkets and wholesale group Laurus NV sold Klaver
Holding BV, under which all of Spar Convenience's activities are
grouped, to a consortium consisting of Sperwer, Spar
Detaillistenvereniging and the management of Spar Convenience for
an undisclosed sum.

Sperwer will have a majority interest in the joint venture.

As previously announced, the Spar Convenience format no longer
fits into Laurus' strategy.

Spar Convenience, which supplies 260 independent retailers, 284
mobile shops and 180 other wholesale customers, has 514
employees.

"There will be no compulsory redundancies as a consequence of the
proposed transaction," Laurus said.

Laurus earlier announced the closure of its loss-making chain of
Basismarkt discount stores in the Netherlands in April next year,
designed to improve the company's results and strengthen its
financial position.


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


KVAERNER ASA: Banks Concede to New Plan
---------------------------------------

The bank connections of Kvaerner conceded the new rescue plan for
the troubled Anglo-Norwegian engineering and construction group,
the Aftenposten/FT Information reported.

Norway's Den norske Bank and Kreditkassen, the Norwegian arm of
Nordea, the Nordic banking group, participated in the
negotiations of the rescue plan, as did Norsk Tillitsmann, the
Norwegian bondholders trustee.

The solution means that Kvaerner will secure new equity through a
Directed Equity Issue, a subsequent Rights Issue, and through the
merger of Aker Maritime's core business with Kvaerner Oil & Gas.

The revised plan for Kvaerner will be presented to the company's
shareholders for final approval at a new Extraordinary General
Meeting to be held no later than December 19.


KVAERNER ASA: Sells Pulp & Paper Business to Voith Paper
--------------------------------------------------------

Kvaerner has completed the sale of the Recycling and Dewatering
activities of Kvaerner Pulp & Paper to Germany's Voith Paper
HoldingGmbH.

The net cash consideration for the sale amounts to approximately
50 million Norwegian krone, of which approximately 15 million
Norwegian krone will be paid following the resolution of closing
accounts.

According to Kvaerner, the sale is expected to give the company a
small profit.

Voith Paper and Kvaerner's Fiberline Division are continuing to
investigate further co-operation possibilities within the Pulp
and Paper business.

For further information, contact Paul Emberley, Vice President,
Group Communications, +44 (0)20 7339 1035 or +44 (0)7768 813090
or email paul.emberley@kvaerner.com


KVAERNER ASA: Shareholders Elect New Board Members
--------------------------------------------------

Shareholders of Kvaerner have elected at the Extraordinary
General Meeting in Oslo a new Board for the troubled Anglo-
Norwegian construction and engineering group.

Aker Maritime ASA's chairman Kjell Inge Roekke was elected new
chairman of its own board, while Helge Lund, Aker Maritime ASA's
deputy chairman, was elected deputy chairman of the new Kvaerner
board.

The other nominees, Yngve Hagensen, Tore Toenne, Reidar Lund and
Anders Eckhoff, were also elected to the board, it added.

The election committee consisted of Ragnhild Wilborg, head of
investments for ODIN Forvaltning, Allan �kerstedt, president of
Storebrand Kapitalforvaltning, and Kjell Inge Rokke, Chairman of
Aker RGI.

For more information, contact Marit Ytreeide, Kvaerner Vice
President for Corporate Communications at telephone +47 67 51 31
06.


=========
S P A I N
=========


IBERIA SA: Invited to Air France Alliance
-----------------------------------------

Air France is proposing that Iberia joins its alliance with
Alitalia, Dow Jones Newswires reports.

If Iberia chooses to do so, the Spanish airline will have to
leave the Oneworld alliance with British Airways and American
Airlines.

Iberia recently unveiled a cost saving measures, dubbed as "anti-
crisis" plan, which would save the company up to 799 million
euros. The plan involved savings of 625 million euros through a
15% cut in capacity, 120 million euros through redundancies and a
cut of 54 million euros in general costs.


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


SULZER MEDICA: Injunction Stopping Suits Extended
-------------------------------------------------

An injunction preventing individual product liability lawsuits
from proceeding against Sulzer Medica, Europe's biggest
orthopedics device maker, was extended until February, while
settlement negotiations continue in a federal class-action case
regarding faulty hip and knee replacement joints, Dow Jones
Newswires reports.

Under the terms of agreement, District Court Judge Kathleen
O'Malley in Cleveland is also empowered to appoint an investment
banking group to evaluate the proposed settlement and make
recommendations.

Sulzer Medica earlier said it would not increase its proposed
$783 million settlement for US lawsuits over faulty hip products.
Some plaintiff's attorneys, however, have complained about the
proposed settlement.

If a settlement is not reached by then, the injunction will lift
automatically, which means the lawsuits can proceed unless both
sides agree to extend the ban, Sulzer Medica attorney Richard
Scruggs explains.

Reaching a settlement is vital to Sulzer Medica's viability.
Market watchers have warned the company that it will have to file
for Chapter 11 bankruptcy protection for its U.S. Sulzer
Orthopedics Inc. business if it is obliged to pay damages claims.


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


BRITISH TELECOM: Releases Virus to Customers
--------------------------------------------

British Telecommunications admitted it has infected the computers
of dozens of its Internet clients with a new computer virus able
to tap passwords for websites including sensitive information in
online banks, the Independent News reported.

According to a BT Openworld spokesman, its support department
sent e-mails to a number of customers that contained a virus
called Badtrans.

Millions of home and business PCs in up to 40 countries around
the world were infected with the virus, which was first spotted
in the UK.

Exactly the same error occurred in September when BT sent copies
of an earlier version of Badtrans to many subscribers.


EQUITABLE LIFE: E&Y to Face Legal Action Over Equitable
-------------------------------------------------------

Equitable Life says it will launch a legal action against its
former auditor Ernst & Young over its involvement in the collapse
of the troubled life insurer.

A report from law firm Herbert Smith and forensic accountancy
team at PricewaterhouseCoopers raises serious concerns over E&Y's
work at Equitable and is seeking for explanation.

Herbert Smith is also writing to the previous Board's legal
advisors Denton Wilde Sapte, and also to Counsel, seeking an
explanation of their advice.

"If we do not receive satisfactory explanations, and if it is
cost-effective to do so, we will commence legal proceedings,"
Equitable's new chief Vanni Treves adds.


EQUITABLE LIFE: Will Sue Ex-bosses
----------------------------------

Equitable Life says it will sue the City's most eminent figures
it believes contributed to the life assurer's troubles.

The legal action is the result of an investigation on behalf of
the current board of Equitable by Herbert Smith, the city law
firm.

Herbert Smith is writing to 20 former directors, including
Jonathan Dawson, a partner at investment bank Lazard, and Peter
Sedgwick, the chairman of investment group Schroders, to seek
their explanation for a number of issues of concern or face legal
proceedings.

Dawson and Sedgwick were not available for comment.

Proceeds from a successful lawsuit will benefit Equitable
policyholders.

However, lawyers predict the letter can be the beginning of a
long legal battle between current and former board members.

Equitable was forced to close to new business in December after
the House of Lords ruled that it should increase bonus payouts to
guaranteed annuity rate (GAR) policyholders.


ICELAND GROUP: Will Change Name as Sales Steady
-----------------------------------------------

Iceland will change its name to the Big Food Group as soon as its
interim results show signs of stable sales, reports the Financial
Times.

The UK food retailer earlier said pre-tax profits before goodwill
amortization and exceptionals fell sharply to 16.7 million
pounds. Turnover rose to 2.4 billion pounds, reflecting the
acquisition of Booker in June last year.

"We have now stabilized the sales performance of Iceland Foods
and the profitability of the group," chief executive Bill Grimsey
said.

A new management team headed by Grimsey was brought in this year
to turn round the ailing business, which has issued a series of
profit warnings.

Some think that a rights issue or other equity financing would be
needed, as Iceland had more than 500 million pounds of debt in
its balance sheet at the year end in March.

The company said a week earlier it had reduced debt by 74 million
pounds through strong cash flow.


LETSBUYIT.COM: To Cut 50% of Workforce
--------------------------------------

Troubled online retailer LetsBuyIt.com announced it would remove
another 58 jobs or about half of its employees as it continues
reorganizing, a report from Bloomberg and Telecom Paper said.

For the third quarter, LetsBuyIt.com revealed that operating loss
narrowed to 14 million euros from a loss of 26 million euros,
while sales decreased to 335,000 euros from 9.3 million euros in
the year-earlier period.

In January, it asked a Dutch court to lift its protection from
creditors and start bankruptcy proceedings. It later withdrew its
request after receiving "written commitments" for 4 million euros
in funding.


MARCONI PLC: In Talks With Banks on Debt Restructure
----------------------------------------------------

Telecommunications equipment company Marconi is holding further
talks with its 31 creditor banks about plans to renegotiate its
debt, the Financial Times reports.

While one investment banker expects a draft of the basic term
sheet for a debt renegotiation to be agreed by the small group of
banks, led by Barclays and HSBC, by the end of the year, a wider
group of banks may approve the plan early next year.

Marconi is trying to reduce its debt burden of more than 3
billion pounds. It has raised 25 million pounds from the sale of
6 million shares in Italian company Lottomatica last week, and
has already disposed small non-core assets in recent months.


NTL INCORPORATED: Disappointed With Moody's Action
--------------------------------------------------

Heavily indebted cable-television group NTL Incorporated noted
with disappointment the recent rate cut action taken by Moody's
Investors Service Inc.

Moody's cut NTL's rating to Caa2 based on publicly disclosed
information on the group's third quarter results.

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

For more information, contact John F. Gregg, Senior Vice
President - Chief Financial Officer, Bret Richter, Vice President
- Corporate Finance and Development or Tamar Gerber, Director-
Investor Relations at telephone (+1) 212 906 8440, or via e-mail
at investor_relations@ntli.com


NTL INCORPORATED: Moody's Downgrades Ratings to Caa2
----------------------------------------------------

Moody's Investors Service downgraded the debt and preferred stock
ratings of NTL Incorporated and its subsidiaries. The outlook for
all ratings remains negative.

Affected ratings of NTL Inc are the senior implied, from B1 to
B3, the senior unsecured issuer ratings from Caa1 to Caa3, and
the preferred stock rating from Caa3 to Ca.

The convertible subordinated notes of NTL Delaware Inc. was also
downgraded from Caa2 to Caa3.

NTL Communications Corporation's senior unsecured notes received
further downgrade from B3 to Caa2, while its convertible
subordinated notes from Caa1 to Caa3.

The senior unsecured notes of NTL (Triangle) LLC was cut from B3
to Caa1, the senior unsecured notes of Diamond Cable
Communications Ltd from B3 to Caa3, the senior unsecured notes of
Diamond Holdings Ltd from B3 to Caa1, the senior secured bank
facility of NTL Business Limited from Ba3 to B1, and the senior
secured bank facility of Cablecom (Ostschweiz) AG from B1 to B3.

The downgrade reflects Moody's heightened concerns regarding
NTL's liquidity position and longer-term ability to adequately
service its debt, following the company's third quarter results
announcement.

NTL's third quarter cash burn was greater than anticipated by
Moody's (approximately 572 million pounds). Although negative
working capital movements and the timing of certain payments
appear to have contributed to the accelerated cash spend.

Moody's now believes that a restructuring of the company's
balance sheet is a greater possibility as it appears increasingly
likely that the company may be unable to grow into its highly
leveraged capital structure.


RAILTRACK GROUP: To Offer "Golden Handcuffs"
--------------------------------------------

Railtrack plans to offer hundreds of engineers and managers
"golden handcuffs" to stem the exodus of employees, reports The
Times newspaper.

"We have not calculated how much it will cost, but we want to
offer staff decent bonuses. The levels of disillusion are
affecting performance," a source close to Railtrack said.

Directors of Railtrack Group will this week ask Railtrack
administrator Ernst & Young to make the millions of pounds
available by the end of the year.

Since Railtrack went into administration, as many as 70 crucial
employees had so far resigned.

                                   **********

     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.

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