/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/011212.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, December 12, 2001, Vol. 2, No. 242 Headlines * B E L G I U M * REAL SOFTWARE: Okays Sale of U.K. Subsidiary SABENA SA: $98MM Loan Recall Could Undermine Rescue Efforts SABENA SA: Ex-employees to Block Brussels Airport on EU Summit * F I N L A N D * SONERA CORP.: Completes Rights Offering * F R A N C E * MOULINEX SA: Government Will Spend E24.4MM for Jobs and Factories * G E R M A N Y * CONSORS AG: Schmidtbank Wants to Sell Consors Soonest * I T A L Y * FIAT SPA: Will Close 18 Factories by 2004 FIAT SPA: Cuts 6,000 Jobs FIAT SPA: Sells Shares to Raise 1BB Euros FIAT SPA: Testore to Step Down as CEO * N E T H E R L A N D S * PHARMING GROUP: Reaches Agreement With Genzyme PHARMING GROUP: Suspends Trading * P O L A N D * ELEKTRIM SA: eCenter Faces Bankruptcy Threat ELEKTRIM SA: Will Cut Jobs at Subsidiaries NETIA HOLDINGS: Bond Buy-back Fails * S W E D E N * ICON MEDIALAB: Withdraws Offers to Holders * U N I T E D K I N G D O M * AES CORPORATION: Shares Drop After Downgrade of U.K. Unit ATLANTIC TELECOM: Sell-off May Delay Until Next Year BRITISH AIRWAYS: May Cut More Staff Members BRITISH AIRWAYS: Mulls 1-BB-Pound Rights Issue CENES PHARMACEUTICALS: Assigns Head Office Lease to De Novo COLT TELECOM: Raises 494MM From Share Sale EQUITABLE LIFE: Treves Presses for Yes Vote to Compromise Deal MARCONI PLC: Wins $80MM Contract From Grande Communications MARKS & SPENCER: Shares Dip After Merrill Lynch Cut NTL INCORPORATED: Announces Redundancy to Cut Cost RAILTRACK GROUP: Ernst & Young to Reveal New Board Structure ============= B E L G I U M ============= REAL SOFTWARE: Okays Sale of U.K. Subsidiary -------------------------------------------- Software group Real Software N.V. agreed to sell its Real Software UK Ltd. unit for an undisclosed sum to Integrated Health Management, an investment company specializing in healthcare services, Dow Jones Newswires reported. The company intends to concentrate, on continental Europe and to streamline its operations. For the first nine months of the year, Real Software posted sales of 4.2 million euros, over a negative EBIT of 1.1 million euros, and a net loss of 1.4 million euros. A failed U.S. acquisition and huge outstanding debts brought Real Software to the verge of bankruptcy last year. SABENA SA: $98MM Loan Recall Could Undermine Rescue Efforts ----------------------------------------------------------- A recall on the US$98 million loan extended by SIC Sabena bank to the carrier within the week could make the re-launch of the airline around Delta Air Transport impossible, says AFX News. Belgian financier Etienne Davignon raised the possibility Monday after learning that creditors of the bank are due to decide this week whether or not to call in their loans. This money is currently being used to finance several Sabena units. Davignon, however, disclosed he is bent on convincing the Flemish regional government to pitch in some money into the rescue efforts for Sabena. The businessman is aiming to raise US$218 million in regional government and private sector funding. So far, only the governments of Brussels and Wallonia have responded. "The Brussels and Wallonia regions are disposed to put up the money. We must now persuade the Flemish region to do so too," Davignon told a press briefing on the progress of the financing effort. SABENA SA: Ex-employees to Block Brussels Airport on EU Summit -------------------------------------------------------------- Sabena Tomorrow, which represents the former employees of bankrupt Sabena Belgian World Airlines SA, will form a blockade at Brussels airport during the EU summit this weekend. According to a report from the AFX News, the organization wants to raise awareness among EU leaders about the difficulties the ex-employees are facing following the collapse of Sabena. Sabena Tomorrow is also concerned about managers of Delta Air Transport who have been recruited from the former Belgian airline. They are worried that the new airline will not honor the labor agreements they had with Sabena. ============= F I N L A N D ============= SONERA CORP.: Completes Rights Offering --------------------------------------- Sonera Corporation, an international forerunner in mobile communications and mobile-based services and applications, said Monday its Board of Directors has approved the allocation of shares subscribed in the company's rights offering. The corresponding increase in Sonera's share capital of 337,049.05 euros was registered with the Finnish Trade Register on December 11. Following the registration of the total increase in Sonera's share capital resulting from subscriptions in the rights offering, Sonera's registered share capital amounts to 479.58 million euros, consisting of 1.115 billion shares. As previously announced, Sonera will use the net proceeds of 1,004 million euros to reduce its debt of around 3.5 billion euros. For further information, contact Jari Jaakkola, Executive Vice President Corporate Communications & IR. =========== F R A N C E =========== MOULINEX SA: Government Will Spend E24.4MM for Jobs and Factories ----------------------------------------------------------------- The French government will spend 6.1 million euros on jobs and 18.3 million euros on three years of "re-qualification" for factories owned by the bankrupt French electrical appliances group Moulinex that are to be shut down, Les Echos reports. The appropriate authorities will identify job-creation schemes, supported by an exceptional loan guarantee of 70% next year. Earlier, French union CGT has criticized the government for its approach to release 91.47 million euros funds for the sites Moulinex. CGT said that the government is releasing only 30.49 million euros and that employees and sub-contractors of the company "had the right to expect more". ============= G E R M A N Y ============= CONSORS AG: Schmidtbank Wants to Sell Consors Soonest ----------------------------------------------------- German private bank Schmidtbank plans to sell its online brokerage subsidiary ConSors Discount Broker AG as quickly as possible, the Financial Times reports. Schmidtbank chairman Paul Wieandt says the sale process will begin immediately and be completed by March next year. Wieandt declines to name any interested parties, but several potential bidders have emerged in recent weeks. Talks have been held with Commerzbank but negotiations broke down over price. Postbank and Internet broker Fimatex are also understood to be interested in the Nuremberg-based broker. Consors has been up for sale following the near-collapse of its parent company SchmidtBank, rescued from bankruptcy last month by a consortium of Germany's largest banks that includes Deutsche Bank, HVB Group, Commerzbank, Dresdner Bank, and the Bavarian savings banks. ========= I T A L Y ========= FIAT SPA: Will Close 18 Factories by 2004 ----------------------------------------- Fiat SpA, which owns the sports carmakers Ferrari and Maserati, will close or restructure 18 factories by 2004 as part of the company's restructuring plan, Bloomberg reports. Its Fiat Auto SpA unit, which makes Alfa Romeo and Lancia models as well as Fiat-branded vehicles, will be split into four divisions, Bloomberg adds. Fiat Auto lost money for three straight years and its operating loss in the first nine months of the year totaled 117 million euros. FIAT SPA: Cuts 6,000 Jobs ------------------------- Fiat SpA, the maker of Alfa Romeo sports cars and New Holland tractors, is shedding 6,000 jobs outside Italy, Bloomberg reports. Fiat will use a state-subsidized program to cut production while also hiring fewer part-time workers, Bloomberg adds. Recently, Fiat said it would idle 4,000 staff for three days in January to cut production of models such as the Marea and Multipla by 1,800 units. FIAT SPA: Sells Shares to Raise 1BB Euros ----------------------------------------- Fiat S.p.A. said Monday its Board of Directors approved a rights offering to raise approximately 1 billion euros through the issue of new ordinary shares in the automobile manufacturer. The rights offering will be launched on January 2002. Under the terms, the issuance of three new ordinary shares for each 25 shares of any class of Fiat S.p.A. will be offered at a subscription price of 15.5 euros. The ordinary share issued will have a warranty of five years, an exercise ratio of one new ordinary share for each four warrants, and an exercise price ranging between 30 and 35 euros. Fiat S.p.A.'s largest shareholders, IFI and IFIL, already announced their intentions regarding the rights offering. The net proceeds of this underwritten rights offering will be used to support the Fiat Group through the uncertain economic environment in 2002 until its restructuring and asset disposal initiatives can produce their expected effects. FIAT SPA: Testore to Step Down as CEO ------------------------------------- Widening losses prompted Roberto Testore to resign as chief executive of the No. 6 carmaker, Fiat SpA. According to a report from Bloomberg, Giancarlo Boschetti, now head of Fiat's Iveco truck unit, will replace Testore. Dragged down by the auto business, which accounts for almost half of sales, Fiat has lost a third of its market value in the past year. At the end of September, Fiat's net debt jumped to 7.5 billion euros from 5.54 billion euros at the end of the second quarter. The company in October scrapped debt and profit targets it had given in April after the terrorist attacks in the U.S. worsened the outlook for demand for its products, ranging from cars, vans, buses and trucks to combines, tractors, production-line equipment and insurance policies. ===================== N E T H E R L A N D S ===================== PHARMING GROUP: Reaches Agreement With Genzyme ---------------------------------------------- Pharming has reached an agreement with U.S. biotechnology company Genzyme that would enable the troubled Dutch biotechnology firm to continue operations, move forward with its clinical development programs and implement its future plans. Under the agreement, Genzyme will acquire all Pharming assets relating to the diagnosis and treatment of Pompe disease, a statement from Pharming said. The deal also calls for Genzyme to purchase all shares of Belgian subsidiary Pharming N.V., to release Pharming Group from claims for capital contributions to joint ventures formed to develop a treatment for Pompe disease, and to forgive repayment of the promisory note due from Pharming Group under certain conditions. Both companies further agreed to terminate all legal actions between them. PHARMING GROUP: Suspends Trading -------------------------------- Dutch biotechnology company Pharming Group N.V. was suspended from trading Monday from 12 o'clock noon until 1 o'clock in the afternoon, Euronext Amsterdam in its pres release said. The security affected was ISIN code NL0000377000. It was reported earlier that Pharming and its Dutch statutory subsidiaries have been granted final legal moratorium until July 2002 by the district court in The Hague. In the third quarter of 2001, Pharming Group posted a net loss of 27.9 million euros (See http://www.bankrupt.com/misc/pharming3Q.pdffor the company's Interim report) on revenues of 10.3 million euros. Its cash position of 11.8 million euros makes the company unable to fund its operations. =========== P O L A N D =========== ELEKTRIM SA: eCenter Faces Bankruptcy Threat -------------------------------------------- Elektrim's e-business service firm eCenter is running out of cash and will probably file for bankruptcy, the Warsaw Business Journal reports. According to Marcin Zabielski, an independent consultant hired to sell Elektrim's online companies, Elektrim will not rescue eCenter from impending bankruptcy. "The costs of eCenter were high and the revenue low. In the long- term, the strategy is that Elektrim will not finance any of its companies that (generate) losses," adds Zabielski. Elektrim owns 58% of eCenter, while Internet incubator Internet Investment Fund owns the remaining shares. ELEKTRIM SA: Will Cut Jobs at Subsidiaries ------------------------------------------ Elektrim, the Warsaw-based telecommunications, cable manufacturing, and power engineering conglomerate, is planning to cut jobs at its three Internet subsidiaries before selling them next year, the Warsaw Business Journal reports. Marcin Zabielski, an independent consultant hired to sell Elektrim's online companies, will not say how many positions will be eliminated at e-commerce firm Easy Net and IT firms CT Creative Team and VPN Service. "If we sell them now, the price of the companies would be really low," Zabielski adds. Heavily indebted Elektrim has been considering the fate of its eight Internet and data transmission subsidiaries since Vivendi Universal failed to acquire them in September. NETIA HOLDINGS: Bond Buy-back Fails ----------------------------------- Less than 65% of Netia's bondholders have agreed to sell back shares for 14% of the nominal value, the Polish News Bulletin reported. Precise figures on how many of the holders agreed to the sale were not disclosed, but are expected to be very low. Netia, Poland's leading alternative local and long-distance fixed-line telecommunications provider, is seeking to by US$850 million worth of bonds for some US$110 million in order to reduce rising interest payments by $500 million every year. Netia remains open to reaching an agreement with creditors. It debts total about 8 billion Swedish kronas. =========== S W E D E N =========== ICON MEDIALAB: Withdraws Offers to Holders ------------------------------------------ IconMedialab Holding AB, a leading global e-business consulting and integration firm, decided to withdraw the offer to the shareholders and the holders of warrants of Icon Medialab International AB. The move came as the Swedish government proposed changes in the corporate taxation, limiting the right to deduct capital losses on shares in subsidiaries. In November, IconMedialab made a public offer to the shareholders of Icon Medialab International AB as a part of a financial restructuring of the Icon group. An essential part of the restructuring was to realize tax capital losses by selling subsidiaries from Icon Medialab International AB to IconMedialab Holding AB. As a result of the withdrawal, the shareholders that have already registered for the offer will have their original shares returned to each shareholder's securities account at the latest on December 14. For those shareholders whose holding is registered with a trustee at a bank or other asset manager, each trustee will manage the return. For further information, please contact William Kellerman, Corporate Communications, IconMedialab International, at telephone +46-70-375 90 20 or email william.kellerman@iconmedialab.se =========================== U N I T E D K I N G D O M =========================== AES CORPORATION: Shares Drop After Downgrade of U.K. Unit --------------------------------------------------------- Shares of power plant operator AES Corp. fell 10% in early Monday trading after the debt of the company's Drax power plant in the U.K. was downgraded to "junk" status, Reuters reported. AES shares were down $1.67 to $14.83 on the New York Stock Exchange. Over the weekend, the credit-rating agency Moody's Investors Service downgraded the debt of AES Drax Holdings Ltd. to "junk" status. Moody's said the outlook for long-term U.K. power prices and uncertainties about Drax's insurance coverage affected its downgrade. ATLANTIC TELECOM: Sell-off May Delay Until Next Year ---------------------------------------------------- Some parts of the collapsed Aberdeen-based Atlantic Telecom may be sold within the next weeks, but others units are more difficult to dispose and will drag on into next year, reports the Herald newspaper. It also seems that the U.K. operation will not generate any cash from the sale of its German operation that filed for protection from creditors after Atlantic called in administrators in October. The news came as administrator Iain Bennet from PricewaterhouseCoopers confirmed that creditors, owed more than 690 million pounds from Atlantic, were set to receive just 0.5p back for every pound they are due. Companies such as BT, IBM, Marconi, Worldcom and Cable & Wireless will be among Atlantic's largest creditors. Bennet said Atlantic is in talks with parties interested in buying parts of the business after earlier attempts to sell the entire business failed. In October, executives estimated Atlantic's assets at a mere 7.9 million pounds. BRITISH AIRWAYS: May Cut More Staff Members ------------------------------------------- British Airways, Europe's largest airline, may slash more employees in February 2002 as earnings sank because of the drop in passengers, Bloomberg reports. BA's passenger numbers fell by almost 18% in November, hit by the economic downturn, the attack on the World Trade Center in September, and the increasing strength of the no-frills operators. BA already has announced 7,000 job cuts since September. The company's shares fell 4.3 pence, or 1.9%, to 223.75p on Monday's trading. BRITISH AIRWAYS: Mulls 1-BB-Pound Rights Issue ---------------------------------------------- British Airways Plc is considering a 1-billion-pound rights offer as part of its restructuring program, knows as "Future Size and Shape," to be unveiled in February, the Times of London reports. According to BA chief executive Rod Eddington, the rights issue is an appropriate mechanism for reducing the airline's debt of 6.5 billion pounds. Europe's largest airline is also considering dropping unprofitable European routes, scaling back operations at London Gatwick airport and divesting its 25% stake in the Australian carrier Qantas Airways Ltd, the paper adds. The company's bonds have been relegated to junk status as credit rating agencies have grown increasingly concerned at the outlook for the airline industry. CENES PHARMACEUTICALS: Assigns Head Office Lease to De Novo ----------------------------------------------------------- CeNeS Pharmaceuticals plc, an England-based biopharmaceutical company specializing in the development and commercialization of drugs for CNS disorders and pain control, said yesterday that it had exchanged contracts to assign its head office lease at Compass House in Cambridge to De Novo Pharmaceuticals Limited. Under the terms of the agreement, De Novo Pharmaceuticals will take over the head lease and pay CeNeS 600,000 pounds for certain laboratory equipment and leasehold improvements that are no longer required by the restructured CeNeS operations. CeNeS will also receive 516,000 pounds that was previously held on deposit as security for the annual rent. The assignment is subject to final landlord's approval, which has been already given in principle. Concurrently, CeNeS will take a smaller sub-lease for office space from De Novo Pharmaceuticals. In November, Cenes sold its chemical library of ion channel blockers to US-based Scion Pharmaceuticals Inc for up to $2.8 million in order to reduce its cash burn and become self-funding in 2003. For more information, please contact CeNeS Pharmaceuticals chairman Alan Goodman or finance director Neil Clark at telephone +44 (0)1223 266466 or fax +44 (0)1223 266467 COLT TELECOM: Raises 494MM From Share Sale ------------------------------------------ Colt Telecom Group Plc, the cash-strapped provider of voice and data services to businesses in 13 European countries, raised 494 million pounds by selling 633.4 million new shares, or 97.5% of the number of shares offered to shareholders, at 62p each, Bloomberg reported Monday. The London-based company plans to use the funds to complete its network. U.S. fund manager Fidelity Investments, who bought 309 million shares in the offering, will purchase the remaining 16 million shares. Fidelity wants to acquire another 152 million shares to take its stake in Colt to 54%. Trading in the new shares is expected to begin on December 13. EQUITABLE LIFE: Treves Presses for Yes Vote to Compromise Deal -------------------------------------------------------------- Equitable Life chairman Vanni Treves has pressed for a yes vote for a compromise deal aimed at restoring stability to the troubled mutual life assurer, the Financial Times reported. If the compromise is rejected, the company will have increasing instability and no investment freedom, Treves said. "Bonuses are bound to be cut, we don't receive 250 million pounds from the Halifax and crucially, there will be 30 or 40 years the society will continue to live on, enormous anxiety for all our members," the chief added. Equitable's 485,000 individual policyholders and 6,000 pension group trustees must decide by January 11 on the compromise scheme that will allow the assurer to cap its liabilities to holders of valuable guaranteed annuity rate policies (GARs), estimated at about 1.6 billion pounds. MARCONI PLC: Wins $80MM Contract From Grande Communications ----------------------------------------------------------- Troubled telecom equipment supplier Marconi announced Monday that it has signed a five-year, $80 million networking supply agreement with Grande Communications, a Texas-based broadband service provider. Marconi will bring optical fiber connectivity to within 750 feet of most of Grande's customers, allowing the convenience of buying faster Internet, telephone and cable television services from a single provider. This deal will extend Marconi's leadership position in the deployment of Deep Fiber network access. Marconi is trying to reduce its debt burden of more than 3 billion pounds. It recently raised 25 million pounds from the sale of 6 million shares in Italian company Lottomatica, and has already disposed small non-core assets in recent months. MARKS & SPENCER: Shares Dip After Merrill Lynch Cut --------------------------------------------------- Marks & Spencer Plc shares fell 3%, or 10.75 pence to 349p, on Monday's trading after Merrill Lynch & Co. downgraded its stock recommendation for the U.K.'s largest clothing retailer to "neutral" from "accumulate," Bloomberg reported. The recent drop was the biggest decline since October. Earlier, reports say that Marks & Spencer is delisting from stock markets in Paris, Amsterdam and Brussels due to the low amount of its shares traded in each exchange. The company has introduced new lines, sold stores and businesses outside the U.K., and closed operations in Belgium, Germany, Portugal, Luxembourg and the Netherlands to reverse two years of sliding profit. M&S hopes to return 2 billion pounds to shareholders next March from money raised through disposals and property deals. NTL INCORPORATED: Announces Redundancy to Cut Cost -------------------------------------------------- NTL Incorporated, the debt-ridden broadband services company, said Monday it would cut an additional 2,000 jobs in drive to save cash. The redundancies will bring the workforce in U.K. down from 17,000 to around 13,000 by the end of 2002. NTL also said that it would implement a pay freeze for managers, a review of all operating and capital expenses, and review and remove all non-essential consultants and contractors to improve efficiency. "The initiatives being announced today are a continuation of our cost cutting program. They are prudent in the current climate and will allow us to operate more efficiently," NTL Chief Executive Officer Barclay Knapp said. For further information, contact John F. Gregg, Senior Vice President - Chief Financial Officer or Tamar Gerber, Director - Investor Relations at telephone (001)212 906 8440, or via e-mail at investor_relations@ntli.com RAILTRACK GROUP: Ernst & Young to Reveal New Board Structure ------------------------------------------------------------ Administrator Ernst & Young plans this week to announce the new board structure for collapsed infrastructure company Railtrack plc. According to a report from the Financial Times, John Prideaux is expected to replace Railtrack chairman John Robinson. Railtrack engineering director Richard Middleton will be promoted to chief executive to replace Steve Marshall. Project finance director Sebastian Bull will replace David Harding as finance director. Plans for a new executive team follow speculation that John Robinson and David Harding will resign this week. Steve Marshall is also expected to announce his departure this week. Robinson and Marshall both resigned after Railtrack plc was put into administration in October. They will remain directors of Railtrack Group, the parent company, which is not in administration. *********** 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 * * *