/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/011220.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 Thursday, December 20, 2001, Vol. 2, No. 248 Headlines * B E L G I U M * SABENA SA: Court Grants SIC Creditor Protection * D E N M A R K * ENERGY SOLUTIONS: Escapes Insolvency * F R A N C E * AIR LIB: Receivers Refuses to Sign Sale Documents VALEO SA: Divests Sainte-Savine Facility * G E R M A N Y * BANKGESELLSCHAFT BERLIN: Berlin Frees Bank of Real Estate Risks DAIMLERCHRYSLER: May Cut 6,000 Jobs in Germany FLOWTEX TECHNOLOGIE: Managers Face Imprisonment GONTARD & METALLBANK: Threatened by Insolvency KINOWELT MEDIEN: Bank Sacrifices Kinowelt in Fight With AOL LOBSTER NETWORK: Shares Plunge 60% Amid Insolvency PHILIPP HOLZMANN: Adopts Ex-board Members' Settlement * I T A L Y * ALITALIA SPA: Lazard to Raise 1.4BB Euros * N O R W A Y * BRAATHENS SA: Sunde to Compete With SAS Offer KVAERNER ASA: Bondholders Reject Rokke Conditions STEPSTONE ASA: Says Rights Issue 27% Oversubscribed * P O L A N D * NETIA HOLDINGS: Appoints PwC as Auditors NETIA HOLDINGS: Will Continue Business Activities * S W E D E N * AXIS AB: Sells Real Estate Property * S W I T Z E R L A N D * SWISSAIR GROUP: EDS to Provide IT Services to Atraxis Clients * U N I T E D K I N G D O M * DANKA BUSINESS: Appoints CEO as Board Chairman EQUITABLE LIFE: Chairman Chides Trustees for Vote Delay MILLENNIUM DOME: Government Rids Itself of Dome NTL INCORPORATED: Delays Mast Sale NTL INCORPORATED: Develops New Business Plan NTL INCORPORATED: Observers Say Debt-restructuring in the Offing P&O PRINCESS: Maintains Negative Review From Fitch RAILTRACK GROUP: Completes Debt Standstill Agreement RAILTRACK GROUP: Plans to Sue Government to Extract Compensation RAILTRACK GROUP: Posts Profits in Third Quarter ============= B E L G I U M ============= SABENA SA: Court Grants SIC Creditor Protection ----------------------------------------------- The Brussels commercial court gave the Sabena Belgian World Airlines SA coordination center (SIC) another 15 days' protection from creditors as talks continue to work out a restructuring plan. According to a report from Belga news agency, the options being considered include conversion of the SIC loans to DAT into shares in the successor airline to be set up around DAT. Sabena units Technics and Sobelair might also see their debt rescheduled. ============= D E N M A R K ============= ENERGY SOLUTIONS: Escapes Insolvency ------------------------------------ Energy Solutions International, the supplier of software for the oil and gas industry, has escaped insolvency after the company entered a lending agreement with its banks. The agreement, according to the Borsen newspaper report, will be announced shortly. The company has debts of about 93 million Danish krone as of June 30. Its turnover is expected to total about 100 million Danish krone in 2002. =========== F R A N C E =========== AIR LIB: Receivers Refuses to Sign Sale Documents ------------------------------------------------- Receivers of troubled French airline Air Lib have refused to sign the documents relating to its disposal before December 21, preventing the buyers from taking possession of the airline's assets, the French newspaper Les Echos reported. This, in turn, has denied them the possibility of including the assets in question in their application for the bank loans needed to compensate for the 61 million euros debt which the Swiss national carrier Swissair has been unable to pay Air Lib due to its own insolvency. Pascal Perri, executive director of Holco, the company that took over Air Lib in July, claims that the court's decision ordering for the signature of the receivers should enable French airline to obtain 30 million euros worth of tangible assets. VALEO SA: Divests Sainte-Savine Facility ---------------------------------------- Valeo's Valeo Electronics has concluded an agreement with NIEF Plastic on the sale of its injection molding and small production runs activities of its facility in Sainte-Savine. The plan to divest this facility employing 335 people was announced in September. This operation is part of the strategy of the automotive components supplier aimed at refocusing the group on its core business through the sale of non-core activities. In November, the company sold its Filtrauto business to Italian car parts group Sogefi SpA. Contact Kate Philipps at telephone + (33) 1 40 55 20 65 or via email kate.philipps@valeo.com for more information. ============= G E R M A N Y ============= BANKGESELLSCHAFT BERLIN: Berlin Frees Bank of Real Estate Risks --------------------------------------------------------------- Bankgesellschaft Berlin AG major shareholder, the state of Berlin, has agreed to free the bank of existing real estate risks to meet the demands of potential investors, the Handelsblatt reported. The debt-ridden Berlin bank and employee representatives have further agreed a savings package to reduce costs by 450 million euros by 2005. Personnel costs will account for 300 million euros of the total. The bank previously said that it plans to cut 4,000 of its existing 15,000 jobs. A wider cost savings package still has to be submitted to the E.U. Commission for approval by end of January. Only a few months ago Bankgesellschaft was rescued from bankruptcy by a 2 billion euros capital increase after incurring massive losses in its real-estate business. In November, Bankgesellschaft reported a loss of 369 million euros for the first nine months of this year. The bank said the loss was due to its underperforming real estate business and stock write-downs. DAIMLERCHRYSLER: May Cut 6,000 Jobs in Germany ---------------------------------------------- DaimlerChrysler AG may reduce its German work force by 5,000 to 6,000 next year because its commercial-vehicles business has been hit by the stalling global economy. Personnel chief Guenther Fleig, according to the Wall Street Journal, says that if the work force must be cut, it will only be done through voluntary measures. Senior DaimlerChrysler spokesman Hartmut Schick said that no decisions about job reductions have been made, and that the company is still weighing various scenarios for its operations. FLOWTEX TECHNOLOGIE: Managers Face Imprisonment ----------------------------------------------- The managers of Flowtex Technologie GmbH, the German drilling equipment maker that collapsed last year with debts of 1.75 billion euros, were sentenced to prison for commercial fraud, tax evasion and forgery. According to a report from the Financial Times, the Mannheim court sentenced chief executive Manfred Schmider to 12 years in jail for his role in some 2,700 bogus leasing deals. His former business partner, Klaus Kleiser, was also sentenced to serve nine and a half years behind bars. Two other partners, among them the ex-CFO of Flowtex, were sentenced to six and a half and seven and a half years in prison. KPMG paid the banks and leasing companies that suffered damage through the collapse a compensation sum of 50 million euros. GONTARD & METALLBANK: Threatened by Insolvency ---------------------------------------------- Frankfurt-based bank Gontard & Metallbank AG will face insolvency if it fails to find fresh equity. Chairman Lothar Mark, according to a report from Die Welt newspaper, intends to carry out a capital increase in which Gold Zack AG, a German financial services group that controls 45% of the bank, is expected to participate. The bank's equity does not meet the legal minimum requirements of 8% any longer. At present, its equity amounts to only 4.6% of its lending volume. KINOWELT MEDIEN: Bank Sacrifices Kinowelt in Fight With AOL ----------------------------------------------------------- Kinowelt Medien AG said that ABN Amro's decision to foreclose on its credit and to file an insolvency suit against the German film rights group was made in order to strengthen the Dutch bank's position with AOL Time Warner film arm Warner Bros. "This is amply proven by the course of events", explains Kinowelt Chief Executive Dr Michael Kolmel. "We could not understand why ABN AMRO Bank NV chose this moment to call in loans although it had extended the term of payment for many months and despite the fact that it has relatively poor collateral from Kinowelt's assets." Burdened by its indebtedness, Kinowelt revealed a net loss of 309.1 million euros in the first nine months of the year, compared with a net profit of 8.5 million euros in the same period in 2000 (See http://www.bankrupt.com/misc/kinowelt3Q.pdf for the company's interim report). Kinowelt has a loss of 272.2 million euros before interest and taxes, compared with earnings before interest and taxes of 28.3 million euros the previous year. For further information, contact Jorg Lang, Vice President Investor Relations, at telephone 089-30 796 8103, fax 089-30 796 7330, or via email at IR@kinowelt.de LOBSTER NETWORK: Shares Plunge 60% Amid Insolvency -------------------------------------------------- Shares of German data security network server manufacturer Lobster Network Storage AG plummeted by 60% on Monday, the Frankfurter Allgemeine Zeitung reported. The Berlin-based company filed for bankruptcy protection early this week in order to protect the interests of its creditors, shareholders and employees. It intends to proceed talks with potential investors and to bring them to a successful end. Further information, contact Kira Baitalskaia at Zimmerstrasse 68, 10117 Berlin, telephone 030.896.72-0, fax 030.896.72-499, or via email info@lobster.de PHILIPP HOLZMANN: Adopts Ex-board Members' Settlement ----------------------------------------------------- German construction group Philipp Holzmann AG said Tuesday it has adopted the motions presented by the Board of Management and the Supervisory Board regarding the company's settlements with former Board of Management members and their liability insurance. Under this settlement, the insurance company AIG will pay 38 million Deutshce marks to Philipp Holzmann AG in compensation for the claims for damages presented against former Board of Management members Prof. Dr. Dr. Lothar Mayer, Lothar G. Freitag, Gerhard L"gters, Dieter Rappert, J〉gen Sch"nwasser and Michael Westphal. Simultaneously, Philipp Holzmann also negotiated separate settlements with those former Board of Management members for waiving a substantial part of their pension entitlements. The volume of the settlement amounts to a total of 50 million Deutshce marks. Philipp Holzmann in September posted a net loss of 56.52 million euros (see http://bankrupt.com/misc/philipholzmann1.pdffor the company's financial statement). ========= I T A L Y ========= ALITALIA SPA: Lazard to Raise 1.4BB Euros ----------------------------------------- Italian flagship carrier Alitalia, which is seeking fresh cash to beat a sector crisis, has appointed investment bank Lazard LLC as adviser to raise funds on capital markets. According to a Reuters report, a source close to the operation said that one way of raising cash would be through a convertible, five-year bond. The other solution would be mixed, with a share float alongside the issue of non-convertible bonds. Plans to seek funding for 1.2 to 1.4 billion euros from investors had already been announced in a 2002-03 industrial plan approved in November. =========== N O R W A Y =========== BRAATHENS SA: Sunde to Compete With SAS Offer --------------------------------------------- Norwegian financier Olav Nils Sunde is tempted to challenge Scandinavian Airlines System (SAS), the airline for Denmark, Sweden and Norway, if the airline is forced to scrap its loyalty program. According to a report from Aftenposten, Sunde has written a letter to the competition authorities revealing that he may focus on the airline sector again in the future. The financier owns Norwegian transport company Color Group. Sunde believes that if SAS' loyalty program is scrapped and the flight passenger fee is reduced, new players on the Norwegian domestic market may emerge. SAS is in the process of taking over Braathens ASA and will thereafter hold a quasi monopoly on the Norwegian domestic market. Its takeover offer has already been accepted by majority of the Norwegian airline's shareholders. KVAERNER ASA: Bondholders Reject Rokke Conditions ------------------------------------------------- Two groups of bondholders in Kvarner, the Anglo-Norwegian engineering and construction group, have rejected the conditions of shareholder Kjell Inge Rokke for a refinancing of the company, the Aftenposten reported. The group was forced to hold new negotiations with its 50 banking connections. The two groups, which asked for modifications in the refinancing proposal, were told that Kvarner is at risk of being declared insolvent if the conditions were not supported. It has left little impression on the bondholders. They were also told that they would lose 20 million Norwegian krone if they support Rokke's conditions, Aftenposten added. STEPSTONE ASA: Says Rights Issue 27% Oversubscribed --------------------------------------------------- Oslo-based online recruitment agency said that the rights issue from November 28 to December 11 was 27% oversubscribed. A total of 334,558,858 shares was subscribed for by 2,352 investors, while the number of shares to be issued in the rights issue is 263,992,166. Notice of allotment was sent to investors Tuesday, and payment will take place on December 20. Following completion of the offer, StepStone ASA will have 1,161,898,266 shares outstanding. Orkla Enskilda Securities ASA acts as Manager, and ABG Sundal Collier Norge ASA acts as Co-manager of the offer. The cash raised in the offer will be used to rebuild the business. It was revealed that the company would have run out of cash by Christmas without the new funding. For further inquiries, please contact Bob Gregory, IR Director, at telephone +44 7836 572 133, or Colin Tenwick, CEO, at +44 7808 946 402 =========== P O L A N D =========== NETIA HOLDINGS: Appoints PwC as Auditors ---------------------------------------- Netia Holdings S.A., Poland's largest alternative fixed-line telecommunications services provider, said Tuesday it has appointed PricewaterhouseCoopers as their auditor. The auditing firm will examine the company's stand-alone financial statements and the company's consolidated financial statements for the financial year ending December 31, 2001. NETIA HOLDINGS: Will Continue Business Activities ------------------------------------------------- Netia Holdings S.A. said Tuesday it would continue its business activities despite negative financial results. The company in September reported a loss of 1.87 billion Polish zlotys, which exceeds the aggregate of the spare capital, the reserve capital and one-third of the company's 1.74 billion Polish zlotys share capital. Netia previously announced plans to engage in discussions with its bondholders concerning a consensual reorganization of its balance sheet to reduce its debt and interest burdens. Netia's American Depositary Shares are listed on the Nasdaq National Market, while the company's ordinary shares are listed on the Warsaw Stock Exchange. Contact Anna Kuchnio (IR) at telephone +48-22-330-2061 for further information. =========== S W E D E N =========== AXIS AB: Sells Real Estate Property ----------------------------------- Axis, a developer of solutions for user-friendly and secure communication over wired and wireless networks, announced Tuesday that the company has sold a real estate property in Lund. The purchase-sum is approximately 13 million Swedish kronas and the sale will not have any positive effect on Axis' results since the change of offices will involve additional costs. Since its nBand has not been able to secure further funding, the company is closing down its operations and is pursuing sale of its intellectual property assets. In the view of this, as stated in Axis' third quarter interim report, Axis has decided to write down its holding of shares in the company to zero. The booked value of Axis' holding in nBand was 32 million Swedish kronas. The group posted an operating loss for comparable units of 91 million Swedish kronas for the nine-month period, an improvement of 45 million Swedish kronas compared with the corresponding period in the preceding year. For further information, please contact Anne Rhenman, Head of Corporate Communications and Investor Relations, Axis Communications at telephone + 46 708-90 18 29 or via email anne.rhenman@axis.com, or Jorgen Lindquist, CFO, at telephone + 46 42 272 28 08 or email jorgen.lindquist@axis.com ===================== S W I T Z E R L A N D ===================== SWISSAIR GROUP: EDS to Provide IT Services to Atraxis Clients ------------------------------------------------------------- Swissair Group said that EDS, the world's leading provider of IT services to the airline industry, finalized its agreement to provide IT services to former clients of Atraxis, the IT subsidiary of Swiss aviation group, which is currently under creditor protection. Under terms of the agreement, EDS ensures the uninterrupted continuation of IT services to Atraxis' worldwide client base of airlines and airports. A number of Atraxis employees in Switzerland, South Africa and the U.S. will transition to EDS as part of the agreement. The agreement also secures social plan benefits for the Atraxis employees in Switzerland who are not scheduled to transition to EDS. Financial terms of the agreement were not disclosed. =========================== U N I T E D K I N G D O M =========================== DANKA BUSINESS: Appoints CEO as Board Chairman ---------------------------------------------- Danka Business Systems PLC said that its chief executive officer P. Lang Lowrey would assume the role of chairman of Danka's Board of Directors effective January 13. Michael B. Gifford, who lead Danka as chairman up to its recent financial restructuring, will remain as a director of following January 13. Danka also announced the appointment of Dr. Kevin C. Daly, currently the Chief Technical Officer for the Storage Solutions Group of Quantum Corporation, to its Board of Directors also effective January 13. Danka Business, headquartered in London and Florida, is one of the world's largest providers of office imaging solutions, related services and supplies. The company 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. EQUITABLE LIFE: Chairman Chides Trustees for Vote Delay ------------------------------------------------------- Equitable Life Chairman Vanni Treves recently criticized the trustees of group pension schemes for showing "insufficient sense of urgency" in the ongoing compromise deal voting. Mr. Treves, according to The Times, is disappointed over the initial voting turn out, which indicates that many trustees have yet to vote. "Trustees who miss this deadline will be disenfranchising their members," Mr. Treves warned. Equitable's survival is hinged on the approval of the compromise deal by majority of its policyholders. However, equally critical is the support of its 6,000 group scheme members. The voting mechanics provide not only for the majority support of the policyholders, but also 75 percent by value of voting policies. Trustees of these group pension schemes hold sway to over 20% of the value of the GBP20.1 billion (US$29.2 billion) with-profits fund. MILLENNIUM DOME: Government Rids Itself of Dome ----------------------------------------------- The British government will not receive a penny until at least 2004 from a new deal putting the Millennium Dome into private hands of the Meridian Delta Limited consortium, Reuters reported Tuesday. The consortium includes Lend Lease, Quintain Estates and Anschutz Entertainment Group. The site will remain government-owned and will be leased from English Partnerships for up to 20 years. The final deal will not be in place until May, Reuters added, with the government receiving nothing until at least the end of 2004. David Hutton of property group Quintain Estates said the public should eventually receive some 500 million pounds over 25 years from the deal. The Dome, which closed it doors to the public on New Year's Eve after it received only a little over half the predicted 12 million visitors, will become a venue for sports and concerts once the plan is completed. NTL INCORPORATED: Delays Mast Sale ---------------------------------- NTL Incorporated, the UK's leading broadband services company, said Tuesday that talks are continuing with a number of third parties on the sale of its Broadcast and Continental European operations. Chief executive Barclay Knapp said NTL had hoped to announce details of the broadcast transaction and the options being considered for the continental operations by the end of the year. "Unfortunately, this is not the case, but our new plans allow us to continue to approach these alternatives with the goal of maximizing shareholder value," he said. Investors regard the sale of the broadcast unit as a crucial part of a plan to shore up its finances after a two-year spending spree to both expand and upgrade its cable network. NTL hopes to sell the broadcast unit that transmits signals for British commercial TV stations ITV1, Channel Four and Channel Five for well in excess of one billion pounds. NTL INCORPORATED: Develops New Business Plan -------------------------------------------- Debt-laden cable company NTL Incorporated said Tuesday that its management team is developing a new business plan that will result in incremental positive cash flow compared. The company will provide details of its revised plans and revised market guidance for 2002 early next year. This date will be confirmed in the New Year, NTL said in a statement. NTL INCORPORATED: Observers Say Debt-restructuring in the Offing ---------------------------------------------------------------- NTL Incorporated may have successfully arrested a further slide in its share value Tuesday, but analysts are still not impressed, says The Times. According to the report, most analysts believe NTL will still be forced next year to restructure its debts composed of a complex web of bank and bond obligations. "We're getting closer and closer to some type of debt restructuring, whether it's a bond buyback or debt-for-equity swap. People are losing confidence in them," says Louis Landeman, a high-yield credit analyst at Bear Stearns. NTL shares ended its relentless slide Tuesday, rising 12 cents to 74 cents in early New York trading. This, as investors welcomed news that the firm will "meet or exceed" full-year earnings targets. The company has projected EBITDA of GBP485 million (US$706 million) this year on revenue of 2.6 billion pounds. Meanwhile, the company confirmed reports that sale of its transmission towers and European assets will be deferred until the New Year. NTL said it is still talking with potential buyers of the transmission towers, which it is peddling for GBP1 billion (US$1.45 billion). P&O PRINCESS: Maintains Negative Review From Fitch -------------------------------------------------- International rating agency Fitch said Tuesday it maintained the rating Watch Negative status on the 'BBB+/F2' Senior Unsecured and Short-term ratings of P&O Princess Cruises plc. The action follows the rejection by P&O Princess' management of a bid by Carnival Corporation. Carnival's conditional offer consisted of a mixture of cash and equity of $4.6 billion, excluding debt in value. In November, Fitch put P&O Princess on Rating Watch Negative when the proposed merger with Royal Caribbean was announced. P&O Princess also received a downgrade review from Moody's Investors Service. RAILTRACK GROUP: Completes Debt Standstill Agreement ---------------------------------------------------- Railtrack Plc, Britain's collapsed rail track operator, has successfully completed a standstill agreement after its creditors have agreed not to call in 3.1 billion pounds worth of debts and other financing arrangements, Reuters reported Tuesday. The creditors entered into standstill agreements on two billion pounds worth of bank loans and of finance leases under which around 428 million pounds is outstanding, Railtrack administrators said. Railtrack said on Friday that holders of nearly 1.14 billion pounds in bonds had agreed not to call in the debts or take legal action against the insolvent railway operator to recover their money. The standstill agreement is the first stage in the government's plans to transfer the debts to a successor firm, which the government envisages as a not-for-profit firm funded entirely by debt. Under terms of the deal, bondholders waive their rights to all claims of default. In return, the government will service Railtrack's debt for three years or until its liabilities are transferred to a replacement company. RAILTRACK GROUP: Plans to Sue Government to Extract Compensation ---------------------------------------------------------------- Railtrack Group Plc, owner of Britain's railway operator that collapsed in October, said it planned to sue ministers to recover money for its shareholders, including thousands of Railtrack workers and some of the world's biggest investment funds. The legal action comes after Railtrack Group reported an unexpected 67% rise in pre-tax profit to 292 million pounds in the six months to September 30. "As we have said consistently, Railtrack Plc was not insolvent until the Secretary of State chose to make it so," Chief Executive Steve Marshall said. Defending his decision to push Railtrack out of business, Transport Secretary Stephen Byers said the company was headed for a deficit of 700 million pounds by December and 1.7 billion pounds by end March. RAILTRACK GROUP: Posts Profits in Third Quarter ----------------------------------------------- Railtrack posted a near doubling of its interim profits on Tuesday and said there was no reason to make it insolvent. The collapsed rail network operator posted pre-tax profits of 292 million pounds for the six months to September 30, an increase of 117 million pounds from the previous year. Operating profit also rose to 333 million pounds during the half from 197 million pounds last year. The group also reported net assets of 2,933 million pounds and total undrawn, committed facilities of approximately 1,900 million pounds. No dividend will be paid for the period. Railtrack was put into administration on October 7 by the government, leaving shareholders without any way to recoup their investment. The High Court has appointed Ernst & Young LLP as administrator for Railtrack. *********** 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 * * *