/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/011224.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 Monday, December 24, 2001, Vol. 2, No. 250 Headlines * B E L G I U M * LERNOUT & HAUSPIE: Administrator Accepts EUR1.25BB in Claims REAL SOFTWARE: Increases Capital by EUR2.8MM SABENA SA: Atraxis to Cut 100 Jobs * G E R M A N Y * DEUTSCHE TELEKOM: Hives Off Antenna Business to Cut Debt LTU GROUP: Banks Question Role in Rescue Plan PIXELPARK AG: May Face Lawsuit on Spanish Withdrawal Plan WINDHOFF AG: Files for Insolvency WUNSCHE AG: Subsidiary Facilitates Parent Insolvency * I R E L A N D * AER LINGUS: Union Approves Restructuring Plan * I T A L Y * FINMECCANICA SPA: Moody's Assigns Baa2 Rating to Program * S W I T Z E R L A N D * SWISSAIR GROUP: May Delay Units Sell-offs * U N I T E D K I N G D O M * BRITISH TELECOM: MmO2 Appoints Non-Executive Director COLT TELECOM: Shares Tumble on Setback in Germany ENRON CORPORATION: Wessex Unit Draws Buyers MARCONI PLC: Disposes of U.S. Subsidiary to Ease Debt MARCONI PLC: Falls on Bond Buyback MARCONI PLC: Sells 43MM-Euro Bonds to Ancrane MARCONI PLC: Sells Hotpoint Stake to Reduce Debt NTL INCORPORATED: Senior Bondholders Seek for Law Firm RAILTRACK GROUP: Faces 6.8BB-Pound Funding Gap RAILTRACK GROUP: WestLB in Talks to Drop Bid ============= B E L G I U M ============= LERNOUT & HAUSPIE: Administrator Accepts EUR1.25BB in Claims ------------------------------------------------------------ Lernout & Hauspie Speech Products' administrators have accepted 406 claims by creditors of the bankrupt company worth 545 million euros, Dow Jones Newswires reported. The Ypres commercial court will decide in April 311 other claims of 1.25 billion euros, which the administrators dispute, the news agency added. REAL SOFTWARE: Increases Capital by EUR2.8MM -------------------------------------------- Software group Real Software increased its capital by 506.866 shares or 2.8 million euros through a debt-for-equity swap. Dow Jones Newswires reported that the new shares represent 3.3% of the company's capital. 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 the company to the verge of bankruptcy last year. SABENA SA: Atraxis to Cut 100 Jobs ---------------------------------- Atraxis Belgium, the information technology unit of the former Sabena Group, plans to lay-off 100 people, or almost half of its staff, Le Soir reports. The move is a measure to keep the company viable. The company, which employs 2,100 workers worldwide, has already axed more than 300 employees. ============= G E R M A N Y ============= DEUTSCHE TELEKOM: Hives Off Antenna Business to Cut Debt -------------------------------------------------------- Deutsche Telekom AG will hive off its antenna infrastructure business into a separate company to convince investors that it is serious about dismantling its debt burden of 65 billion. DT chief finance officer Karl-Gerhard Eick, according to a Handelsblatt report, "will find a buyer without any problem." Eick added there is already a strong demand for installations of that kind, and demand is set to get stronger as mobile-phone companies build up their third-generation networks. LTU GROUP: Banks Question Role in Rescue Plan --------------------------------------------- The rescue plan for German tour operator LTU GmbH ran into unexpected trouble when banks have questioned their role in the operation. According to a Handelsblatt report, Stadt-Sparkasse Dusseldorf, WestLB and Dresdner Bank, are demanding further security beyond the 120-million-euro guarantee by the North Rhine-Westphalian federal state government for the tour operator. The European Union Commission already approved the guarantee. Under the rescue plan, the three banks will release the funds, aimed at keeping the company from going bankrupt, within the next six months. A Stadt-Sparkasse Dusseldorf spokesman told Handelsblatt that there is a potential for conflict of interests if the bank acts as a trustee on the one hand and a provider of funds on the other. LTU's already difficult situation became perilous following the collapse of its major shareholder, Swissair Group AG. PIXELPARK AG: May Face Lawsuit on Spanish Withdrawal Plan --------------------------------------------------------- Pixelpark AG may face a compensation claim from Banco Bilbao Vizcaya Argentaria (BBVA) because the Spanish bank only found out about Bertelsmann AG's unit decision to withdraw from Spain via the press. According to a report from the daily Frankfurter Allgemeine Zeitung, BBVA representative Victor Goyenechea in his letter to Pixelpark chairman Paulus Neef did not exclude the possibility of filing a suit against the Berlin-based Web site designer and Internet consultant. Pixelpark was currently negotiating with BBVA, its Spanish unit's minority shareholder, about its planned withdrawal from Spain, but the news has unnerved clients and staff of Pixelpark Latam SA, the paper said. A Pixelpark spokeswoman said it Pixelpark will either close its unit down completely or only hold a minority stake in Pixelpark Latam. BBVA currently owns a 20% stake in the unit. Pixelpark posted an operating loss of 14.2 million euros in the third quarter. Sales were down 26% to 17.4 million euros as a result of continual, difficult market conditions. Shares overall have dropped 80% this year, valuing the company at about 142 million euros. WINDHOFF AG: Files for Insolvency --------------------------------- Rheine-based plant and machinery company Windhoff AG is considering filing for insolvency after banks were reluctant to accept a bail-out plan put together by the company and potential investors. At the end of November, the company claimed it was still heading for a balanced result in 2002, expecting to reach a profit in 2003. Windhoff AG, which reported losses during the previous 12 months, last paid a dividend during fiscal year 1998, when it paid dividends of 0.18 per share. For further information, contact Windhoff at telephone 05971/58-0 or via email at info@windhoff.de WUNSCHE AG: Subsidiary Facilitates Parent Insolvency ---------------------------------------------------- Debt-ridden fashion group Wunsche will file for insolvency for its Hamburg-based parent group Wunsche AG this week. Handelsblatt reported that the group's creditor banks, one of which is BHF-Bank, were aiming to facilitate a quick sale of Wunsche AG subsidiaries shareholdings designer label Joop GmbH, fashion house Cinque Modevertriebsgesellschaft mbH, trading company Miles Handelsgesellschaft International mbH and textile group Jansen Textil GmbH. The creditors believe that the only way to achieve an acceptable selling price for the units is by filing for insolvency for the parent company to limit the risk of credit default. Luxury-goods group LVMH and cosmetics giant Lancaster Group were said to be interested in taking over Joop GmbH. Early this month, Wunsche chairman Gerhard Janetzky told shareholders that the company was threatened by insolvency. The group was set to close 2001 with losses of 35 million deutsche marks. ============= I R E L A N D ============= AER LINGUS: Union Approves Restructuring Plan --------------------------------------------- Majority of the Aer Lingus workers from the SIPTU union gave a nod on the restructuring plan that will see more than 2,000 jobs go at the cash-strapped national airline. According to a Reuters report, 2,250 members or 69% have voted on the survival plan, with 81% backing the measures. The airline's survival plan involves reducing capacity by a quarter and cutting more than 2,000 jobs from a workforce of 6,300. SIPTU branch secretary Owen Reidy, however, warned that its support was conditional on there being no compulsory redundancies. Aer Lingus is facing losses of around 70 million Irish pounds for the year. It was already suffering from the global downturn and also the foot-and-mouth livestock disease outbreak last Spring before the September 11 attacks on the U.S. severely hit travel demand. ========= I T A L Y ========= FINMECCANICA SPA: Moody's Assigns Baa2 Rating to Program -------------------------------------------------------- Credit ratings agency Moody's Investors Service assigned a Baa2 rating to the 1-billion-euro Medium-Term Note program of Finmeccanica S.p.A., a diversified company with primary participation in the aerospace and defense markets. Moody's said that the Baa2 rating reflects the company's importance as Italy's primary defense contractor, its strong market positions, as well as the potential for further strengthening of its operating performance and balance sheet. Furthermore, the rating considers uncertainty related to the success of the new joint-ventures between Finmeccanica and the European Aeronautical, Defense and Space Company (EADS) in the military aircraft and civil aerostructures businesses as well as in missiles. After years of disappointing operating performance and poor financial condition, its new management team embarked on a new strategy aimed at repositioning its businesses through divestments of underperfoming non-core businesses. The Rome-based company recently announced the disposal of part of its 21.7% stake in STMicroelectronics. Its net bank debt as of September 30 is 1.4 billion euros, down 53 million euros compared to June 30 and down 65 million euros compared to September 30 the previous year. ===================== S W I T Z E R L A N D ===================== SWISSAIR GROUP: May Delay Units Sell-offs ----------------------------------------- The disposal of the healthy Swissair units will take a few more months as talks are still on going, Reuters reports. A spokesman for Gate Gourmet, the world's second-largest airline caterer, say it will take two to three months before a deal will be concluded. A Swissair Group board member said recently in a newspaper interview that Gate Gourmet had a value of four billion Swiss francs before September 11, but this had dropped to between 1 billion and 1.5 billion after the attacks. The disposal of maintenance subsidiary SR Technics, Reuters adds, is going at a slower pace. Meanwhile, the sale of ground handling services unit Swissport to Candover Partners of Britain is almost in the bag and will be concluded this year. Swissair Group and several of its other subsidiaries have been operating under creditor protection since early October and will be wound up late in 2002. The sales are the sole chance that creditors of the collapsed Swissair Group will see any return on the more than 12 billion Swiss francs it owes. =========================== U N I T E D K I N G D O M =========================== BRITISH TELECOM: MmO2 Appoints Non-Executive Director ----------------------------------------------------- mmO2, the demerged wireless arm of British Telecommunications Plc, announced a further strengthening of its board with the appointment of Ian Meakins as a Non-Executive Director with immediate effect. Meakins will bring in-depth marketing experience, allied with a tremendous track record of aggressively driving business growth and building brand awareness in highly competitive international markets. According to mmO2 chairman David Varney, Meakins will be a significant asset to the company, as they focus on further improving operational performance and leveraging their leading position in mobile data and internet services. COLT TELECOM: Shares Tumble on Setback in Germany ------------------------------------------------- Shares of cash-strapped COLT Telecom Plc fell 11% Thursday after it said sales growth at its key unit in Germany would slow next year. COLT German chief Horst Enzelmueller, according to a Reuters report, expected revenue growth to slow to 30% next year, from 55% forecast for this year. He added that break-even at the German business was now expected only in 2003-2004. The London-based company, a provider of voice and data services to businesses in 13 European countries, recently secured 494 million pounds in funding after a share issue backed by fund manager Fidelity, its biggest stakeholder. COLT stock is underperforming the DJ Stoxx pan-European telecom index by 90% this year. It lost 90% of its value in an over- supplied market for telecoms capacity. ENRON CORPORATION: Wessex Unit Draws Buyers ------------------------------------------- U.S. energy trader Enron Corporation, which filed for bankruptcy early this month, has drawn up potential bidders for its Wessex Water utility in the U.K. According to a Bloomberg report, Italian power company Enel SpA may bid for the water company to enter the European water industry. Other possible buyers include Germany's biggest state-owned bank Westdeutsche Landesbank Girozentrale and Royal Bank of Scotland Group Plc. Analysts estimate Enron will raise between 1 and 1.2 billion pounds for Wessex Water, excluding assumed debt. Enron is selling assets from India to Latin America to pay debt and continue trading energy. MARCONI PLC: Disposes of U.S. Subsidiary to Ease Debt ----------------------------------------------------- Buckling under some 3.5 billion pounds of net debt, telecom equipment group Marconi is selling off its wholly-owned subsidiary, Marconi Commerce Systems, to tools and environmental controls maker Danaher Corporation to ease the burden. "This transaction represents a major milestone in our on-going program to focus on our core communications business," Marconi Chief Executive Mike Parton said. The 225-million-pound transaction, which is subject to regulatory approvals, is expected to close in early 2002. Marconi Commerce Systems, headquartered North Carolina in the U.S., is a leading supplier of fuel dispensing equipment, fully integrated point of sale systems and back office accounting systems for the global petroleum marketplace. During the six month period ended September 30, the company contributed sales of 183 million pounds and operating profits of 5 million pounds. The value of the company's net assets was 108 million pounds at September 30. MARCONI PLC: Falls on Bond Buyback ---------------------------------- Shares in Marconi PLC fell 2.4p, or 6.7%, to 33.60, after it said it would sell stock to existing shareholders to cut debt, Bloomberg reported. Marconi said it plans to buy back about $219 million of its euro- and dollar-denominated bonds. The debt-laden company has plunged 95% this year. MARCONI PLC: Sells 43MM-Euro Bonds to Ancrane --------------------------------------------- Troubled telecom equipment group Marconi plc said that its subsidiary Ancrane Limited has purchased or agreed to purchase the company's bonds. The sale includes Marconi's 43 million euros of its 500-million- euro 5.625% bonds due 2005, 181 million of its 1-billion-euro 6.375% bonds due 2010 and $18 million of its $900 million 7.75% bonds yankee bonds due 2010. Marconi's 6.375% euro bond due 2010 was bid at 47% of face value up two points on the day. It fell to as low as 27 percent of face value earlier this year. Following the purchase, the 457-million-euro 2005 eurobonds, 819- million-euro 2010 eurobonds and $882 million of the 2010 yankee bonds remain in issue and not held by Marconi plc or any of its subsidiaries. Ancrane Limited may, in due course, make arrangements to cancel the bonds it has purchased. MARCONI PLC: Sells Hotpoint Stake to Reduce Debt ------------------------------------------------ Phone-equipment maker Marconi sold its 50% stake in washing machine maker Hotpoint to Merloni Elettrodomestici SpA chairman Vittorio Merloni to cut its debt, the Financial Times reported, without citing its sources. Financial details were not disclosed. The move came as Marconi stepped up efforts to reduce its debt with a surprise bond buy-back. Marconi's debt swelled after former Chief Executive Officer George Simpson sold defense assets and bought phone-equipment businesses. Now sales are falling as customers cut spending. NTL INCORPORATED: Senior Bondholders Seek for Law Firm ------------------------------------------------------ A group of senior NTL bondholders in the U.S. are looking to appoint a legal firm to represent them in the event the debt laden cable operator restructures its debt, the Financial Times reported, without citing sources. Many bondholders are seeking legal advice to ensure their interests are defended in a swap of new NTL equity for most or all of NTL's debt of $17 billion. They want to ensure their claims are not over-ridden by those of the banks, shareholders, and the company's management and staff, who own about 11% of the equity. U.K. and European bondholders have already appointed international law firm Cadwalader, Wickersham & Taft to represent their interests, the FT said. NTL is struggling to increase revenue and sell assets. It recently raised job cuts to 8,800, froze salaries to its executives, pared capital spending plans to preserve cash. RAILTRACK GROUP: Faces 6.8BB-Pound Funding Gap ---------------------------------------------- Railtrack Group Plc is facing a funding gap of 6.8 billion pounds over the next five years, almost double its original estimate, the Financial Times reported. SwiftRail, the group led by Westdeutsche Landesbank Girozentrale that is trying to buy the collapsed owner and operator of U.K.'s rail network, said the company needs an extra 6.8 billion pounds income from track access charges and government grants for 2001 to 2006, the paper said. An unidentified Railtrack source admitted that the funding gap was "substantially" bigger than the company's last published estimate of 3.8 billion pounds. "It shows the fact the revenue wasn't sufficient for the needs of the railway," Railtrack director of corporate affairs Sue Clarke said. The company's Railtrack Plc business was declared insolvent in October after the British government halted subsidies, citing the train company's rising debt. RAILTRACK GROUP: WestLB in Talks to Drop Bid -------------------------------------------- German bank WestLB is in talks about dropping its bid for Railtrack on a deal to pay off shareholders with private sector cash, the Times reports. The deal presented to David Rowland, the director-general of Rail and Aviation, at a meeting in November, could see Railtrack removed from administration within six months. Government officials are concerned about the threat of legal action from shareholders and the length of time the company could stay in administration. WestLB's plan proposes to set up the government's preferred company to replace Railtrack, with funding provided by the German bank. Under the deal, Railtrack will pay shareholders "a fair value" for their investments to end the threat of litigation hanging over transport secretary Stephen Byers. Byers has also pledged before the House of Commons that shareholders would never be paid from the public purse. WestLB expects to get a response from the Government on its proposals in January. *********** 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. 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