/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/020107.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, January 07, 2002, Vol. 3, No. 4 Headlines * F I N L A N D * SONERA CORP.: Quam Resumes Sale Tuesday * F R A N C E * LVMH: Shares Lose 35% of Value MOULINEX SA: Candy Improves Brandt Offer MOULINEX SA: Conair Contests SEB Buyout * G E R M A N Y * DAIMLERCHRYSLER: Chrysler December Sales up 6% EDEL MUSIC: Sells Stake in Eagle Rock to HgCapital EM.TV: Chief Klatten to Buy Haffa Stake * L U X E M B O U R G * CARRIER1 INTERNATIONAL: Launches Exchange Offer * N O R W A Y * BRAATHENS ASA: Elects New Board After SAS Buy KVAERNER ASA: Completes NKr2BB Share Placing KVAERNER ASA: To Raise NKr1.5BB in Rights Issue * P O L A N D * ELEKTRIM SA: BRE Eyes More Elektrim Stake ELEKTRIM SA: Faces Bankruptcy Threat From Bondholder * S W E D E N * LM ERICSSON: Croatia Unit Signs GSM Deal in Bosnia * U N I T E D K I N G D O M * BEDE PLC: Issues Profit Warning ENRON CORPORATION: Expects to Sell Teeside Stake in February ENRON CORPORATION: Metals Trading Arm Nears Sale EQUITABLE LIFE: Pension Body Urges "Yes" on Compromise Deal MARKS & SPENCER: Analyst Raises M&S Estimates XEROX CORPORATION: Moody's Puts Ratings on Downgrade Review ============= F I N L A N D ============= SONERA CORP.: Quam Resumes Sale Tuesday --------------------------------------- Quam, the German mobile-telecommunications service owned by Telefonica Moviles SA and telecommunications operator Sonera Oyj, will resume sales of its services as soon as Deutsche Telekom AG gives it full network access next week. According to a Dow Jones Newswires report, Quam expects Deutsche Telekom's wireless unit T-Mobile International AG to open its network for direct calls by January 8. Quam suffered a setback when it suspended sales and marketing activities in December. Sonera has been forced to sell off assets and engage in rights offering to pay down debt of around 3.5 billion euros. =========== F R A N C E =========== LVMH: Shares Lose 35% of Value ------------------------------ Shares in LVMH Moet Hennessy Louis Vuitton, the world's largest luxury goods group known for the Louis Vuitton, Christian Dior and Givenchy brands, lost a total of 35.18% of their value in 2001 to close the year on 45.7 euros. According to a Le Monde report, the falling value of the Japanese yen and the onset of global recession, both of which would have a negative effect on the French group's accounts, concerned analysts. LVMH in December sold 11.57 million shares in Gucci NV to Credit Lyonnais SA for 1.147 billion euros in order to book a significant capital gain in 2001 accounts. The retail activities of LVMH, which has issued three profit warnings last year, comprise mainly the loss-making Duty Free Shoppers (DFS) chain and Sephora. MOULINEX SA: Candy Improves Brandt Offer ---------------------------------------- Italian electrical goods maker Candy has improved its offer for Brandt France, part of bankrupt French home appliance manufacturer Moulinex, notably by offering jobs for 3,700 of the company's 4,400 employees. Dow Jones Newswires reported that Candy announced its improved offer of up to 590 million euros, prior to the January 9 administrative tribunal meeting to decide the fate of Brandt France. Candy, which owns the brands Candy, Rosieres, Hoover and Iberna, is competing with Whirlpool Corp. of the U.S., Israel's Elco, and Turkish group Arcelik-Beko to take over parts of Brandt. Moulinex filed for bankruptcy in September after shareholder Elettro Finanziaria SpA of Italy withdrew its backing for a 350- million-euro rescue package. Brandt employs 11,026 workers, including 5,311 in France. MOULINEX SA: Conair Contests SEB Buyout --------------------------------------- U.S. electrical goods company Conair is contesting the partial buy-out of bankrupt French consumer electrical goods manufacturer Moulinex SA by French rival SEB SA. According to a report from AFX News, Conair claims the deal will give the combined group more than a 45% market share in some European countries and 70% in France. Conair has complained to the European Commission, which will say on January 8 if it has decided to authorize the deal or demand an in-depth investigation, AFX added. ============= G E R M A N Y ============= DAIMLERCHRYSLER: Chrysler December Sales up 6% ---------------------------------------------- The December auto sales of DaimlerChrysler AG's Chrysler Group unit in the U.S. rose 6.2% to 178,001 units, compared with sales of 167,672 for the same month a year ago, AFX News reported. However, 2001 sales fell 9.9% to 2.27 million units compared with sales of 2.52 million units for the same period of 2000. In November, the Chrysler unit offered more early retirement for its employees and suspended matching payments for a company- sponsored retirement plan. The early retirement offer is part of CEO Dieter Zetsche's plan to turn around the Chrysler Group as sales figure have fallen despite deep discounts on many of its units. EDEL MUSIC: Sells Stake in Eagle Rock to HgCapital -------------------------------------------------- Edel Music AG, a Hamburg-based music company that was once worth $1.8 billion, sold its controlling interest in Eagle Rock Entertainment Plc to HgCapital, a provider of finance to the European private equity market. Financial terms were not disclosed. The sale is part of edel music's previously announced disinvestments program, the company said in a release on the Frankfurt exchange. Edel Music is selling assets after it failed to integrate 10 acquisitions and its market value shrank to $13 million. In November, the company sold its 80% stake in New York-based Red Distribution Inc. In May, it sold a stake in television company Viva Media AG. The company said in September its first-half loss widened to 172.2 million marks from a loss of 8.6 million marks in the same period the previous year. Edel Music is involved in recording of music, the manufacture of CDs, DVDs, LPs and cassettes and the publishing and distribution of rock, pop, dance, jazz and classic music under its own label or under license. It is also involved in publishing books on music related topics and owns a library of classical music and has subsidiaries in Europe, Argentina, the USA and Singapore. Contact Barbel Tomas, Investor Relations, at telephone 040 / 890 85 225 or via email Baerbel_Tomas@edel.com EM.TV: Chief Klatten to Buy Haffa Stake --------------------------------------- EM.TV & Merchandising head Werner Klatten will complete the purchase of a 25.1% stake in the struggling media group from his predecessor Thomas Haffa later this month. Financial terms were not disclosed. According to Reuters' report, Klatten expects to secure an agreement with a venture capital firm in the next few days on financing the deal. Speculation about Klatten's financial backers included Munich media mogul Leo Kirch. EM.TV shares rose more than 20% on the news to 2.05 euros. It's stock dropped last year after accounting errors forced it to restate its results. German prosecutors said in November they were bringing criminal charges against Thomas Haffa and his brother Florian, the company's former financial officer, for allegedly making false statements and manipulating the company's share price. =================== L U X E M B O U R G =================== CARRIER1 INTERNATIONAL: Launches Exchange Offer ----------------------------------------------- Pan-European bandwidth provider Carrier1 International SA announced Friday that it has launched a cash and share exchange offer for all of the company's outstanding high yield notes and consent solicitation for amendments to the indentures. The exchange offer, according to a Frankfurt Stock Exchange release, will be conditioned upon the receipt of tenders for more than 50% of the principal amount of each of the company's outstanding Euro Notes and Dollar Notes taken individually. Carrier1 added it has secured irrevocable commitments from note holders to tender a majority of the Euro Notes and Dollar Notes and to consent to the amendments. The company is confident that the minimum conditions of the tender offer will be satisfied and that the offers will be consummated. Carrier1 in December said that it might miss an interest payment this year on about $236 million in debt after bondholders rejected the company's offer to buy back its bonds. It has struggled after prices for its services slumped and growth in data transmission slowed. In the third quarter of 2001, the company posted a loss of $495 million. It had $36.3 million in net cash in September, down from $162.2 million a year earlier. Contact Keith Johnson at telephone +44 20 7001 6357 or via email keith.Johnson@carrier1.com for more information. =========== N O R W A Y =========== BRAATHENS ASA: Elects New Board After SAS Buy --------------------------------------------- New board members representing the Braathens ASA's shareholders were elected following Scandinavian Airlines System AB's takeover of the Norwegian airline, AFX News reported. SAS purchased 98.48% pct of the shares in Braathens. Braathens' board now comprises of Joergen Lindegaard as chairman, Gunnar Reitan, Bernhard Rikardsen and Knut Solberg. The employee-elected board members remain the same, AFX said. Braathens ASA is based in Oksenoyvn, Fornebu. For more information, contact telephone +47 67 59 70 00 or through fax +47 67 59 13 09 KVAERNER ASA: Completes NKr2BB Share Placing -------------------------------------------- Kvaerner has completed a 2 billion Norwegian krone share placing on the Oslo stock exchange. According to a report from The Times newspaper, the loss-making Anglo-Norwegian engineering group is merging with Oslo-based Aker Maritime by issuing 2.8 billion Norwegian krone in shares to its rival. Kvaerner chief executive Helge Lund said the deal would create a multi-billion Norwegian krone oil and gas engineering giant. The deal also allows Aker chairman Kjell Inge Rokke to control 50% of Kvaerner. KVAERNER ASA: To Raise NKr1.5BB in Rights Issue ----------------------------------------------- Following the share placing in the Oslo exchange, Kvaerner will engage in a rights issue to raise a further 1.5 billion Norwegian krone this week. The offering will give existing shareholders the opportunity to maintain their holdings in the Anglo-Norwegian construction and engineering group. Kvaerner's debts brought the company to the brink of insolvency late last year. =========== P O L A N D =========== ELEKTRIM SA: BRE Eyes More Elektrim Stake ----------------------------------------- Poland's BRE Bank SA wants to become a major shareholder in cash-strapped conglomerate Elektrim SA and will take part in its refinancing and restructuring as soon as other shareholders approve BRE's move, Dow Jones Newswires reported. According to BRE President Wojciech Kostrzewa, Elektrim may be suffering from liquidity problems and has lost the market's trust, but it still holds valuable assets. BRE in December said it held a 5.02% stake in Elektrim, after France's Vivendi Universal, which has an almost 10% stake. ELEKTRIM SA: Faces Bankruptcy Threat From Bondholder ---------------------------------------------------- Spanish construction company Acciona, the largest holder of Elektrim's defaulted convertible bonds, may seek to push the Polish telecom and power group into bankruptcy. According to a Financial Times report, Acciona is unhappy with Elektrim's debt-restructuring proposal. Elektrim, which plunged into crisis in December after bondholders exercised put options forcing the early redemption of the bonds, has asked a Polish court to mediate an agreement writing off 40% of its debt and paying the rest over three years. The size of the proposed reduction angered bondholders, as did Elektrim's move to pay off some of its other creditors before making the court filing. Acciona said it knows that Elektrim has cash and earns enough to pay the bonds. =========== S W E D E N =========== LM ERICSSON: Croatia Unit Signs GSM Deal in Bosnia -------------------------------------------------- Ericsson's unit in Croatia closed an agreement worth 9 million euros to supply equipment for a GSM network in Bosnia. Reuters reported that the mobile phone manufacturer signed the accord with state-owned PTT Sarajevo in December. The contract consists of the delivery and implementation of base stations for the expansion of the GSM network. Ericsson, which posted a pre-tax loss of 5.8 billion Swedish krona ($548.7 million) in the third quarter of 2001, earlier signed a sale-lease back agreement regarding test plant equipment for US$750 million to improve its cash position. =========================== U N I T E D K I N G D O M =========================== BEDE PLC: Issues Profit Warning ------------------------------- X-ray instrument manufacturer Bede warns that revenues and earnings for 2001 are expected to fall slightly short of market expectations. According to an Ananova report, last year's results have been affected by delayed shipments. The directors of the County Durham-based company say turnover for 2002 is expected to be significantly higher than the previous year. The directors also say there is evidence of returning confidence in the worldwide market. For the year to December 31, 2000, Bede posted a pre-tax loss of 127,000 pounds on turnover of 4.9 million pounds. The group has yet to make a profit. For more information, contact Bede plc/Bede Scientific Instruments Ltd by mail at Belmont Business Park, Durham DH1 1TW UK or by telephone ++ 44 (0) 191 332 4700, fax ++ 44 (0) 191 332 4800 or via email info@bede.co.uk ENRON CORPORATION: Expects to Sell Teeside Stake in February ------------------------------------------------------------ The sale of Enron's 42% stake in Teesside Power is expected to take at least another month. According to a Financial Times report, the delay was caused by efforts to make the unit fully independent of Enron and ongoing negotiations with fellow U.S. stakeholders GPU and Northern Electric. PricewaterhouseCoopers, which is acting as Enron administrator, in December agreed to the sale of Enron Direct to Centrica. Enron's remaining U.K. assets include south-west England water supplier Wessex Water. ENRON CORPORATION: Metals Trading Arm Nears Sale ------------------------------------------------ Administrators to Enron are close to the sale of the London-based metals trading business of the collapsed US energy group. The Financial Times reported that the deal could be announced within days. Potential buyers for all or parts of the business are Swiss commodities trader Glencore, Sempra Energy of San Diego, HSBC and Goldman Sachs. The metals trading business would be the third significant disposal to be negotiated in Britain since Enron's European operations were put into administration at the end of November. The business has continued to operate independently of Enron on the London Metals Exchange since the parent company filed for bankruptcy protection last month. EQUITABLE LIFE: Pension Body Urges "Yes" on Compromise Deal ----------------------------------------------------------- The National Association of Pension Funds has urged its members to support Equitable Life's compromise deal designed to stabilize the troubled insurer's finances this week, the Times newspaper reported. Under the compromise scheme, Equitable is offering policy uplifts averaging 17.5% to policyholders with valuable guaranteed annuity rate (GAR) options in return for waiving those rights. Non-GAR policyholders are offered 2.5% for agreeing not to sue the society for mis-selling. If the 485,000 individual policyholders and the 6,000 trustees vote through the deal by the January 11 deadline, Equitable will receive an extra funding from Halifax worth 250 million pounds. Halifax bought the insurer's fund management and administration operations last year. MARKS & SPENCER: Analyst Raises M&S Estimates --------------------------------------------- Deutsche Bank AG has increased its earnings estimates and raised its price target for the U.K.'s largest clothing retailer. According to a Bloomberg report, Deutsche raised its profit estimate to 400 pence from 330p for the current fiscal year and 5% to 622 million pounds for next year. Deutsche analyst Sundeep Bahanda believes M&S has had its best Christmas since 1997 and is said to see some chance of it outperforming its rivals. Marks & Spencer shares rose 11.25 pence, or 3.1%, to 371.5p, on the estimates. The broker also expects M&S, which is cutting back its loss- making operations in Britain and Europe, to pay back 2 billion pounds of capital to shareholders by March from money raised through disposals and property deals. XEROX CORPORATION: Moody's Puts Ratings on Downgrade Review ----------------------------------------------------------- Moody's Investors Service placed the long term ratings of Xerox Corporation and its financially supported subsidiaries under review for possible downgrade. Ratings under review for possible downgrade include Xerox Corporation's senior unsecured at Ba1, subordinated at Ba2 and preferred stock at Ba3, and Xerox Credit Corporation's senior unsecured at Ba1. Xerox Overseas Holdings Limited's senior unsecured at Ba1 and Xerox Capital (Europe) PLC's senior unsecured at Ba1 were also included in the downgrade review. The credit ratings agency said that the review is focused on the company's prospects for improvement in core profitability and debt protection measures in 2002 and beyond. The American photocopier group, which reported its fifth consecutive quarterly loss in October, has been struggling to return to profitability amid an SEC investigation over accounting scandals. At year end 2001, it is expected that Xerox will have approximately $3.9 billion of cash relative to $2.0 billion of public debt maturities in 2002 in addition to the need to refinance its fully utilized $7 billion senior unsecured revolving credit facility, which matures in October 2002. ********** 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 2002. 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 * * *