/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/020115.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 Tuesday, January 15, 2002, Vol. 3, No. 10 Headlines * B E L G I U M * SABENA SA: Government to Broker Loan for Sabena Technics * G E R M A N Y * ADAM OPEL: Crisis Plan Faces Opposition From Workers EDEL MUSIC: Appoints New Managing Director for Danish Operations KIRCHGRUPPE: Renews EUR450MM Debt Talks With Dresdner LTU GROUP: Rewe's Marbach Joins LTU Board SCHMIDTBANK GMBH: Consortium Banks Offer to Buy 20MM Shares TV6: Receives Closure Order From Court * N E T H E R L A N D S * LAURUS NV: Plans to Sell Spanish Operations * N O R W A Y * BRAATHENS ASA: SAS Launches Buy-out Offer to Shareholders KVAERNER ASA: Wins $560MM Contract to Build Platform for Statoil * P O L A N D * NETIA HOLDINGS: Reaches Swap Settlement With JPMorgan NETIA HOLDINGS: To Propose Increase in Share Capital * S W I T Z E R L A N D * SWISSAIR GROUP: Zurich Backs Swissair Bailout * U N I T E D K I N G D O M * BALTIMORE TECHNOLOGIES: Apax Partners Backs Off Content Bid BRITISH TELECOM: May Withdraw Microwave Activities in Germany CAMMELL LAIRD: In Talks With Union on Relaunch CAMMELL LAIRD: MP Demands Probe Into Shipyard Sale INVENSYS PLC: To Sell Industrial Valve Business for 400MM Pounds MARCONI PLC: Finmeccanica Wants Marconi Assets in Italy MARCONI PLC: To Reveal Slump in Revenues Next Week OVERLAND GROUP: Appoints Arthur Andersen as Administrator P&O PRINCESS: Carnival May Raise Bid for P&O Princess PHONE PEOPLE: Collapses Into Administration RAILTRACK GROUP: Government Faces Call for Bond Buyback RAILTRACK GROUP: Swiftrail Ready for Bid Talks ============= B E L G I U M ============= SABENA SA: Government to Broker Loan for Sabena Technics -------------------------------------------------------- The Belgian federal government has agreed to broker a commercial loan for airline repair and maintenance company Sabena Technics, a former unit of the Sabena Group, Dow Jones Newswires reported. Sabena Technics needs an estimated 25 million euros to cover the cost of a restructuring plan that involves job loss for 700 of 2,000 staff. The company lost about a third of its work volume when Belgian national airline Sabena SA went bankrupt in November. ============= G E R M A N Y ============= ADAM OPEL: Crisis Plan Faces Opposition From Workers ---------------------------------------------------- Peter Klein, works council deputy chairman of troubled car manufacturer Adam Opel AG, told Handelsblatt that its workforce of 36,000 will not be prepared to accept the planned wage cuts called for on its latest restructuring plans. Opel plans to cut its workers' pay to the minimum levels set down in industry-wide pay agreements. Staff member's pay is now 20% above the minimum level, and workers receive a full thirteenth month of salary at Christmas rather than the half month according to the works council agreement. The reported agreement for which the added pay was secured expired at the end of 2001. Klein estimates the Opel workforce has shouldered 900 million to Opel's restructuring efforts over the past four years. Opel incurred a loss of about 670 million euros last year, the largest in its history. EDEL MUSIC: Appoints New Managing Director for Danish Operations ---------------------------------------------------------------- Hamburg-based music publishing company edel music AG said it has appointed Freddie de Wall as new managing director of its recently merged Danish operation Edel-Mega Records Denmark A/S. De Wall will replace Jakob Deichmann, who will take up a new role within the company. "We are excited that he is joining us. He will complement our team perfectly with his profound experience and international background," COO Helge Trilck of edel records Europe said. Freddie de Wall has been in the music business for twenty years. He worked for several major record companies in Germany and went to London in 1997 to become European Vice President Marketing for BMG. edel music creditors earlier ordered the group's chief, Michael Haentjes, to liquidate some of his private assets to save the company from financial ruin. Proceeds from the sale, which is likely to reach a two-digit million euros sum, will be used to pay off loans extended by Commerzbank and HypoVereinsbank. Edel Music's debts currently total 125 million euros. KIRCHGRUPPE: Renews EUR450MM Debt Talks With Dresdner ----------------------------------------------------- Cash-troubled media group KirchGruppe will meet with Dresdner Bank this week to discuss about the 450-million-euro debt repayments. According to a Dow Jones Newswires report, the payment on the credit that was extended in December will be due by mid-January. Kirch has debts of 11 to 12 billion Deutsche marks and more than contingent liabilities of 5 billion Deutsche marks. It aims to reduce the number of short-term loans and dispose of non-core assets, mainly minority holdings in non-German businesses, to improve its balance sheet. LTU GROUP: Rewe's Marbach Joins LTU Board ----------------------------------------- Jurgen Marbach of retailer Rewe is joining the management board of German charter airline LTU, reports Handelsblatt. Within LTU's management, Marbach will be responsible for marketing and sales. An LTU spokesman described the move as a positive sign that Rewe might be interested in supporting the restructuring program of LTU, in which it holds a 40% stake. LTU Group escaped insolvency in December after shareholders, banks and the government of North Rhine Westphalia cut a deal worth 120 million euros in credits. Since then, it has been in search of an investor to take over the 49.9% stake in its capital formerly held by the collapsed Swiss aviation company, Swissair group. SCHMIDTBANK GMBH: Consortium Banks Offer to Buy 20MM Shares ----------------------------------------------------------- The consortium of German banks that bailed out troubled Schmidtbank intends to make an offer to buy the 20 million outstanding shares in the private German bank, Dow Jones Newswires reports, citing news magazine Spiegel. The report adds that the consortium plans to offer 6 euros per share for shares bought in a public listing and 13 euros for shares acquired directly through Schmidtbank. The private bank, which holds a majority stake in online broker Consors Discount Broker, has a total of 76 million shares. The German banks involved in the buyout in November include HVB Group, Commerzbank, Dresdner Bank and the Bavarian savings banks. TV6: Receives Closure Order From Court -------------------------------------- A Russian high court on Friday has ordered the liquidation of the country's only independent national television station, TV6, the Financial Times reported. The order is a blow to Russian financier Boris Berezovsky, who acquired 75% of the company. Berezovsky said he would take his fight to the Russian Constitutional Court and the European Court of Human Rights. A lawyer for TV6 said the Russian courts had ignored recent changes in law, and improvements in TV6's finances, which should have staved off the liquidation order. The US state department earlier urged that TV6 be allowed to stay in business, saying the case smacked of "political pressure in the judicial process against the independent media". ===================== N E T H E R L A N D S ===================== LAURUS NV: Plans to Sell Spanish Operations ------------------------------------------- Dutch supermarkets and wholesale group Laurus NV is planning to sell its Spanish operations, Dow Jones Newswires reports, citing Het Financieele Dagblad. The report said that Laurus has hired ABN Amro to help with the sale. Laurus earlier announced the sale of Klaver Holding BV to improve the company's results and strengthen its financial position. The company will also close its loss-making chain of Basismarkt discount stores in the Netherlands in April. =========== N O R W A Y =========== BRAATHENS ASA: SAS Launches Buy-out Offer to Shareholders --------------------------------------------------------- Scandinavian Airlines System AB will make a 27 Norwegian krone per share mandatory offer to buy out the remaining shareholders in Braathens ASA from January 14 to February 11, AFX News reported. Braathens' board recommends that its shareholders accept the offer. SAS earlier purchased 98.48% of the shares in the Norwegian airline. Shares in Braathens are facing suspension beginning January 14, and will later be de-listed from the Oslo stock exchange. In the third quarter, the company based in Oksenoyvn, Fornebu, swung to a net loss of 757 million kroner due to large goodwill writedowns and a generally depressed travel sector following the September terrorist attacks in the U.S. For more information, contact telephone +47 67 59 70 00 or through fax +47 67 59 13 09 KVAERNER ASA: Wins $560MM Contract to Build Platform for Statoil ---------------------------------------------------------------- Anglo-Norwegian engineering and construction company Kvaerner and merging partner Aker Maritime won a 5-billion-Norwegian krone ($560 million) contract to build an offshore platform for Statoil, their energy-producing compatriot. The Financial Times reported that Statoil awarded the main contract to design and construct the topsides of its Kristin gas platform to Aker's Stord yard near Bergen. The engineering design for the platform will begin in mid- January, with construction work set to start in January 2003. The platform is expected to begin regular production in October 2005 and will deliver about 35 billion cubic meters of natural gas in the period until 2016. The partners in the project are Statoil with 46.6%, Norwegian state oil company Petoro with 18.9%, Norsk Hydro with 12%, Exxon Mobil of the US with 10.5%, Agip of Italy with 9% and TotalFinaElf of France with 3%. Kvaerner staved off bankruptcy in November by agreeing to merge with its rival Aker. =========== P O L A N D =========== NETIA HOLDINGS: Reaches Swap Settlement With JPMorgan ----------------------------------------------------- Netia Holdings S.A., Poland's largest alternative fixed-line telecommunications services provider, said that its subsidiary Netia Holdings III B.V. has reached an agreement with JPMorgan Chase Bank regarding the cross-currency swap transactions on July 31, 2000 and January 18, 2001. Netia announced in December that it did not make the payment due on December 17, 2001 under the swap agreement of January 18, 2001, and that it was in discussions with JPMorgan Chase Bank as to the renegotiation of all swaps entered into with that bank. The swap agreements were immediately terminated by both parties due to Netia's planned debt restructuring. 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 defaulted on swap obligations also in December. NETIA HOLDINGS: To Propose Increase in Share Capital ---------------------------------------------------- Netia Holdings S.A. says it will propose during its shareholders' Extraordinary General Meetings in Warsaw on February 5 and 19 resolutions to increase the company's share capital. The telecommunications services provider says that this plan will be done by increasing Netia's share capital of up to PLN631.4 million through the issuance of up to 600 million ordinary bearer series H shares with a nominal value of PLN1. In addition, Netia will propose granting authorization to the Management Board to further increase the company's share capital by up to PLN141.3 million through the issuance of ordinary bearer series I shares, or a subsequent series of shares, within the period ending on February 5, 2005. Approval of the capital increase will not represent a commitment on the part of any shareholder to provide additional capital or financial support to the company. ===================== S W I T Z E R L A N D ===================== SWISSAIR GROUP: Zurich Backs Swissair Bailout --------------------------------------------- Zurich voters have approved a multi-million dollar contribution towards a new national airline to replace Swissair, which filed for bankruptcy protection in October and is due to be replaced by the new company in March. According to a report from the BBC News, Zurich cantonal authorities offered to invest more than $240 million in the new airline that is being created out of Swissair's former regional subsidiary company, Crossair. BBC's Emma Jane Kirby said that if residents had voted no, the future of the new airline could have been put in doubt. Swissair has raised its capital by 2.3 billion Swiss francs (US$1.4 billion) through funds from the Swiss government, UBS AG, Credit Suisse Group and private investors to fund its fleet. The group still needs another 450 million Swiss francs from cantonal governments, including the credit from Zurich, to achieve its targeted equity ratio of 35% to be able to finance the new airline. Zurich is home to Switzerland's largest airport and is the base of Swissair. =========================== U N I T E D K I N G D O M =========================== BALTIMORE TECHNOLOGIES: Apax Partners Backs Off Content Bid ----------------------------------------------------------- Cash-strapped e-security provider Baltimore Technologies has suffered a further setback after Apax Partners decided to withdraw its offer to bid for Content Technologies, the Guardian reported. Apax is understood to have halted talks at the last minute amid concerns about the amount of cash needed to get the operation back on its feet. Analysts had been forecasting that Baltimore's Content business might be worth about 50 million pounds, but the loss of Apax will raise concerns that the price could drop even further. A spokeswoman for Baltimore said the company still had three or four potential bidders for Content Technologies. Mounting losses and dwindling cash reserves forced Baltimore into a radical restructuring, involving hundreds of job cuts and the sale of non-core operations. BRITISH TELECOM: May Withdraw Microwave Activities in Germany ------------------------------------------------------------- British Telecom, the U.K.'s second-largest phone company, is considering a withdrawal from directional radio (microwave) activities in Germany, the Financial Times Deutschland/FT Information reported. According to a spokesman for subsidiary BT Ignite, this market did not develop as the company had imagined. Several companies have withdrawn from this technology, including German-based Arcor. BT is currently going through a major restructuring. It has sold unprofitable businesses and spun off its wireless unit to slash debt that had tripled to 27.9 billion pounds ($40.3 billion) in the year ending March 31 2001. CAMMELL LAIRD: In Talks With Union on Relaunch ---------------------------------------------- The new owner of Cammell Laird Holdings PLC is in talks with union leaders on the rebirth of the ship repair group's Birkenhead yard. According to a report from the Liverpool Echo, David Ring of ship repair specialist A&P Group Holdings Ltd, which bought Cammell Laird for about 10 million pounds in August, met with AEEU and GMB union chiefs to discuss bringing ship repairs back to business. The Birkenhead yard is set for reopening by the summer, or autumn at the latest. The renewed operation may initially employ close to 100 people. Cammell Laird went into receivership in April after the loss of a 50-million-pound Italian cruise ship contract. CAMMELL LAIRD: MP Demands Probe Into Shipyard Sale -------------------------------------------------- Birkenhead MP Frank Field has called for an investigation into the receiver's role in the sale of the Cammell Laird shipyard to A&P Group Holdings Ltd. According to a report from the Daily Post, Field sent a letter to watchdog the Institute of Chartered Accountants on concerns about the role of PricewaterhouseCoopers in the deal. Field claims there could be a "serious conflict of interest" surrounding the part of PwC. A&P are 85% owned by an arm of the Royal Bank of Scotland but are also audited by PwC. The Daily Post added that Field asked the Royal Bank of Scotland for its direct or indirect participation in the sale of the yards. The bank refused to reply. Field said PwC were called in when the yard's debts began to mount and invited offers for its sale. INVENSYS PLC: To Sell Industrial Valve Business for 400MM Pounds ---------------------------------------------------------------- Invensys, Britain's largest engineering company, will sell its industrial valves business as part of a debt reduction program put in place by new chief executive Rick Haythornthwaite. The 400-million-pound deal is expected to conclude within days. The company is likely to sell the business to a trade buyer rather than venture capitalists, the paper said. The move should mean that Invensys would avoid the need to tap shareholders for fresh funds to shore up its balance sheet this year. The London-based company, which last week sold its Brook Crompton unit and battery business, is trying to cut debt amid speculation by investors that it might breach agreements with lenders as profits fell. The group was battered last year by a series of profits warnings. It had 3.3 billion pounds of debt as of September 30. Invensys operates in all regions of the world through the Software Systems, Automation Systems, Power Systems and Control Systems divisions. With close to 76,000 employees, the group supplies products and services ranging from advanced control systems, remote diagnostics and energy management for process plants, factories and commercial environments to electronic devices and networks for residential buildings, as well as complete power systems for the industrial, telecommunications and information technology sectors. For information, contact Duncan Bonfield/Jane Hurley at telephone +44(0) 20 7821 3712 MARCONI PLC: Finmeccanica Wants Marconi Assets in Italy ------------------------------------------------------- Rome-based Finmeccanica SpA wants to buy Marconi's defense- related assets in Italy to bolster its main defense and aerospace businesses, Il Sole/24 Ore reported, citing no one. Among the Marconi assets, Finmeccanica is most interested in the production of naval and aeronautical communication systems, Il Sole says. The Marconi businesses employ 3,000 people and have annual sales of 500 million euros ($446 million). Marconi is selling units to cut debt and focus on its telecommunications activity. MARCONI PLC: To Reveal Slump in Revenues Next Week -------------------------------------------------- Troubled telecoms equipment maker Marconi is expected to publish next week a third-quarter sales figure that is below analysts' expectations, the Observer reported, citing unidentified people close to Marconi. Analysts are forecasting a loss of more than 100 million pounds ($145 million) for the quarter ended December 31 and a drop in revenues to between 900 and 950 million pounds, the paper said. The company faces slumping sales at its main telecommunications business as customers such as BT Group Plc continue to curb spending. The Observer also said that Marconi Chief Executive Officer Mike Parton would confirm next week that the company would meet its debt reduction target after selling assets. Net debt fell from 4.4 billion pounds when the plan was announced to 2.9 billion by the target date in March, within the 2.7 billion to 3.2 billion target range. Sources close to the company said it was too early to tell what the figures would be. The London-based company is selling assets over the past three months three months in an effort to reduce between 2.7 and 3.2 billion pounds of debt by March. Debt peaked at 4.4 billion pounds in mid-2001. The company reported a loss of 5.1 billion pounds during the six months to September. OVERLAND GROUP: Appoints Arthur Andersen as Administrator --------------------------------------------------------- Overland Group, worldwide distributor of Caterpillar clothing and Paul Smith shoes, has appointed Arthur Andersen as administrator after it collapsed due to mounting losses. According to a report from the Daily Telegraph newspaper, the accountancy firm's main task is to run the business and find a buyer. The company, headed by chief executive Stephen Palmer, tumbled to a loss of 1.45 million pounds in the last nine months of 1999, its most recently published set of accounts. Losses are thought to have risen sharply since, as costs leapt. Arthur Andersen stressed that four other European subsidiaries are not included in the administration. P&O PRINCESS: Carnival May Raise Bid for P&O Princess ----------------------------------------------------- U.S. cruise operator Carnival Corporation is considering raising its hostile bid for P&O Princess Cruises Plc, Bloomberg reported. According to Carnival's Chief Financial Officer Gerald Cahill, they will consider raising their bid if they can get certain information from P&O. However, P&O still has not responded to Carnival's request. The size of Carnival's offer depends partly on whether London- based P&O can break up the joint venture deal with rival cruise line operator Royal Caribbean Cruises Ltd., which P&O wants to acquire. Carnival also wants to clarify the cost of so-called "poison pills" inserted into the Princess-Royal Caribbean merger to fend off third parties. Cahill said that Carnival's offer stands at around 450 pence a share, valuing the offer at about 3.2 billion pounds ($4.6 billion) excluding debt. Including debt, the company would cost Carnival about $6 billion. P&O Princess, which received a downgrade review from Moody's Investors Service in November, repeated it would continue to back a merger agreed with Royal Caribbean Cruises, unless Carnival came up with a better offer by January 18. The world's three biggest cruise liners are engaged in a bid battle as they seek cost-cutting alliances to counter a sharp slump in passengers since the September 11 attacks on the United States. PHONE PEOPLE: Collapses Into Administration ------------------------------------------- The Phone People, Britain's second largest independent mobile phone retailer after Carphone Warehouse, has collapsed into administration for the second time. The Daily Telegraph reported that receivers Levy Gee were called in last week as sales of mobile phones have slumped in the last three months of 2001 to around 5 million from 10 million a year earlier. Merseyside-based The Phone People was rescued from administration last July by a consortium lead by Internet entrepreneur Simon Berisford, less than a year after fending off a 30-million-pound takeover bid. RAILTRACK GROUP: Government Faces Call for Bond Buyback ------------------------------------------------------- Bondholders are preparing to try to persuade transport secretary Stephen Byers that it must buy back up to 1.5 billion pounds of Railtrack bonds before proceeding with a fresh effort to raise finance for the successor of the rail network operator, the Times newspaper reported. Warnings that Railtrack could be in administration until at least August 2003 have increased the bondholders' frustration. The discussions are going on as remaining Railtrack bondholders are expected to approve an agreement waiving their rights to claims of default today. Bondholders are hoping that the approval of the standstill agreement will mean that the company's debt can be restored to investment grade. The rating was lost after Railtrack was declared insolvent in October. RAILTRACK GROUP: Swiftrail Ready for Bid Talks ---------------------------------------------- German-owned consortium Swiftrail is ready to meet the British government to discuss its proposed bid for rail network operator Railtrack, Reuters reported. WestLB, the Dusseldorf bank leading the consortium, said its proposals would get Railtrack out of administration by June this year. The consortium's proposal would include plans to refinance a 3.5 billion pound loan made to Railtrack by the government, plus raise a further three billion by June. Part of the money would be used to buy Railtrack out of administration and some could be used as compensation for shareholders. Railtrack was forced into administration in October after the government withdrew financial support. *********** 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 * * *