/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/020116.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, January 16, 2002, Vol. 3, No. 11 Headlines * A U S T R I A * KIWWI CEE: Finds Potential Investor RHI AG: Seeks Bankruptcy Protection for U.S. Unit * B E L G I U M * LERNOUT & HAUSPIE: Will Pay $1MM to the Bakers SABENA SA: DAT Creditors Reject Debt Restructuring Proposal * F I N L A N D * SONERA CORP.: Finland Not in Talks to Sell Stake * G E R M A N Y * DEUTSCHE TELEKOM: To Issue Dividend for 2001 EM.TV: Dutch Firm to Fund EM.TV CEO's 24.8% Buy * I R E L A N D * AER LINGUS: Travel Agents Take Legal Action * I T A L Y * ALITALIA SPA: To Issue Bond in May, June BLU SPA: Shareholders Agree to Finance Blu * N E T H E R L A N D S * KPN NV: Will Sell Cesky Telecom Stake * P O L A N D * NETIA HOLDINGS: Inks Network Services Deal With Telia * R U S S I A * TV6: Press Minister Sets Tender for Broadcasting Rights in April TV6: Shareholders Fail to Attend Liquidation Meeting * S W E D E N * SCANDINAVIA ONLINE: Insiders Accept Eniro's Bid * S W I T Z E R L A N D * 4M TECHNOLOGIES: Continues Recapitalization Talks With Investors GRETAG IMAGING: Plans Capital Increase to Improve Balance Sheet GRETAG IMAGING: Shares Rise on New Technology MTF HOLDING: Files for Bankruptcy SWISSAIR GROUP: Will De-list Shares and Bonds in February * U N I T E D K I N G D O M * BALTIMORE TECHNOLOGIES: Falls on Report of Apax Withdrawal BALTIMORE TECHNOLOGIES: Hopeful of Content Sale CONSIGNIA: Will Cut 30,000 Jobs in February COOKSON GROUP: Shares Tumble Over Trading Jitters GAP INC.: Moody's Cuts Ratings to Baa3 RAILTRACK GROUP: Boss Queries Financing Plan SSL INTERNATIONAL: Government to Review Coloplast Buy UPF-THOMSON: Insolvency Puts Land Rover Jobs at Risk ============= A U S T R I A ============= KIWWI CEE: Finds Potential Investor ----------------------------------- A potential investor has emerged for telecom company Kiwwi CEE Holding, which declared bankruptcy at the end of 2001 after lead investor Dresdner Kleinwort Capital backed down. The bankruptcy move has left Kiwwi's operations in the Czech Republic, Hungary, Slovakia and Slovenia up for grabs. According to a report from Prague Business Journal, Stanislav Vencel, general director of Kiwwi's operation in Slovakia, said that there are three potential investors for Slovak Kiwwi and that a new investor should be settled by the end of the month. Although David Wolfe, Kiwwi's country manager in the Czech Republic would not disclose any names of potential buyers, one potential investor has already surfaced. Budapest-based telecom and Web development firm Amtel Voice and Internet Communications may be the buyer of all or part of Kiwwi's foreign assets, Amtel CEO Thomas Antalffy told BBJ last week. Antalffy said that there is no way of estimating a price before the creditors' demands are submitted. Kiwwi is a multinational corporation based in Vienna, Austria. It is a telecommunications supplier for Central and Eastern Europe. RHI AG: Seeks Bankruptcy Protection for U.S. Unit ------------------------------------------------- Debt-riddled RHI, the Wein-based supplier for refractory materials for the steel industry, was forced to seek bankruptcy protection for one of its U.S. units in an effort to ward off bankruptcy due to asbestos claims. The Financial Times reported that North American Refractories Company (Narco) had filed for protection under Chapter 11 of the U.S. bankruptcy code. RHI and Narco's former owner are in dispute over the interpretation of the contractual agreements regarding asbestos liabilities claims responsibilities. RHI disclosed that the dispute, combined with inadequate insurance coverage at Narco, plus the ongoing financial crisis, "may result in a financial burden that may exceed the company's ability to pay". RHI's troubles were attributed to a downturn in the US steel industry, added with the mounting cost of asbestos claims it inherited with the companies it acquired. Narco operates four of RHI's 27 US plants and has a workforce of 800. ============= B E L G I U M ============= LERNOUT & HAUSPIE: Will Pay $1MM to the Bakers ---------------------------------------------- Lernout & Hauspie Speech Products NV will have to pay Janet and James Baker $1 million in cash from L&H unit L&H Holdings USA Inc. as part of a new claims settlement, reports Dow Jones Newswires. The Bakers own the speech and language technology business Dragon Systems Inc., which was merged into an L&H unit in 2000 in exchange for now-deflated L&H common stock. The deal, payable within 90 days, is in settlement of all merger- related and other claims against L&H and L&H Holdings, according to Karen C. Dyer of Boies Schiller & Flexner LLP, counsel for the Bakers. The settlement is subject to court approval at a later date. L&H and the Bakers had reached a claims settlement deal last year that provided for L&H Holdings to pay the Bakers $1.75 million for their $300 million in merger-related claims. L&H lost nearly $10 billion in market value last year amid an accounting scandal sparked by reports of inflated revenue. In 2000, L&H filed for Chapter 11 in Delaware and concordat proceeding in Belgium. SABENA SA: DAT Creditors Reject Debt Restructuring Proposal ----------------------------------------------------------- Creditors of short-haul airline Delta Air Transport (DAT), the successor to bankrupt former national carrier Sabena, rejected a proposal over the weekend for restructuring the airline's debt. According to a Dow Jones Newswires report, investor Etienne Davignon said that he and other investors would not recapitalize the airline if an agreement is not reached. Davignon and another investor, Fortis Chairman Maurice Lippens, presented a new proposal to creditors last week. They want half of DAT's 100-million-euro debt to SIC, Sabena's former financial arm, canceled and half transformed into a shareholding in DAT. ============= F I N L A N D ============= SONERA CORP.: Finland Not in Talks to Sell Stake ------------------------------------------------ Finland is not in active talks to sell its 53% stake in Sonera, an international forerunner in mobile communications and mobile- based services and applications, Reuters reported, citing Finland's communications minister. Minister Kimmo Sasi said that all telecom operators are now taking a breathing space from consolidation and that it could last from one to two years. The European telecom industry are focusing on their debt-heavy balance sheets rather than finding merger partners. Sonera was forced to sell off assets and organize a billion-euro rights issue in November to pay down debts of around 3.5 billion euros. ============= G E R M A N Y ============= DEUTSCHE TELEKOM: To Issue Dividend for 2001 -------------------------------------------- Fixed line operator Deutsche Telekom AG will issue a dividend for 2001, although it will likely post a loss for the full year, Handelsblatt reported, citing Chief Finance Officer Karl-Gerhard Eick. "I think that a company should only discuss the possibility of a cut in dividend if there's a long-term excess of expenditure over cash flow," Eick said. The Telekom finance chief was unwilling to provide figures for 2001, saying it would wait until the final numbers are in. Last year, Telekom sold its shares and asset-backed bonds as part of the company's plans to clean its balance sheet and bring down debt levels to US$49.9 billion by end of 2002. EM.TV: Dutch Firm to Fund EM.TV CEO's 24.8% Buy ----------------------------------------------- Amsterdam-based venture capital company Constant Ventures is providing a convertible loan to finance the purchase of a 24.8% stake in struggling media group EM.TV & Merchandising AG by its chairman Werner Klatten, reports Dow Jones Newswires. The price of the 36.16 million shares, which come from the holding of the company's former chairman Thomas Haffa, was not disclosed. Stan Vermeulen, founder and main shareholder of Constant Ventures, said the funding for the loan to Klatten was not 100% covered. He added, however, that he was confident the company would secure funding from investors before the deal closes at the end of the month. The change of ownership of the stake marks a break with the company's troubled past under Haffa, when EM.TV's soaring stock market valuation gradually crumbled under the weight of overvalued acquisitions and mounting losses. 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. ============= I R E L A N D ============= AER LINGUS: Travel Agents Take Legal Action ------------------------------------------- Travel agents are considering legal action against collapsed airline Aer Lingus, in response to the airline's plan to drastically reduce agent commissions as of February, the Irish Independent reported. Aer Lingus intends to cut the commission level of licensed Aer Lingus agents for the second time in the last 11 months. Relations between the Irish Travel Agents' Association, representing 370 travel agents in Ireland (ITAA) and the Irish carrier have become strained after Aer Lingus insisted it will realize its plan to cut commissions from their present 7% level to 5% from February 1. The move means agents will have seen commissions come down from 9% last March, totaling to a 44% slide in 11 months. According to an ITAA spokeswoman, the association had taken advice on various options it may take, including legal action and reporting the matter to the Director of Consumer Affairs and/or the Competition Authority. The spokesman said that some of the 4,500 jobs in the country's travel agencies were threatened by the Aer Lingus move. ========= I T A L Y ========= ALITALIA SPA: To Issue Bond in May, June ---------------------------------------- Cash-strapped Italian flag carrier Alitalia will issue a planned convertible bond worth 1.2 to 1.4 billion euros ($1.1 billion to $1.25 billion) after the approval of its 2001 balance sheet between May and June, reports Reuters. The convertible bond issue is part of Alitalia's new industrial plan aimed at helping the airline weather a crisis aggravated by the September 11 attacks on the United States. The plan also envisages layoffs of around 4,400 jobs. BLU SPA: Shareholders Agree to Finance Blu ------------------------------------------ The shareholders of Rome-based Blu SpA have agreed to fund the mobile phone company until the middle of February, the Times newspaper reported. The investors, which include BT Group Plc and the Benetton family, will meet again on January 28 to discuss offers made to buy the company. A BT spokesman warned that Blu could be forced to close if a buyer could not be found to take over the struggling mobiles group. The company did not say how much would be needed to keep it operating. In December, the shareholders approved a plan to sell unprofitable Blu, which has about 1.7 million customers. ===================== N E T H E R L A N D S ===================== KPN NV: Will Sell Cesky Telecom Stake ------------------------------------- The Hague-based telecommunications company Royal KPN NV still plans to sell its approximately 20% stake in Cesky Telecom despite reports to the contrary, reports Dow Jones Newswires, citing KPN spokesman Marinus Potman. The spokesman adds that KPN does not plan to raise its stake. KPN is in the process of selling all its assets that are outside of its core operations in the Benelux countries and Germany in order to trim its 22.3-billion-euro debt pile. =========== P O L A N D =========== NETIA HOLDINGS: Inks Network Services Deal With Telia ----------------------------------------------------- Netia Holdings S.A., Poland's largest alternative fixed-line telecommunications services provider, said Monday its subsidiary Netia Telekom S.A. has signed an agreement with Telia subsidiary Prima Communications Sp. z o. o. on the provision of commercial network services. Under the deal, Netia will lease to Telia for 15 years two ducts on the route between Warsaw and the Szczecin area for the amount of approximately US$16 million. During the lease term, Netia will offer to Telia related services such as cable installation, cable maintenance and co-location services on the route. The parties hope to complete the agreement by April 2002. Netia Holdings 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. It defaulted on swap obligations in December. =========== R U S S I A =========== TV6: Press Minister Sets Tender for Broadcasting Rights in April ---------------------------------------------------------------- Press Minister Mikhail Lesin said that a tender for the right to broadcast on TV-6's frequencies would be held in April, the Moscow Times reported. The minister said that the license to allow the use of the station's frequencies would be annulled in the very near future. TV6 lawyers, however, said that the broadcasting license of the country's only independent national television station should be annulled only after the liquidation of the network. The lawyers add that liquidation, in turn, must be carried out within six months of the first appeals ruling, which was entered in November. TV6: Shareholders Fail to Attend Liquidation Meeting ---------------------------------------------------- Most TV6 shareholders failed to attend a meeting on Monday regarding the liquidation of the company. RIA Novosti news agency reported that representatives of shareholders LUKoil-Garant, Logovaz, Delfin and Ontikst, failed to show up at the meeting. LUKoil pension fund unit LUKoil-Garant, which holds a 15% stake in TV6, initiated the bankruptcy suit against the station. LUKoil-Garant earlier said that it plans to bid for the broadcasting license of TV6 and may rehire some of the TV station's journalists. =========== S W E D E N =========== SCANDINAVIA ONLINE: Insiders Accept Eniro's Bid ----------------------------------------------- Scandinavia Online, the leading Internet media company in the Nordic region, said that its board members and senior employees have accepted the public bid by Eniro AB to acquire all the shares in SOL for 11,50 Swedish kronas per share. The following people have accepted the offer: Birger Steen (31.406 shares), Stein Erik Berget (413 shares), Thorleif Boman (546 shares), Nils Kristian Einstabl(1.059 shares), Thomas Gudbjerg (16.421 shares), Anne Langbraaten (25.455 shares), Dan Malm (200 shares), Sverre Munck (89.730 shares), Kristin Skogen Lund (40.998 shares), and Dag Wigum (23.330 shares). After completion of Eniro's bid, no registered insiders own shares in the company. Scandinavia Online recently divested its entire holding of approximately 2.4 million shares in Sense Communications for 23 million Swedish kronas. For more information, please contact Birger Steen (CEO) at telephone +46 709 35 28 18, or via email birger.steen@scandinaviaonline.se Scandinavia Online AB is located at Box 1388, 111 93 Stockholm, Sweden. ===================== S W I T Z E R L A N D ===================== 4M TECHNOLOGIES: Continues Recapitalization Talks With Investors ---------------------------------------------------------------- 4M Technologies Holding, a manufacturer of production systems for optical discs, says it is continuing recapitalization talks with private investors. "Contrary to some opinions, such recapitalization and refinancing contemplated in the project under discussion foresees potential private investment and not a trade sale," it says. Preliminary fourth quarter figures projects a further net loss to be added on top of the 9-month loss, it adds. 4M Technologies reported for the nine months ending September 30 a net loss of 33.4 million Swiss francs, compared to a loss of 60.9 million Swiss francs in 2000. GRETAG IMAGING: Plans Capital Increase to Improve Balance Sheet --------------------------------------------------------------- Swiss photo development machinery maker Gretag plans to improve its balance sheet with a capital increase. According to Dow Jones Newswires, the company will issue around 6 million shares with a nominal value of 10 Swiss francs. Shareholders have already approved the plan at an extraordinary meeting in December. All the shares will be placed privately as only in this way can the swift inflow of capital needed be assured. Gretag spokesman Kurt Muenger says preliminary talks with potential investors are already under way. GRETAG IMAGING: Shares Rise on New Technology --------------------------------------------- Shares in Regensdorf-based development machinery maker Gretag imaging Holding AG have jumped about 50% in the last two trading sessions, spurred by a television report about its new digital photo-finishing technology. According to Dow Jones Newswires' Monday edition, the Cyra Systems brought the shares up 21%, or 1.80 Swiss francs, at 10.30 Swiss francs at 1457 GMT. This new technology processes traditional analog negatives into digital images and is cheaper than photo laser printers. The Cyra laboratory line costs up to 1 million Swiss francs and produces 10,000 to 20,000 photos per hour. Despite the news, analysts say investors should stay away from Gretag's shares because the company still needs to boost its capital base. Zuercher Kantonalbank analyst Daniele Tedesco maintains his sell rating on the stock because the cash position of the company is weak. Gretag is burning through 15 million to 20 million Swiss francs a month. In its 2001 first half results, Gretag's debt stood at 413 million Swiss francs, around three times its share capital of 142 million Swiss francs. MTF HOLDING: Files for Bankruptcy --------------------------------- Olten-based MTF Holding filed for bankruptcy at the end of December, Neue Zurcher Zeitung/FT Information reported, citing company chairman Markus Wullschleger. The thirteen constituent companies comprising the IT group are in the black and will continue to operate. The firm's 300 jobs are not in any danger and contracts with customers and suppliers will continue to be honored, the report added. SWISSAIR GROUP: Will De-list Shares and Bonds in February -------------------------------------------------------- The shares and bonds of Swissair Group, which filed for creditor protection in October 2001, will be de-listed on the Swiss Exchange in February. According to a report from Bloomberg, the de-listing refers to the registered shares, as well as eight bonds, one convertible bond and two warrants. The aviation company will cease trading three days after creditors' deadline to register their debts with a judge. =========================== U N I T E D K I N G D O M =========================== BALTIMORE TECHNOLOGIES: Falls on Report of Apax Withdrawal ---------------------------------------------------------- Shares of cash-strapped e-security provider Baltimore Technologies Plc fell 8.7% after a U.K. newspaper reported that a buyout firm withdrew its offer for Content Technologies, Bloomberg reported. The Guardian earlier reported that London-based Apax Partners & Co. withdrew its offer for the Content Technologies division amid concerns about the amount of cash needed to get the operation back on its feet. Baltimore spokeswoman Sarah Marsland stressed the company has at least more than one bidder for Content and that discussions are on going. Mounting losses and dwindling cash reserves forced Baltimore into a radical restructuring, involving hundreds of job cuts and the sale of non-core operations. BALTIMORE TECHNOLOGIES: Hopeful of Content Sale ----------------------------------------------- Baltimore Technologies is insisting there is still more than one bidder interested in acquiring its Content Technologies business now that private equity firm Apax Partners has backed out. Baltimore, which hopes to complete the disposal by the end of the first quarter, says the sale process is continuing, with more than one bidder involved. As the group struggles to break even before its cash reserves run out, a successful sale of Content is increasingly seen as critical to its future. At the end of September, Baltimore had 32.4 million pounds left in cash. CONSIGNIA: Will Cut 30,000 Jobs in February ------------------------------------------- Consignia, the state-owned post office group saddled with heavy fixed costs, will detail up to 30,000 job losses next month, reports the Times newspaper. The organization is discussing the cuts with the Communication Workers Union and hopes to reach an agreement at the end of the month. In November, Consignia reported a fivefold increase in first-half operating losses accruing to 100 million pounds. The company is failing to meet service targets for first and second-class mail delivery and is struggling to cut 1.2 billion pounds from its 8-billion-pound cost base to restore profitability and become more competitive. COOKSON GROUP: Shares Tumble Over Trading Jitters ------------------------------------------------- Shares in the indebted industrial materials group Cookson fell 11.75p to 85p on Monday's trading as Schroder Salomon Smith Barney handled the sale of 7.17 million shares at 83p. The Times newspaper reported that the drop was an effect of some investors who were unsettled by the timing of the disposal. They hope to hear that losses at Cookson's electronics division have been stemmed. They also seek comments on the rumored sale of its precious metals unit for up to 400 million pounds. Cookson, which has issued a string of profits warnings in recent months, has been looking at ways to raise cash as it sets about tackling a large debt burden, which in December stood at around 800 million pounds. It has sold a plastics molding business this month for around 38 million pounds. The value of the company has fluctuated wildly. At the beginning of 2001, Cookson was worth nearly 1.3 billion pounds, but closed last week with a market capitalization of just 674 million pounds. In 1990 it was worth 250 million pounds. GAP INC.: Moody's Cuts Ratings to Baa3 -------------------------------------- Credit ratings agency Moody's Investors Service said it has lowered the long-term ratings of Gap Inc. to Baa3 and its short term ratings to Prime-3. Moody's said the rating action is based on the clothing retailer's continuing decline in financial performance and the expectation that the company will be challenged in the current operating environment to generate significant and sustainable improvement in sales and profitability in 2002. Gap Inc.'s products such as Gap, Banana Republic, and Old Navy continue to experience negative comparable store sales and lower profitability following a period of rapid store expansion and changes in the competitive landscape. Total comparable store sales have been negative since May 2000. The ratings affected are Gap Inc.'s senior unsecured intermediate term Notes, which was downgraded to Baa3 from Baa2, the senior unsecured notes to Baa3 from Baa2, and the commercial paper and extendible commercial notes to Prime-3 from Prime-2. Gap International B.V.'s eurobonds were also lowered to Baa3 from Baa2, and Gap (Japan) K.K.'s senior Notes to Baa3 from Baa2. The U.S.-based Gap Inc. operates about 4,179 stores in the U.S., Canada, the U.K., France, Germany and Japan and an Internet business. It has $1.45 billion in committed bank credit agreements ($150 million expiring in 2004 and $1.3 billion expiring in June 2002). RAILTRACK GROUP: Boss Queries Financing Plan -------------------------------------------- Railtrack Group chief executive Steve Marshall is questioning the financial credibility of the Strategic Rail Authority's rail rescue plan. According to Reuters' report, the Railtrack chief has applauded the rail regulator's 10-year plan for the nation's ailing railway system, but queried whether the financial foundations of the plan could be met. The Strategic Rail Authority estimates that up to 70 billion pounds is needed to modernize tracks and trains on Britain's railways, and the government said on Monday it would put forward 33.5 billion pounds. Reuters also reported that private investment would be unforthcoming unless Railtrack's private investors received fair value for their investment and a fast track plan was implemented to get Railtrack plc out of administration. SSL INTERNATIONAL: Government to Review Coloplast Buy ----------------------------------------------------- The acquisition of SSL International Plc's continence care unit by Danish healthcare equipment maker Coloplast A/S is being referred to the Competition Commission. According to a Reuters' report, the move is in accordance with the advise of the Director General of Fair Trading, saying that the merger raises the possibility of price increase. Coloplast said in October it was buying the SSL unit for 80 million pounds ($116 million) to boost its position in the European sector. About 70 SSL staff members will transfer to Coloplast. SSL, best known for making Durex condoms and Scholl sandals, has been hit by allegations of overstating its results in 1999 and 2000. The U.K. Serious Fraud Office launched an investigation into SSL in August after finance director Garry Watts discovered that exceptional charges were being used to hide the existence of fraudulent sales. UPF-THOMSON: Insolvency Puts Land Rover Jobs at Risk ---------------------------------------------------- The insolvency of UPF-Thomson, a supplier of Ford group's unit Land Rover, has put hundreds of jobs at risk. According to a report from the Scotsman newspaper, Land Rover has threatened to stop the production of its off-road Discovery model in the spat with UPF-Thomson receivers KPMG. KPMG is understood to have demanded a 45-million-pound payment from Land Rover to help save the company. However, Land Rover claims that is in breach of existing contracts with the supplier. If Land Rover suspends production, up to 1,400 workers could be laid off. UPF-Thomson, which also supplies General Motors and DaimlerChrysler, has supplied Solihull-based Land Rover since the 1950s and presently sells the firm about 70,000 Discovery chassis a year. The troubled British engineering group fell into receivership in December after its debts hit 50 million pounds, double its annual sales. *********** 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 * * *