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        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

            Friday, February 08, 2002, Vol. 3, No. 28


                            Headlines

* F I N L A N D *

SONERA CORP.: In Talks on Fate of 120 Jobs
SONERA CORP.: Posts EUR4MM Loss for 2001
SONERA CORP.: Sells DT Shares for EUR393MM

* F R A N C E *

SAUVAGNAT SA: Court Fails to Rule Out Sale

* G E R M A N Y *

KINOWELT MEDIEN: Will Sell Participations in Bid for Recovery
KIRCHGRUPPE: Dresdner Will Not Extend April Deadline
KIRCHGRUPPE: Murdoch in Talks on Kirch Takeover
TEAMWORK INFORMATION: Shareholders Agree to Reconstruction Plan

* I R E L A N D *

ELAN CORPORATION: Faces Fraud Suit From the U.S.
ELAN CORPORATION: Moody's Puts Debt Ratings on Downgrade Review
ELAN CORPORATION: S&P Places Elan Ratings on CreditWatch
ELAN CORPORATION: Shares Gain 13.7% on Takeover Rumors
ELAN CORP: Will Defend Class Action Lawsuits

* I T A L Y *

BLU SPA: Board Makes No Decision on Sale of Company
FIAT SPA: Shares Slide 6.2% on Debt-Burden Fears

* N E T H E R L A N D S *

KPN NV: Why the State Cannot Sell Its KPN Stake?
KPN NV: Will Get EUR5.6MM for Sale of Teleprofs Stake

* P O L A N D *

ELEKTRIM SA: Board Fires Siwak, Walczykowski

* S W E D E N *

LM ERICSSON: Sees Full-Year Loss From 3G Networks

* S W I T Z E R L A N D *

SULZER MEDICA: Shares Surge 23.2% on Settlement Agreement
SWISSAIR GROUP: Sells 49.8% Stake in Volare Group

* U N I T E D   K I N G D O M *

BRITISH AIRWAYS: Set to Cut More Jobs With GBP160MM Loss
CLUBHAUS PLC: Sells Chesfield Golf Club for GBP3.9MM
CLUBHAUS PLC: Stocks Slip 8% on Asset Sale
EQUITABLE LIFE: Criticized for Favoring Lower Bid for CET Stake
RAILTRACK GROUP: Will Apply for Funds From Rail Regulator


=============
F I N L A N D
=============


SONERA CORP.: In Talks on Fate of 120 Jobs
------------------------------------------

The Sonera Group on Wednesday began its employer/employee
negotiations for productional and financial reasons at its
Primatel Ltd and Sonera Plaza Ltd subsidiaries, and at Sonera's
Corporate R&D unit.

Negotiations will focus on a total of 120 office jobs, primarily
support and development, and supervisory roles. Of the jobs being
discussed, 60 are at Primatel Ltd, 40 at Sonera Plaza Ltd, and 20
at the Corporate R&D unit.

In August 2001, measures were taken at the Sonera Group to
streamline the company's operations and eliminate overlaps.

The negotiations, which will be concluded in a minimum of six
weeks, will determine the final number of those who may be either
reassigned or let go.

For further information, please contact Juha Pentti, Sonera
Corporation Vice President for Human Resources, at telephone +358
2040 58711 or via e-mail at juha.pentti@sonera.com


SONERA CORP.: Posts EUR4MM Loss for 2001
----------------------------------------

Sonera Corporation, an international forerunner in mobile
communications and mobile-based services and
applications, reported a loss of 4 million euros ($3.4 million)
on Wednesday.

Neb debt of the Helsinki-based company fell to 3.3 billion euros
during the year from 5.6 billion euros.

Sonera has arranged a billion-euro rights offering and, in line
with its new strategy, launched a new efficiency-boosting program
to improve profitability.

The Board of Directors is proposing that no dividend will be paid
for the 2001 fiscal year.

For further information, please contact CFO Kim Ignatius at
telephone +358 2040 54015, or via email at
kim.ignatius@sonera.com


SONERA CORP.: Sells DT Shares for EUR393MM
------------------------------------------

Sonera Corporation said Wednesday it has sold approximately 19.7
million Deutsche Telekom shares between December 1, 2001 and
February 6, 2002 at an average price of about 20.01 euros per
share through a series of small market transactions.

The proceeds from the DT share sales amount to approximately 393
million euros ($340 million).

The DT shares sold were part of the lot of approximately 72
million shares Sonera received from Deutsche Telekom in May 2001
as consideration for the shares of U.S. GSM operators VoiceStream
Wireless Inc. and Powertel Inc.

Sonera still owns approximately 19 million Deutsche Telekom
shares, worth approximately 309 million euros.

In addition, Sonera has exercised a put option to convert its
Eliska Wireless Ventures shares to approximately 2.8 million DT
shares, subject to FCC approval.

During 2001 and 2002, Sonera has sold a total of approximately 53
million Deutsche Telekom shares through a series of market
transactions at an average price of approximately 21.54 euros per
share. Sonera's total proceeds from the transactions amount to
approximately 1.1 billion euros.

Sonera said it would use the proceeds to strengthen its financial
position.

After the latest sales, Sonera's current net debt stands at
approximately 2.8 billion euros.

With the remaining DT shares, Sonera's net debt is approximately
2.5 billion euros.

Early this week, Sonera received 310 million euros for the sale
of its 23% stake in Hungarian wireless operator Pannon.


===========
F R A N C E
===========


SAUVAGNAT SA: Court Fails to Rule Out Sale
------------------------------------------

Following the liquidation of French garden furniture specialist
Sauvagnat SA, the commercial court of Grenoble has not ruled out
a sale of the company piece by piece over the next few weeks, the
Les Echos reported.

Sauvagnat's stock has been valued at nearly 7.62 million euros,
excluding patents, one brand and a position on the quality market
for some products, which are expected to attract potential
buyers.

At the end of 2000, a takeover bid led to a rupture between
shareholders Patrick Goffi, who hold 60% of the capital, and
investment company 3i.

In June, it needed nearly 15.24 million euros as turnover grew,
but the banks refused to co-operate.

Bankruptcy was inevitable for Sauvagnat by October. It underwent
a change of shareholders - Swiss finance group Celinvest, in
association with French company Europeenne de Decoration - which
were to inject it with a total of 12.20 million euros.

However, Sauvagnat defaulted on this payment and the company was
forced into liquidation.


=============
G E R M A N Y
=============


KINOWELT MEDIEN: Will Sell Participations in Bid for Recovery
-------------------------------------------------------------

Marburg-based film rights group Kinowelt Medien AG aims for
recovery through the sale of two participations and a
concentration on core activities such as film rights trading,
film lending, and home entertainment (videos and DVDs).

According to a report from the Financial Times Deutschland,
subsidiary Kinopolis (cinemas) will be sold shortly, while Atlas
Air (in-flight entertainment) will be disposed within the coming
weeks.

Interim administrator Wolfgang Ott said that Kinowelt's operating
business was already back to normal and that it would continue to
pay amounts owed (especially wages and salaries).

A final decision on the fate of the troubled media group is
expected at the end of March.

Kinowelt AG and its subsidiary Kinowelt Lizenzverwertungs GmbH
have filed for insolvency proceedings at the Munich court on
December 19 after Dutch bank ABN AMRO decided to call in its
credit.

Difficulties began for Kinowelt in 1999, when it overstretched
itself paying for a film package that proved unsatisfactory. It
showed losses of over 309 million euros in the first nine months
of 2001 on turnover of around 168 million euros.

For inquiries, contact the company's Corporate Communications &
Investor Relations at telephone + 49 89-30 796 7270 or fax + 49
89-30 796 7330, or via e-mail presse@kinowelt.de


KIRCHGRUPPE: Dresdner Will Not Extend April Deadline
----------------------------------------------------

Dresdner Bank is unlikely to push back a deadline on a 460
million euro ($398 million) debt repayment for cash-strapped
Munich-based media group Kirch, Reuters reported.

The creditor had already once agreed to postpone the deadline on
the loan to April this year, but the 767-million-euro claim by
its partner, publisher Axel Springer, against Kirch last week
raised fresh doubts over the group's ability to survive.

One financial source told Reuters on Wednesday that Dresdner
would not extend the credit deadline beyond April and was not
interested in any debt-for-equity swap.

Kirch, which has amassed debts of some $5 billion (3.5 billion
pounds) due to losses at its pay-television business, may have to
cough up billions to repay debt and cover options to banks and
media partners this year.

Industry insiders say Kirch's troubles may lead to the split-up
of the empire, which includes commercial television
ProSiebenSat.1, rights to Formula One and thousands of movies, as
well as loss-making pay television Premiere.

Kirch also owns 40% of Springer, while Springer holds an 11.5%
stake in ProSieben.


KIRCHGRUPPE: Murdoch in Talks on Kirch Takeover
-----------------------------------------------

Rupert Murdoch and his key European television executives met
yesterday to discuss proposals to take control of Kirch pay-TV or
trigger an option that could bankrupt KirchGruppe, the heavily
indebted Munich-based media group.

The meeting of the board of British Sky Broadcasting, the U.K.
satellite broadcaster controlled by Murdoch, focused on whether
to take control of the loss-making Kirch pay-TV business and try
to turn it around, or try to extract cash by triggering the 1.6-
billion-euro put option it holds against KirchGruppe.

Other choices include the control of the whole media group by
bringing Kirch to the brink of insolvency and then negotiating a
work-out with the banks, or walk away and write off the
investment as a lost cause.


TEAMWORK INFORMATION: Shareholders Agree to Reconstruction Plan
---------------------------------------------------------------

Shareholders of Paderborn-based information management solutions
provider teamwork information management AG have agreed to the
company's reconstruction plan.

The plan comprises of a capital reduction in the ratio 5:1 and
subsequent capital increases in the stages 1:1 and 2:3.

In addition, the shareholders consented to two convertible bonds
and the creation of approved capital, with the aim of further
ensuring the stable supply of financial resources.

Following prompt entry of the resolutions in the commercial
register, the capital reduction will first be carried out.

As part of this, teamwork shareholdings will be reduced in the
ratio 5:1 by the banks administering the securities accounts. The
share price will increase five-fold as a result of this capital
measure.

Following approval of the offering prospectus by Deutsche Borse
AG, shares will be offered for the first capital increase.
Approval of the prospectus is expected at the end of this month.

Shareholders can subscribe to the shares in the ratio 1:1 at the
theoretical nominal value of 1 euro. This first capital increase
will inject 0.9 million euros into the company and is intended to
provide teamwork with working capital.

Subscription to shares for the second capital increase is being
aimed for at the end of March. The capital from this subscription
will be used to repay the company's debts and finance the
insolvency plan proceeding that was initiated on January 2001,
where lawyer Dr. Frank Kebekus was appointed as receiver.

The business operations of teamwork AG, however, continued in
full despite the fact that insolvency proceedings have been
instigated.

The company has been able to initiate considerable costs savings
in the provisional insolvency proceedings, in particular through
a reduction in the workforce to its current level of around 90
employees.

Therefore, the banks involved, Sparkasse Paderborn and
Westdeutsche Landesbank Dsseldorf, have agreed to the receiver's
concept for continuing the company even after instigation of
insolvency proceedings.

Contact Dr. Sabine Brummel at telephone +49 (0) 5251-5201-145 or
via e-mail at sbrummel@teamwork.de


=============
I R E L A N D
=============


ELAN CORPORATION: Faces Fraud Suit From the U.S.
------------------------------------------------

Connecticut-based law firm Scott Scott, LLC said that a class
action has been commenced in the United States District Court for
the Southern District of California on behalf of purchasers of
Elan Corporation's publicly traded securities during the period
between April 23, 2001 and January 29, 2002.

The complaint charges Elan and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.

Scott Scott's complaint alleges that, during the class period,
defendants reported favorable financial results for Elan. They
did this while concealing expenses through joint ventures,
recognizing income from companies in which Elan had invested
(round-trip revenue) and concealing material related-party
transactions.

As a result, Elan's stock traded as high as $65.

The Dublin-based pharmaceutical company is also facing two other
class action lawsuits from the U.S.

New York City-based law firm Wolf Haldenstein Alder Freeman &
Herz on Tuesday filed a class action against Elan, its officers
and auditors KPMG claiming the company misled the market between
December 2000 and February 2002.

California-based Milberg Weiss and Connecticut-based Scott &
Scott claim Elan distorted its accounts and concealed material
transactions to boost its figures.

Elan however denied such allegations.


ELAN CORPORATION: Moody's Puts Debt Ratings on Downgrade Review
---------------------------------------------------------------

Moody's Investors Service placed the debt ratings of
pharmaceutical company Elan Corporation PLC (Baa2 notes
guaranteed on a senior basis) under review for possible
downgrade.

The review will affect around $2.6 billion in securities issued
by Elan and subsidiaries Athena Neurosciences and Dura, Moody's
said.

The rating action, according to Moody's, follows the company's
fourth quarter earnings announcement and 2002 guidance, which
include slower-than-anticipated growth in product revenues, as
well as higher expected R&D and sales/marketing expenditures.

Moody's further notes the recent questions related to Elan's
accounting practices, the decline in Elan's share price and
market capitalization, as well as shareholder lawsuits.


ELAN CORPORATION: S&P Places Elan Ratings on CreditWatch
--------------------------------------------------------

Standard & Poor's said Wednesday it placed all of the ratings of
Elan Corp. PLC on CreditWatch with negative implications.

The ratings agency said that the actions were taken following
Elan's announcement of higher-than-expected R&D and marketing
expenditures, and the possibility of slower-than-expected product
sales growth.

The ratings affected were Elan's corporate credit rating (BBB)
and senior unsecured debt (BBB).


ELAN CORPORATION: Shares Gain 13.7% on Takeover Rumors
------------------------------------------------------

Shares in Irish drugmaker Elan Corporation were up 13.7% at
$15.65 in New York trading on Wednesday and 12% at 17.95 euros in
Dublin as bid talk approaches.

Elan earlier lost some $9 billion in value as the company
released a grim 2002 profit warning and accounting concerns.

One company tipped as potential buyer for Elan's assets is
British rival specialty drugmaker Shire Pharmaceuticals Group
Plc.


ELAN CORP: Will Defend Class Action Lawsuits
--------------------------------------------

Elan Corporation will defend the class action lawsuits filed
against the company, Dow Jones Newswires reported.

The move came as Elan learned that it and certain of its officers
and directors have been named as defendants in the lawsuits
brought by its purchasers of securities, alleging violations of
the U.S. federal securities laws.

Elan had so far received three cases from the United States.


=========
I T A L Y
=========


BLU SPA: Board Makes No Decision on Sale of Company
---------------------------------------------------

The board of Rome-based mobile phone operator Blu continues to
examine five non-binding offers for all or part of the company,
Dow Jones Newswires reported.

If the board does not agree on a sale by March, the shareholders
would have to inject more money to keep the company operating, a
source close to the company told Dow Jones Newswires.

A BT spokesman warned earlier that Blu could be forced to close
if a buyer could not be found to take over the struggling mobile
group.

The company has enough liquidity to take it through February.

Blu said in January that Telecom Italia Mobile SpA, Enel-
controlled Wind SpA, Hutchison Whampoa-backed H3G SpA, Vodafone
unit Omnitel Pronto Italia SpA and Autostrade-Sitech SpA had
submitted non-binding offers to buy all or part of Blu.

The Benetton family is Blu's biggest shareholder. Benetton family
holding company Edizione Holding owns 9% of Blu directly and a
further 32% through Autostrade.

Additional holders in Blu include BT Group plc with 29%, Distacom
with 9%, Banca Nazionale del Lavoro SpA with 7%, Societa Italiana
per il Gas SpA with 7% and Palatinus, part of Caltagirone SpA
with 7%.

Blu was valued at 1.2 billion euros ($1.04 billion) in December.


FIAT SPA: Shares Slide 6.2% on Debt-Burden Fears
------------------------------------------------

Concerns as to whether Turin-based car manufacturer Fiat SpA will
succeed in plans to trim its debt has sent the company's shares
down by 6.2%, the Wall Street Journal reported.

According to people familiar with the situation, the Bank of
Italy has urged Italian bank Sanpaolo IMI SpA to not participate
in a group of banks assembling a multibillion-euro loan to
Edipower, an energy consortium in which Fiat indirectly holds a
controlling stake.

The Bank of Italy also asked Banca di Roma SpA not to take part,
the paper added.

Fiat's debt burden is among the highest of the European auto
sector, with a net debt of about 6 billion euros ($5.21 billion)
at the end of 2001.

While Bear Stearns analyst Victoria Whitehead agree that Fiat is
not facing any liquidity problem, the news, she says, confirms
her view that Italy's largest industrial group has debt problems.

Fiat announced in December a drastic restructuring aimed at
bringing its car unit into the black. In January, it raised the
target for 2002 asset sales to 3 billion euros from 2 billion
euros to halve the debt by year's end.


=====================
N E T H E R L A N D S
=====================


KPN NV: Why the State Cannot Sell Its KPN Stake?
------------------------------------------------

The Dutch Parliament has asked for a report on the role of the
state in KPN over the past two years to understand why the
government has not sold its stake in Royal KPN NV.

In a letter to the Parliament, the Dutch daily de Volkskrant said
that the minister explained to the public that the Ministry of
Economic Affairs has had no opportunities of selling the
government's 35% stake in KPN.

Due to devaluation and problems with the company, KPN's shares
have lost a lot of what they were worth.

The ministry was almost permanently aware of the strategic
decisions that the debt-riddled telecoms group was going to take
and had to follow the rules of insider trading.


KPN NV: Will Get EUR5.6MM for Sale of Teleprofs Stake
-----------------------------------------------------

Heavily indebted Hague-based telecommunications company
KPN Telecom NV said Wednesday it would sell its 50% interest in
Teleprofs to the Vedior employment agency as part of its non-core
assets disposal program.

KPN would receive 5.6 million euros ($4.8 million) in cash from
the deal.

The sale of Teleprofs would not have any consequences for the
company's personnel.

Early this week, KPN Mobile had completed the sale of its 44.66%
stake in Hungarian mobile operator Pannon GSM to Norwegian
telecoms group Telenor, reaping 603 million euros in proceeds.

According to chief financial officer Maarten Henderson, KPN
currently has 8.8 billion euros in cash on hand, while the
company's net debt as of December 31 is estimated at 16.5 billion
euros.


===========
P O L A N D
===========


ELEKTRIM SA: Board Fires Siwak, Walczykowski
--------------------------------------------

The nine-strong supervisory board of debt-riddled Polish
telecommunications and power conglomerate Elektrim SA on Tuesday
dismissed acting chief executive Waldemar Siwak and deputy CEO
Jacek Walczykowski amid frantic attempts to stave off bankruptcy,
the Financial Times reported.

Walczykowski was earlier suspended due to differences of opinion
within the Elektrim management board over court-ordered debt
settlement proceedings.

Dariusz Jacek Krawiec, head of metals trading firm Impexmetal and
a member of Elektrim's board, becomes chief executive, while Jan
Rynkiewicz, another board member representing financial
investors, succeeds Walczykowski.

Supervisory board member Aleksander Kotlowski said the changes
were necessary in order to clarify corporate governance issues
and bring in a more experienced chief executive to lead the
company in its very difficult negotiations with bondholders.

Elektrim has been suffering serious liquidity problems since
1999, when the then CEO Barbara Lundberg launched an ambitious
and high leveraged round of telecom and cable TV acquisitions.
Its fate has hung in the balance since it defaulted on
convertible bonds worth $415 million in December.

The company won a reprieve on January 16 when a Warsaw district
court rejected a bondholders' bankruptcy petition and instead
accepted Elektrim's request for court-brokered composition, or
debt renegotiation, proceedings.


===========
S W E D E N
===========


LM ERICSSON: Sees Full-Year Loss From 3G Networks
-------------------------------------------------

Stockholm-based telecom equipment maker LM Ericsson is expected
to make a loss from its new 3G mobile Internet networks this year
due to very high development costs, a senior Ericsson source told
Reuters.

Some analysts expect Ericsson's 3G network business to lose
between 10 billion Swedish crowns ($940.8 million) and 15 billion
Swedish crowns this year.

LM Ericsson recorded a loss of 21.1 billion Swedish crowns ($2
billion) for 2001, or 30.3 billion Swedish crowns after including
restructuring costs and exceptional gains, and 5.1 billion
Swedish crowns in the final quarter.


=====================
S W I T Z E R L A N D
=====================


SULZER MEDICA: Shares Surge 23.2% on Settlement Agreement
---------------------------------------------------------

Shares of Sulzer Medica surged 23.2% to 113 Swiss francs as
Europe's biggest orthopedics company agreed a $1 billion
settlement in an attempt to resolve US lawsuits over faulty hip
and knee implants, the Financial Times reported.

Medica had warned it would put its US subsidiary, Sulzer
Orthopaedics Inc., into Chapter 11 protection from creditors if
claims ran out of hand.

Some 3,000 patients have filed lawsuits in the U.S. federal court
in Cleveland. Around 2,780 of them have already undergone
remedial hip surgery, while over 260 others have gone through
further knee operations.

Sulzer Medica will provide $425 million in cash and $300 million
in a callable convertible instrument (CCI) for the elderly US
patients who filed the suits.


SWISSAIR GROUP: Sells 49.8% Stake in Volare Group
-------------------------------------------------

Collapsed Swissair Group sold its stake in Volare Group, the
second-largest airline in Italy in terms of turnover, a report
obtained from Il Sole 24 Ore said.

The 49.8% shareholding was acquired by Italian businessman Gino
Zoccai, who founded the airline with a number of other partners,
increasing Zoccai and his partners' stake in Volare to 80%.

Volare Group chairman Zoccai exercised his option and agreed a
price of 70 million Swiss francs ($41.28 million) with Swissair's
liquidators.

The payment will be finalized following the approval of the
antitrust watchdog.

Zoccai said he is open to partnership agreements and even share
swaps with other leading carriers.

The Volare Group delivered around 500 million euros last year,
the French paper added.

Swissair Group collapsed in October 2001 after running out of
cash. The Swiss aviation group is currently being liquidated.


===========================
U N I T E D   K I N G D O M
===========================


BRITISH AIRWAYS: Set to Cut More Jobs With GBP160MM Loss
--------------------------------------------------------

Cash-strapped British Airways looks set to cut thousands more
jobs after the flagship carrier yesterday reported quarterly pre-
tax losses of pounds 160 million, the Birmingham Post reported.

According to some estimates, as many as 10,000 staff members will
be made redundant over the next five years, on top of 7,300 job
cuts already announced.

BA chief executive Rod Eddington remained mum about his plans,
which would be revealed to investors next week.

The airline was badly hit by the September 11 events and the rise
of low-cost airlines such as easyJet and Ryanair.

BA added its debt level was 339 million pounds higher at 6.5
billion pounds, almost three times its market value.


CLUBHAUS PLC: Sells Chesfield Golf Club for GBP3.9MM
----------------------------------------------------

Clubhaus, the embattled golf course owner, disposed one of its
non-core clubs to reduce bank borrowings.

The Chesfield Downs golf club was sold to Leisure Links
International Limited for 3.9 million pounds ($5.5 million). The
consideration comprised of 3.8 million pounds in cash and a
deferred payment of 100,000 pounds payable on or before August 5,
2003.

The golf course owner continues to be in talks with its principal
bankers and its bondholders over a possible restructuring of its
finances.

For further inquiries, contact Clubhaus PLC Managing Director
Charlie Parker or Finance Director Rupert Horner at telephone
01732 835 900


CLUBHAUS PLC: Stocks Slip 8% on Asset Sale
------------------------------------------

Shares of Clubhaus Plc, the unprofitable London-based golf course
and health club operator, dropped 8% to 5.75p after it said it
has sold a gold club to Leisure Links International for 3.9
million pounds in cash.

Clubhaus, which defaulted on a 3.9-million-pound interest payment
due on a 60-million-pound bond in December, is currently in talks
with bankers about restructuring its debt of about 105 million
pounds.

The group is negotiating for a debt-for-equity swap deal with
plans to support a share issue open to ordinary shareholders.

Shareholders include Paul Davidson (15.21%), Edinburgh Fund Mgrs
PLC (10.73%), PDFM Ltd (7.91%), AXA Equity & Law Life Assur
(5.96%), Electra Quoted Mngt Ltd (5.92%), Crown Sports PLC
(3.86%), Singer & Friedlander Inv Mgmt (3.36%), A Baron Von
Spoercken (1.74%), other Directors (0.51%).

The gross book value of the business is 4 million pounds.


EQUITABLE LIFE: Criticized for Favoring Lower Bid for CET Stake
---------------------------------------------------------------

Irate policyholders, who recently had to sign a compromise deal
to keep Equitable Life afloat, criticized the company anew after
learning that it is favoring a much lower bid for its stake in
the Charter European Trust.

According to a report by the Electronic Telegraph, policyholders
are dismayed that the company is favoring the bid of Henderson
Global Investors over the offer of the CET board.

Henderson is offering shareholders and 10,000 private investors a
chance to cash in 75% of their investment at net asset value. On
the other hand, the board is allowing investors to cash in up to
100% of their holdings.

"There needs to be a very good reason why institutions are
choosing not to maximize their returns," says Stuart Bayliss,
coordinator of the Equitable Life Action Group, in questioning
the company's position.

The company, together with Standard Life, own 19% of the trust.
Both are looking to reduce their investment trust holdings, the
report says.

Equitable, however, clarified that the decision over which offer
to accept lay with David Marchant, the Clerical Medical fund
manager administering the money.


RAILTRACK GROUP: Will Apply for Funds From Rail Regulator
---------------------------------------------------------

Railtrack, the rail network operator that was put into
administration by the government in October 2001, will apply to
the rail regulator to increase its income, reports the Financial
Times.

Chief executive John Armitt said the company could not afford the
budget that was set by the rail regulator for 2001-06, and that
there was a review under way of what would be needed.

Last year, Railtrack said it wanted 2.6 billion pounds on top of
the 15 billion pounds it was allotted. Many expect that the
figure will now increase after the real situation of the network
has been revealed.

The government has asked the European Commission to approve a
loan of up to 5.4 billion pounds.

                                ************

     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.

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