/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/020213.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, February 13, 2002, Vol. 3, No. 31 Headlines * B E L G I U M * SABENA SA: DAT Takes EUR125MM Loan From Federal Investment * F R A N C E * KALISTO ENTERTAINMENT: New Consoles Cannot Save Kalisto * G E R M A N Y * COMDIRECT BANK: May Fall on Nemax 50 Reshuffle KIRCHGRUPPE: HVB Offers EUR1.1BB Lifeline KIRCHGRUPPE: Italian Prime Minister May Buy Kirch Assets KIRCHGRUPPE: Mediaset Eyes Telecinco Stake KIRCHGRUPPE: ProSiebenSat.1 Up 8% as Brokers Highlight Value KIRCHGRUPPE: Put Option Threatens Kirch Liquidity LTU GROUP: Stadtsparkasse Dusseldorf Not Affected by LTU Rescue * H U N G A R Y * MOL RT: In Well-Drilling Agreement With Yukos * N E T H E R L A N D S * KPN NV: May Pull Out of KPNQwest * P O L A N D * NETIA HOLDINGS: Hopes to Reach Agreement With Bondholders * R U S S I A * SIBUR: Gazprom Launches Sibur Bankruptcy to Recover $800MM SWISSAIR GROUP: Swiss Exchange De-lists SAirGroup Bonds * U N I T E D K I N G D O M * APPLECRAFT LIMITED: Enters Administrative Receivership BRITISH AIRWAYS: Marshall Plans to Stay Three More Years BRITISH TELECOM: Bland Pays GBP1MM for BT Stock CORDIANT GROUP: Will Fall Into Red With GBP200MM Write-Down CORUS GROUP: Will Freeze Workers' Pay ENRON CORPORATION: Creditors Brace to Count Cost ENRON CORPORATION: Innogy Bids for U.K. Power Station ENRON CORPORATION: PwC Sells Metals Group to Sempra Energy ICELAND GROUP: Shares Rise on Share and Leaseback Plan ============= B E L G I U M ============= SABENA SA: DAT Takes EUR125MM Loan From Federal Investment ---------------------------------------------------------- Delta Air Transport (DAT), Sabena's successor airline, has taken a 125-million-euro five-year loan from Belgium's Federal Investment Company to replace a government bridge loan it was forced to pay back last week, Reuters reported. The Belgian government gave the bridge loan to DAT after Belgian national carrier Sabena collapsed in early November but had to pay it back by February 7. DAT is Sabena's former short-haul subsidiary and is currently in merger talks with Brussels-based discount airline Virgin Express, which is expected to conclude later this month. =========== F R A N C E =========== KALISTO ENTERTAINMENT: New Consoles Cannot Save Kalisto ------------------------------------------------------- Observers say that the console onslaught in Europe has come too late to save the Bordeaux-based video games company Kalisto, Le Monde reported. Kalisto filed for bankruptcy on Friday after French stock market watchdog Commission des Operation de Borse (COB) refused to approve its refinancing plan. The rescue plan would have required it to swap most of its 25- million-euro debt into convertible bonds and loans and raise 15 million euros in additional funding from U.S. investment fund Global Emerging Market. ============= G E R M A N Y ============= COMDIRECT BANK: May Fall on Nemax 50 Reshuffle ---------------------------------------------- Shares of Comdirect Bank AG, Europe's largest online broker, may be hurt in coming months as Deutsche Boerse AG prepares to re- shuffle its list of high-tech firms on its Nemax 50 Index, reports Bloomberg. The operator of the Frankfurt stock exchange intends to revise how it calculates its indexes to consider the company's free- float or the number of freely tradable shares, rather than its market value. Martin Possienke, analyst of financial services provider Equinet Institutional Services AG, said that the change would bring down companies like Comdirect with a relatively small free-float. In effect, investors whose funds seek to mirror the index will tend to shift their holdings accordingly. Deutsche Boerse said last week, its Nemax 50 column, which tracks the 50 biggest companies by market value, will be re-evaluated in June and the changes will be announced in May. Comdirect is selling its unit companies in France and Italy as these will not be able to reach profitability fast enough to meet the Comdirect group targets. KIRCHGRUPPE: HVB Offers EUR1.1BB Lifeline ----------------------------------------- Bayerische Hypo- und Vereinsbank (HVB), which is among Kirch's largest creditors with 460 million euros of loans on its books, has offered to pay 1.1 billion euros ($964 million) for Kirch's 40% stake in publisher Axel Springer Verlag AG. Kirch insiders said Monday that the group would decide this week whether it would accept HVB's offer. They said the group had also initiated talks with its other creditor-banks, who may also decide to make offers for the Springer stake. Other banks and potential financial investors who have presented their rescue plans for Kirch include: Deutsche Bank and German publishing group WAZ Group. German politicians and bankers have been working on plans to carve up Kirch's most valuable assets to enable the group to manage its 5.6 billion euros of debt and at least 2.3 billion euros in contingent liabilities due this year. KIRCHGRUPPE: Italian Prime Minister May Buy Kirch Assets -------------------------------------------------------- Silvio Berlusconi, Italy's prime minister, may become embroiled in the crisis at the embattled media conglomerate Kirchgruppe. Berlusconi has stepped back from running his companies, Italian TV companies Fininvest and Mediaset, but might buy some of Kirch's assets, the Daily Telegraph reported. Kirch is urgently raising cash, including the sale of a EUR500 million stake in the Spanish free-to-air television station Tele 5. A potential buyer of part of the stake is believed to be either Fininvest or Mediaset, which already owns a stake in Tele 5. KIRCHGRUPPE: Mediaset Eyes Telecinco Stake ------------------------------------------ Mediaset SpA chairman Fedele Confalonieri said that Italy's television group wants to buy part of KirchGruppe AG's 25% stake in the Spanish television network Telecinco, AFX News reported. Mediaset already has 40% stake in Telecinco. Kirch, which has amassed debts of some $5 billion due to losses at its pay-television business, owns 69.75% of KirchPayTV/Premier (estimated value of stake is 2 billion euros), 58% of Formula One motor-racing (1.2 billion euros), 40% in publishing firm Axel Springer (1 billion euros), 25% in Telecino (500 million euros) and 100% of Beta Research (100 million euros). KIRCHGRUPPE: ProSiebenSat.1 Up 8% as Brokers Highlight Value ------------------------------------------------------------ ProSiebenSat.1 Media AG, the commercial television arm of Munich- based media group Kirch, jumped in midmorning trade as a number of brokers in large investment houses called the stock a trading buy, AFX News reported. The stock was up 0.46 euros or 8.23% at 6.05 in spite of ongoing worries about the indebtedness of KirchGruppe. If Kirch goes bankrupt, an appointed auditor would have to get the highest price for the media empire and put ProSiebenSat.1 in an auction. KIRCHGRUPPE: Put Option Threatens Kirch Liquidity ------------------------------------------------- The put option exercise of U.S.-Australian media business News Corp to sell its 22% stake in KirchGruppe's loss-making payTV unit Premiere World back to the German media empire would threaten the company's capital structure, AFX News reported, citing KirchGruppe chief executive officer Dieter Hahn. "Our principal task for months has been to improve the capital structure of Premiere. This issue must be resolved," Hahn said. It is believed that News Corp chairman Rupert Murdoch has commissioned representatives of an unknown international auditing firm to appraise KirchGruppe. Murdoch, who expects the completion of the appraisal next week, needs to know the current earnings and business position, as well as Kirch Gruppe's results from the past years in case he decides to buy parts of the media group or Kirch files for insolvency. LTU GROUP: Stadtsparkasse Dusseldorf Not Affected by LTU Rescue --------------------------------------------------------------- The rescue of troubled German charter airline LTU has not affected the profits of its creditor Stadtsparkasse Dusseldorf, the Frankfurter Allgemeine Zeitung reported. Chairman Hans Schwarz said there was no need for his bank to increase its risk provisions as a result of the action, as the regional government is acting as guarantor on 90% of loan. Stadtsparkasse Dusseldorf is not involved with attempts to find a buyer for a 49% stake formally owned by the collapsed Swiss aviation company, Swissair group. Schwarz believes this task lies in the hands of the major shareholder Rewe and the North Rhine Westphalia government. 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 stake in its capital formerly held by Swissair group. ============= H U N G A R Y ============= MOL RT: In Well-Drilling Agreement With Yukos --------------------------------------------- Hungarian oil and gas MOL Rt and the Russian oil company Yukos are expected to sign an agreement in Budapest next week regarding well-drilling operations, the Budapest Business News reported. The two companies plan to extract 2.5 to 3 million tons of crude oil annually from the Zapadno-Malobalik oil field in the autonomous region of Hanti-Mansi of Western Siberia under a new cooperation agreement. The deal will provide both companies a 50-50 split of the crude oil extracted from the cooperation. In the first nine months of 2001, MOL revealed losses of 14.29 billion forints ($51.6 million), while its gas division lost 111 billion forints. ===================== N E T H E R L A N D S ===================== KPN NV: May Pull Out of KPNQwest -------------------------------- Analysts fear that Qwest and Hague-based telecommunications company KPN may pull out of its joint venture company KPNQwest as both companies are trying to cut their debts, Het Financieele Dagbald reported. The two partners originally had stakes of 45% each in KPNQwest, with the remaining 10% of the shares traded on the Amsterdam stock exchange. KPN already sold a 4% package of shares to Qwest and under terms of their agreement, KPN can sell the remainder of its KPNQwest shares to Qwest beginning March. KPN chief financial officer Maarten Henderson said earlier that the company currently has 8.8 billion euros in cash on hand, while net debt as of December 31 is estimated at 16.5 billion euros. =========== P O L A N D =========== NETIA HOLDINGS: Hopes to Reach Agreement With Bondholders --------------------------------------------------------- Warsaw-based Netia Holdings S.A., Poland's largest alternative, hopes to reach a key deal with its bondholders after its main shareholders, Swedish telecom Telia (with 48%) and global private equity firm Warburg Pincus (9%), made an agreement to save the distressed alternative fixed-line telecommunications services provider from bankruptcy, Warsaw Business Journal reported. Netia found itself in financial trouble in December when it defaulted on two bond interest payments totaling more than $13.3 million. The company again failed to issue payment after a 30-day grace period ended in mid-January. Netia Holdings in September reported a loss of 1.87 billion Polish zlotys ($450.85 million), which exceeds the aggregate of the spare capital, the reserve capital and one-third of the company's 1.74 billion Polish zlotys (US$419.52 million) share capital. The company posted a debt of 2.77 billion Polish zlotys ($655 million) in the third quarter of 2001. =========== R U S S I A =========== SIBUR: Gazprom Launches Sibur Bankruptcy to Recover $800MM ---------------------------------------------------------- Gazprom, the gas group that is 38% controlled by the state, launched bankruptcy proceedings against Siberia-Ural Petrochemical & Gas Company (SIBUR) as it attempts to recover over US$800 million from its previous management. Gazprom director Alexander Ryzanov foresees the bankruptcy filing as the only way to recover its investments, the Financial Times sources said. Russian prosecutors continue to hold Sibur chief executive Yakov Goldovsky and vice chairman Yevgeny Koshits for charges linked to abuse of authority and asset stripping. The insolvency move appeared to indicate continuing financial difficulties and political and management pressure for Gazprom to recover money. Gazprom has over US$10 billion in debts and is under pressure by its minority shareholders of mismanagement and rumors of a cash crunch. According to Dmitry Avdeyev, oil and gas analyst with the Moscow brokerage United Financial Group, the bankruptcy procedure is set to spark a fight between other creditors to Sibur and Gazprom, which is owed three-quarters of Sibur's unsecured debts. Avdeyev said that it was difficult to assess the value of Sibur's assets, since the company is a loose alliance of different petrochemical plants, and many of its businesses are in fact held by its shareholders rather than belonging directly to the parent company. ===================== S W I T Z E R L A N D ===================== SWISSAIR GROUP: Swiss Exchange De-lists SAirGroup Bonds ------------------------------------------------------- The securities of Zurich-based aviation company SAirGroup AG were de-listed from the SWX Swiss Exchange on February 8, Dow Jones Newswires reported. The Swiss Exchange said the move was made to ensure that SAirGroup bonds, which have not been lodged and therefore have not been delivered in connection with the liquidation of SAirGroup, could still be traded on the SWX system. The pricing of these securities will take place through the matcher of the SWX Exchange system, the news agency added. It does not apply to outstanding SAirGroup Eurobonds, which will remain suspended. In December, the estate administrator of Swissair Group estimated that bondholders might recover around 12% of their investment, while shareholders could lose all. =========================== U N I T E D K I N G D O M =========================== APPLECRAFT LIMITED: Enters Administrative Receivership ------------------------------------------------------ Bruce Cartwright and Iain Bennet of PricewaterhouseCoopers were appointed joint receivers of Applecraft Limited on January 3 after the restaurant chain failed to achieve anticipated growth in turnover. Applecraft operates seven restaurants under the Leonardo name in Glasgow, Dundee, Aberdeen and Stirling. It employs approximately 120 full time employees and a similar number on a part time basis. "We expect strong interest in buying the business as a going concern to run as a separate brand or alongside an existing portfolio. Leonardo's will remain open for business during this transitional period," Cartwright said. For further information, please contact Bruce Cartwright at telephone 0131 260 4087 or Iain Bennet at telephone 0141 245 2222. BRITISH AIRWAYS: Marshall Plans to Stay Three More Years -------------------------------------------------------- British Airways chairman Lord Marshall plans to stay in the job at the cash-strapped airline for the next three years, a report from The Times newspaper said. Some of the BA's investors warned, however, that if the struggling airline does not put up another candidate as chairman they would abstain from voting at the company's annual general meeting in July to show disapproval. The investors believe that the company needs a new chairman to help implement its so-called Future Size and Shape project that will alter BA's business plan in an attempt to compete with budget airlines and lift the deep malaise dogging the company. Thousands of job cuts are planned. Standard Life, the insurance company that owns nearly 3% of BA, is deeply concerned about the succession. Clerical Medical, which owns more than 3% of the airline, remained mum on its views about individuals on the board, but said any director who did not agree with a company's strategy should resign. BA was badly hit by the September 11 catastrophe and the rise of low-cost airlines such as easyJet and Ryanair. The airline's debt level is 339 million pounds higher at 6.5 billion pounds, almost three times its market value. BRITISH TELECOM: Bland Pays GBP1MM for BT Stock ----------------------------------------------- BT chairman Sir Christopher Bland, who has a paper loss of more than 200,000 pounds on the 220,000 shares he bought last May, spent 1 million pounds for another 388,000 shares in the telecoms group, London's The Times newspaper reported. New chief executive Ben Verwaayen joined Bland by buying shares worth 1 million pounds. Under the terms of his contract, BT immediately bought him another 2 million pounds worth of shares, which he will be able to take in 2005. John Nelson, who joined BT as a non-executive director, paid 127,000 pounds for 49,200 shares. BT Group reported that its net debt has been cut from some 30 billion pounds to 13.6 billion pounds at the end of last year following a wave of disposals and the 5 billion pounds rights issue. CORDIANT GROUP: Will Fall Into Red With GBP200MM Write-Down ----------------------------------------------------------- Cordiant Communications Group PLC, the London-based advertising group that issued three profits warning in 2001, will dive heavily into the red when it reports its annual results on March 15 because of the cost of taking an expected 200 million pounds ($286 million) write-down on the value of its acquisitions. According to a Financial Times report, most of the non-cash charge will reflect a reassessment of the value of Lighthouse, the marketing services group Cordiant acquired in September 2000 for 315 million pounds plus the assumption of 65.6 million pounds of debt. Marketing Services Financial Intelligence editor Robert Willott said it would be difficult to place a value of over 125 million pounds on Lighthouse today, 190 million pounds less than Cordiant paid for it. With write-downs on smaller acquisitions also likely, the total value to be written off is expected to reach about 200 million pounds. Cordiant has made a total of 1,100 workers (from 9,500) redundant in 2001. CORUS GROUP: Will Freeze Workers' Pay ------------------------------------- Corus workers face another blow as Europe's third-largest steel maker announced plans to freeze their pay to save cash, Ananova reported. The company, which cut thousands of jobs last year, said that the decision would apply to all employees covered by pay reviews due between April this year and March 2003. "The current and forecast business climate shows no real sign of improvement in the short term, particularly in the UK manufacturing sector, and conservation of cash therefore continues to be the critical priority for the company in order to see us through this difficult period," Corus executive director Allan Johnston said in a letter to unions. ENRON CORPORATION: Creditors Brace to Count Cost ------------------------------------------------ Administrators PricewaterhouseCoopers (PwC), appointed to wind Enron Europe up after a financial scandal engulfed U.S. energy trader Enron Corporation, will this week meet in London with the creditors on the progress of selling the company's assets, Reuters reported. One of the administrators, Neville Kahn, said earlier this month that Enron had billions of dollars of liabilities owed to creditors, which include other energy companies and banks. U.K. utility Centrica has put its exposure to Enron at 30 million pounds ($42.74 million), while German energy giant RWE said last week it would claim 11 million euros from Enron's administrators. Creditors of retail company Enron Direct, sold to Centrica, met yesterday while creditors of other units, including the flagship trading division, will gather on Friday in the City, London's financial district. The administrators say they expect to collect about $750 million from the sale of assets, which includes Enron's stake in the U.K. Teesside power station. With Enron Direct already sold and a bid in from U.K. utility Innogy for the Teesside power station stake, the administrators should be able to start making payments to creditors soon, Howard Morris, a partner at the recovery and insolvency unit at London law firm Denton Wilde Sapte told Reuters. Enron Europe was put into administration with PwC in November, shortly before parent Enron Corporation filed for Chapter 11 bankruptcy protection. Enron Corp. is selling its diminished assets to pay creditors a fraction of the more than $40 billion they are owed. It fired 16% of Europe's 6,800 work force in November and is now retaining a small group of employees to help sell various businesses. ENRON CORPORATION: Innogy Bids for U.K. Power Station ----------------------------------------------------- British power utility Innogy is bidding for the stake of failed U.S. company Enron in a power station on Teesside in northeast England, an Innogy spokesman told Reuters, refusing to put a figure on the bid. PricewaterhouseCoopers, administrators of the bankrupt U.S. energy trading giant's European assets, was not immediately available for comment. Reuters added that a rival bid for the power station could be from Enron's own management at the plant. None of Enron's partners, Midland Power International and Northern Electric, have so far said they are interested in Enron's stake. Teesside power station is run by Teesside Power Limited, of which Teesside Power Holdings has a 50% share. Enron itself has 85% of Teesside Power Holdings, with Midlands Power International holding the remaining 15%. Of the other 50% of Teesside Power Limited, Midlands Power has 19.2%, and Northern Electric and Western Power Distribution both 15.4%. ENRON CORPORATION: PwC Sells Metals Group to Sempra Energy ---------------------------------------------------------- PricewaterhouseCoopers, the joint administrators of Enron Metals Group Limited, has completed the sale of London-based Enron Metals Limited to U.S.-based Sempra Energy Trading, a leading participant in marketing and trading physical and financial energy products, including natural gas, power and crude oil, throughout North America, Europe and Asia. On January 29, Sempra Energy Trading announced that it had purchased the business for a cash price of approximately $145 million. Enron Metals Limited, which was acquired by Enron in mid-2000 as part of the Metallgesellschaft plc group, is being renamed Sempra Metals Limited and will continue to be based in London. "The sale was good news for EMGL's creditors as well as for the employees and the counterparties of Enron Metals Limited," Dipankar Ghosh of PwC said. Dipankar Ghosh, Anthony Lomas, Neville Kahn and Steven Pearson, all partners at PricewaterhouseCoopers, were appointed administrators of EMGL by the High Court on December 3, 2001. The same four partners were appointed administrators of Enron Europe Limited and a number of other companies in the Enron Europe group in November. For further information, please contact Dipankar Ghosh at telephone 020 7804 1159. ICELAND GROUP: Shares Rise on Share and Leaseback Plan ------------------------------------------------------ Shares in cash-strapped supermarket group Iceland Group PLC gained 2.5p at 141 pence in mid-morning trade Monday, and the FTSE 250 was up 19.4 at 5810.2, after confirming it is considering a sale and leaseback of its store portfolio, AFX News reported. The troubled retailer, which issued three profit warnings in 2001, have struggled recently amid rumors that the group was considering a rights issue to pay for necessary investment and to help shave its debt, which stood at 430.4 million pounds in November. The group has appointed accountant Ernst & Young to examine fundraising options. Iceland, which owns the Booker cash and carry business, as well as the frozen food chain, is now valued at 475 million pounds ($673.1 million). It employs 28,000 people in the UK. THUS PLC: Court Okays Creation of New Holding Company ----------------------------------------------------- Thus PLC, a provider of voice, data and call center services and owner of Internet service provider Demon, said that the Scheme Of Arrangement to create a new holding company for Thus has been approved by shareholders representing 99.75% of the company's share capital. Thus will now proceed to apply to the Court of Session in Edinburgh for sanction of the Scheme of Arrangement. The company hopes that the Scheme of Arrangement will become effective on March 14. In December, Thus had bridged its funding gap and paid off a debt of 260 million pounds to its major shareholder, Scottish Power. *********** 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 * * *