/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/020227.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 27, 2002, Vol. 3, No. 41 Headlines * B U L G A R I A * BALKAN AIRLINES: Sells Four Heathrow Slots to BA for EUR5.15MM * G E R M A N Y * COMDIRECT BANK: Gives up Italian Subsidiary COMMERZBANK GROUP: Examines Sale of Asset Management Business DEUTSCHE TELEKOM: German Regulator Blocks Cable-TV Sale DEUTSCHE TELEKOM: Moody's Puts DT Rating on Downgrade Review EDEL MUSIC: Eliminates Liabilities With Restructuring ELSA AG: Court Appoints Thomas Georg as Insolvency Administrator KIRCHGRUPPE: Banks Pressure Kirch to Appoint Insolvency Experts LUCENT TECHNOLOGIES: Makes 400 German Workers Redundant MICROLOGICA AG: Creditors' Committee Approves Insolvency Plan * I R E L A N D * MARLBOROUGH GROUP: CPL to Buy Two Marlborough Units * I T A L Y * BLU SPA: Receives Formal Offers From Wind, TIM, H3G IPSE 2000: Telefonica Comes to Ipse Rescue With EUR250MM * S W I T Z E R L A N D * SWISSAIR GROUP: Crossair Crew Agrees to Cut Expenses SULZER MEDICA: Agree With Former Parent on Liability Issue * U N I T E D K I N G D O M * CORUS GROUP: Land Sale Deal Heads for Clash With Unions CORUS GROUP: Unionists Balk at Industrial Action EGG PLC: Cuts Loss to $125.6MM With Wider Customer Base ENERGIS PLC: Crisis Worsens as Customers Approach Rival Operators ENERGIS PLC: Sale May Rake in $214MM ENRON CORPORATION: Centrica Buys NewPower Holdings for $130MM ENRON CORPORATION: Enel Backs Out From Wessex Water Bid ENRON CORPORATION: Sudamin Buys Former Enron Metals Unit INVENSYS PLC: S&P Puts Invensys Ratings on Watch Negative MARCONI PLC: Finmeccanica Mum on Marconi Unit Bid MICHAEL PAGE: Middle of March Critical NTL INCORPORATED: Liberty Media Eyes on U.K. Cable Market =============== B U L G A R I A =============== BALKAN AIRLINES: Sells Four Heathrow Slots to BA for EUR5.15MM -------------------------------------------------------------- Bulgaria's indebted national airline Balkan sold four of its five slots at London's Heathrow Airport to British Airways for 5.15 million euros, AFX News reported. A slot is a defined time period during which an airline can take off or land. Balkan operates six flights a week between Sofia and London, daily except Tuesday, giving it 12 slots per week. The sale is Balkan's last-ditch attempt to earn cash to cover operating costs. In February 2001, a Bulgarian court has placed Balkan Airlines into receivership. Bulstrad, a local insurance company that claims the carrier owes it US$11 million, brought the bankruptcy proceedings against the airline. Burdened with 84.5 million euros in debt, Balkan lost 33.35 million euros in 2001. Under a restructuring plan worked out by receivers in December, the company would make 1.1 million euros this year. ============= G E R M A N Y ============= COMDIRECT BANK: Gives up Italian Subsidiary ------------------------------------------- comdirect bank AG, Europe's largest online broker, announced Monday the liquidation of its subsidiary comdirect bank S.p.A. in Milan, Italy. Price wars in Italy have led to a price level that is no longer acceptable. This development and the continuing slump of the stock markets have resulted in a business performance that failed to meet plans and expectations in 2001. It was therefore impossible to reach breakeven within the time period originally envisaged. As other options were not sufficiently successful, comdirect bank AG will now give up its subsidiary. At comdirect bank AG, which holds all shares of its Italian subsidiary, this move will result in an extraordinary value adjustment of 51.7 million euros on the 2001 balance sheet. With this closure, comdirect bank AG continues the announced measures to restructure the group, which are aimed at achieving substantial cost reductions. Contact Gregor Sparfeld, Investor Relations, at telephone +49- 4106-704-1966 for further information. COMMERZBANK GROUP: Examines Sale of Asset Management Business ------------------------------------------------------------- Commerzbank is examining the sale of overseas asset management units in a major strategic shift to return Germany's third- largest listed bank to profitability, bankers familiar with the plans told the Financial Times. The Frankfurt-based bank will initially seek a buyer for its UK- based fund management group Jupiter International Group, which was bought in 1995 for more than 1 billion euros. Analysts say Commerzbank is not expected to recover its investments on Jupiter, which is only expected to fetch around 600 million pounds on its sale. Commerzbank could also exit the US as part of a strategic review of its loss-making fund businesses, the paper added. The bank's advisers, Goldman Sachs and Commerzbank investment banking unit ComSec, will facilitate in the transactions. Commerzbank, which suffers from poor profitability and high costs, has been the subject of persistent takeover speculation for almost two years, including a failed attempt to merge with Dresdner Bank. Shareholders have been pressing the bank to sell assets such as its industrial holdings to counter a sharp fall in its share price over the past year. For the fourth-quarter, Commerzbank lost 189 million euros ($163 million) before taxes as it has set aside more money for bad loans and took a charge of 283 million euros to pay for an overhaul, which includes shedding 3,400 jobs. DEUTSCHE TELEKOM: German Regulator Blocks Cable-TV Sale ------------------------------------------------------- Bonn-based telecom giant Deutsche Telekom received a blow in its debt-cutting drive when the Federal Cartel Office blocked the sale of 60% of its cable TV business to U.S. media group Liberty Media Corporation. The sale covered the regional cable TV companies in Hamburg/Schleswig-Holstein/Mecklenburg-Western Pomerania, Bremen/Lower Saxony, Rhineland-Palatinate/Saarland, Berlin/Brandenburg, Saxony/Saxony-Anhalt/Thuringia and Bavaria, including the Level 4 operator Deutsche Telekom Kabel Services GmbH (DeTeKS) and MediaServices GmbH (MSG). Deutsche Telekom, which has always considered that the sale of its cable TV network to Liberty Media as key element of its plan to reduce debts to $43.5 billion by the end of this year from $56.5 billion now, regrets the decision of the German regulator. The Cartel Office had already issued a warning in its preliminary assessment on January 31. It reiterated its doubts about the 5.5 billion euro ($4.8 billion) deal, calling Liberty's plan to upgrade Telekom's worn-out cable network to carry phone calls and high-speed Internet access non-committal and partly inconsistent. The emergence of a new infrastructure provider in the local network would have been a particular benefit. Leading competition experts had also spoken out in public calling for the project to be approved. Deutsche Telekom is open to new negotiations with interested parties. The program of systematic debt reduction shall continue. Now, Deutsche Telekom will again have to look at other potential bidders, such as private UK equity house Compere Associates, to sell the cable assets that serve some 10 million German homes. Compere has said it would make a formal bid. DEUTSCHE TELEKOM: Moody's Puts DT Rating on Downgrade Review ------------------------------------------------------------ Credit ratings agency Moody's Investors Service has placed Deutsche Telekom AG and its guaranteed subsidiary Deutsche Telekom Finance BV's A3 long-term debt ratings on review for a possible downgrade. The credit rating review follows after the deterioration in the company's share price. Worries involving Telekom's mobile unit T- Mobile floatation and failure of the sale of Telekom's 5.5 billion euro assets proposed to US media group Liberty Media Corporation added to the anxiety. The review will examine the probability that the company will be able to cut its net debt to 50 billion euros by the end of 2002, a goal that is currently a factor in the present A3 rating, Moody's explains. Moody's expect Deutsche Telekom's cash generation to grow strong in the short-term. The review will be concluded in the next six to eight weeks. EDEL MUSIC: Eliminates Liabilities With Restructuring ----------------------------------------------------- edel music AG said Monday it has completely eliminated all its bank liabilities that had been 152 million euros ($132.14 million) in the last annual statement by December 2000 by restructuring the indebted parts of the group and with the help of a partial waiver from its banks. The Hamburg-based music publishing company sold part of its publishing division to Warner Music Group and has now finalised most of its planned divestments. The company will in the future concentrate solely on its core business, the development and international marketing of own artists and repertoire. After all necessary valuation reserves are accounted for, the current equity of edel music AG stands for more than 40 million euros. The complete debt relief of the parent company is a significant step towards the realignment of the edel group. Over the last months progress has also been made in the implementation of the group restructuring plan, which edel developed in conjunction with Roland Berger Strategy Consultants. As part of this concept, edel has, in addition to the part sale of the publishing division, disposed of its 74.9% stake in Brussel's Play It Again Sam group, Eagle Rock Entertainment, RED Distribution and VIVA TV. edel is also restructuring its European record division as part of this plan. Contact Baerbel Tomas, Investor Relations, at telephone +49-40- 89085-225, or via e-mail at baerbel_tomas@edel.com for further information. ELSA AG: Court Appoints Thomas Georg as Insolvency Administrator ---------------------------------------------------------------- The responsible district court in Aachen named lawyer Thomas Georg of Monning & Georg law-office as preliminary insolvency administrator for software specialist Elsa AG as a security measure in regard to a continuing business. The appointment came after the management board of Elsa AG filed for insolvency proceedings on Monday at the Aachen court. As previously reported in the Troubled Company Reporter Europe, a banking pool decided on February 7 to cancel a 28 million euros credit to Elsa AG effective February 15. Sweden's SEB and the Netherlands' ABN Amro are believed to have been the driving force behind the creditors' action. One of the creditors, rumored to be Dresdner Bank, notified Elsa that the credit facility of 10 million euros, provided until March 30, 2002, will not be extended. Elsa has a current market valuation of less than 20 million euros ($17.39 million). For more information, contact Sven Heyden, Investor Relations Manager, through mail at Sonnenweg 11, D-52070 Aachen, Germany; or through telephone +49 (0)241 606-1188, fax +49 (0)241 606-1149 or via e-mail at investor@elsa.de; Web http://investor.elsa.com KIRCHGRUPPE: Banks Pressure Kirch to Appoint Insolvency Experts --------------------------------------------------------------- Kirch Gruppe creditors forced the heavily indebted Munich-based media group to appoint three insolvency experts as consultants, the Financial Times reported. News of the appointment suggests Kirch's six main German creditor banks, including Deutsche Bank, Dresdner Bank AG, HypoVereinsbank (HVB Group), Commerzbank, DZ-Bank and Bayerische Landesbank Girozentrale, are desperate for information in order to decide which of a Kirch rescue or an insolvency process would best minimize their losses. The three consultants are Dusseldorf-based insolvency and restructuring lawyer Wolfgang van Betteray, lawyer Klaus-Hubert Gorg from the supervisory board of construction group Holzmann, and insolvency and corporate crisis consultant Hans-Joachim Ziems. The bankers said they had imposed the consultants on Kirch because they were no longer confident of the accuracy of the information coming from the Bavarian media giant. While it was understood that KirchGruppe has debts of about 6 billion euros and about 2.5 billion in contingent liabilities, it was recently reported that the company has actually 8 billion euros in debt and 5 billion euros in other commitments. None of the creditor banks has complete knowledge of Kirch's finances because they are not allowed access to its books. Separately, the banks, as well as JP Morgan and Lehman Brothers, will appoint next week a moderator to represent their interests in talks with Kirch. LUCENT TECHNOLOGIES: Makes 400 German Workers Redundant ------------------------------------------------------- The U.S.-based telecom company Lucent, which expects to return to profitability and positive cash flow during fiscal year 2002, has cut 400 jobs in Nuremberg, Germany, following the collapse of talks on the sale of its factory there to Solectron, the Totla Telecom reported, citing the German news site BerlinOnline. The workers will leave by September. A total of 600 staff work at Lucent's Nuremberg plant manufacture base stations and optical networks. It was said that Lucent intends to cut its workforce across Germany by around 1,000 to 1,850 by autumn this year. MICROLOGICA AG: Creditors' Committee Approves Insolvency Plan ------------------------------------------------------------- The creditors' committee for Micrologica AG has unanimously agreed to the restructuring by approving the insolvency plan for the Bargteheide-based software company on Monday's meeting at the Reinbek insolvency court. So long as the two-week legal protector period has passed without an appeal and the insolvency court in Reinbek has finalized the proceedings, the restructuring plan, as jointly drawn up by the Hamburg-based official receiver RA/StB/vBP Berthold Brinkmann and the company's management board member Andreas von Arnim, can be implemented. Micrologica is thus the first company listed on the Neuer Markt to see a positive end to its insolvency proceedings - and that, in less than one year. In accordance with the approved settlement, the company's creditors will receive an unusually high pay-out quota of 60% of the value of their receivables, already in April. An additional future distribution from shares previously held by the founding shareholders is also planned. The management board explains that the company will in the future, increasingly act as a holding company, since the bulk of its operations were sold during the restructuring process to Tenovis during which 80% of all jobs were safed and maintained in Bargteheide. The company shall - despite today's positive, and at the Neuer Markt up to now unique results - change to the Geregelter Markt segment at the end of March 18, since an arbitration court has decided against the appeal of the company against the delisting rules of the Neuer Markt at February 12,2002. Further information is available from Micrologica AG i.l. Brinkmann & Partner Frauke von Benzon RA/StB/vBP Berthold Brinkmann Bahnhofstr. 5a Sechslingspforte 2 22941 Bargteheide 22087 Hamburg Tel: +49/04532 403-0 Tel: +49/040-226677 Fax: +49/04532 403-199 Fax: +49/040-22667888 eMail: fvb@micrologica.de eMail: Hamburg@brinkmann-partner.de ============= I R E L A N D ============= MARLBOROUGH GROUP: CPL to Buy Two Marlborough Units --------------------------------------------------- CPL Resources, Ireland's second listed recruitment company, will pay less than 1.2 million euros for the bulk of the Irish operations of the rival Marlborough group, the Irish Independent reports. A series of meetings were held Monday with Marlborough receiver David Hughes of Ernst & Young. CPL's board will finalize the deal to buy the Ann O'Brien secretary business and temporary contractual workforce business. The 300 employees and contract staff will now be absorbed by CPL. Though details of the negotiation remain limited, it is reported that CPL will take on staff and client liabilities to ensure the continuity of contracts. Marlborough paid 4.95 million euros for the Ann O'Brien secretarial company in 1999. A downturn in the economy last year hit the group hard and Marlborough managing director David McKenna attributes the blame to the fall-off in banking recruitment at its UK subsidiary Walker Hamill. Mr McKenna said he had tried to sell two UK companies to divide the group's debt and trade its way out of crisis. In 2000, after a planned merger with US firm E-Pawn collapsed following an FBI investigation into mafia links and securities fraud at the US company, Marlborough's reputation was bruised. Marlborough lost 350,000 euros from its online venture fillthejobs.com. It also took a hit for 3.3 million euros when its debt collecting systems failed. ========= I T A L Y ========= BLU SPA: Receives Formal Offers From Wind, TIM, H3G --------------------------------------------------- Italy's minister for communication Maurizio Gasparri said that Telecom Italia Mobile SpA, Enel-controlled Wind SpA and Hutchison Whampoa-backed H3G SpA have all placed their offers to acquire Rome-based mobile phone operator Blu, the La Stampa newspaper reported. Italian motorway operator Autostrade-Sitech SpA have also presented an offer, so with Vodafone unit Omnitel Pronto Italia SpA, which is said to be interested in acquiring 500Mhz of frequencies, a call center and 300 sites. As reported in the February 20 edition of the Troubled Company Reporter Europe, Blu has called a shareholders' meeting on March 5 to discuss a long-planned sale or lease of its assets. If the board does not agree on a sale by March, the shareholders, including Autostrade, BT Group, Caltagirone group, Rome-based bank BNL, Italgas and Hong Kong's Distacom, would have to inject more money to keep the company operating. A BT spokeswoman earlier said that liquidation would be an option if no firm bids will come. Blu was valued at 1.2 billion euros ($1.04 billion) in December. IPSE 2000: Telefonica Comes to Ipse Rescue With EUR250MM -------------------------------------------------------- Spanish multimedia company Telefonica has allocated 250 million euros to pay for 12 months of operations at its cash-strapped Italian 3G mobile venture Ipse. Telefonica is financing the 2002 budget with its 100 million euros contribution and the 2001 budget with the other 150 million. At the end of January, there had been suggestions that Ipse could lose its 3G license in Italy following apparent reluctance by the investors to stump up more cash. Ipse's 3G licenses cost 3.27 billion euros. With reference to the fresh funding, Italian minister of telecommunications Maurizio Gasparri said that the Italian investors must also take responsibility for the revitalization of the company. A meeting by Ipse's board of directors in November failed to yield final approval for the company's business plan, leading to rumors that it could suspend or even liquidate the project because of financing difficulties. Ipse 2000 is owned 45.59% by Telefonica Moviles, 12.55% by Finnish operator Sonera, 12% by Atlanet, 10% by Banca di Roma, 5% by Xera S.p.A., 5% by Edison-Falck, and 4.8% by Goldenegg. Other shareholders hold the remaining 5%. ===================== S W I T Z E R L A N D ===================== SWISSAIR GROUP: Crossair Crew Agrees to Cut Expenses ---------------------------------------------------- Crossair AG, which took over the operations of its collapsed parent company Swissair Group and regional carrier Crossair, announced the agreement of 2,300 of its cabin crew to trim down on their expenses. The airline further assured that the crew's salaries would not be cut, sources told Dow Jones Newswires. The negotiation, to effect on April 1, form part of Crossair's bid to cut personnel costs by 10%. The new Crossair, which received funding from the Swiss government, will promote budget airfare and will fly under its brand name "Swiss" before April. Crossair operates a fleet of 80 to 125 aircrafts, handling flights to 137 destinations in 30 countries in Europe, North Africa, and the Middle East. Switzerland's two largest banks, Credit Suisse First Boston and UBS Warburg control 70% of Crossair. For more information, visit Crossair's website at http://www.crossair.com. SULZER MEDICA: Agree With Former Parent on Liability Issue ---------------------------------------------------------- Sulzer AG and its former unit Sulzer Medica AG have reached an agreement on the future financial obligations on class action cases in the U.S arising from faulty hip-and-knee-joint replacements. According to a Dow Jones Newswires report, Sulzer Medica signed a deal agreeing to pay all future liability that may go beyond a settlement proposal between the company and its U.S plaintiffs. Sulzer will no longer bear any remaining financial responsibility, including risks relating to patients who opt out of the settlement, Dow Jones added. Sulzer AG spokesman Markus Niederhaeuser said that should the $1 billion settlement be rejected by a large number of U.S. patients, the accord between Sulzer and Sulzer Medica may have to be revised. The agreement requires Sulzer Medica to pay $725 million and Sulzer AG $75 million in cash and financial instruments. Insurer Winterthur International Insurance will shoulder a further $200 million. Plaintiffs who do not wish to accept Sulzer Medica's proposed settlement will be able to file individual lawsuits after March 8. A final fairness hearing is scheduled May 14. In the event that the settlement will fail, Sulzer Medica may petition for bankruptcy protection. =========================== U N I T E D K I N G D O M =========================== CORUS GROUP: Land Sale Deal Heads for Clash With Unions ------------------------------------------------------- Steel maker Corus Group is poised for another clash with unions over secret plans to raise 450 million pounds in cash this year, while insisting on a pay freeze for its U.K. employees. Corus aims to raise the cash by selling land and buildings that are no longer required at the Anglo-Dutch steel company's main sites and by securitising trade debts owed to it. Corus has appointed property adviser GVA Grimley to review its land holdings, with a view to raise between 150 million pounds and 200 million pounds for its intended divestment. In addition, the company intends to sell land and buildings that will be rendered useless to its steel operations' main sites. It is understood that the sales may involve sites from which Corus is still operating. Corus is currently working on development plans for sites that have partly closed, such as the 2,100-acre Llanwern steelworks where production ended last year. The fund raising through divestment is expected to anger the company's workers in the U.K. who have been told that the company must impose a pay freeze to conserve cash. A meeting with the unions of its U.K. staff this week will discuss industrial its action over compulsory pay freeze and 6,000 jobs cut in the U.K., while their Dutch colleagues were awarded a 7% pay rise and was able to avoid compulsory job cuts. CORUS GROUP: Unionists Balk at Industrial Action ------------------------------------------------ Members of the two steel unions considering industrial action against Corus were reluctant to go on strike in a week or two because of job fears at the Anglo-Dutch steel group, the Financial Times reported. The Iron and Steel Trades Confederation and Amicus consulted their members two weeks ago after Corus imposed to freeze the pay of its U.K. workers to conserve money, while awarding their Dutch colleagues a 7% pay raise. "The feeling we are getting back so far is that people are more worried about their job security than the pay freeze," one union official admitted. Workers are afraid for their jobs because U.S. president George W. Bush is expected to impose import charges on some steel products within weeks to protect the U.S. steel industry. Corus, which lost more than 200 million pounds ($286 million) in the first half of 2001, is hoping to raise up to 200 million pounds from the sale of some of its property portfolio. The two largest sites for sale would be Ebbw Vale, in the Welsh valleys, and part of Llanwern, a more strategically placed site near the M4 motorway. Property adviser GVA Grimley was appointed to review the prospective land sales, which could include dozens of smaller sites. EGG PLC: Cuts Loss to $125.6MM With Wider Customer Base ------------------------------------------------------- EGG plc trimmed its full-year losses to 87.8 million pounds ($125.6 million), compared with a pre-tax deficit of 93.2 million pounds in the previous year, as its core credit card business regained momentum with 600,000 new customers, the Financial Times reported. The online bank added 82,000 new clients in the year to February 21 to pass the 2 million mark for the first time. While its credit card unit continues to expand, the bank said it expected further outflows from its savings business. The increase in clients pushed bad debt provisions up from 37 million pounds to 68 million pounds, but chief executive Paul Gratton said the underlying performance of the book remained strong, with charges falling as a percentage of balances. ENERGIS PLC: Crisis Worsens as Customers Approach Rival Operators ----------------------------------------------------------------- The pressure on Energis Plc to find a quick solution to its financial problems increased on Monday as it emerged that customers of the struggling London-based Internet traffic carrier had begun approaching rival operators, reports the Financial Times. At least one customer that has a dual contract with Energis and one other network carrier is understood to have transferred all of its traffic to the rival operator. Another Energis customer, which refused to be named, said it was exploring the "what if" scenario that the telecom operator would be unable to maintain its services. Many others are actively considering transferring to other network carriers. Chief executive Bill Allan of Thus, a rival network operator, confirmed the group was attracting interest from Energis customers. Other big clients of Energis include the BBC, Going Places, Boots and two German media groups, Bertelsmann and the Axel Springer Verlag. Analysts warned that an exodus of customers would reduce interest from potential buyers including private equity house Apax Partners, which has made former Energis chief executive Mike Grabiner a partner. Energis was close to collapse after it racked up with more than one billion pounds ($1.4 billion) of net debt. Now, it plans to sell its loss-making operations in continental Europe, fire 400 workers to save 25 million pounds a year, and renegotiate bond debt in a bid to persuade banks to lend the money it needs to survive. The company has lost 99% of its value over the past year and faces relegation from the FTSE 250 Mid-cap index when the index compiler reshuffles it next month. On Friday, shares in Energis closed at three pence valuing it at just more than 50 million pounds. That compares with a peak of near 14 billion pounds in March 2000. Bonds were further traded at around 15% of their face value, after credit agencies cut their ratings on the company because of fears that it would default on its payments for the 565 million pounds ($804.8 million) of bonds. Founded in 1993, Energis is an IT services and telecommunications solutions provider. It is focused on the business marketplace, offering integrated solutions from a portfolio of data, voice, connectivity, complex managed hosting and managed application services. The company has a significant presence in the U.K, Germany, the Netherlands, Switzerland, Ireland and Poland. ENERGIS PLC: Sale May Rake in $214MM ------------------------------------ Internet traffic carrier Energis Plc expects to gain no more than $214 million from the sale of its European assets, Bloomberg sources say. Energis announced its intention to sell or close unprofitable Ision Internet AG, Enertel NV, Energis Carrier Services, Energis Interactive and Energis Polska, a joint venture with founder and biggest shareholder National Grid Group Plc, which last week refused to pump more money into the company. The loss-making company told bankers last week it intends to lay off 400 of its workforce in the U.K., shut down its European operations and renegotiate with its creditors in order to survive. Last year, Energis paid 1 billion euros ($913 million) in acquiring a German Web-hosting firm ISION Internet AG. Analysts say ISION will fetch no more than $115 million. Enertel NV, bought for $596 million in 2000, will raise a maximum $100 million, the report adds. Other European assets may be worthless. It will keep its Ireland-based joint venture with Viridian Group Plc, Northern Ireland's dominant power company Nevada.tele.com. Energis will not give up its stake in Metroholdings Ltd., a joint venture with France Telecom SA and Deutsche Telekom AG that built fiber networks serving the U.K. ENRON CORPORATION: Centrica Buys NewPower Holdings for $130MM ------------------------------------------------------------- Centrica, Britain's biggest electricity and gas supplier, will acquire electricity and gas marketer NewPower Holdings, the US company of which Enron owns 43%, for $130 million. The deal, according to a Financial Times report, will give Centrica a platform for growth in key target markets including Texas, Michigan, Ohio and Georgia. It furthers Centrica's aim of having 10m 'customer relationships' in North America by the end of next year. NewPower is the second Enron-related company to be bought by Centrica. In December, PricewaterhouseCoopers sold UK electricity and gas supplier Enron Direct to the utility group for 96.4 million pounds. Centrica said it would begin a tender offer in a week to acquire all the outsanding shares of NewPower, which supplies about 650,000 residential customers in US markets. ENRON CORPORATION: Enel Backs Out From Wessex Water Bid ------------------------------------------------------- Enel SpA, Italy's biggest power company, has pulled out of the bidding to acquire Enron Corp.'s U.K. unit Wessex Water. According to Enel chairman Chicco Testa, the asking price for Wessex was too high. Collapsed energy trader Enron is selling Wessex, which provides water to 1.2 million people in southwest England, for about 1.2 billion pounds ($1.7 billion). Enel joins Germany's biggest state-owned bank Westdeutsche Landesbank in withdrawing from the bidding for Wessex Water. WestLB decided not to proceed with a non-binding offer because of regulatory concerns, people familiar with the matter said earlier this month. Remaining bidders for Wessex Water include Royal Bank of Scotland, which the Wall Street Journal Europe said this month teamed up with Abbey National Plc and GE Capital Corp. Hong Kong-based infrastructure company Cheung Kong Infrastructure Holdings said earlier this month it has made a non-binding offer of about 1 billion pounds ($1.4 billion). Enron bought Wessex in 1998 for 1.36 billion pounds (then worth $2.2 billion, now worth $1.9 billion). Schroder Salomon Smith Barney, the U.S. investment bank handling the sale, is expected to find a buyer by the end of March. ENRON CORPORATION: Sudamin Buys Former Enron Metals Unit -------------------------------------------------------- UK-based metals trading company Sudamin Limited acquired a 100% interest in Enron Metall Recycling & Co KG, the German base metals recycling operations of fallen U.S. energy giant Enron Corporation, at an undisclosed amount. Sudamin Limited is a subsidiary of Belgium-based Sudamin Investments SA, which operates antimony trioxide producer SICA. The group's non-ferrous metals trading activities are centered in London. Enron Metall Recycling, which operates four scrap yards in Germany, is the largest European copper scrap company. It was formed when Enron Metals unit MG Metall Recycling GmbH & Co. KG bought certain business units of W. & O. Bergmann GmbH & Co. KG and all the assets of Bergmann's Walter Hutzer Metallhandel GmbH subsidiary, both active in trade in non-ferrous metals and metal scrap. The metals unit, the former Metallgesellschaft brokering and market-making business, was acquired by Enron in July 2000 for around $445 million and sold to U.S.-based Sempra Energy Trading in January for $145 million. While Enron's European operation was placed under administration in November in the wake of a financial crisis at its Houston- based parent, Enron Metals itself was not under administration and remained a viable trading entity throughout the sale process. INVENSYS PLC: S&P Puts Invensys Ratings on Watch Negative --------------------------------------------------------- Standard & Poor's said Monday it has placed the ratings of Invensys PLC and related entity Baan Co. N.V. on CreditWatch. This action followed the recent deterioration in market confidence resulting from Invensys' substantial refinancing requirements due in August 2002. The CreditWatch placement reflects Invensys' reduced level of financial flexibility, driven by a recent weakening in market sentiment. The group has significant short-term refinancing requirements, as bank facilities of 950 million pounds ($1.36 billion) fall due in August 2002. London's largest engineering group has been cutting jobs and selling assets to cut its 3 billion pounds of debt, 89% of its market value, on speculation it may breach loan agreements after posting a first-half loss. Outstanding loans also include a $1.25 billion credit line arranged two years ago by HSBC Holdings Plc and UBS Warburg that comes due in 2005. Contact Invensys' Duncan Bonfield at telephone 020 7821 3712 for further information. MARCONI PLC: Finmeccanica Mum on Marconi Unit Bid ------------------------------------------------- A spokesman for Finmeccanica remained silent regarding a speculation that the Italian defense and engineering group could make a bid for Marconi Mobile, the Genoa-based subsidiary of the cash-strapped London-based telecom equipment company Marconi. Marconi Mobile makes secure communications systems for the military, aviation and police markets and employs about 3,000 people. It is worth an estimated 400 million pounds ($572 million). Marconi confirmed on Monday it was in early talks about selling its Italian defense unit as it struggles to revive its fortunes and pay off its debts, still standing at 2.9 billion pounds ($4.1 billion). Over the weekend, British newspapers said that bidders for Marconi Mobile were thought to include BAE Systems, French company Thales and the European Aeronautic, Defence and Space Co. (EADS), as well as Finmeccanica. Marconi, which has raised 1.5 billion pounds from selling non- phone equipment assets in the past few months, plunged into financial chaos last year and resulted in the ousting of chairman Sir Roger Hurn, chief executive Lord Simpson, and chief executive John Mayo. MICHAEL PAGE: Middle of March Critical -------------------------------------- Michael Page International, the recruitment consultant that issued two profit warnings last year, said trading in 2002 had begun slowly, with activity levels below those in the first quarter of 2001. Chief executive Terry Benson said the group's current forecast was that first quarter revenue would be no better than the 49.9 million pounds it achieved in the fourth quarter of 2001. Trading conditions could even get worse in the second half. Mr Benson said all the company's markets remained difficult. Conditions in the City of London and in IT and telecoms remained difficult, so with the U.S. market. Michael Page has reduced its headcount from about 2,900 in mid- 2001 to 2,600. The group was also under investigation by the Financial Services Authority in August of last year over its 650- million-pound flotation in March. The City watchdog was concerned on whether the company made accurate projections at the time of the float, and whether it acted quickly enough to inform investors of a downturn in its business. NTL INCORPORATED: Liberty Media Eyes on U.K. Cable Market --------------------------------------------------------- Liberty Media is believed to turn its attention to NTL Incorporated after the German cartel office blocked the media investment group's attempt to become Germany's leading cable operator, reports the Independent News. Liberty has offered 5.5 billion euros ($4.8 billion) for Deutsche Telekom's cable assets, which distribute TV. The German regulator blocked the bid on concern that the U.S.-based Liberty would occupy a monopoly position and is not willing to upgrade the network. It is understood that Liberty Media's John Malone is examining the restructuring now underway at NTL, which is in a debt crisis. The British cable television operator is looking at ways to cut its crippling 12-billion-pound debt mountain. One of the main elements of this plan would be to persuade lenders to agree to a debt-for-equity swap. Having Mr Malone on board as a strategic investor would greatly add credibility to NTL's plans. It is thought that Microsoft and AOL Time Warner are also considering a cash injection into NTL but Liberty is the front-runner. ********** 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. 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