/raid1/www/Hosts/bankrupt/TCREUR_Public/020308.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

             Friday, March 08, 2002, Vol. 3, No. 48


                            Headlines

* G E R M A N Y *

COMMERZBANK AG: Munich Re Not Interested in Commerzbank
DEUTSCHE TELEKOM: Compere May Complete Cable Buy in Six Months
FLOWTEX TECHNOLOGIE: Prison Sentences Demanded for Schmider
KIRCHGRUPPE: Banks' Rescue Talks Continue
KIRCHGRUPPE: Bernie Ecclestone, Auto Execs to Bid for F1 Stake
KIRCHGRUPPE: Fuses Sports Rights Marketing Agencies
KIRCHGRUPPE: Plans to Sell Premier Stakes to Hollywood Studios
KIRCHGRUPPE: Premiere Will Launch Video on Demand With Arcor
MAN AG: Sees 2002 Net Loss for U.K. Unit
PHILIPP HOLZMANN: Creditors Will Discuss Rescue Talks Today

* G R E E C E *

OLYMPIC AIRWAYS: EU Investigates Aid to Greek Airline

* I R E L A N D *

AIB GROUP: Faces Securities Fraud Suit in the U.S.

* I T A L Y *

BLU SPA: Financial Investors Save Company From Liquidation

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

LAURUS NV: Admits Unsatisfactory Financial Year

* P O L A N D *

ELEKTRIM SA: Submits Audit of Assets to Judge Commissioner

* U N I T E D   K I N G D O M *

BALTIMORE TECHNOLOGIES: Postpones Break-even Target to 2003
BIG FOOD: CEO, CFO Buy Big Shares
BIG FOOD: Expenditures to Weigh on Retail Group
BRITANNIC PLC: Hires Merrill Lynch to Peddle Company
BRITISH TELECOM: Compere Proposes BT Network Sale
CONSIGNIA PLC: Posts Victories on Pay Claim
CONSIGNIA PLC: Says Revenue Will be up for Grabs
CORUS GROUP: Calls for Action on Steel Tariffs
INVENSYS PLC: Shuts Down Engine Business, Lays Off 450 Jobs
PACE MICRO: Issues Third Profit Warning in Six Months
RAILTRACK GROUP: Government Dismisses City Complaints
TELEWEST COMMUNICATIONS: CEO Holding Out Despite Impending Woes


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


COMMERZBANK AG: Munich Re Not Interested in Commerzbank
-------------------------------------------------------

Munich Re, the world's biggest reinsurer, stressed on Wednesday
it has no interest in acquiring Frankfurt-based Commerzbank AG.

Chief Executive Jurgen Schinzler told Handelsblatt that his group
is a keenly interested observer in the developments at the
Frankfurt-based bank, but it would not be a prime mover in
shaping the developments.

Early last week, there were reports that Commerzbank plans to
sell its British fund management subsidiary Jupiter International
Group, which was bought in 1995 for more than 1 billion euros.
The sale is a major strategic shift to return Commerzbank to
profitability.

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.

The bank lost 189 million euros ($163 million) before taxes in
the fourth quarter as it 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: Compere May Complete Cable Buy in Six Months
--------------------------------------------------------------

UK investment group Compere Associates may complete the 5.5-
billion-euro purchase of Deutsche Telekom's cable TV business
within three to six months, Compere co-chairman John Moreland-
Lynn told the Financial Times Deutschland.

Moreland-Lynn promised that Compere may quickly and more
extensively upgrade DT's cable network than planned by the
previous bidder, U.S. media group Liberty Media. Compere would
soon introduce 862 megahertz broadband cable.

The Bonn-based telecommunications giant, which recently revealed
a loss of 3.5 billion euros ($3 billion) in 2001, is under
pressure to sell assets and reduce debt after Moody's Investment
Service and Standard & Poor's last week said they might lower the
company's long-term credit ratings.


FLOWTEX TECHNOLOGIE: Prison Sentences Demanded for Schmider
-----------------------------------------------------------

FlowTex Technologie GmbH's second trial for fraud calls for
a prison sentence of eight-and-a-half years for defendant
Matthias Schmider and a four-year jail sentence for co-defendant
Massimo Corbari.

Schmider's lawyer has pleaded for a reduction of his sentence to
less than six-and-a-half years, a Financial Times report says.

Matthias Schmider is accused of participating in the sale of non-
existent drilling equipment. It was reported that when the
drilling equipment maker was threatened by, his brother, chief
executive Manfred Schmider intervened.

In December, Manfred was found guilty of commercial fraud, tax
evasion and forgery and was sentenced by the Mannheim court to 12
years in jail. Co-founder Klaus Kleiser faced damage claims of
more than 4 billion Deutsche marks (US$1.8 billion).

According to the December 20 edition of the Troubled Company
Reporter Europe, KPMG paid the banks and leasing companies that
suffered damage through the collapse a compensation sum of 50
million euros.


KIRCHGRUPPE: Banks' Rescue Talks Continue
-----------------------------------------

KirchGruppe's key creditors will hold a supervisory board meeting
next Tuesday to discuss last-ditch options to rescue the Munich-
based media empire.

One source close to the talks told Reuters that Kirch is very
close to the limit. Shareholders and creditors, including
Deutsche Bank AG, Dresdner Bank AG, HypoVereinsbank AG (HVB
Group), Commerzbank, Bayerische Landesbank Girozentrale, DZ Bank
and Lehman Brothers Holdings, are demanding to get their money
back, forcing Kirch to sell its assets and refinance debt of 6.5
billion euros ($5.7 billion).

Earlier, insolvency experts were brought on board to study
Kirch's complex internal accounts and on how the debt-laden
Bavarian group might be saved. The experts are due to flesh out
their ideas in the next few days and may force Kirch to make more
radical asset sales.

Kirch, which has about 3 billion euros in option payments, is
putting its 40% stake in publisher Axel Springer Verlag AG and
the 25% interest in Spanish broadcaster Telecinco up for sale.


KIRCHGRUPPE: Bernie Ecclestone, Auto Execs to Bid for F1 Stake
--------------------------------------------------------------
  
Formula One founder Bernie Ecclestone and the main carmakers
involved in F1 are poised to offer to buy all or most of Kirch's
prized 75% stake in the motor sport, reports the Financial Times.

The senior car company executives include Fiat chairman Paolo
Cantarella, Premier Automotive Group head Wolfgang Reitzle, and
Mercedes-Benz's Jurgen Hubbert.

If accepted by Kirch, the deal will leave the manufacturers and
Mr Ecclestone's family trust, SLEC, with majority control of the
companies holding the broadcasting and other commercial rights to
F1.

People aware of the negotiations would give no indication of the
size of the offer.

In an interview with KirchGruppe founder Leo Kirch, as reported
in the February 26 edition of the Troubled Company Reporter
Europe, he said he would be "really bitter" if he is forced to
sell his stake in Formula One car racing.

In his interview with Der Spiegel magazine, Mr Kirch said that
last year's $1.5 billion purchase of Formula One's television
rights was the climax of his career and to have to get rid of the
stake will be a "really bitter pill to swallow."


KIRCHGRUPPE: Fuses Sports Rights Marketing Agencies
---------------------------------------------------

Kirch Group's media rights unit KirchMedia has merged
international sports marketing agencies CWL Telesport & Marketing
AG and Prisma Sports & Media AG into KirchSport AG in January 1
as it continues to give its sport division a face-lift.

A spokesman told Dow Jones Newswires that the merger creates one
operating unit for Kirch's sports rights marketing.

The Bavarian media group founded KirchSport in the summer of 2000
as a holding company for the sports rights activities of
KirchMedia.

KirchSport markets rights ranging from the 2002 and 2006 soccer
World Cups to the ice hockey World Cup and the European handball
championship.


KIRCHGRUPPE: Plans to Sell Premier Stakes to Hollywood Studios
--------------------------------------------------------------

Kirch wants to offer stakes in its pay-television unit to Walt
Disney Co. and other U.S. film companies, reports German
newspaper Sueddeutsche Zeitung, without citing its sources.

The Bavarian media giant told its banks about the plan to sell
stakes in KirchPayTV and is in talks with the Hollywood film
studios about their role in Kirch's rescue, the paper said.

Kirch spokesman Hartmut Schultz did not comment on the report.

The KirchGruppe -- http://www.kirchgruppe.de-- is blaming its  
pay television business for a large part of its current financial
woes.

As reported in the February 25 edition of the Troubled Company
Reporter Europe, Premier is losing 1.5 million euros a day and
faces a life-threatening liquidity bottleneck.

A recent study by investment bank WestLB Panmure shows that the
broadcaster's funds could run out by September 2002. Many
industry players also say Premier has to find an investor or it
becomes insolvent.


KIRCHGRUPPE: Premiere Will Launch Video on Demand With Arcor
------------------------------------------------------------

Premiere World, the loss-making pay-TV business of the
beleaguered Kirch Group, will launch a video-on-demand service on
the Internet with fixed-network operator Arcor Online GmbH,
reports Handelsblatt.

Premiere chief executive Georg Kofler said that the group plans
to use all available paths to reach its customers. Up to now, the
company has been distributing its programs only via cable and
satellite.

Kofler is under severe pressure to produce results to put an end
to the losses in Premiere that are reaching 1.5 million euros a
day. Its subscriber base currently stands at 2.4 million euros.

Premiere is believed to have only sufficient liquidity to last
only for another six months.


MAN AG: Sees 2002 Net Loss for U.K. Unit
----------------------------------------

Munich-based trucks and engineering group MAN AG --
http://www.man.de-- expects its U.K. truck unit ERF to post a  
net loss for full-year 2002, Dow Jones Newswires reports.

According to Chief Financial Officer Ferdinand Ballestrem, 2002
will not be an easy year for the European truck market. He still
sees ERF posting a loss for the full year.

MAN's largest division, the trucks business, posted a loss for
2001 following balance-sheet falsification at ERF.

As for the whole MAN group, Ballestrem said he sees it posting
strong earnings growth in 2002, compared with the low level last
year.

MAN in 2001 has issued four profit warnings due to falling
orders.


PHILIPP HOLZMANN: Creditors Will Discuss Rescue Talks Today
-----------------------------------------------------------

Creditors of Philip Holzmann will meet today to discuss fresh
funding for the construction group, Handelsblatt reports, citing
people close to the banks.

The agenda will include a spin-off of the group's real estate,
including related debts, into an independent company, in which
the creditors will acquire a stake. The move is aimed at
improving Holzmann's balance sheet and liquidity.

Sources say that Holzmann is set to book a loss of nearly 200
million euros for its 2001 fiscal year. A company spokesman
declined to comment. In fiscal 2000, the group posted a loss of
around 80 million euros.

Chancellor Gerhard Schroder rescued Holzmann from bankruptcy two
years ago, but it has failed to make a recovery since then. At
the time, creditors came up with a rescue package worth around
1.5 billion euros. In addition, the government made available
around 130 million euros in funding.

Holzmann's debt mountain already stands at 1.46 billion euros.


===========
G R E E C E
===========


OLYMPIC AIRWAYS: EU Investigates Aid to Greek Airline
-----------------------------------------------------

The European Commission has opened a formal inquiry as to whether
the Greek government violated EU fair competition rules by
helping debt-ridden national airline Olympic Airways, reports BBC
News.

The probe will center on the legality of last month's loan worth
19.5 million euros ($17 million) by the state-controlled
Commercial Bank of Greece, which might prove to be an illegal
aid.

It will also look at into aid authorized by the government in
1994 and 1998.

If Greece violated EU rules, Olympic may be asked to repay the
government millions of dollars, putting the troubled airline
under further pressure.

Olympic Airways lost its eligibility for further aid when the
Commission approved in 1998 a final $50 million cash injection
and some $378 million worth of state guarantees to finance a
renewal of the carrier's fleet.

In February, Olympic Airways announced a restructuring that will
involve shedding of 2,000 jobs, or more than a quarter of its
work force, to bolster flying operations and to cut debts while
spinning off other departments such as repair, catering and
ground handling.

The move follows government's unsuccessful repeated effort to
convince investors to buy the airline to avoid bankruptcy.  
  
Analysts now fear that Olympic could become the third European
airline to fold in the last six months, following the failures of
Swissair and Sabena.  
  
Olympic, like all other airlines worldwide, has been hit hard by
a slump in passenger numbers in the wake of the World Trade
Center attacks in September last year.


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


AIB GROUP: Faces Securities Fraud Suit in the U.S.
--------------------------------------------------

Dublin-based investment bank Allied Irish Banks PLC is facing a
securities fraud class action suit in the United States District
Court for the Southern District of New York, on behalf of all
persons who bought AIB American Depositary Receipts between
January 1, 2001 and February 6, 2002.

The complaint filed on March 5 alleges that AIB's financial
reports since 1999 fraudulently failed to reflect at least $691
million of currency trading losses associated with its AllFirst
Financial, Inc. subsidiary.

On February 6, 2002, AIB shocked the investment markets by
disclosing for the first time that its AllFirst subsidiary had
concealed massive losses from foreign exchange trading, and that
AIB had halted all currency trading at AllFirst.

Following this announcement, AIB's ADR price fell to $19.77, down
16% from the previous day's close of $23.55. AIB has since
admitted that its 2001 financial reports alone overstated net
income by as much as $449 million.

Plaintiff seeks to recover damages on behalf of class members and
is represented by the law firm Stull, Stull & Brody.

Law firms Finkelstein, Thompson & Loughran and Levy and Levy,
P.C. have also filed a similar suit.

If you wish to discuss this action or have any questions
concerning this notice, please contact Tzivia Brody, Esq. at
Stull, Stull & Brody by calling toll-free 1-800-337-4983, or by
e-mail at SSBNY@aol.com, or by fax at 212/490-2022, or by writing
to Stull, Stull & Brody, 6 East 45th Street, New York, NY 10017.


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


BLU SPA: Financial Investors Save Company From Liquidation
----------------------------------------------------------

Blu SpA's financial partners agreed Tuesday to invest 50 million
euros in order to save the Rome-based mobile phone operator from
liquidation.

Approved by Blu's shareholders, the additional cash injection was
intended to cut Blu's 450-million-euro debt pile incurred in
2001.

Blu's investors, including British Telecom, the Italian bank
Banca Nazionale del Lavoro and the Italian utilities company
Italgas, continues to mull over an alternative to liquidation.

The sale of the company's various assets to the other Italian
mobile operators is a possibility. Potential buyers include Tim,
Omnitel and Wind.

Part of the company's logistical infrastructure will be kept for
its tower management project in which another Blu shareholder,
the Italian motorway management company Autostrade, is involved.


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


LAURUS NV: Admits Unsatisfactory Financial Year
-----------------------------------------------

As reported in February, S-Hertogenbosch-based supermarkets and
wholesale group Laurus N.V. realized very unsatisfactory
results in 2001.

The conversion started last year of its various supermarket
formats in the Netherlands into one single new Konmar format,
together with costly back-office integration problems, the heavy
capital expenditure needed for the planned store conversions and
the heavy losses incurred in Spain during the first half of 2001
led to a serious depletion of the Company's financial resources.

As a consequence, ING, ABN Amro and Rabobank agreed in October
2001 to an extra Standby Facility of 100 million euros and the
granting of a subordinated loan of 150 million euros for a period
of up to April 10 this year.

Furthermore, the Spanish subsidiary continued to incur heavy
losses in the second half of 2001. A restructuring of the Spanish
activities will therefore be much more costly than anticipated.
Divestment of the Spanish subsidiary is under present conditions
not realistic.

At the same time, the indebtedness of Laurus sharply increased as
a result of the negative operational cashflows, lower than
previously expected divestiture proceeds and increased working
capital requirements.

To safeguard the continuity of Laurus and to maintain the
confidence of its suppliers and credit providers, the Company and
its banks have come to the conclusion that this can only be
achieved in association with a partner who is willing to devote
significant financial and human resources to a turnaround of the
Company and its subsidiaries.

The Supervisory and Management Boards of Laurus announced they are
in a negotiation with its banks and with an interested
party concerning the share capital of the company.

Although the negotiations are now in an advanced stage, it is
not yet certain that they can be concluded positively.

In case of a positive outcome, new shares for a total amount of
400 million euros will be issued at a likely issue price of 1 euro
per share, resulting in a significant dilution to the current
shareholders of Laurus.


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


ELEKTRIM SA: Submits Audit of Assets to Judge Commissioner
----------------------------------------------------------

Elektrim S.A. said Wednesday that pursuant to the agreement
executed between the Court Supervisor and MCC Partner S.A., the
evaluation of assets of the Warszawa-based telecommunications and
power conglomerate has been made and submitted to the Judge
Commissioner.

The aim of preparing the evaluation was to assess the value of
the assets of Elektrim to judge whether the sale value of the
assets will cover the amount of liabilities under the composition
proceeding according to the February 13 decision of the Judge
Commissioner.

The book value method and adjusted assets value method were
applied in the evaluation. It has been stated in the report that
the realistic sale value of Elektrim's assets exceeds 2.55 times
the Company's total liabilities under the composition proceeding.

It has also been noted that as a rule, a quick execution of an
assets' sale transaction may result in obtaining a lower price
while by lengthening the process of selling assets adequately the
seller may obtain a higher price.

In addition, it has been emphasized in the report that spreading
the process of selling Elektrim's assets over a sufficiently long
time (3-5 years) could result in a significant increase in their
value against the estimate presented in the report.

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.

In January, as reported in the Troubled Company Reporter Europe,
a group of bondholders filed a petition in a Warsaw court calling
for Elektrim's bankruptcy after a December 17 payment default on
the 480 million euros in bonds.

The court dismissed the petition and ordered Elektrim to begin
composition, or debt restructuring proceedings to repay its
bondholders. Elektrim filed its own petition with the Court,
proposing a 40% reduction of its debt and a three-year grace
period for repaying the remainder.

In the composition proceeding, 124 creditors assert claims
totaling PLN2.33 billion ($560 million).


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


BALTIMORE TECHNOLOGIES: Postpones Break-even Target to 2003
-----------------------------------------------------------

After reporting a weakened financial position in 2001, Baltimore
Technologies' reputation was further blemished on Wednesday by
delaying its break-even target by between six to nine months to
the first quarter of 2003.

The ailing Internet security software company will need to work
hard to turn the business around considering its poor state. Its
sales could pose a serious challenge because many companies are
wary of buying software from manufacturers with financial
troubles.

Turnover in the year to December remained flat at 70.4 million
pounds. Interest received on cash deposits was 7.4 million
pounds. The company's impairment charge and reorganizational
costs contributed to a rise in pre-tax losses from 99 million
pounds to 659.7 million pounds and losses per share from 24.2p to
131.8p.


BIG FOOD: CEO, CFO Buy Big Shares
---------------------------------

Big Food Group's chief executive Bill Grimsey and finance
director Bill Hoskins invested 230,000 pounds on hopes they could
resurrect the supermarket chain.

Grimsey and Hoskins each bought 100,000 shares in Big Food to
underline their confidence in their turnaround scheme for the
company.

Their purchase came as Grimsey outlined plans to raise 375
million pounds from cash flow, a sale and leaseback deal, senior
bank debt and capital markets to finance a recovery program.


BIG FOOD: Expenditures to Weigh on Retail Group
-----------------------------------------------

Frozen food retailer The Big Food Group Plc, formerly known as
Iceland Group, warned on Wednesday that the costs of a 375-million-
pound spending plan will weigh on profits in the coming years.

Chief executive Bill Grimsey outlined the costs of the strategy
to revitalize the business in the coming years. On top of
maintenance capital spending over the next three years of 200
million pounds, an extra 80 million pounds would be spent on the
Iceland chain, 43 million pounds on the Booker cash and carry
business, 17 million pounds on the Woodward food service
subsidiary, and 12 million pounds on a home shopping service.

There would also be costs charged against profits of 5 million
pounds in the year to March 2003, and 17 million pounds over the
following two years. Moreover, 20 million pounds of exceptional
costs would be incurred in the 2003 financial year.

Analysts cut forecasts for 2003 from around 70 million pounds to
55 million pounds. Forecasts for the following year were cut from
around 90 million to 60 million pounds.

Grimsey said the refinancing would add 10 million pounds to
annual costs in higher rent bills and interest charges.

The frozen food 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 425 million pounds at the end
of December.

The group, employing 28,000 people in the UK, has appointed
accountant Ernst & Young to examine fundraising options.

For inquiries, contact The Big Food Group plc Chief Executive
Bill Grimsey or Finance Director Bill Hoskins at telephone 020
7796 4133.


BRITANNIC PLC: Hires Merrill Lynch to Peddle Company
----------------------------------------------------

Britannic has commissioned investment bank Merrill Lynch to sound
out potential buyers for the life assurer after being damaged by
the fall in equity markets in 2001.

According newspaper reports, Merrill might approach insurance
companies such as Royal London and Australian-owned AMP, as well
as branch-based banks such as Alliance & Leicester and Abbey
National.

Britannic was at pains to quash suggestions that it was running
short of regulatory capital and was in desperate need of a deal.

The group was affected by a 280 million pounds fall in investment
returns, resulting in a headline pre-tax loss of 223.3 million
pounds, against a 64.4 million pounds profit last time.

A year ago, Britannic made more than 2,000 salesman and support
staff redundant as a result of disposing of the sales force at a
cost of 90 million pounds.


BRITISH TELECOM: Compere Proposes BT Network Sale
-------------------------------------------------

Private equity firm Compere Associates has launched a campaign to
persuade BT Group plc's key shareholders of the merits of selling
the phone company's fixed-line network.

According to a report from the Daily Deal, Compere, which is
working closely with Germany's Westdeutsche Landesbank
Girozentrale, has presented its case last week to about 25 of the
British phone company's largest institutional shareholders.

Compere aims to separate the fixed-line business from BT's
existing network, leaving the telecom giant to concentrate on the
retail and service aspects of its business.

West LB and Compere first expressed an interest in buying BT's
fixed-line business in 2001 when they offered 25 billion pounds
($36 billion) for the entire wholesale network that includes the
so-called local loop, which provides Internet access directly to
consumers.

Under that proposal, BT would have received a cash payment of 4
billion pounds. BT rejected the idea last year and has repeatedly
said it is not interested in selling its fixed-line business.

BT's management came under heavy criticism a year ago after the
company ran up debt of about 30 billion pounds. It has slashed
that debt by more than half, although questions about BT's
ability to access large amounts of fresh capital remain.


CONSIGNIA PLC: Posts Victories on Pay Claim
-------------------------------------------

Consignia have outlined an agreement with leaders of the
Communication Workers' Union over wages for their 145,000
members, reports The Guardian newspaper.

The state-owned postal group, which is losing 1.5 million pounds
a day, said that substantial progress had been made and that
agreement can be reached this week.

The union had threatened strike action in pursuit of a 5% pay
claim, having turned down a Consignia offer of a 2.8% increase.

Early this week, chief executive John Roberts and head of mail
services Jerry Cope helped to defuse growing rivalry between the
parties by forgoing their 10% pay rise agreed by the Department
of Trade and Industry.


CONSIGNIA PLC: Says Revenue Will be up for Grabs
------------------------------------------------

Postal group Consignia said Wednesday that 2 billion pounds of
its revenue would be up for grabs within weeks unless postal
regulator Postcomm changed its proposals for the U.K.'s mail
market.

Stuart Sweetman, Consignia's Group Managing Director for Strategy
and Business Development, said there was a key flaw in the
figures that Postcomm was using.

Postcomm said in February that a third of the postal market, that
is the bulk mailings of more than 4,000 items, should be open to
competition on April.

However, the regulator has grossly under-estimated the amount of
mail posted in bundles of more than 4,000. Sweetman said it was
half the total market, not the third Postcomm was claiming.

"With half the mail market due to open to competition next month,
it means that 2 billion pounds of revenue will be up for grabs,"
Sweetman said.

Consignia, which is struggling to slash 1.2 billion pounds ($1.7
billion) from its 8-billion-pound cost base in order to restore
profitability, has not finalized its response to Postcomm's
proposals. The initial analysis by Consignia shows that the loss
of revenue involved will lead to 250 million pounds of profit
being lost annually within five years.

Consultation is due to end on March 15 and Postcomm is then due
to take a decision within a few weeks on the proposals, which
will determine Consignia's ability to continue delivering mail to
the U.K.'s 27 million addresses at a uniform price.


CORUS GROUP: Calls for Action on Steel Tariffs
----------------------------------------------

In response to the announcement by President Bush to impose up to
30% tariffs on steel imports into the U.S., Corus Chief Executive
Tony Pedder has on Wednesday called on the UK and Dutch
governments, as well as the European Commission, to take
immediate decisive action to respond with equal measures to
protect and safeguard the EU steel industry.

Pedder has stated that the compelling logic is for the EU to
introduce the same level of tariffs effective from the same date.

A Corus spokesman said that because Corus has a deep and long-
lasting relationship with its customers in the US, unlike many
other exporters to the US who have no tradition of supply and who
are the real cause of market disturbance, the company remains
hopeful of finding ways of maintaining its sales to the US.

Sales of Corus steel products that will be affected by the 15 to
30% US tariffs from March 20, 2002 amounted in 2001 to
approximately 750kt out of Corus' 18 million tons total annual
production.

In December last year, Europe's third-largest steelmaker was
selling as much as 287.5 million euros ($255.9 million) of
convertible bonds due 2007 to help repay debt, which as of June
2001 stood at 1.6 billion pounds.


INVENSYS PLC: Shuts Down Engine Business, Lays Off 450 Jobs
-----------------------------------------------------------

Invensys chairman Lord Marshall is facing another pressure after
the closure announcement of the Brook Crompton engine business
with the loss of 450 jobs.

The engineering group, which suffered a series of profit warnings
last year, has been offloading vast chunks of its assets in an
effort to trim its 3.6 billion pounds ($5.2 billion) of debt.

In January, Invensys sold Brook Crompton for 17 million pounds to
Lindeteves-Jacoberg of Singapore, which has decided to switch
production to Poland and India.

There has been growing expectation that Lord Marshall could soon
be ousted as chairman.

A spokesman said the company had no comment to make on the Brook
Crompton sale.

Earlier this week, the European Union Commission has approved the
sale of Invensys' battery technology unit Energy Storage Group
(ESG) to EnerSys Holdings Inc. for 561 million euros ($488.5
million).

London-based Invensys operates in all regions of the world
through the Software Systems, Automation Systems, Power Systems
and Control Systems divisions.

With close to 76,000 employees, the group supplies products and
services ranging from advanced control systems, remote
diagnostics and energy management for process plants, factories
and commercial environments to electronic devices and networks
for residential buildings, as well as complete power systems for
the industrial, telecommunications and information technology
sectors.

For information, contact Duncan Bonfield/Jane Hurley at telephone
+44(0) 20 7821 3712.


PACE MICRO: Issues Third Profit Warning in Six Months
-----------------------------------------------------

Pace Micro Technology PLC, Europe's largest manufacturer of set-
top boxes, has announced its third profit warning in six months,
wiping away more than two thirds of its market value.

According to a report from The Guardian newspaper, Pace Micro
expects sales for the year ending in May to be 350 million
pounds, a third lower than the 500 million pounds forecast two
months ago.

Pace Micro is blaming the drop in orders from British cable
operators. The majority of the shortfall relates to an order for
300,000 digital set-top boxes from heavily indebted NTL, Pace
Micro's largest customer. NTL owes Pace 25 million pounds from an
order sent in November.

Pace Micro has also seen orders from Telewest drop by a quarter
so far this year, hitting a further 10 million pounds off group
sales.

Pace shares lost 204p to 100p, leaving the firm once valued at
2.7 billion pounds ($3.8 billion) worth just 226 million pounds
($322 million).


RAILTRACK GROUP: Government Dismisses City Complaints
-----------------------------------------------------

The British government has dismissed complaints from fund
managers over its decision to put the country's rail network
operator Railtrack Plc into administration.

More than 20 top fund managers set out their grievances to
Chancellor Gordon Brown on Wednesday over the way the government
pulled the plug on state funding for Railtrack Plc's operating
business last year.

Transport Secretary Stephen Byers said that companies and
investors have continued to invest in the government's rail
projects since Railtrack was declared insolvent in October.

"There is no indication that the private sector is shying away
from public-private partnerships for transport projects," Byers
told a parliamentary committee.

Railtrack will soon begin court action in an attempt to have the
government open up confidential documents on the events leading
up to its administration. It is seeking 380 pence per share in
compensation.


TELEWEST COMMUNICATIONS: CEO Holding Out Despite Impending Woes
---------------------------------------------------------------

Telewest chief executive Adam Singer insists he does not plan to
restructure the group's 5.1 billion pounds ($7.25 billion) debt
despite recent warning from credit ratings agency Moody's
Investors Service for a potential credit downgrade, reports The
Guardian newspaper.

"We are currently performing well. We have adequate funds and the
business is moving forward. Clearly the market is out there with
views of its own," chief Singer said.

Moody's said on Monday it was concerned by Telewest's declining
revenue growth trends and substantially weakened access to the
public capital markets.

Telewest's troubles came after borrowing heavily to buy smaller
rivals and upgrade its cable network. Doom-mongers have further
speculated that Telewest could become a high-profile victim of
the collapse of the telecoms spending boom.

In 2001, the London-based cable company reported a pre-tax loss
of 1.94 billion pounds ($2.7 billion), compared with a loss of
701 million pounds a year earlier.

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      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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