/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/020313.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, March 13, 2001, Vol. 3, No. 51 Headlines * B E L G I U M * XEIKON NV: Punch Takes Over Core Business in Belgium * F I N L A N D * SONERA CORP: State-owned Shares May Be Subject to Divestment * G E R M A N Y * CARGOLIFTER AG: Government Willing to Cough up Money If Needed DEUTSCHE TELEKOM: Market Must Improve for IPO to Push Through KIRCHGRUPE: Kirch Assets Not Enough to Pay Debts, Say Analysts MET@BOX AG: Court Junks Third-Party Insolvency Petition PHILIPP HOLZMANN: Creditor Banks Want Rescue Plan Improved WUNSCHE AG: Goes After Former Owner for Taxes in Arrears * I R E L A N D * ELAN CORPORATION: Faces Another Lawsuit Filed by U.S. Firm ELAN CORPORATION: Lovell & Stewart Files Class Action in U.S. ELAN CORPORATION: Another U.S. Law Firm Launches Class Action ELAN CORPORATION: Finkelstein, Thompson & Loughran Files Suit * I T A L Y * ALITALIA-LINEE: Infrastructure Minister to Block Air France Deal ALITALIA-LINEE: Union Backs Air France's Stake Increase Plan * N E T H E R L A N D S * KPN NV: Enters Negotiations With RDC on Primafoon Franchise * N O R W A Y * KVAERNER ASA: Solid Starting Position for Aker Kvaerner * S W E D E N * LM ERICSSON: Appoints New Senior Vice President * S W I T Z E R L A N D * SWISSAIR GROUP: Weuthrich Says "Swissair" Being Earnestly Sought * U N I T E D K I N G D O M * ARTHUR ANDERSEN: Deloitte in Serious Talks to Acquire Rival BRITISH AIRWAYS: February Traffic Figures Encourage Investors ENERGIS PLC: Worldcom Bid Rumor Reverses Share Slump by 9% GLOBAL CROSSING: To Sell Conferencing Unit, Other Assets in U.K. GUARDIAN IT: Dell Positioning to Grab Debt-ridden Firm ITV DIGITAL: To Be Dissolved in GBP5 billion-merger With Granada KINGFISHER PLC: Castorama to Bare Decision on Takeover This Week NTL INCORPORATED: Faces Pressure as Rights Expire in Ireland NTL INCORPORATED: Drops Pace, Inks Supply Deal With Samsung PACE MICRO: Suffers Big Setback as NTL Turns to Samsung for Boxes TELECITY PLC: Turns Down InTechnology Offer, But News Ups Shares ============= B E L G I U M ============= XEIKON NV: Punch Takes Over Core Business in Belgium ---------------------------------------------------- Punch International NV, EMS provider with registered office at Sint-Martens-Latem, Belgium, today received approval from the liquidators to acquire the assets of bankrupt Xeikon NV. Punch has been interested in taking over the insolvent company for quite some time, submitted several bids in the past. Xeikon NV was declared bankrupt by the commercial court in Antwerp on March 6. Punch immediately resubmitted an offer in the afternoon to acquire all of the company's assets in Belgium and absorb part of its workforce. A preliminary agreement was concluded on March 7, with the liquidators Van Houcke, Van Camp and Van Caneghem. Punch International will retain the Xeikon brand name. Xeikon NV, founded in 1988, is still a world leading supplier of production digital printing systems for a wide range of commercial and industrial applications. Xeikon recently filed a request for creditor protection under applicable Belgian legislation. The Company's subsidiary in France, Xeikon France S.A., recently entered into a receivership proceeding under applicable French legislation. The company's subsidiaries in Germany, UK, Japan and the USA have not filed for creditor protection and continue to operate normally. Xeikon NV clarified its restructuring plan before the Court of Commerce in Antwerp on November 27, 2001 and received temporarily relief from its obligation to service existing debts on November 28, 2001 for a period of four months. As there was still not a full acquisition agreement on March 5, Xeikon decided to go bankrupt. Under a deal with liquidators, Punch acquires all of the assets of Xeikon NV in Belgium and will maintain 235 former employees. The acquisition includes the toner factory in Heultje, the production activity in Mortsel (ao color digital printing systems), the land property in Lier, all of the intangible assets (especially the Intellectual Property Rights) and all of the stock. Punch International is currently negotiating a leasing contract with the bank for the new Xeikon building in Lier. The shareholding in the French Nipson will not be taken over. Nonetheless, Punch is currently investigating the acquisition of Xeikon Inc., the American subsidiary of Xeikon NV, and the Xeikon subsidiary in Japan. The new management team of the digital color press department will mainly consist of former professional and managerial staff of Xeikon NV and will be headed by Jan Van Daele, formerly R&D director at Xeikon. The acquisition price was not made public. Punch International will integrate the digital color press activities in its Professional Electronics business unit, which primarily concentrates on graphical solutions. The company endeavors to restart the activities of the bankrupt Xeikon as soon as possible to guarantee continuity of service to all of the existing and new customers. At present, Punch's graphical division, Strobbe Graphics, is the world leader in print preparation or Computer-to-Plate machines for the newspaper industry. The company keeps an eye on the developments in the graphics sector and had been searching for interesting acquisition opportunities for quite some time to further consolidate its graphics department. Through this strategic acquisition, Punch endeavors to further expand its market share in Europe, extend its product range and broaden its services, so achieving its long-term objective of providing more products with higher added value. For more information about the group and the development of its activities, please visit the company's web site at http://www.punchinternational.com,or at the address or phone number below: Punch International - Investor Relations Bert Devos Koperstraat 1a 9840 St-Martens-Latem Tel 32 (0)9 280 93 53 Fax 32 (0)9 280 93 50 bert.devos@punchinternational.com ============= F I N L A N D ============= SONERA CORP: State-owned Shares May Be Subject to Divestment ------------------------------------------------------------ The government's share in Sonera Corporation could be next to go if it heeds the suggestion of Finance Minister Sauli Niinistoe to sell stakes in state-owned firms to pay the national debt. According to the daily newspaper Helsingin Sanomat, Mr. Niinistoe made the suggestion recently, but did not reveal any specific sales target. The Finnish government holds stakes in 17 companies that includes Stora Enso Oyj, Sonera Corp, Sampo Insurance Co Ltd and Fortum Corp. In 2000, the government earned EUR2.011 billion from stake divestment initiatives. It also sold EUR26 million worth of shares last year, the paper said. ============= G E R M A N Y ============= CARGOLIFTER AG: Government Willing to Cough up Money If Needed -------------------------------------------------------------- The German government is reportedly willing to lend EUR300 million to cash-strapped Cargolifter AG if the latter will ask for it, the Financial Times Deutschland said recently. The economics ministry allegedly assured the company that the government will not ignore the company should it seek a cash injection. The troubled manufacturer of airships is accordingly in need a total of EUR590 million for a serial production due to begin in 2004 or 2005. The company has already raised EUR300 million through a flotation and would need a government loan to bankroll the balance. In a separate report, Frankfurter Allgemeine Zeitung said the company is structuring the loan to be payable when the company shows positive cash flow. The same report also said that the company's liquid assets are only sufficient until April or May. Management hopes that by the time it shall have found strategic investors. The report said the company's strategy includes keeping open its option to increase share capital or to issue a bond with warrants. The report also bared that the company cannot borrow via banks, even on the basis of a public-sector guarantee of almost EUR67 million, approved in 1999 and for which the company is once more applying, as the banks fear those risks are not covered by the guarantee. As a result, management will now attempt to turn the guarantee into a convertible bond that could be placed with private investors. DEUTSCHE TELEKOM: Market Must Improve for IPO to Push Through ------------------------------------------------------------- Deutsche Telekom will not push through with its plan to sell shares of wireless arm T-Mobile International AG, at least as original scheduled, if the stock market does not improve. Deutsche Telekom CEO Ron Sommer told reporters Monday that the stock market must improve "significantly" before the firm proceeds with the initial public offering, Dow Jones Newswires said. The IPO was originally scheduled between the end of June and early July. Later, the company suggested the end of October and early November. Now, it depends on the market condition. To compensate for the delay, Mr. Sommer, who is under pressure to cut Deutsche Telekom's EUR62 billion debt, said he will "step up the sale of real estate compared with the previous year." The IPO, which the company hopes will raise EUR10 billion, is one of the cornerstones of its debt reduction plan. The other pillar, which involved the sale of its cable assets, recently got stymied when the German cartel office blocked the bid of Liberty Media Corporation. KIRCHGRUPE: Kirch Assets Not Enough to Pay Debts, Say Analysts -------------------------------------------------------------- Even as Kirch held a meeting with creditors on Monday and entered the fifth week of negotiations with banks, analysts say it is unlikely creditors will be paid in full. In a report, Bloomberg said analysts are increasingly pessimistic that a deal could be reached, which will not allow lenders to waive part of their loans. WGZ Bank analyst Erik Heinrich says it is impossible that lenders will be repaid in full even if Kirch decides to sell its entire assets. "It's extremely unlikely that banks can get out of this without losses. If you compare the size of liabilities with Kirch's assets, you'll see that it just doesn't fit," Mr. Heinrich told Bloomberg. Kirch is presently facing a US$5.7 billion debt mountain. A US$1 billion loan payment due next month also stares it in the eye. This payment will be for debts owed to minority shareholders, including Axel Springer Verlag AG, the publisher of Germany's most-popular newspaper Bild-Zeitung. Right now, Kirch's game plan includes selling its 40 percent stake in Springer, finding a partner for the pay-TV channel Premiere, and selling part or all of its 58 percent stake in Formula One, the world's most-watched car racing sport, and its 25 percent stake in Spanish broadcaster Telecinco SA. But despite this plan, Commerzbank Securities analyst Sarah Schmitz believes the erstwhile media giant will find it difficult to get additional loans from bank now that it has defaulted on several obligations. Last week, Financial Times Deutschland reported that Kirch had missed paying part of a EUR400 million loan from DZ Bank AG. It is set to repay a EUR460 million loan from Dresdner Bank AG next month and a loan from BayernLB will fall due in June. Kirch lenders include BayernLB -- its biggest with a EUR1.9 billion in loans outstanding -- J.P. Morgan Chase & Co., Dresdner Bank AG, Credit Suisse Group, HVB Group and Lehman Brothers Holding Inc., among others. MET@BOX AG: Court Junks Third-Party Insolvency Petition ------------------------------------------------------- The Hildesheim based Met@box AG has successfully avoided a petition for insolvency that came from a third party. Said petition was denied because of contentious receivables, the Frankfurt Stock Exchange said in a press statement. The company only found out Monday that the application was rejected by the local court of Hildesheim on February 25, 2002 yet. The applicant has to defray the costs. The company says the consolidation process it is currently undertaking is further strengthened by the dismissal of the petition. For further information, contact Melanie Hoffmann, Management Public & Investor Relations, at telephone 05121/75 33-116 or fax 05121/75 33 75, or via e-Mail at hoffmann@metabox.de. PHILIPP HOLZMANN: Creditor Banks Want Rescue Plan Improved ---------------------------------------------------------- Creditor banks of troubled German construction group Philipp Holzmann are undecided as to how much it should retain in the business, delaying further the approval of its rescue plan. Frankfurter Allgemeine Zeitung reported Monday that majority of the banks' representatives had again demanded improvements in the plan, which was prepared by Deutsche Bank. The company had warned last week that failure to promptly approve the plan will make this year's losses exceed the amount of its equity believed to be around EUR126 million. If this happens, the company will be forced to petition for insolvency. The plan involves raising the current capital of the company, which is 60-percent-owned by banks. WUNSCHE AG: Goes After Former Owner for Taxes in Arrears -------------------------------------------------------- German fashion company Wunsche AG, which recently received a demand to pay taxes in arrears, has called on former owner Wolfgang Joop to pay the liability. The company contends the taxes must be paid by Mr. Joop, as the notification of tax alterations covered the 1990-1991 dues of Joop! GmbH, now a subsidiary of Wunsche. The fashion firm says the subsidiary only came under its control in 1998; hence, the tax due is owed by former shareholders. Mr. Joop has promised to look into the matter, the report said. ============= I R E L A N D ============= ELAN CORPORATION: Faces Another Lawsuit Filed by U.S. Firm ---------------------------------------------------------- The Law Firm of Harvey Greenfield announces that a class action lawsuit was filed on behalf of purchasers of the securities of Elan Corporatin PLC between April 23, 2001 and February 8, 2002, inclusive. The action is pending in the United States District Court, Southern District of New York, located at 500 Pearl Street, New York, New York and names as defendants Elan and its senior management, Donal J. Geaney, Elan's Chairman and CEO; Shane M. Cooke, Executive Vice Chairman of Elan; and Thomas G. Lynch, Executive Vice President and CFO. The complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that Elan materially overstated revenues by nearly 40% through the creation and manipulation of joint ventures. According to the complaint, Elan invested monies into these joint ventures, which then used the proceeds to fund purchases from Elan. Elan then reported the proceeds as revenues. The price of Elan's stock was artificially inflated as a result of these sham revenues. For those who bought securities of Elan between April 23, 2001 and February 8, 2002, no later than April 5, 2002, one may request from Court to be appointed lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. For inquiries regarding this action or questions concerning this notice or pertaining to rights and interests with regard to the case, please contact Harvey Greenfield at The Law Firm of Harvey Greenfield, 60 East 42nd Street, Suite 2001, New York, NY, 10165; telephone (212) 949-5500; fax (212) 949-0049; or email harvey.greenfield@verizon.net. ELAN CORPORATION: Lovell & Stewart Files Class Action in U.S. ------------------------------------------------------------- The law firm of Lovell & Stewart, LLP has filed a class action lawsuit on behalf of all persons who purchased or otherwise acquired the common stock of Elan Corporation, between April 23, 2001 and March 7, 2002. The action, Wheelock v. Elan Corporation, plc., et al., filed on March 7, 2002, is pending in the United States District Court for the Southern District of New York (500 Pearl Street, New York, New York), Docket No. 02-CV-1890 (LAK), and has been assigned to the Honorable Lewis A. Kaplan, United States District Judge. A copy of the complaint is available from Lovell & Stewart, LLP. The complaint may also be viewed on Lovell & Stewart's website http://www.lovellstewart.com The complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of Elan common stock. The complaint alleges that Elan's representations were rendered false and misleading by: a) concealing expenses through joint ventures; b) recognizing income from companies in which Elan had invested (round-trip revenue); and c) concealing material related-party transactions. As a result of these material misrepresentations and omissions, Elan's stock traded as high as $65.00 per share during the class period. The complaint further alleges that to overstate Elan's net income and EPS during the Class Period, the Individual Defendants and Elan caused the Company to violate GAAP and SEC rules by recording revenue from transactions with investees and by failing to disclose material related-party transactions. Elan's results were inflated by the Company's manipulation of joint ventures, including with Incara Pharmaceuticals in the 1st Quarter 2001 and with Generex Biotechnology in the 2nd Quarter 2001. Elan's 3rd Quarter 2001 results included $47.5 million in revenues from selling an asset (a drug called Permax) to a company (Amarin) of which it owned 43%. Between April 2001 and March 2002, Elan stock fell by more than 40 percent. Plaintiff seeks to recover damages on behalf of Class members and is represented by the law firm of Lovell & Stewart, LLP, which has significant experience and expertise in prosecuting class actions. Christopher Lovell, the senior partner at Lovell & Stewart, has been appointed lead counsel or co-lead counsel in numerous significant class actions, including actions involving reportedly the largest class action recoveries in history under three separate federal statutes (the Sherman Antitrust Act, the Commodity Exchange Act, and the Investment Company Act of 1940). These record-breaking recoveries for class plaintiffs included the $1.027 billion recovery in In re NASDAQ Market-Makers Antitrust Litigation and a $145.35 million recovery in 1999 in In re Sumitomo Copper Litigation, a class action against various parties who conspired to manipulate the worldwide copper and copper futures markets for their own profit. Any investor who bought or otherwise acquired the common stock of Elan between April 23, 2001 and March 7, 2002 may no later than April 5, 2002, move the Court to serve as lead plaintiff of the Class. Investors who wish to discuss this action may contact Lovell & Stewart at the address, telephone number, or e-mail address below: CONTACT: Lovell & Stewart, LLP, New York Christopher Lovell or Victor E. Stewart, 212/608-1900 sklovell@aol.com TICKERS: NYSE:ELN ELAN CORPORATION: Another U.S. Law Firm Launches Class Action ------------------------------------------------------------- A class action lawsuit was filed in the United States District Court for the Southern District of New York on behalf of all purchasers of the common stock of Elan Corporation, plc from April 30, 1999 through February 4, 2002, inclusive. The Complaint charges Elan and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges, among other things, that defendants issued a series of materially false and misleading statements regarding the Company's financial condition. The Complaint alleges that as part of their effort to boost the price of Elan securities, defendants materially overstated Elan's revenues by creating entities that were essentially controlled by Elan for research and development. Elan immediately took back its investment in the form of a license fee which it recorded as revenue. In some instances the joint ventures had no money left for the development of drugs and Elan ended up lending money to the entity. After the market closed on January 29, 2002, The Wall Street Journal described Elan's accounting as a "charade" and quoted a former SEC accountant as stating that it is like "taking money out of one pocket and putting it in another." On February 4, 2002, Elan announced that earnings for the fourth quarter 2001 would drop 84% and that its profits for fiscal year 2001 would fall well short of estimates. On this news, Elan's ADRs fell $15.10 per share from $29.95 per share to $14.85 per share, a loss of more than 50% of their value in a single day. Plaintiff is represented by The Law Offices of Marc S. Henzel. If you bought the securities during the class period, you may, no later than April 5, 2002, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. For inquiries, rights or interests concerning this case, please contact: Marc S. Henzel, Esq. of The Law Offices of Marc S. Henzel, 273 Montgomery Ave, Suite 202 Bala Cynwyd, PA 19004-2808, by telephone at (888) 643-6735 or (610) 660-8000, by facsimile at (610) 660-8080, by e-mail at Mhenzel182@aol.com or visit the firm's website at http://members.aol.com/mhenzel182. ELAN CORPORATION: Finkelstein, Thompson & Loughran Files Suit ------------------------------------------------------------- On March 1, 2002, Finkelstein, Thompson & Loughran filed a securities fraud class action lawsuit in the United States District Court for the Southern District of New York, on behalf of purchasers of Elan Corporation, plc -- http://www.elancorp.com -- securities between December 21, 2000 and February 1, 2002, inclusive. Named as defendants are Elan and certain of its officers and directors. The Complaint charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges that throughout the Class Period defendants knowingly or recklessly disseminated materially false and misleading statements regarding the Company's financial condition, causing the price of Elan securities to be artificially inflated. For parties who may have purchased Elan securities during the period from December 21, 2000 to February 1, 2002, inclusive, and for entities who meet certain other legal requirements, one may, no later than April 5, 2002, move to be appointed lead plaintiff. For discussions regarding this action or questions concerning this notice, please contact Conor R. Crowley with Finkelstein, Thompson & Loughran, toll-free at 866-592-1960, at 202-337-8000, or by e-mail at crc@ftllaw.com. ========= I T A L Y ========= ALITALIA-LINEE: Infrastructure Minister to Block Air France Deal ---------------------------------------------------------------- In a complete contradiction with his counterpart in the treasury, Infrastructure Minister Pietro Lunardi said he will do everything in his power to block any plan to sell Alitalia to "foreigners." Mr. Lunardi was referring to reports that Treasury Minister Guilio Tremonti had made a deal with his French counterpart regarding the increase of Air France's stake in Alitalia. But Mr. Lunardi told Sole 24 Ore that he intends to learn more about the deal from Mr. Tremonti when he talks to the latter shortly. Air France is believed to be planning to acquire between 8% and 14% Alitalia's equity by middle of May. Either flag carrier, however, has not made any official pronouncement on this deal. Observers say any attempt to privatize Alitalia, which is 53% state-owned, must be preceded by trade union approval for the 2,500 job cuts, which the airline is planning to make in the process. Accordingly, if this approval is obtained, the Italian government might then approve plans for another Alitalia capital increase. As it stands now, the pilots union Anpac has already voiced out support for the plan. ALITALIA-LINEE: Union Backs Air France's Stake Increase Plan ------------------------------------------------------------ Italian pilots union Anpac is amenable to an increase of Air France's stake in Alitalia, a week after it surfaced that the French flag carrier may raise its holdings to as much as 14%. Anpac Chairperson Andrea Tarrone recently told the La Stampa newspaper that the union does not have any objection to the plan. Last week, rumors surfaced that Italian Finance Minister Giulio Tremonti had discussed the matter with French counterpart Laurent Fabius during a meeting of European finance ministers in Brussels. Should the plan push through, Air France's holdings could exceed the initially agreed level of crossed holdings between the two airlines, the paper said. ===================== N E T H E R L A N D S ===================== KPN NV: Enters Negotiations With RDC on Primafoon Franchise ----------------------------------------------------------- KPN and Retail Development Company (RDC) have started exclusive negotiations for RDC to take over 40 Primafoon, public telephone shops currently operated by franchise holders, and 10 KPN-owned and operated Primafoon shops slated for closing. In line with KPN's restructuring strategy for its retail organization, the telecoms firm signed with RDC a statement of intention for the transfer. KPN will retain the Primafoon formula with 100 KPN-owned and operated shops. If the negotiations are successful, RDC plans to exploit the Primafoon shops under a new name. RDC is a holding company with a portfolio of retail chains offering books, paper articles, multimedia, infotainment and office supplies. RDC is offering products and services to expand the assortment currently offered by the Primafoon shops to KPN. KPN is currently discussing the proposed takeover with the Primafoon franchise holders. =========== N O R W A Y =========== KVAERNER ASA: Solid Starting Position for Aker Kvaerner ------------------------------------------------------- Kvaerner, the international oil services, E&C, and Shipbuilding Group, launched recently a new company with 18,000 employees in 17 countries and on five continents. The new company, to be known as 'Aker Kvaerner', will supply products, services, technology and solutions worth NOK20 billion a year to the global oil and gas industry. Aker Kvaerner is the result of a merger between Aker Maritime and Kvaerner Oil & Gas, and forms one of four business areas within the Kvaerner Group. Subsidiaries of Aker Kvaerner have already won contracts totaling NOK15.5 billion (US$1.7 billion) since the start of 2002, almost doubling the Group's order backlog in just over two months. The many companies embraced by the new organization complement each other and Aker Kvaerner is solidly placed to maintain an aggressive commitment both in its traditional home markets and in other parts of the world. In many of its business streams, the new company will rank among the world's leading players. It is strong, for instance, in advanced drilling equipment, subsea facilities, the management of large and complex platform tow-outs, and the installation of seabed equipment. Aker Kvaerner also embraces some of the most advanced solutions for both platforms and mooring systems in deep water. It has become one of the biggest players in the large UK and Norwegian markets for maintenance, modifications and operational support on production platforms. Preparations for merging Aker Maritime and Kvaerner Oil & Gas have been completed in just over two months, with more than 250 employees directly involved in the integration work. In addition, personnel from the whole organization have been drawn into the planning and preparatory process. Establishing a new organization has been a key task. Since the beginning of January, potential candidates for senior roles have been nominated and thoroughly assessed prior to key posts being filled. The merger of Aker Maritime and Kvaerner Oil and Gas represents a major milestone in Norwegian industrial history. With traditions going back almost two centuries, these companies are now joining forces to reinforce their position with oil industry customers. Aker Kvaerner will be a large and significant employer in a number of local Norwegian communities, and one of the biggest sources of private sector jobs in several places along Norway's coast. With some 12,500 employees in Norway, the new company ranks as one of the country's largest industrial employers. For more information: Paul Emberley, Vice President Group Communications, Kvaerner ASA: +44 (0)20 7339 1035 or +44 (0)7768 813090 or paul.emberley@kvaerner.com or Torbjorn Andersen, Communications Manager, Aker Kvaerner: +47 9131 0458 or www.kvaerner.com. =========== S W E D E N =========== LM ERICSSON: Appoints New Senior Vice President ----------------------------------------------- Ericsson announced recently the appointment of Henry Stenson as new Senior Vice President for Corporate Communications and member of the Corporate Management Team. He will enter this position in the summer of 2002. Henry Stenson will replace Roland Klein who has decided to leave the company. Henry Stenson, 46, joins Ericsson from the Scandinavian Airlines group, where he also served as Senior Vice President for Communications. His previous experiences are, among others, eight years in the Volvo group as Senior Vice President Communications at Volvo Car Corporation, Director for Communications at Volvo Aero Corporation and Vice President for Automotive Communications at Volvo Headquarters. He has also spent four years at SAAB Aircraft first as Media Relations Manager and later as Vice President Communications. Stenson will be based in Ericsson's head office in Stockholm, with global responsibility for External Relations, Investor Relations and Internal Communications. Ericsson, currently headed by Kurt Hellstrom, provides innovative mobile and broadband Internet communications solutions in more than 140 countries. For further information, please contact: Ase Lindskog, Director Media Relations, Tel: +46 730-244 872, e-mail: ase.lindskog@lme.ericsson.se. ===================== S W I T Z E R L A N D ===================== SWISSAIR GROUP: Weuthrich Says "Swissair" Being Earnestly Sought ---------------------------------------------------------------- Swissair administrator Karl Wuethrich bared in his latest report that a buyer is seriously courting the "Swissair" brand, which is worth CHF660 million as of November last year. Mr. Wuethrich said talks are progressing seriously, especially now that the Zurich commercial court has rejected Swissair's bid to retain the name in the newly constituted flag carrier under the Crossair outfit. By April, Crossair AG will be renamed "Swiss," a name according to many can lead to confusion in the airline industry. =========================== U N I T E D K I N G D O M =========================== ARTHUR ANDERSEN: Deloitte in Serious Talks to Acquire Rival ----------------------------------------------------------- No.2 accounting firm Deloitte Touche Tohmatsu could end up the new owner of embattled rival Arthur Andersen, the New York Times said Monday. According to the paper, the troubled accounting firm, which operates in 84 countries, including 34 across Europe, is now nearing a deal with Deloitte, a major competitor in the industry. The paper says talks have been taking place in New York since last week, led primarily by Andersen CEO Joseph F. Berardino and Deloitte counterpart James E. Copeland Jr. They are joined by partners, as well as legal and financial advisers. Neither side has so far officially revealed any details of the negotiations. A person privy to the talks, however, told the paper that the discussion is not focused on price but the complex issue of how Deloitte can avoid assuming the legal and financial liabilities Andersen faces for its role in the Enron debacle. Andersen is likely to face possible regulatory action by the Securities and Exchange Commission as well as several lawsuits from companies and individuals hurt by Enron's collapse. There are at least two scenarios being considered in the talks, says the unnamed source. One is to arrange the deal as a sale of assets rather than as a merger or full acquisition. The other would have Deloitte acquire all but Andersen's U.S. operations. The second scenario would require the U.S. operations to temporarily stand alone and continue to exist for the purpose of negotiating a resolution and paying fines and penalties related to the Enron scandal. The paper, however, says that the complex ties between Andersen units may yet prevent a complete takeover or merger. According to the paper, Andersen's overseas offices are somewhat like independent entities that contract with each other. While Andersen's overseas offices may join with Deloitte, industry experts say, some might elect to join other competitors. Andersen, the former No. 1 now the fifth-largest accounting firm worldwide, had total revenues of US$9.3 billion in the last fiscal year. It is now hobbled by defections of employees and major customers in the wake of Enron's collapse. Anderson's woes began in October when Enron disclosed that dealings between the company and a series of partnerships controlled by a former senior executive had caused huge losses. Enron was soon forced to announce that its financial reports dating back to 1997 could no longer be relied upon. In December, the company filed for bankruptcy. Andersen served Enron in several roles, acting as both external and internal accountant as well as consultant. A deal with Andersen will allow Deloitte to share if not take over top spot from PricewaterhouseCoopers in the global accounting hierarchy. Andersen was established in the U.S. in 1913, while Deloitte traces its roots in England, with a history dating back to the 19th century. BRITISH AIRWAYS: February Traffic Figures Encourage Investors ------------------------------------------------------------- British Airways is on an upswing again, at least in the stock market, after leading stockbrokers raised their price target on the company, following an encouraging traffic figures for February. BA shares gained a further 7p to 254p Monday, a six-month high, says The Times. The flag carrier surprised investors last week after it reported a 2.5% year-on-year decline in February, better than the 5% market expectation. In addition, analysts were also encouraged by the drop to 7.8% in premium-class traffic from a high of 10.4% in January. The paper says the encouraging traffic figures has boosted the rally of BA shares, which began in February when CEO Rod Eddington made the rounds, selling his strategy under the "Future Size and Shape" initiative. ENERGIS PLC: Worldcom Bid Rumor Reverses Share Slump by 9% ---------------------------------------------------------- In a positive indication of investors support, shares of Energis jumped more than 9 percent in early trading Monday after talks of Worldcom bidding for the company surfaced. According to the Financial Times, Energis traded at 4.07p during early trading, reversing the sharp collapse of its shares and bonds since last month when it warned that it could breach its GBP600 million banking covenants. At the moment, apart from Worldcom, Apax Partners, Carlyle Group, Kohlberg Kravis Roberts and Providence Capital are also taking interest in Energis. Its fate, however, is in the hands of a 16- bank syndicate. The paper says if WorldCom does bid, its decision will surprise many, considering that its share price has fallen sharply this year because of funding concerns. In fact, Worldcom CEO Bernie Ebbers is selling property and other personal assets to cover his debts to the company, estimated at US$375 million, the paper says. In addition, WorldCom is expected to make write-downs of up to US$37 billion on the value of telecoms assets it bought at over- inflated prices during a US$60 billion acquisition spree at the height of the telecoms boom. GLOBAL CROSSING: To Sell Conferencing Unit, Other Assets in U.K. ---------------------------------------------------------------- In a bid to make itself attractive to investor and in the process avoid liquidation, insolvent communications network operator Global Crossing is peddling its network in Great Britain. Along with its recent announcement to cut 1,600 more jobs and slash capital spending by more than 90%, Global Crossing also said it is seriously mulling the disposal of its U.K. assets. These assets include an entire conferencing division based in the U.K. The troubled Bermuda-based firm plans to cut 2002 operating expenses to US$900 million from US$1.5 billion last year. It also wants its capital spending trimmed to US$200 million from US$3.2 billion in 2001. The company is frantically making itself attractive under threat of a possible liquidation, which creditors might opt if the erstwhile technology darling fails to fetch a higher bid. At the moment, sole bidder Hutchison Whampoa Ltd. and Singapore Technologies Telemedia Pte are only offering US$750 million to assume control of the company. Shareholders and creditors are not keen on accepting the offer, as they believe Global Crossing is worth more than that. The company, which sought bankruptcy protection in January, operates a fiber-optic network that connects 200 cities around the world. It has about 100,000 customers. GUARDIAN IT: Dell Positioning to Grab Debt-ridden Firm ------------------------------------------------------ World's largest PC manufacturer Dell Computer is reported up front in the running to acquire Guardian iT, the heavily indebted disaster recovery group. According to The Times, a Dell spokesman recently admitted that the company is looking for opportunities in Europe. In addition, it is believed the company had previously approached Guardian about setting up a re-seller agreement. "Our president has been in Europe recently and has been fairly public about being interested in looking at new services, partnerships and opportunities," the unnamed spokesman said when asked about the issue. The paper says Dell allegedly initially approached Guardian in December, when the debt-ridden company admitted it had overstated its full-year profits and revenues and was in danger of breaching banking covenants. Guardian's woes stem from its ill-fated foray into the Internet hotel business when it spent GBP50 million on a 190,000 square feet site at Heathrow. Only a fraction of this is being used for disaster recovery services, the paper says. Analysts say the company, which is currently buried under a GBP110 million debt mountain, could only be worth GBP129.6 million now compared to GBP1.1 billion six months ago. ITV DIGITAL: To Be Dissolved in GBP5 billion-merger With Granada ---------------------------------------------------------------- ITV Digital, the loss-making division of Carlton Communications, will be folded up when Carlton merges with Granada later this year, admits Carlton Chief Michael Green. In an interview with The Observer, Mr. Green said the GBP5 billion merger will result in the dissolution of the ITV unit. However, he said, the merger will ultimately make Granada a dominant player in the ITV sector. It is expected that Granada Chairman Charles Allen will surface as the head of the merged business, while his right-hand man, Steve Morrison, would be chief executive. For a while now, the balance sheet of multi-channel firm Carlton has been sorely affected by the financial crisis at ITV Digital, the major factor behind the group's GBP400 million losses last year. According to the paper, the unit's problem has been further compounded by a GBP315 million contract with the Football League, which soccer chiefs demand be honored in full. ITV is a technology that allows one to view television programs through the Internet. KINGFISHER PLC: Castorama to Bare Decision on Takeover This Week ---------------------------------------------------------------- The Castorama board is expected to decide this week whether or not to accept the offer of Kingfisher to take full control of the French DIY company, says the Guardian. According to the report, the board just needs to sort out the structure of the deal, which at the moment involves a choice between taking a stake in Kingfisher and accepting cash for its 45% stake. As of Sunday, Kingfisher refused to deny that it is preparing a rights issue to fund the purchase of the 45% stake, which analysts say is worth up to GBP2.5 billion. Earlier, Castorama Chairman Francis Mackay had hinted that a demerger via a cash buyout is not entirely disadvantageous if the right conditions were met. Kingfisher needs to buy the 45% stake if it wants to take management control of Castorama, the company that controls B&Q, its most highly regarded business. At the moment, Kingfisher does not have full control of the business even if it owns 55% stake because of a complex arrangement that only gives it 50% voting rights. NTL INCORPORATED: Faces Pressure as Rights Expire in Ireland ------------------------------------------------------------ NTL, one of the main Irish cable companies in Ireland, will lose the exclusive right to broadcast in their franchise areas from March 1 and could face extra competition from new market entrants. With cable activities throughout Europe, debt-laden cable group NTL has $17 billion (EUR 14.7 billion) debt and is expected to unveil a restructuring plan next week. The rescue package is said to involve cost cuts in capital expenditure that may undermine the company's ability to provide quality service and network infrastructure to Irish consumers. NTL has already cancelled its plan to upgrade its Dublin, Galway and Waterford networks -- digital TV, telecoms and high-speed Internet -- which racked up 70 million pounds on capital infrastructure in 2000. A range of U.S. or U.K. private equity firms such as Apax Partners are said to be on the list of NTL Irish operations' potential bidders. NTL INCORPORATED: Drops Pace, Inks Supply Deal With Samsung ----------------------------------------------------------- NTL Incorporated held true to its promise to get another supplier of set-top boxes by announcing Monday that it had inked a contract with Malaysian maker Samsung. The company did not reveal the value of the contract, save for saying that it is a multi-million-pound agreement. NTL, U.K.'s largest cable operator, had earlier threatened to shift to another supplier after Pace Micro Technology plc threatened that it will stop delivery of set-top boxes if it is not paid GBP25 million for its November shipment. The decision to get Samsung is expected to sit well with NTL shareholders, who had recently criticized management for relying heavily on Pace. The news sent shares in Pace plummeting Monday as much as 15% in early trading. PACE MICRO: Suffers Big Setback as NTL Turns to Samsung for Boxes ----------------------------------------------------------------- Cash-strapped Pace Micro Technology Plc took another hard blow Monday when NTL Incorporated announced it has shifted to Samsung for the supply of its set-top boxes. Pace, Europe's largest set-top box maker, has just recently announced its third profit warning in six months, blaming losses to the drop in orders from British cable operators, particularly NTL. On Sunday, however, Pace CEO Malcolm Miller downplayed the effects of NTL's expected shift to Samsung, saying: "They were always looking for a second supplier -- it was fully understood." Nonetheless, NTL's departure would strained the company's finances, now that U.K.'s second-biggest cable firm Telewest has also cut down its orders for Pace's boxes. Last week, the Troubled Company Reporter-Europe reported that the company only expects GBP300 million in sales for the year ending in May, a third lower than the GBP500 million forecast two months ago. Pace has blamed majority of the shortfall to an order for 300,000 digital set-top boxes from NTL. At the moment, NTL also owes Pace GBP25 million from an order sent in November. Pace shares has suffered a 63 percent dive since its latest profit warning. TELECITY PLC: Turns Down InTechnology Offer, But News Ups Shares ---------------------------------------------------------------- News that an interested buyer had approach web-hosting provider TeleCity boosted the company shares Monday, opening 17 percent higher at 12.25p, the Financial Times said. InTechnology had reportedly offered 18p for each TeleCity share, which would have valued the company at GBP39.5 million. Accordingly, each shareholder would also be offered one share in InTechnology for every eight they held in TeleCity. "TeleCity plc announces that a preliminary approach has been made by a third party which may or may not result in an offer. Any further announcements will be made as appropriate," the company said on Monday. The Financial Times has learned, however, that TeleCity's management had turned down the offer, hoping it could get at least 30p for each share. The paper said TeleCity Chairman and CEO Michael Hepher had persuaded 3i, the biggest shareholder in the company with a 48.7 percent stake, to reject the indicative bid. The company maintains that it does not need to accept a low bid, as it is fully funded until it becomes cash generative later this year. InTechnology, backed by the co-founder of Freeserve and architect behind Planet Online, has a market capitalization of GBP195.4 million. It runs two data centers, one near London and another between York and Leeds. It is thought to be looking to expand its operations in the U.K. and Europe by picking up fitted facilities from struggling companies at a relatively low price. ********** 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 2001. 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 * * *