/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/020401.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 Monday, April 1, 2002, Vol. 3, No. 63 Headlines * G E R M A N Y * DAIMLERCHRYSLER AG: To Seek Dismissal of Shareholder Suit in U.S. KIRCHGRUPPE: Partners Pressure Banks to Forget Debts for Stake MOBILCOM AG: France Telecom, Schmid End Tussle With Mutual Gains MOBILCOM AG: Regulator Mulls Probe on France Telekom-Bank Deal * N E T H E R L A N D S * KPN NV: European Commission Raps Mobile Firms for High Fees LETSBUYIT.COM: Deutsche Borse Delists Online Retailer * N O R W A Y * KVAERNER ASA: Notification of Director Changes * P O L A N D DAEWOO-FSO: Still Out of General Motors-Daewoo Korea Purchase ELEKTRIM SA: Announces MPTE Energia Unit for Liquidation NETIA HOLDINGS: Shareholders Adjourn Meeting * S W E D E N * ICONMEDIALAB: Notification of Annual General Meeting LM ERICSSON: Analysts See Management Strain in New Chair's Entry SONERA CORPORATION: TDC Seen as Likely Member of Nordic Alliance * S W I T Z E R L A N D * SWISSAIR: U.S. Equity Fund Buys Gate Gourmet for US$800 Million * U N I T E D K I N G D O M * BRITISH TELECOMS: Concludes Closure of Call Centers BRITISH TELECOMS: Announces Adjustment of Director's Interests COLT TELECOM: Initiates Search for Successor to CFO CORDIANT COMMUNICATIONS: Notification of Shareholder's Interest ENERGIS PLC: Notification of Shareholders' Interests ITV DIGITAL: Opts for Administration to Avoid Liquidation ITV DIGITAL: Administration Petition Pleases Shareholders MARCONI PLC: Bond-for-share Swap Inevitable as Options Dwindle NTL INCORPORATED: Announces 4Q and Full Year 2001 Results ============= G E R M A N Y ============= DAIMLERCHRYSLER AG: To Seek Dismissal of Shareholder Suit in U.S. ----------------------------------------------------------------- DaimlerChrysler AG is not giving its fight to block an US$8 billion suit, after a US federal judge recently allowed it to go forward, the Wall Street Journal said last week. Citing a source close to the company, the paper said the automaker intends to file another motion to dismiss the case. The matter could take from six months to a year to be resolved, the report said. Recently, U.S. District Court Judge Joseph Farnan in Wilmington, Delaware allowed the suit filed by shareholder Kirk Kerkorian to move ahead. The suit accuses the company of lying to win shareholder support for the US$35 billion acquisition of Chrysler in 1998. Mr. Kerkorian is seeking damages. Mr. Kerkorian through his firm Tracinda Corp. and other shareholders sued DaimlerChrysler in November 2000, after the Financial Times quoted Chief Executive Juergen Schrempp as saying he always intended to control Chrysler and operate it as a division. Tracinda claims it would not have voted in favor of the 1999 merger had it known then-Daimler-Benz AG intended to subjugate Chrysler and fire its management, the report says. KIRCHGRUPPE: Partners Pressure Banks to Forget Debts for Stake -------------------------------------------------------------- As the salvage plan for KirchGruppe begins to take shape, so has the "poker game" among the rescuers, says Handelsblatt. According to the German daily, investors in different parts of the Kirch media empire are pressuring the four leading creditor banks of KirchGruppe to renounce their claims and take a 25% stake in Kirch Media, the core rights business. Initially, the business partners of Kirch as well as the banks were thought to have agreed on pooling EUR800 million in order to shore up the finances of the debt-laden media giant. But a source told Handelsblatt that the business partners are looking to emerge from the talks with as much as possible for as little outlay. The paper did not point to a particular block of investors behind the move, but among the more influential investors involved in the rescue efforts are Rupert Murdoch, Italian Premier Silvio Berlusconi and Prince Al Waleed of Saudi Arabia. Although HVB Group, Commerzbank AG, DZ Bank and Bayerische Landesbank are not thought to agree, insiders believe they'll have little choice, particularly since the collateral provided against the loans they've issued takes the form of film and sports rights, which are not seen as very much attractive, says the paper. The banks have a combined exposure to Kirch of EUR3 billion. MOBILCOM AG: France Telecom, Schmid End Tussle With Mutual Gains ---------------------------------------------------------------- Although it blinked first in a staring match recently, France Telecom nevertheless heaved a resounding sigh of relief at the end of its tussle with MobilCom CEO Gerhard Schmid last week. The French firm avoided a costly buyout of Mr. Schmid and his wife's 43% share in MobilCom after a number of banks apparently came to its rescue by buying the stakes, instead. The move by the banks, which included Deutsche Bank, ABN Amro, Merrill Lynch and Societe Generale, which had extended MobilCom EUR4.7 billion in loans, meant that neither France Telecom nor they have more than 30% stake in the company. A German law that took effect in January this year obligates companies that hold 30% or more in another company to make a buy- out offer to outstanding shareholders, says Handelsblatt. Had France Telecom, which currently holds a 28.5% stake in Mobilcom, been forced to takeover the firm, it would have also absorbed another EUR6-7 billion euros in debt. But not only France Telekom may have benefited from the deal. Mr. Schmid is also expected to be satisfied with his gambit. According to the paper, at the widely rumored price of EUR22 per share, Schmid could receive as much as EUR570 million for his stake in the company he founded, but would be leaving in mid- April. France Telecom is expected to push for the consolidation on Germany's UMTS market and merge MobilCom with one of the three smaller operators, E-Plus, O2 or Quamm, the paper says. MOBILCOM AG: Regulator Mulls Probe on France Telekom-Bank Deal -------------------------------------------------------------- The deal arranged by France Telecom and the banks that bought MobilCom stakes last week has attracted the attention of Germany's market regulator, the Financial Times says. The watchdog is reportedly considering a probe into the special arrangement that allegedly circumvents a German law governing takeovers. Of particular interest is the rumored condition forged between France Telecom Finance Director Jean-Louis Vinciguerra with the banks, in which the former would be allowed to buy the stakes from the latter after a defined lapse of time or else make compensatory cash payment. The arrangement was attacked last week by the SdK, a German shareholder association pushing for a full offer to all shareholders. Under a German law that took effect this year, a company that offers to buy 30% or more of another firm will have to extend that offer to the remaining shareholders. The deal with the banks was structured to enable France Telecom to avoid making a bid for MobilCom now that would require it to consolidate a further EUR7 billion of debt, just as it is fighting to pay down its EUR60.7 billion debt pile, the report says. France Telecom would face a cut in its credit rating by Moody's if it took responsibility for MobilCom's debt, the ratings agency said on Wednesday. ===================== N E T H E R L A N D S ===================== KPN NV: European Commission Raps Mobile Firms for High Fees ----------------------------------------------------------- Dutch telecoms group KPN NV took a hit from the European Commission last week, as the Brussels-based regulator formally charged the company for levying too much fees on fixed-line-to- mobile calls. According to the Financial Times, the charge relates to the complaint filed by WorldCom in 1999 against KPN, Libertel, the Dutch arm of Vodafone, Deutsche Telekom, Mannesmann, Vodafone's German arm, and Comvig of Sweden. The Commission says it is also investigating other telecoms operator over concerns that mobile phone companies are making too much profit by charging fixed line operators high prices for connecting to the network. The fees - known as call termination charges - account for up to two-thirds of the retail price of a call to a mobile phone and for a substantial part of the revenues of mobile phone groups, the paper says. The paper says the Commission will release in a few weeks recommendations that would make it easier for national telecommunications regulators to force mobile phone companies to reduce excessive call termination charges. Accordingly, the proposals will substantially lower the price of calls to mobile phones, but could hit operators' revenues. Last year, UK telecoms regulator Oftel estimated that a 3% reduction in call termination charges would save consumers GBP200 million a year, but will cost Britain's four mobile companies GBP150 million a year. The report says the proposed rules, which will be reviewed before the end of 2004, could be accompanied by separate actions against some mobile phone operators for excessive call termination charges. The Financial Times did not explain what will happen to the formal charge against KPN or whether a penalty or sanction will be imposed on the Dutch mobile operator. LETSBUYIT.COM: Deutsche Borse Delists Online Retailer ----------------------------------------------------- The Deutsche Borse AG announced last week that the trading of the shares of LetsBuyIt.com N.V. will be terminated from the "Neuer Markt" with effect on April 27, 2002. However, the company will object to this termination by filing an appeal to the Primary Markets Arbitration Panel of Deutsche Borse AG. This delisting announcement will not be enforced until the final decision will be made by the German stock exchange within the next few months. LetsBuyIt.com N.V. has filed for an injunction with the Court of Appeals in Frankfurt. The court hearing is scheduled for April 9, 2002. Even if those appeals do not succeed, the shares of the company will remain admitted to the Regulated Market of the Frankfurt Stock Exchange. =========== N O R W A Y =========== KVAERNER ASA: Notification of Director Changes ---------------------------------------------- Rufus Laycock of the Anglo-Norwegian Construction and Engineering group announced Tuesday that Larry Simpson resigned as a director of Kvaerner PLC March 22, 2002. Ron Woods has been appointed to fill the vacancy caused by this resignation. He is a member of the senior management of the Kvaerner Group (the Group of companies whose ultimate parent company is Kvaerner ASA). For further information regarding this announcement, please contact Rufus Laycock at telephone number: +44 (0)20 7339 1049; facsimile number +44 (0)20 7559 6423 or send email at : rufus.laycock@kvaerner.com. =========== P O L A N D =========== DAEWOO-FSO: Still Out of General Motors-Daewoo Korea Purchase ------------------------------------------------------------- There's still no deal that will prevent the bankruptcy of Daewoo's Polish unit, even as General Motors nears a deal with the main unit in South Korea. According to the South China Morning Post, the U.S. carmaker is not keen on including in the purchase of the mother unit the Daewoo-FSO plant in Warsaw. A new plan, however, is being hatched that allegedly interests at least five foreign car manufacturers. The scheme would involve transferring Daewoo-FSO's most valuable assets to a "New Small Company," which will be free of debt. It is hoped that the new company will be able to make a recovery. Daewoo-FSO's creditor would get stakes in the company NSC, which would be bought out as the company developed, the report says. Poles have already taken a liking to the locally assembled Daewoos marketed at competitive prices, says the report. However, due to the gloomy economic condition, Polish new car sales fell by a third last year. Daewoo-FSO took the greatest hit with sales falling by 72% last month from the previous year to just 1,808 cars, as customers feared the company would not survive the three-year warranties it was giving out on the cars, the report says. Daewoo's market share has slid from 19.8% to just 8.2% and it has been forced to sack 60% of its staff, leaving just 3,250 workers at the plant, the report says. ELEKTRIM SA: Announces MPTE Energia Unit for Liquidation -------------------------------------------------------- The Management Board of Elektrim S.A., the Warszawa-based telecoms and power conglomerate said last week that on March 22, 2002 the Extraordinary Meeting of Shareholders of the MPTE Energia S.A. (pension fund), Elektrim's subsidiary, passed a resolution on dissolving the company and opening the liquidation proceedings. Marek Tatar has been appointed the Company's liquidator. NETIA HOLDINGS: Shareholders Adjourn Meeting -------------------------------------------- Netia Holdings S.A., the debt-ridden Polish telecoms group, announced that the Extraordinary General Meeting of Shareholders of the company held on March 27, 2002 approved a one-week adjournment of the meeting until April 4, 2002 at 12:00 p.m. CET. No substantive resolutions were voted upon by the shareholders at Wednesday's meeting. According to the Troubled Company Reporter-Europe's March 14 issue, Netia has pushed through with its plan to issue new shares to finance a life-saving debt-for-equity swap with bondholders. The company said it issued 317.7 million new shares to fund the deal it made with bondholders, giving bondholders 91% of the equity after debt restructuring and the share issue. Netia's key shareholders include the Swedish group Telia and U.S. Funding group Warburg Pincus. Contact Information: Netia, Warsaw Investor Relations Anna Kuchnio, +48-22-330-2061 Media: Jolanta Ciesielska, +48-22-330-2407 or Taylor Rafferty, London Jeff Zelkowitz, +44-(0)20-7936-0400 or Taylor Rafferty, New York Andrew Saunders, 212/889-4350 =========== S W E D E N =========== ICONMEDIALAB: Notification of Annual General Meeting ---------------------------------------------------- The shareholders of Icon Medialab International AB -- http://www.iconmedialab.com-- announced Wednesday that there will be an Annual General Meeting to be held on April 25, 2002 at 9:30 a.m. at the Company's premises in Stockholm at Sergels Torg 12. Shareholders who wish to participate in the meeting shall have entered to the share ledger at VPC AB on Monday April 15, 2002, and give notice of his or her intention to attend in the meeting not later than Monday April 22, at 4:00 p.m. Notice of attendance at the meeting shall be made in writing to; Icon Medialab International AB, Att: Karolina Hjers, P.O. Box 863, SE-101 37 Stockholm, by fax +46 8 522 390 98 or by e-mail to bolagsstamma@iconmedialab.se. When giving notice of participation, the shareholder should preferably state name, personal identity number/registration number, address, telephone number, shareholdings and the number of advisors (no more than two). Shareholders who wish to be represented by a representative shall submit a written power of attorney giving authorization to a specific person together with the notice of participation. Owners with nominee-registered shares must, in order to participate at the General Meeting temporarily register the shares in his or her own name. Such shareholder must notify its nominee regarding the above-mentioned matter in due time before April 15, 2002. Proposed Agenda 1 Election of Chairman of the Meeting. 2 Preparation and approval of the voting list. 3 Approval of agenda. 4 Election of one or two persons to certify the minutes. 5 Determination of whether the meeting has been duly convened. 6 The Managing Director's report. 7 Presentation of Annual Report and Auditor's Report and the Consolidated Financial Statement and the Group Auditor's Report. 8 Resolutions regarding the following: a. the adoption of the income statement and balance sheet and the consolidated income statement and consolidated balance sheet; b. allocation of the company's result in accordance with the adopted balance sheet; c. discharge from liability for members of the Board of Directors and the Managing Directors. 9 Resolution regarding of fees for the Board of Directors. 10 Resolution regarding the number of members and deputy members of the Board of Directors. 11 Election of members and deputy members of the Board of Directors. 12 Resolution regarding the issue of stock options according the Global Share Option Plan of Icon Medialab International. 13 Resolution regarding authorisation for the board of directors to issue subordinated debentures with detachable warrants. 14 Other matters duly referred to the Meeting. 15 Closing of the meeting. Proposed Resolutions Dividends (item 8b) The Board of Directors proposes a no dividend shall be paid for the fiscal year 2001. Resolution regarding the issue of stock options according the Global Share Option Plan of Icon Medialab International (item 12) At the General Meeting in Icon Medialab International AB held on November 12, 1999 it was resolved to adopt a Global Share Option Plan (the "Option Plan") for the employees of the group, whereby the employees of the group are granted call options (so called stock options) each entitling the holder to acquire one share in the company. The exercise price for the stock options under the Option Plan shall materially correspond to the market value of the shares of the company at the time of the granting of the stock options. The stock options may be exercised earliest one year and latest seven years from the granting date and under the condition that the holder is still employed within the group. The company has granted stock options to the employees at four different occasions. Of the total amount of granted stock options, March 27, 2002, 3,229,634 options remain. To ensure the option undertakings of the company under the Option Plan a corresponding numbers of warrants have been subscribed by PIMI AB, a wholly owned subsidiary to Icon Medialab International AB. Moreover, PIMI AB has subscribed for warrants to cover administrative costs and social contributions or similar taxes that may arise by reason of the Option Plan. The objectives of the Option Plan are inter alia to create opportunities to retain and recruit competent personnel to the Group and to increase the motivation of the employees. In order to attract and to retain key employees during the great structural changes in connection to the merger with Lost Boys N.V., the Board of Directors proposes that the General Meeting approves that the company, grant no more than 18,000,000 new stock options to the executive managers and key employees under the terms and conditions of the Option Plan. Each person shall be allotted no more than 2,000,000 stock options. If all stock options are exercised, executive managers and key employees of the Group will acquire shares in the company corresponding to a dilution effect amounting to approx. 10.3% after dilution and considering the coming rights issue. Considering previously adopted incentive programmes to the employees, the aggregate dilution effect amounts to approx. 12% after dilution. Resolution regarding authorisation for the Board of Directors to issue subordinated debentures with detachable warrants (item 13) The Board of Directors proposes that the General Meeting resolves to authorize the Board of Directors to issue subordinated debentures with no more than 23,400,000 detachable warrants at one or several occasions during the period until the next Annual General Meeting. By virtue of dissapplication of the shareholders' preferential rights, wholly owned subsidiaries in the Group shall be entitled to subscribe for the shares. If the authorization is fully used and if all 23,400,000 warrants are exercised, the company's share capital will increase by SEK 1,872,000. The purpose of the disapplication of the shareholders' preferential rights is to ensure the option undertakings according to the described incentive programme under item 12 and to cover administrative costs, social security contributions and similar taxes arising in connection to the program. Miscellaneous From April 11, 2002, the complete text of the Board of Directors' proposals as set out above will be obtainable at the company's premises in Stockholm at Sergels Torg 12 on the company's website, www.iconmedialab.com and sent to the shareholders who have notified to attend the Annual General Meeting. Other shareholders who wish to receive those documents may notify the company, whereupon the documents will be sent by mail or by e-mail. LM ERICSSON: Analysts See Management Strain in New Chair's Entry ---------------------------------------------------------------- The naming of Michael Treschow as LM Ericsson's chairman last week has made some analysts doubt the stability of the firm's management at a time when it's negotiating an uphill climb. According to the Financial Times, as early as now analysts are already seeing tensions developing between Mr. Treschow and incumbent CEO Kurt Hellstrom. Many believe they won't likely have a friendly relationship outside business. "I cannot imagine Mr. Hellstrom is going to get on with Mr. Treschow. They are such different sorts of people," Credit Lyonnais analyst Susan Anthony told the paper. A self-made man who had none of the chairman's aristocratic upbringing, Mr. Hellstrom recently dropped any pretense of cordiality upon hearing Mr. Treschow's appointment. Citing an interview by Dagens Industri recently, the paper said Mr. Hellstrom accordingly described the chairman as "a non- executive", while noting that he does not have a telecoms background. He was also quoted as saying that the chairman "is not more important than other members of the board." The interview prompted Mr. Treschow to phone Mr. Hellstrom to clarify matters, the Financial Times says. Analysts believe a new round of job cuts will follow the chairman's appointment. Mr. Treschow, who earned the nickname "Mike the Knife" as chief executive of Electrolux, is expected to push for the cost-cutting measure. Last year, as part of its restructuring program, the company cut more than 22,000 jobs in a bid to save SEK20 billion a year. With European operators still reluctant to make equipment investments, a lot more heads will have to be guillotined to reach Ericsson's target of 5% operating margin this year, analysts say. At a time when the company is desperately trying to get back to black, analysts say the group is now faced with a sticky situation that only the two top men can call whichever way. And if significant disagreements emerge between Mr. Treschow and Mr. Hellstrom, it is likely to be the latter who loses out. Some analysts even believe that Mr. Hellstrom could decide to step down within the next year, the paper says. Son of a farmer, the 58-year-old Mr. Hellstrom rose from the ranks, becoming the company's head of Asian operations before his promotion to president and chief executive. He is popular within the company and admired for his selling skills, the paper says. On the other hand, Mr. Treschow, 58, enters the company by virtue of his connection. Related by marriage to the country's powerful Wallenberg family, whose holding company, Investor, is a large Ericsson shareholder, he sports an aristocratic ring on his finger and hails from the south of the country, the report says. SONERA CORPORATION: TDC Seen as Likely Member of Nordic Alliance ---------------------------------------------------------------- TDC, the Danish former incumbent, is said to be considering entry into the newly formed Telia-Sonera partnership to achieve a full pan-Nordic collaboration, says the Financial Times. Accordingly, TDC's inclusion in the alliance will create in the telecoms sector what Nordea has achieved in banking. The idea looks attractive, as Telia-Sonera is weak in the Danish market. Meanwhile, analysts interviewed by the paper say Telenor of Norway may follow the recent Telia-Sonera combination by either renewing its proposal to TDC or targeting Finland's Elisa. The likelihood of this is bolstered by the fact that SBC Communications, the US telecoms group that owns 42% of TDC, is reportedly eager to sell its stake in the company. The recent Telia-Sonera tie-up makes the group the dominant operator in the Nordic region, with about 8 million mobile subscribers, 34,000 employees and annual pro-forma sales of EUR9 billion. It will have significant positions in the Russian, Baltic and Turkish markets, the report says. ===================== S W I T Z E R L A N D ===================== SWISSAIR: U.S. Equity Fund Buys Gate Gourmet for US$800 Million --------------------------------------------------------------- Texas Pacific, a US private equity firm, is now the new owner of Swissair's Gate Gourmet, the world's second-biggest airline catering business, says Reuters. The American firm, headquartered in Fort Worth, Texas, grabbed the unit for a little less than US$800 million, according to estimates. Second only to Lufthansa's Sky Chef, the Swissair unit generated sales of CHF3.2 billion in 2001. The deal is the second foray of Texas Pacific into the troubled airline business. In the 1990s, the US$8 billion-company also bought into Continental Airlines Inc. It holds a stake in America West Holdings Corp. Although the deal still requires approval from regulatory authorities and the court-appointed administrator overseeing Swissair's affairs, Texas Pacific founding partner James Coulter is confident it will have an easy time getting the nod. Further information from Texas Pacific Group may be obtained by contacting Owen Blicksilver at telephone number +1 516 742 59 50; from Swissair Group by calling Jean-Claude Donzel at telephone number +41 1 812 01 02; or from Gate Gourmet by getting in touch with Henning Boysen at telephone number +41 1 812 30 30. =========================== U N I T E D K I N G D O M =========================== BRITISH TELECOMS: Concludes Closure of Call Centers --------------------------------------------------- BT Group, the London-based telecommunications company under restructuring, announced Wednesday announced the shape of its next-generation contact center operation following an extensive review of its call centers and consultation with the unions. BT is to spend GBP100 million on developing a network of 30 next- generation multi-function contact centers that will better meet the changing demands of its customers. As a result of an extensive review of call centers that handle the greatest volume of contacts and a month-long consultation with the unions, BT has decided to: - create a network of 30 next-generation contact centers, on which it will spend GBP100 million over the next two years; - close 53 of its existing call centers during the next two years,with the majority of employees relocating to next- generation sites; - keep open eight existing sites for up to four years before they close to allow the transition to be managed more smoothly for relatively isolated centers; - retain a further six sites which will be used for other specialist functions, not directly related to next- generation work. Patricia Vaz, BT Retail's Managing Director of Customer Service, said: "We do not underestimate the impact of this transformation project and virtually everyone in our existing call center operation will be affected in one way or another. However, we are totally committed to manage these changes sensitively and professionally, and in line with specific principles agreed with the unions. "We value our people very highly and will be giving them all the support we can. We are committed to finding suitable alternative roles for everyone who wants to remain in BT. "Even though this will mean upheaval for many of our people, it is a step we cannot not shy away from if we are to ensure BT's call center operations are kept in-house and are given the capabilities to achieve the twin goals of industry-best customer service and increased efficiency. "We are absolutely committed to offering the best possible customer experience and ensuring we develop a call center operation that will be truly world-class and set the standard for others to follow in Europe. This project will deliver just that - using our own people and properly-equipped centers. Although just over 50% of existing call center sites will close within two years, the proportional impact on job numbers will be significantly less. Vaz said: "In close consultation with the unions, we are exploring every possible avenue to ensure that most people can be relocated to next-generation sites which are within travelling distance. Where that is not possible, we are looking at alternative options across BT Group, including non-call centre work." The overall net effect on BT and agency jobs by the end of the two-year project is expected to be a reduction of around 2,200 full-time equivalent posts. This would take the number of full- time equivalent posts in BT Retail's contact centre operation from 15,800 to around 13,600. There will be no compulsory redundancy. The closures will be implemented in seven, overlapping phases over the two years, with six months notice being given in all cases. The first closures are expected to happen in October. Wherever possible, closure sites where further work is needed to identify relocation or redeployment options will be left open until the latter part of the two-year program. The new multi-function centers will cover a range of services for residential and small business customers. This will provide greater flexibility and robust processes to ensure customers get a consistently high quality of service, irrespective of which center they contact. They will also give the customer a greater choice of how to interact with BT. Carol Borghesi, Director of the next-generation contact center project said: "We will be spending GBP100 million to ensure our people get the best training, have the best working environment and can exploit cutting-edge technology to deliver the kind of services our customers want. "The quality of our call centers is critical to achieving our goal of being the UK's customer service champion within two years. Creating a smaller network of leading-edge multi-function contactcall centers is key to making dramatic improvements to the quality of customer service. "Every year about 10% of people working in our contact centers leave by their own choice to take up positions elsewhere in company or leave BT altogether. This natural wastage, over the two-year implementation period, gives us scope and flexibility and will help with redeployment. "In parallel with these moves, we are already implementing a raft of other initiatives to improve the standard of our service to the customer. Over the past 18 months, we have made much progress in improving the standard of service offered by our call centers. These include a 35% reduction in repeat contacts, a fall of 50% in the number of abandoned calls and a 10% improvement in the number of calls answered promptly. But we have now reached a watershed, and, to achieve any further dramatic improvement, we have to re-appraise completely the way in which we organize and run our call center operations. "Everything we are currently doing and planning is geared to meeting the changing demands of the customer, while also ensuring that we maintain our commitment to our people in this period of significant transition." BT Retail, BT Ignite, BT Wholesale, BTopenworld, BT Affinitis and Btexact Technologies are the businesses that make up the BT Group. It is the U.K.'s leading communications service provider and the prime channel to market for the other businesses in the Group. The group, which employs around 50,000 employees had a turnover of GBP11.8 billion in the last full financial year. Further information may be obtained from Malcolm Williams, PR Manager of BT Retail at telephone number 01442 294 306; Edward Townsend of Le Fevre Communications at mobile phone number 07887 983254; or Claire Dumican of Le Fevre Communications at mobile phone number 07712 821150. For inquiries regarding this announcement, please contact BT Group newsroom on its 24-hour number: 020 7356 5369. From outside the U.K., dial +44 20 7356 5369. BRITISH TELECOMS: Announces Adjustment of Director's Interests -------------------------------------------------------------- BT Group plc advised Wednesday that the Royal Bank of Scotland Trust Company (Jersey) Limited (the Trustee), as trustee of a discretionary employee trust established by British Telecommunications plc (BT)) (the Trust), transferred 375,617 ordinary shares in BT Group plc (BT Group Shares) and 375,617 ordinary shares in mmO2 plc (mmO2 Shares) to a total of 395 beneficiaries of the Trust in satisfaction of options held by them under the BT Employee Sharesave Scheme 1994. Following this transfer, the Trustee holds 45,286,908 BT Group Shares, as well as 45,286,908 mmO2 Shares. The Executive Directors of BT Group plc (Ben Verwaayen, Sir Christopher Bland, Philip Hampton, Andy Green, Pierre Danon and Paul Reynolds) are for the purposes of the companies Act 1985 treated as interested in all of the BT Group Shares held in the Trust. Despite this technical interest in all of the BT Group Shares, each Executive Director will only be entitled to receive from the Trustee the number of BT Group Shares to which he is entitled on the exercise of options held by him under the BT Employee Sharesave Scheme 1994. Such options are only exercisable until May 19, 2002. COLT TELECOM: Initiates Search for Successor to CFO --------------------------------------------------- COLT Telecom Group plc had initiated a search Wednesday for a successor to Chief Financial Officer Lawrence M. Ingeneri, who has informed the Board of his intention to step down as a director and CFO. The company said it had begun the search process for a successor and that both internal and external candidates would be considered. A detailed timetable has not been finalized. Larry Ingeneri, COLT Chief Financial Officer, said: "I have been CFO of COLT for nearly six years and have accomplished what I set out to accomplish. The infrastructure build phase of our business plan is complete, our financial position is secure and now is the right time for me to move on. I've asked the Board to begin the search process now to ensure that we have ample time for a successor to be chosen and an orderly transition to be completed." COLT Chairman Jim Curvey said: "Larry Ingeneri has made an extraordinary contribution to COLT's success over the years. He guided COLT through its Initial Public Offering in 1996 and through his prudent stewardship of our finances has created a company with one of the strongest balance sheets in this industry. We all respect Larry's decision and wish him well." COLT President and CEO Peter Manning added: "It has been a privilege to work alongside Larry over the past few years and I look forward to continuing to work with him while we look for a successor. His contribution to COLT's success has been enormous. He has been both a driving force and a guiding light. I take this opportunity to say thank you to one of the most able and effective managers I have known." Mr. Ingeneri was appointed Chief Financial Officer in July 1996. Prior to joining COLT he was Senior Vice President Finance and CFO of Ascom Timeplex Inc. From 1992 until 1995, he was a Vice President, and from 1988 to 1992 an Associate, in the Corporate Finance Department of Salomon Brothers Inc. From 1980 until 1986 he served as an officer in the United States Navy. He was appointed to the Board of Directors of COLT on June 19, 2001. COLT Telecom Group plc is communication services provider with high bandwidth local networks in 32 European cities in thirteen countries supported by a series of Internet Solution Centres and high capacity fiber-optic long distance network. During the year ended December 2001 turnover was GBP905.7 million and it carried over 20 billion switched minutes of voice and data traffic. COLT Telecom Group plc is listed on the London Stock Exchange and Nasdaq. Information about COLT and its products and services can be found on the web at www.colt.net For further information, contact: John Doherty Director Investor Relations email: jdoherty@colt.net telephone number +44 20 7390 3681 CORDIANT COMMUNICATIONS: Notification of Shareholder's Interest --------------------------------------------------------------- Cordiant Communications Group plc, advertising and communications holding company headquartered in London, declares that CGNU PLC has a total of 36,349,479 shares in the company or an equivalent of 9.06% of the total shares in issue. For inquiries regarding this announcement, please contact Rebecca Taylor at telephone number 0207 479 0519. ENERGIS PLC: Notification of Shareholders' Interests ---------------------------------------------------- Energis, London-based telecoms and Internet service provider, has advised Wednesday that HSBC Investment Bank plc holds an interest in 52,294,944 ordinary shares in Energis representing 3.01% of its issued ordinary share capital. HSBC Investment Bank Holdings plc as HSBC Investment Bank plc's parent and HSBC Holdings plc as the ultimate parent company are also interested in the abovementioned shares. Standard & Poor's has lowered the credit rating of cash-strapped Internet traffic carrier Energis Plc to "D" from "C" after it Defaulted interest payment GBP300 on bonds due 2010. The troubled firm plans to sell its unprofitable European ventures and fire 400 workers. The company has admitted to be at risk of breaching a 725 million-pound credit line. Bondholders have appointed Bingham Dana LLP and Talbot Hughes LLP as legal and financial advisers. Aberdeen Asset Management Plc, Morley Fund Management Ltd., Merrill Lynch & Co. Inc. and M&G Group Plc are among the biggest holders of Energis bonds. ITV DIGITAL: Opts for Administration to Avoid Liquidation --------------------------------------------------------- After failing to come to terms with the Football League, ITV Digital finally made its way to the court and put itself under administration last week. According to The Times, Mr. Justice Etherton granted the troubled channel six months to renegotiate its GBP315 million broadcasting deal with the league, minus the threat of liquidation. Gabriel Moss QC successfully swayed the High Court to grant the protection by pointing out that denying the petition would result in liquidation or sale to a new party that would not necessarily provide the same service. In explaining the petition for administration, a company spokeswoman said: "The board of ITV Digital has a duty to declare if the business is viable and as of today ITV Digital's financial position is untenable. Administration means the shareholders are continuing to fund the business while the restructuring work is completed, they have extended the lifeline." For days, the cash-strapped digital channel, co-owned by Granada and Carlton, sought a GBP130 million cut spread over two years on the broadcasting rights to save on operating costs. But the football chiefs who signed the contract in June 2000 refused to budge. It is expected that the administration petition has significantly upped the company's bargaining power, the report says. The protection spans six months, but the company is scheduled to appear in Court on April 15 to announce the results of the negotiations with the league. In the meantime, the company says parent company Granada and Carlton will inject more cash into the losing venture to ensure subscribers continue to receive TV programs through their set-top boxes. The report says accounting firm Deloitte & Touche, brought in last month to help restructure ITV Digital, will likely be the administrator of the company. The financially challenged digital TV operator has already axed 600 staff as part of its cost-cutting drive, leaving it with 1,800 employees. The report says Granada and Carlton have pumped GBP800 million into ITV Digital, which was seen as a flagship for digital television when launched in 1998 as ONDigital. Both companies have been hit hard by the severe downturn in the advertising industry over the past year, squeezing the level of available funding. The paper says the company lost an estimated GBP329 million in its most recent financial year despite subscriber numbers rising to 1.26 million by the end of December. ITV DIGITAL: Administration Petition Pleases Shareholders --------------------------------------------------------- Shareholders of Carlton Communications and Granada couldn't be happier over the decision to put the company under administration, says the Financial Times. Shares of Carlton gained 5 3/4p to 272p last week, while Granada ended higher by 4p at 142 1/2p after the High Court granted the petition for creditor protection. "The fact that Carlton and Granada will no longer be bleeding cash on ITV is frankly reassuring," a leading shareholder told paper shortly after the order was released. According to the paper, the decision to seek protection did not surprise investors and shareholders. In fact, it even disappointed some who believe the move should had been taken much earlier. But despite the protection, it is not yet clear what will become of the losing company, a joint venture of Carlton and Granada. The company is set to announce on April 5 the results of its negotiations with the Football League over a cut on its broadcasting rights. The report says the company also needs to talk with bondholders and come up with a viable plan, if they intend to keep the digital TV on air. According to estimates, ITV Digital faces GBP500 million in expenses should it decide to pull the plug. This money represents ITV's expected liabilities for abandoning contracts, the expenses for shutting its call centers and the cost of compensating subscribers. MARCONI PLC: Bond-for-share Swap Inevitable as Options Dwindle -------------------------------------------------------------- A debt-for-equity swap is the only remaining viable solution available to Marconi Plc, as it continues to deteriorate, say analysts interviewed by Bloomberg. According to the experts, such a swap would erase some GBP1.8 billion of debts and free money for other pressing expenses that will buy it a fighting chance to weather the storm. "The sooner Marconi recognizes that a restructuring is required, the better," says Anthony Robertson, in an interview with Bloomberg. Mr. Robertson, who helps run more than EUR150 million ($131 million) of high-yield bonds at New Flag Asset Management, says "pretty much all the bonds will have to be changed to equity." Just how heavy are the bonds of Marconi? According to Bloomberg, as of March 16 Marconi owes EUR92 million in bond interest. About EUR28.2 million is due on its 5.625 percent bond maturing in 2005, and EUR63.8 million must be paid on the 6.375 percent bond maturing in 2010. "The money would stay on the balance sheet for general corporate purposes, and a restructure frees up more cash as the bond interest goes," Mr. Robertson said in pointing out the benefits of a swap. Marconi's woes began when it exited its defense business three years ago and spent more than US$8 billion to focus on supplying communications gear. The shift turned out to be ill-advised, as the demand for communications equipment slumped thereafter. The move pushed debt as high as GBP4 billion, including GBP2.2 billion owed to banks. The heavy debt load forced the company last year to sell about EUR1.52 billion of assets to help cut debt, which stood at GBP3.5 billion at the end of last year. In addition, the 116-year-old company, formerly called General Electric Co. Plc, is now planning to cut 13,000 jobs to slash its workforce by a third, Bloomberg says. Last week, the company cancelled EUR3 billion credit line arranged with Barclays Plc, HSBC Holdings Plc and more than 20 other lenders. It also agreed to cancel the EUR930 million unused credit from a EUR4.5 billion loan gained in 1998, also arranged by Barclays and HSBC. Meanwhile, the EUR3.57 billion it already drew must be repaid by March 2003, although the banks can call in the loan at any time, the report says. NTL INCORPORATED: Announces 4Q and Full Year 2001 Results --------------------------------------------------------- NTL Incorporated, the debt-laden telecommunications company of the U.K., announced Wednesday the release of the company's results for the three months and December 31, 2001 Results. The group outlined the highlights of its fourth quarter postings as follows: - Exceeded 2001 digital, broadband and EBITDA targets - UK Broadband market leadership achieved with over 180,000 customers today - Q4 ARPU of GBP40.69 per month (GBP488.28 on an annualized basis) - Recapitalization discussions continuing - Exceptional 2001 charges, principally in Q4, of approximately GBP8.0 billion (US$11.6 billion) associated primarily with the impairment of goodwill, the write-down of certain other assets and cost rationalization Financial Highlights (In GBP millions) Annual Quarterly Results Results REVENUE 2001 2000 Q4- Q4- 2001 2000 Home 1,396 970 356 321 Business 582 464 152 131 Broadcast 239 210 63 56 TV Programming 28 10 13 4 NTL Europe 232 94 74 325 Total Revenues 2,570 1,886 678 586 EBITDA* 492 229 159 65 EBITDA margin %* 19.1% 12.1% 23.5% 11.1% * The components of EBITDA as defined by the Company are set forth in the results summarized under the heading "Financial Results for the three months ended 31 December 2001". Commenting on the results, Barclay Knapp, President and Chief Executive of NTL, said: "I am pleased to report that in 2001 we exceeded our aggressive growth targets for broadband and digital subscribers as well our EBITDA guidance. Achieving our growth milestones during a challenging overall environment for the industry, while undergoing substantial organizational change, speaks well of the quality of our operating businesses and the commitment of our associates. In addition to the aggressive growth targets we set for ourselves, we embarked on a full operating review in 2001 which was designed to accelerate the integration of previous acquisitions and drive inefficiency out of the business. The result has been significant cost and operational benefits as evidenced by the growth in EBITDA margin at the operating businesses. This process has so far yielded material improvements in our network operating performance, a radical reduction in operating costs and a focus on further improving customer service. We have also been able to roll out new and improved offers to our customer base, such as our broadband offer. With over 180,000 customers, we are currently the clear UK broadband market leader. Notwithstanding the huge progress we have made in the management and operation of our business, last year was one of the most challenging years in our Company's history. The declining value of assets in the sector is reflected in the writedown we announced today, primarily of goodwill. Our major focus now is fixing our balance sheet, which is encumbered with a high level of debt relative to our cash flow. As we announced in January, we are engaged in a recapitalization process to reduce the Company's debt. Our recapitalization process is underway and making progress. We are in the midst of a constructive dialogue with our bondholders, bank group and potential investors. Operationally this is a strong business. The board and management are taking every possible step to preserve the value of the enterprise to our key constituents." Recapitalization Disclosure "We announced on January 31, 2002 that we had appointed Credit Suisse First Boston, JP Morgan and Morgan Stanley to advise on strategic and recapitalization alternatives to strengthen our balance sheet, reduce debt and put an appropriate capital structure in place for our business. We have commenced and are continuing discussions with an unofficial committee representing the holders of approximately one half of the principal amount of our outstanding senior and subordinated notes and steering committees representing the lenders under each of our credit facilities. There are various uncertainties with respect to this process, such as our ability to maintain adequate liquidity to complete the process and our ability to obtain the agreement of our creditors. Furthermore, we are engaged in discussions with strategic and other investors with regard to a possible infusion of capital. There can be no assurance that we will successfully complete a recapitalization or financing in a timely manner in order to sustain the Company's operations. In addition, as we expected, our auditors have indicated that the uncertainty inherent in not having reached definitive agreement with regard to these matters will necessitate the inclusion of a going concern explanatory paragraph in their audit report for the year ended December 31, 2001." For complete details of the company's third quarter and December 31, 2001 results, please check the company's website at: http://www.ntl.com/. *********** 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, Larri-Nil Veloso 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 US$575 per half-year, delivered via e-mail. 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