/raid1/www/Hosts/bankrupt/TCREUR_Public/020403.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, April 3, 2002, Vol. 3, No. 65


                            Headlines

* B E L G I U M *

SN BRUSSELS: Confident to Reach 2002 Goals in Business Plan

* G E R M A N Y *

COMMERZBANK: Decision on Jupiter Sale Expected in Six Days
CONSORS AG: Societe Generale Gives Way to Unidentified U.S. Firm
GAUSS GROUP: Reveals Financial Statements 2001
KICHRGRUPPE: Axel to Weigh Between KirchMedia and ProSiebenSat.1
KIRCHGRUPPE: Investors, Banks to Restart Stalled Talks This Week

* I R E L A N D *

ELAN CORPORATION: Woes Could Reach Crisis Proportion Next Year

* P O L A N D *

ELEKTRIM SA: New Bidder for Elektrim Telekomunikacja Favored

* R U S S I A *

TV6: Broadcast License Goes to Media-Socium, Ex-staff Group

* S P A I N *

TERRA LYCOS: Needs to Review Earnings Target on Bertelsmann Deal

* S W E D E N *

ADERA AB: Sale of Subsidiary Approved at EGM
ADERA AB: Changes on Adera's Board of Directors
BOLIDEN AB: Notice of AGM, Announcement of Agenda
LM ERICSSON: Denies Drafting New Efficiency, Lay-off Program

* S W I T Z E R L A N D *

ABB LTD: Negotiates US$ 3BB Facility With Bankers Today
SULZER MEDICA: Proposes Rene Braginsky's Directorship on Board
SWISSAIR GROUP: Returns to Sky Via New Flag Carrier "Swiss"
SWISSAIR GROUP: EasyJet Threatens to Scuttle BA-Swiss Alliance

* U N I T E D   K I N G D O M *

BRITISH TELECOM: Internet Arm Calls AOL Exemption Unfair
BRITISH TELECOM: Concludes Unwinding of Concert
CENES PHARMACEUTICALS: Announces 2001 Preliminary Results
CENES PHARMACEUTICALS: Will Finance 2002 Operations by Itself
ENRON CORPORATION: Absence of Guarantee Spoils U.K. Asset Sale
CLAIMS DIRECT: 2001 Losses Top Projections Due to Poor 2nd Half
ITV DIGITAL: Wales Worries Impending 900-job Loss in Call Center
ITV DIGITAL: Expects Football League to Reconsider Contract Claim
NTL INCORPORATED: Wittingly Cancels US$ 100MM Interest Payout
RAILTRACK PLC: Will Ask Gov't to Relax Rules on Property Ventures


=============
B E L G I U M
=============


SN BRUSSELS: Confident to Reach 2002 Goals in Business Plan
-----------------------------------------------------------

New Belgian national flag carrier SN Brussels Airlines believes
it can achieve growth projections this year outlined in its
business plan, says AFX News.

The company recently disclosed increasing seat load factors that
reached peaks of more than 60% on several days in March, implying
that it is carrying over 10,000 passengers daily.

"The company is quite confident that it can reach profitability
in the last quarter of the year, as planned in its business
plan," the company said in a statement.

SN Brussels Airlines is what emerged from the ashes of Sabena and
low-cost subsidiary DAT.


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


COMMERZBANK: Decision on Jupiter Sale Expected in Six Days
----------------------------------------------------------

Speculations regarding the sale of Jupiter refuse to die down, as
the scheduled completion of Commerzbank's strategic review on its
asset management operations nears.

According to The Times, it is very likely that the UK asset
management business will be sold with a price tag of US$1
billion.  The review will be announced on April 9.

There are currently no known bidders.  The report says it is
unlikely that former chairman John Duffield, who now heads New
Star Asset Management, will bid for his old company.

Commerzbank bought the unit in 1995 for GBP660 million.


CONSORS AG: Societe Generale Gives Way to Unidentified U.S. Firm
----------------------------------------------------------------

Societe Generale, which earlier submitted a non-binding takeover
proposal for Consors Discount-Broker AG, has abandoned the offer
saying a US company is expected to offer a far better deal.

The French banking giant did not identify the U.S. firm, which is
allegedly willing to pay a premium in return for the opportunity
to gain a foothold in the European market.

CEO Daniel Bouton told Journal de Finance that its offer will be
"clearly below that of rival bidders."

France's biggest bank BNP Paribas SA, on the other hand, have
finally admitted that it had made a bid for Consors, though it
declined to give details on how much it had offered, the
Handelsblatt said.

Accordingly, Consors would complement BNP's discount broker
Cortal, which is the French market leader ahead of Societe
Generale's Fimatex.

The report says intense pressure is currently pushing institutes
operating in Europe's converging direct banking and online
brokerage markets to consolidate.  The outcome of the bidding for
Consors could decide which of them will be a Europe-wide player
on the online brokerage market.

Consors, owned by troubled Schmidt-Bank, is valued EUR677.5
million, the report the German daily says.


GAUSS GROUP: Reveals Financial Statements 2001
----------------------------------------------

Gauss Interprise AG and the Gauss Group, Harburg-based Internet
consultancy services group, published their audited Financial
Statements for 2001 yesterday.

After the sale of the consulting division in December
(discontinued operations), the Financial Statements of the Gauss
Group mainly include the figures of the continued operation
software products; the figures for 2000 have been adjusted
accordingly.  

(Amounts in million EUR, Comparative figures 2000 in brackets)
The Gauss Group, which reports according to US GAAP, was able to
considerably increase revenues generated in the software product
business to a 72% increase.

License sales accounted 49% of total revenues. The US accounted
for 57% of total revenues, Germany for 24%, and  rest of Europe
19%. The gross result after directly attributable manufacturing
costs amounted to 22.3, which corresponds to a gross margin of
68%.

The operating loss (EBITDA) amounted to 25.3 (-18.2).  The net
loss of the Group totaled 39.3 (-116.9), which resulted in a loss
per share of 1.11 EUR ( - 3.90 EUR). At the end of 2001, the
Group had shareholders' equity of 20.0 or 53% of the balance
sheet total; liquid funds amounted to 2.0.

The number of employees declined to 280 per end of 2001 (492 at
the end of 2000).

The break-even measures taken enabled the Gauss Group to
considerably reduce its  EBITDA loss in the fourth quarter 2001
against the previous periods to 2.3, of which 1.5 are non-
recurring restructuring costs.

Based on the lasting effects of  these cost reductions, the
Executive Board expects slightly increasing revenues and an
operating profit (EBITDA) for the entire year 2002.

The financial statements of Gauss Interprise AG and the Gauss
Group have been published at http://www.gaussvip.com.

Gauss Interprise AG, InvestorRelations/CorporateCommunications,
Weidestrabe 120a, 22083 Hamburg, Phone: +49-40-3250-1100, Fax:
+49-40-3250-191589, e-mail: investor@gaussvip.com.


KICHRGRUPPE: Axel to Weigh Between KirchMedia and ProSiebenSat.1
----------------------------------------------------------------

Players in the KirchGruppe rescue efforts are reportedly offering
Axel Springer Verlag AG two choices in return for calling off a
EUR767 million "put option": Get a stake in KirchMedia or
increase control in ProSiebenSat.1.

Citing an unnamed source, Dow Jones Newswires says this is where
the talks are heading in relation to Axel's exercise of the
option in January.

"All parties, including the banks and investors, have an interest
in resolving this open cash call. There can't be a restructuring
of KirchMedia with this claim hanging," the source said.

It is not clear how much stake Axel could get in the profitable
core media rights business if it chooses the first option.  Banks
and other investors, however, are amenable to giving Axel greater
control over ProSiebenSat.1, the report says.

The report says the German publisher of best-selling newspaper
Bild is still weighing the options.


KIRCHGRUPPE: Investors, Banks to Restart Stalled Talks This Week
----------------------------------------------------------------

Negotiations on KirchGruppe's rescue have turned into a dead end
and would need to be re-started this week, according to reliable
sources of Bloomberg.

The paper said the salvage efforts have abruptly stalled just as
speculations and various accounts on the terms of the rescue
package began pouring in.

The negotiations, however, is expected to take a more pressing
pace once re-started, as the company needs to raise US$1 billion
cash this month to pay back loans and buy out investors.

The company also needs as much as US$3 billion in October to pay
back loans and to buy out Murdoch's British Sky Broadcasting
Group Plc, which has an option to sell a 22 percent stake in the
pay-television unit for about EUR1.7 billion in cash to Kirch,
says the report.

The report did not state any reason for the sudden end of the
talks.  However, it was widely rumored last week that the "poker
game" between the banks and other Kirch investors had started,
with the latter pressuring the banks to forget their cash claims
and instead take a stake in the media empire.

Bayerische Landesbank Girozentrale, Germany's second-largest
state-owned bank, has EUR1.9 billion in loans outstanding.
Dresdner Bank AG has at least EUR460 million in Kirch loans,
while HVB Group, the Germany's second-largest bank, said it has
EUR450 million in loans to two Kirch units, the report says.

Analysts, however, believe that an insolvency petition is still
far-fetched, if the banks would have their way, as they are
expected to avoid a second debacle after Philipp Holzmann.

"The banks have a lot to digest at the moment. Another insolvency
case is the last thing they need," Merck, Finck & Co. analyst
Alexander Kachler told Bloomberg in an interview.


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


ELAN CORPORATION: Woes Could Reach Crisis Proportion Next Year
--------------------------------------------------------------

Pharmaceutical firm Elan Corporation faces a severe cash crunch
next year as its stocks and bonds continue to spiral down, the
Irish Independent said yesterday.

According to the paper, this early the company needs to start
looking for US$1 billion in preparation for an imminent exercise
of a "poison put" option by investors next year.

The paper says the odds are not very encouraging, since all signs
point to an early cash call.  What compounds matters is the
worsening performance of its stocks and bonds in the market.

The report says even if the present value of the stocks double,
it would still be unprofitable for bondholders to swap their
bonds for common stocks; hence, redemption is most likely.

"But Elan's bonds have already sunk to junk status, so getting
the long-term funds to repay the bondholders could more than
double its interest charge at a time when earnings are already
under pressure," the paper says.

Issue at 52.5 cents in the dollar with a roll-up of interest of
3pc per annum, redeeming them all at US$61.66 each next year will
cost Elan approximately US$1 billion, the report says.
  
The paper says investors can call on the company to repay them by
December 2003.


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


ELEKTRIM SA: New Bidder for Elektrim Telekomunikacja Favored
------------------------------------------------------------

A joint bid by Poland's BRE Bank SA and Netherlands-based
retailer Eastbridge could end up snatching Elektrim's 49% stake
in Elektrim Telekomunikacja, sources told Dow Jones Newswires
recently.

The EUR400 million combined offer of the two firms appears to be
favored by the ailing Elektrim, which allegedly wants a quick
settlement with creditors on a EUR480 million convertible bond.  
The company has been in default of this obligation since mid-
December, the report says.

"There's hope the telecom deal will be sealed by early next
week," one source close to the BRE-Eastbridge consortium told the
newswire.

The offer is much lower than the EUR900 million reportedly being
dangled by another consortium led by Citigroup. Both groups want
to take a piece of Elektrim Telekomunikacja, which controls 51%
of Eastern Europe's largest mobile telephone operator Polska
Telefonia Cyfrowa.

The deal, however, could be scuttled by Elektrim shareholders,
who could install new supervisory and management boards opposed
to the transaction at a general meeting set for April 10, the
report says.

Accordingly, much will depend now on whether BRE can leverage its
13.4% stake in Elektrim, along with about 10% held by close
allies and a possible alliance with Elektrim's second-largest
shareholder Vivendi, into a working majority to back its plan for
restructuring the company.

In addition, the nature of the BRE-Eastbridge offer could also
spell complications, as the bid isn't wholly in cash.  Sources
told the newswire that Elektrim would also be paid using other
financial instruments, including promissory notes or bonds issued
by a special-purpose company formed by BRE and Eastbridge.

The newswire projects an additional bond issue or bank loan to
cover the balance of Elektrim's estimated EUR600 million in
current liabilities.

But if things work out fine, the plan will ultimately lead to the
consolidation of the Elektrim Telekomunikacja's stakes under the
special-purpose company, holding direct majority control of
mobile carrier PTC.

No less than BRE President Wojciech Kostrzewa confirmed last week
that the telecom assets would be pooled in a "single entity" for
resale to a final buyer within two or three years, the report
says.

The most likely candidate would be Deutsche Telekom AG, whose
mobile unit DeTeMobil already controls 49% of PTC.


===========
R U S S I A
===========


TV6: Broadcast License Goes to Media-Socium, Ex-staff Group
-----------------------------------------------------------

The broadcasting license of Russia's sixth television channel was
awarded to non-commercial partnership Media-Socium, Itar-Tass
reported late last week.

According to the report, the Yevgeny Kiselev-led team composed of
former TV-6 channel journalists was also incorporated with the
winning consortium, the report added.

The Moscow Arbitration Court ruled to liquidate the TV firm on
September 27.


=========
S P A I N
=========


TERRA LYCOS: Needs to Review Earnings Target on Bertelsmann Deal
----------------------------------------------------------------

Internet portal Terra Lycos would need to modify its projected
revenues for the next five years after Bertelsmann AG announced
recently that it is cutting back advertising expenses.

Bertelsmann accounts for one-third of the company's core media
revenues.  The two companies inked a US$1 billion advertising
contract in May 2000.

Under the terms of the deal, Bertelsmann agreed to spend US$1
billion over five years on "advertising, placement and
integration services from Terra Lycos", the Financial Times says.

However, the first part of US$325 million was to be spent before
October 2002, while the remaining spending is optional, the
report says.

Bertelsmann was recently quoted by the paper as saying: "We will
decide over the next months if and for which amount we will
continue after October 2002. It will definitely be much less than
the [expected] US$675 million."


===========
S W E D E N
===========


ADERA AB: Sale of Subsidiary Approved at EGM
--------------------------------------------

The extraordinary general meeting of Adera AB, held on March 28,
2002, approved the sale of all the shares in the subsidiary Adera
Kommunikation AB, the last remaining marketing communications
business in the Group.

This transaction is expected to generate a total liquidity
increase for the parent company of SEK6 million, but also a
capital loss of approx. SEK2 million.  

After the sale, the total number of employees in the Group will  
be just under 100.  

For further information, please contact Torbjorn Lindh, President
and CEO; Phone: +46 (0)709-27 30 85; or Nils-Ove Andersson, Vice
President Phone: +46 (0)70-30 36 733.


ADERA AB: Changes on Adera's Board of Directors
-----------------------------------------------

Following the sale of Adera Kommunikation AB, Adera is now a
dedicated IT and business development company. As a consequence
of this, Rolf Jansson and Jean-Michel Deligny resigned on March
28, 2002, from Adera's board of directors.

Rolf Jansson, the founder of Adera, will continue as working
chairman of the board at Adera Kommunikation AB.

Jean-Michel Deligny was elected as a board member in October,
2000, following Adera's acquisition of the marketing
communications company Nucleus Ltd, which was sold at the end of
last year.


BOLIDEN AB: Notice of AGM, Announcement of Agenda
-------------------------------------------------

The Board of Boliden The shareholders in Boliden AB are convened
to attend the Annual General Meeting to be held at the Expolaris
Kongresscentre, Kanalgatan 73 - 75, Skelleftea, Sweden, on
Monday, April 29, 2002 at 3 p.m.

Registration of shareholders will start at 1.30 p.m. and coffee
will be served. Shareholders are offered the opportunity to
attend a guided tour of the Ronnskar Smelter. Busses will leave
Expolaris at 11.30 a.m. Shareholders who would like to
participate in the guided tour shall give notice hereof in
connection with the notification of attendance.

Shareholders who wish to attend the Annual General Meeting shall
give notice hereof no later than Tuesday, April 23, 2002, at 4
p.m., to the company under address: Boliden AB, Legal Affairs,
Box 5001, SE-194 05 Upplands Vasby. Notice may also be given by
tel. +46 8 507 126 16 weekdays between 9 a.m. and 4 p.m., by
telefax +46 8 507 126 30 or via Boliden's web site
www.boliden.se.

When giving notice of attendance please state your name, personal
or registration number, address, telephone number and attending
assistants. Shareholders represented by proxy should issue a
power of attorney, which should be sent to the company at the
address above.

Shareholders who wish to attend the Meeting must be entered in
the register of shareholders kept by the Swedish Securities
Register Centre, VPC AB on April 19, 2002.

Shareholders whose shares are registered in the name of a nominee
must temporarily be entered into the register kept by VPC in
their own name in order to be entitled to participate in the
Meeting. Request for such re-registration must be submitted to
the nominee in due time before April 19, 2002.

In order to facilitate the registration at the Meeting, powers of
attorney, certificates of registration and other documents of
authority should be sent to the company at the address above in
due time before the Meeting. Notice of attendance will be
confirmed by an admission card, which should be shown at the
registration at the meeting.

The following items will be dealt with at the Meeting:
1. Election of the chairman of the Meeting.
2. Preparation and approval of the list of voters.
3. Election of two persons to approve the minutes of the Meeting.
4. Determination of whether the Meeting has been duly convened.
5. Approval of the agenda for the Meeting.
6. Presentation of the Annual Report, the Auditor's Report and      
   the Consolidated Accounts and the Auditor's Report on the  
   Consolidated Accounts
7. The President's speech
8. Approvals:
a) The Profit and Loss Statement and the Balance Sheet, the
   Consolidated Profit and Loss Statement and the Consolidated
   Balance Sheet for the Group
b) Allocation of the loss in accordance with the Balance Sheet
c) To discharge the members of the board and the president from  
   liability
9. Decision regarding the number of members and deputy members of
   the Board.
10. Determination of the remuneration payable to the Board of
    Directors
11. Election of Board members
12. Determination of remuneration payable to the auditors.
13. Closing

Allocation of the loss (Item 8 b)
The Board of Directors proposes that no dividend be paid for year
2001.

Remuneration to the Board of Directors (Item 10) and the Auditors
(Item 12) Shareholders who represent more than 50% of the total
number of votes of the company have proposed that the
remuneration to the Board of Directors shall be SEK 1.575.000, to
be distributed by the Board amongst its members.

The remuneration to the Auditors is proposed to be paid on
account. It is noted that the company's auditors are elected
until the end of the Annual General Meeting in year 2005.

Election of Members to the Board of Directors (Item 11)
Shareholders who represent more than 50% of the total number of
votes in the company have proposed to re-elect Messrs. Carl
Bennet, Goran Collert, Jan Johansson, Bengt Lofkvist, Kjell
Nilsson and Anders Sundstrom and to elect Mr. Sverker Martin-Lof.


LM ERICSSON: Denies Drafting New Efficiency, Lay-off Program
------------------------------------------------------------

There is no truth to the existence of a "new efficiency program"
that outlines a 25,000 lay-off, clarified LM Ericsson Tuesday,
denying a FinansVision report that bared the plan.

"There are no grounds for the information printed in Swedish
press that speculates about a new efficiency program leading to
25,000 redundancies at Ericsson," the company said in a
statement.

Meanwhile, according to AFX News, Ericsson shares fell yesterday
morning as ABN Amro and Nomura International reiterated their
"sell" recommendations, after the company's AGM held Monday
failed to convince analysts that it can meet its profit-targets.

"We can not yet foresee a turnaround. For Ericsson the arduous
task of adapting to the situation continues. At the same time, we
are safeguarding our leading position and achieving new market
successes," CEO Kurt Hellstroem was quoted as saying at the AGM.


=====================
S W I T Z E R L A N D
=====================


ABB LTD: Negotiates US$ 3BB Facility With Bankers Today
-------------------------------------------------------

Heavily indebted Swiss-Swedish engineering firm ABB Ltd. could
succumb to a financial crisis today if it fails to convince banks
to keep a US$3 billion credit facility available.

According to the Financial Times, the outcome of the company's
meeting with its bankers, which established the emergency line in
December, could impact greatly ABB's short-term financing needs.

The meeting was supposed to take place last week, shortly after
Moody's downgraded the company's credit ratings two rungs down,
triggering the renegotiation of the facility.

Analysts say the company will be at the mercy of the banks.

"The bankers are in the driving seat. They will determine where
ABB goes and what it does," one London analyst told the paper.

"If you are a customer of the company, you are going to be
reading about crisis talks and liquidity problems. If you are a
supplier, you are going to be considering reducing their credit
terms. There are real-world implications," the analyst said.

ABB, however, is convinced it can renegotiate the 364-day
unsecured revolving credit facility, which includes an option to
convert US$1 billion into a one-year term loan, says the paper.


SULZER MEDICA: Proposes Rene Braginsky's Directorship on Board
--------------------------------------------------------------

The Board of Directors of Sulzer Medica Ltd., the Swiss medical
device company, will propose at the coming General Shareholders'
Assembly that the former banker Rene Braginsky, of InCentive
Capital Ltd., be named to the Board.

This is in addition to the two members already proposed for
membership, Professor Urs Watter and Dr. Johannes Robert
Randegger.

The Board of Directors of Sulzer Medica Ltd., which currently
consists of three members, would be substantially enhanced by the
addition of the three members put forth for membership. The Board
would then consist of members of national and international
renown.

Max Link, Chairman of Sulzer Medica's Board of Directors stated:
"InCentive Capital is by far the largest shareholder in our
company. While there is no legal prerequisite for InCentive
Capital to request a seat on the Board of Directors, it is
clearly within the interests of the company to offer a Board seat
to a shareholder with such a significant holding. Rene Braginsky
will particularly offer assistance in the area of finance.
Current members of the Board decided unanimously to offer a seat
to Mr. Braginsky in the interests of our shareholders and staff."


SWISSAIR GROUP: Returns to Sky Via New Flag Carrier "Swiss"
-----------------------------------------------------------

"Swiss," the newly crowned national flag carrier, took off Sunday
without any hitch, but with toll orders to turn in a profit by
2003.

As expected, analysts took a cautious stand on the viability of
the new airline, the result of a US$3.3 billion public-private
sector bailout and the fusion of Swissair and Crossair.

"There's a reasonable chance it will survive over the next 12 to
24 months. The chances of survival beyond the medium term in its
current form are limited. This is not a business I'd invest in,"
Merrill Lynch & Co. analyst Anthony Bor told Bloomberg.

The airline expects to lose CHF1.1 billion this year in operating
26 long-haul and 102 short-haul aircraft from Switzerland.  

But with a domestic market of only 7.2 million people, the
airline will be too dependent on transfer passengers to fill the
planes, making its viability a little bit questionable, Mr. Bor
said.

Many are criticizing the size of the airline's expanded fleet
composed of Crossair's present birds and 52 from Swissair's
former hangar. According to some, it will have difficulty
entering into any alliance, as it is expected to have more
capacity than its partners in terms flights in and out of
Switzerland.

But CEO Andre Dose is adamant.  

"It's the ideal size. If you don't do it, then you'd have to stop
flying in Switzerland altogether because this is what makes the
most sense economically," Mr. Dose told Bloomberg.

"Swiss" rises from the ashes of Swissair barely six months after
the latter filed for bankruptcy. It currently runs on an
unprecedented bailout plan backed by some of Switzerland's
biggest companies.


SWISSAIR GROUP: EasyJet Threatens to Scuttle BA-Swiss Alliance
--------------------------------------------------------------

Low-cost airline EasyJet, which is currently in the process of
expanding operations in mainland Europe, has threatened to object
to the planned Swiss-British Airways alliance, says Times Online.

"If these two airlines are to cooperate on services, then the
very least they should do is give up slots to other carriers," an
EasyJet spokesman told the paper.

"There is every chance we would go to the authorities. This deal
would give all the benefit to the airlines and none to the
consumer," the spokesman was quoted as saying.

Though believed to be still far and wide, the negotiations
between British Airways and Swiss have been going on in earnest,
after the latter successfully sealed a deal with American
Airlines recently.

A deal with British Airways is a pre-requisite to Swiss' entry
into the "Oneworld" aviation alliance, which includes American
Airlines and Qantas.  

A source told the online paper that "some tough bargaining" still
remains to be done between the two airlines, as the British
outfit fears that Swiss could become a rival within the alliance
rather than an ally.

Alliances enable airlines to save huge expenses by coordinating
operations and cross-marketing each other's services.  It also
allows airlines to offer more destinations to travelers.


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


BRITISH TELECOM: Internet Arm Calls AOL Exemption Unfair
--------------------------------------------------------

BTopenworld, the Internet arm of British Telecom, is crying foul
over the seemingly uneven treatment of Internet Service Providers
in the U.K.

The company recently pointed out the discrepancy in the country's
tax measure, which exempts rival AOL from paying VAT as it is
classified differently from the others.

According to a report by the Independent, AOL can save as much a
GBP40 million a year because of the loophole, which classifies it
as a content provider, instead of a telecoms business like
BTopenworld and other ISPs.

"Given typical broadband margins, this is a huge sum that could
enable AOL to become the dominant retail provider of broadband
access," wrote BTopenworld CEO Alison Ritchie in letter complaint
to financial secretary to the Treasury Paul Boateng.

"It is clearly perverse for the Government to prevent a genuinely
competitive market at this important juncture, particularly when
the advantage is being given to a U.S.-based company," she
continued.

The uneven keel emanated from a decision made by Customs and
Excise.  It decided that Internet companies based outside the EU
could be treated as content providers and not charged the VAT
levied on telecom service businesses - a category BTopenworld
falls under.

The report says AOL can hide under the exemption until July next
year, when it will have to register business in an EU state.  But
chances are it will also register in Madeira where VAT levels are
lower than those in the U.K., the report said.

In that case, Ms. Ritchie said the company will also move
business and taxes out of Britain.

"Should AOL seek to register for VAT in a comparatively favorable
jurisdiction such as Madeira then clearly other U.K. ISPs would
have to look at their own arrangements to see if such imbalance
could be redressed by similar treatment," Ms. Ritchie said.


BRITISH TELECOM: Concludes Unwinding of Concert
-----------------------------------------------

British Telecom, the loss-making telecoms group, confirmed
yesterday that it has completed the unwinding of Concert, its
international joint venture with AT&T, and the termination of
their Canadian joint venture in relation to AT&T Canada.

As a result of the unwinding of the joint venture, all Concert's
businesses, customers and networks have now been returned to
their relevant parent company.

BT and AT&T have entered into commercial inter-working agreements
in order to honour commitments to customers using existing
services.

Tim Smart, former COO of Concert and now President of BT Ignite
Global Business, said: "Ever since we announced our intention to
unwind the joint venture last October, our primary objective has
been to ensure that our customers continue to enjoy the service
that they have come to expect. With the return of former Concert
employees, BT now has over 9000 experienced people in 29
countries outside the U.K. and is well positioned to deliver
market leading account management and customer service to
multinational customers. "

"In addition, the integration of the Concert global network with
BT's extensive pan-European network enables us to provide
customers with IP VPN, Internet and broadband connectivity in all
the key commercial centres in Europe, North America and Asia."

"Combining the Concert and BT Ignite product & service portfolios
will deliver an even broader set of capabilities attuned to the
needs of international business customers today - ranging from
managed voice and data services, IP-based eBusiness solutions,
consultancy, and outsourcing to systems integration for complex
global requirements. In our core European markets, customers will
benefit from a simplified, cohesive set of domestic and
international services, with a single pricing structure and
consistent levels of service."

Plans for the Concert joint venture were first announced in July
1998. After receiving all regulatory approvals, Concert began
trading in January, 2000.

The agreement to unwind Concert and to exit the Canadian joint
venture was announced on October 16, 2001. All of the appropriate
regulatory clearances for the unwind of Concert have now been
received.


CENES PHARMACEUTICALS: Announces 2001 Preliminary Results
---------------------------------------------------------

CeNeS Pharmaceuticals plc announced last week its results for the
year ended Dec. 31, 2001 and an update on its restructuring plan.

The company outlines that Jan 2001 were highlighted by the
following events:

Restructuring
-- Implementation of restructuring program announced in Oct 2001
-- Focus on lead clinical candidates in pain and pharmaceutical
    products division
-- Research activities halted. USA site shut down
-- Non-core assets - divestment plan initiated
-- Cash burn significantly reduced

Pharmaceutical Sales Division
-- 2001 was 1st full year of this division - products performing  
    to plan
-- UK hospital sales force recruited and new pain product Xefo
    launched in Q3 2001

New Business Venture
-- Pain portfolio expanded with commencement of business venture         
    in June 2001 with Elan Corporation plc
-- Under this business venture M6G is to be combined with Elan's
    Medipad drug delivery technology to develop a treatment for
    chronic pain
-- Elan business venture extended in Oct 2001 to include M6G  
    post-op pain clinical programs
-- Elan became a CeNeS shareholder and now holds 9.9% of CeNeS   
    shares

Clinical Pipeline
-- M6G global clinical program fully managed via business
    venture with Elan
-- M6G reports further positive phase II results in post-op pain
-- Following further phase II trials in 2002 M6G is planned to  
    enter phase III trials in post-op pain in 2003
-- Phase 1 study for treatment of chronic pain using M6G  
    underway
-- CNS5161 - Phase II neuropathic pain trial 1st cohort   
    completed - results due Q2
-- CEE 310 - 2nd phase II sleep trial successfully completed -
    partners being sought
-- CEE 320 - Schizophrenia candidate successfully advanced to
    pre-clinical stage - partners being sought

Pharmaceutical Services
-- Cognition - management team strengthened and sale expected Q2  
    2002
-- Channelwork - Wyeth orders US$1.2 million of ion-channel  
    screening equipment
-- Drug Delivery - CeNeS commenced divestment of drug delivery
    technologies

Financial and Corporate
-- Retained loss for 2001 of GBP64.6 million after goodwill     
    write off of GBP33.7 million and provision for loss on       
    disposal of discontinued operations of GBP4.2 million.     
    Retained loss for 2000 was GBP20.8 million
-- Turnover down to GBP5.3 million in 2001 from GBP6.6 million
    in 2000
-- GBP5.5 million raised through Elan's 2 subscriptions of CeNeS
    shares. Elan now holds 9.9% of CeNeS shares in issue.
-- CeNeS assigned its head office lease and sold surplus fixed   
    assets for GBP0.6 million
-- Cash burn reduced so that on completion of restructuring cash
    resources are expected to be sufficient until the end of 2003
-- CeNeS is in discussion with the administrator of Bioglan
    regarding the pain development and drug delivery contracts    
    with Bioglan that can be terminated by CeNeS on Bioglan's  
    entry into administration
-- CeNeS has approached the administrator of Bioglan to agree an
    orderly disposal of Bioglan's 8.9 million CeNeS shares

Commenting on the results, Alan Goodman Chairman said: "We are
effecting our restructuring plan successfully. We are
implementing our strategy to build a specialized pharmaceutical
company focused on the development and sale of CNS and pain
pharmaceutical products. We are looking forward to building on
the expertise we have developed in CNS and pain and expanding our
clinical pipeline and product portfolio."

CeNeS has focused its business in the second half of 2001 on its
core capabilities in pain and CNS drug development and
pharmaceutical product sales and marketing. CeNeS is now well
placed to capitalize on its expertise in these fields.

CeNeS' preferred policy has been to maintain an interest in
disposed assets in the form of milestones or royalties. As part
of the restructuring, CeNeS has stopped research and is
concentrating on the development of late stage candidates subject
to adequate funding being available. CeNeS has reduced the number
of employees from 145 to 50 and the number of sites from which
the group operates.

CeNeS' strategy is designed to capitalize on the synergy between
the marketing and clinical experiences gained in our chosen
areas. CeNeS is now positioned so that on completion of the
restructuring it expects to have sufficient existing cash
resources and future cash generation from its recurring
pharmaceutical product revenue stream to be self-funding into
2003.

Chairman's Statement

The year has been a difficult one for CeNeS and a major
restructuring was announced in Oct. 2001 to secure the future of
the company. The restructuring has progressed well and management
has implemented a simplified strategy.

The company received a frustrated bid approach from Bioglan
Pharma early in 2001 that diverted management time and reduced
the ability of the company to secure appropriate funding from
external sources. Funding opportunities were further reduced by
the downturn in the global economy that accelerated in the 2nd
half of 2001 and the shortfall in funding was exacerbated by
delays in revenue generation from the company's drug delivery and
research divisions.

Unfortunately, the restructuring has resulted in job losses at
the group's 3 main operating sites in Cambridge (England), Irvine
(Scotland) and Boston (U.S.). I wish all of our former employee's
success in their future careers and thank them for their hard
work at CeNeS.

The restructuring resulted in a number of changes to the Board.
Dan Roach (CEO) and Martyn Collett (Commercial Director) stepped
down as directors in October and I would like to thank them for
their significant contributions to the development of CeNeS. I
would also like to thank the 4 non-executive directors who
stepped down in October namely, David Needham, Mike Redmond,
Harry Wilcox and Paul O'Brien.

Neil Clark, our Finance director was appointed COO. John Buckle
joined the Board as Pharmaceutical Operations Director and Tim
Wright, from Elan Pharmaceuticals European operation, was
appointed as non-Executive Director.

The Board and management have faced up to the key issues for the
company and acted decisively to move the company forward.

The outlook for the restructured CeNeS business is positive and
on completion of the restructuring, the core operations are
expected to be self-financing into 2003. The Board are now
looking forward to building up the pharmaceutical products and
clinical development portfolios in line with our increased focus
on pain control and CNS diseases and disorders. The Board will
deliver value to shareholders by maximizing its pain and CNS
expertise. This is expected to be led by the further progress in
the development of M6G - CeNeS' leading candidate for the
treatment of pain and, subject to funding, the development of
CNS5161 for the treatment of neuropathic pain.

Chief Operating Officer's Review

Strategy

CeNeS remains focused on becoming a key UK player in the field of
pain and CNS pharmaceuticals. The company has acted to reduce its
commitment to non-core activities and is now looking to build its
pharma product and clinical assets focused on its existing
expertise in the areas of pain control and disorders of the CNS.
The Board is committed to maintaining a clear business focus.

Sales and Marketing of CNS Pharmaceuticals

CeNeS' strategy is to build the regulatory, sales, marketing and
distribution infrastructure that will support the launch of
CeNeS' own development candidates in the future.

CeNeS launched its pharmaceutical business in late 2000 with the
acquisition of 3 GlaxoWellcome products: Diconal, Cyclimorph and
Valoid. Diconal and Cyclimorph are strong analgesics used in the
management of moderate to severe pain either by the oral route
(Diconal) or the i.v. route (Cyclimorph). Cyclimorph contains
morphine whereas Diconal contains the analgesic dipipanone. In
both cases, the analgesic is combined with cyclizine; a proven
agent to counter the nausea and vomiting commonly associated with
opioid analgesics. Valoid contains cyclizine as the sole active
ingredient and is used to counter nausea and vomiting. These
products have performed in line with expectations in 2001 and we
expect further growth in 2002 based on an increased marketing
effort. In Sept. 2001 CeNeS launched Xefo, a novel product for
the treatment of post-op pain, which had been in-licensed from
Nycomed in Jan. 2001.

Sept. 2001 also saw the establishment of CeNeS hospital sales
force. Therefore, within 12 months of the acquisition of the
GlaxoWellcome products, CeNeS has successfully completed its aim
of forming a small, focused pharma products sales and marketing
division. Now that CeNeS has established a critical mass in this
area, the plan is to acquire new products in the chosen areas of
expertise to achieve maximum benefit from the infrastructure.

Divesting of Non-Core Assets

During the restructuring we have cut back on certain of our non-
core activities and focused on our pharma products and pain
control clinical programs. As part of this process we are
undertaking a systematic exercise to complete commercial
arrangements to realize value for non-core assets.

Clinical Development in CNS and Pain

Under the restructuring plan, CeNeS has cut back on its clinical
development programs and is concentrating its efforts in the
medium term on its leading pain candidate M6G for severe pain
(fully partnered with Elan) and CNS 5161 for the treatment of
neuropathic pain. In Oct. 2001, CeNeS suspended the phase II
clinical trial investigating the use of sipatrigine in the
treatment of stroke. After discussion with our partner
GlaxoSmithKline, it has been agreed that we hand back all our
rights to sipatrigine to GSK. CeNeS' other clinical projects have
been placed on hold and we are talking to prospective and
existing collaborators with regard to the future development of
these candidates. CeNeS' strategy with these non-core projects is
to seek milestone and royalty-based deals that involve no funding
requirement from CeNeS.

Research in CNS and Pain

Under the restructuring plan we have cut back our internal and
external funding of research. Our research facilities in Boston,
U.S. has been shut down. We have disposed of our ion-channel
focused chemical library to Scion Pharmaceuticals Inc. for
US$300,000 in cash at completion together with further stage
payments totaling US$500,000 and up to US$2 million in the form
of milestone dependent payments.

CeNeS has reduced its research capability in Cambridge, England
to focus solely on our world leading ion-channel high throughput
screening technology and associated research projects. Our
Parkinson's disease research program has been assigned to our
partner Shire Pharmaceuticals plc and we again retain an interest
in the form of milestones and royalties in this program should it
proceed to clinical development.

In the medium term, CeNeS is reviewing its strategy regarding its
expertise in ion-channel research and associated platform
technologies and is talking to interested parties with this in
mind. As part of CeNeS' strategy, the company plans to remove its
commitment to research funding and focus its efforts solely on
clinical development projects.

Clinical Development - Pain Portfolio

CeNeS is focusing its clinical development efforts on its pain
portfolio. CeNeS is actively looking to out-license its other
clinical candidates and is also looking to in-license appropriate
clinical candidates in its chosen areas of expertise.

M6G (morphine-6-glucuronide)- For the Treatment of Post-op Pain

In Jan. 2001 we announced successful results from clinical trials
in over 140 post-op pain patients which showed that CeNeS' lead
drug candidate M6G, metabolite of morphine, has an advantage over
morphine by reducing by more than 50% the incidence of nausea and
vomiting.

In Oct. 2001 CeNeS announced further positive phase II results
for our lead candidate M6G in post-op pain. These results showed
that M6G had again shown positive results in a Phase II clinical
trial comparing M6G with morphine in the relief of post-op pain.
A total of 18 patients undergoing hip-replacement surgery were
studied and M6G doses were escalated in 3 steps, each of which
was compared with a standard dose of morphine. Drugs were
administered as i.v. bolus injections followed by use of a
Patient Controlled Analgesia (PCA) device for 24 hours post-
operatively. The data showed that all doses provided effective
analgesia during the 24-hour post-op period and that all doses
were well tolerated. A reduction in pain scores over 24 hours was
seen in all groups. After 24 hours there did not appear to be any
difference between pain relief provided by any of the M6G dose
groups and the standard dose of morphine.

CeNeS is currently carrying out a phase II study of M6G to
investigate the effect of timing of administration of M6G in
order to optimize pain control during the immediate post-op
period. The extended Elan/CeNeS business venture has taken
responsibility for this program worldwide. In the extended
development program, CeNeS will carry out a further dose
escalation study in 2002, which will enable a well-designed phase
III worldwide program to commence in Europe during 2003. This
will be a major milestone in the history of the company. Current
sales of morphine in post-op pain are estimated to be 350m pounds
in the U.S. and Europe.

In June 2001, we entered into a collaboration with Elan
Corporation plc to develop M6G with their unique Medipad
subcutaneous drug delivery device for the treatment of chronic
pain. Preliminary subcutaneous bioavailability studies have
commenced in volunteers to enable Phase I clinical trials with
M6G/Medipad to be carried out later in 2002.

Opioids are the mainstay of the treatment for chronic cancer pain
and it is estimated that there are over 13 million cancer
patients in the U.S. and Europe requiring increasing doses of
opioids as their disease progresses. If the clinical development
of M6G in the Medipad device is successful, it will provide a
portable treatment option for these patients.

CNS 5161 - For the Treatment of Neuropathic Pain

Our candidate for the treatment of neuropathic pain (CNS 5161)
commenced a phase II single center study in early 2001. CNS5161
is a blocker of the NMDA ion channel. Earlier studies showed that
CNS5161 was well tolerated by healthy volunteers and that it
caused a statistically significant reduction in pain as compared
to either morphine or placebo. The current study was placed on
hold under the restructuring but results of the trial to date
will be analyzed when available and if appropriate, it is then
planned to restart this study as a Phase II multi-center study.

The market for the treatment of neuropathic pain is large and few
drugs are currently licensed for treatment of this chronic and
debilitating condition. For example, up to 35% of the over 13
million diagnosed diabetics in the U.S. and Europe are thought to
suffer from neuropathic pain. In addition, neuropathic pain is
experienced by patients with shingles (post-herpetic neuralgia),
phantom limb pain and following trauma.

CEE 03 310 - For the Treatment of Sleep Disorders

CEE 03-310 is a dopamine D1 receptor antagonist and CeNeS has
been developing the drug candidate for sleep disorders and
substance abuse. In the sleep disorders field CeNeS reported data
previously describing the significant effect of CEE 03-310 on
sleep patterns in young healthy volunteers. In Oct. 2001, CeNeS
announced the results of a 2nd volunteer study completed in 24
male subjects. CEE 03-310 again showed a significant alteration
in sleep architecture, specifically changes in some non-REM
stages of light and slow-wave sleep. These effects on sleep
patterns, however, did not translate into effects on subjective
ratings of sleep quality in the healthy volunteers.

To progress CEE 03-310, the next step in the clinical development
program should be in patients with sleep disorders to explore the
effects of this drug in subjects with already dislocated sleep
patterns such as patients experiencing sleep disorders following
cardiac surgery. With these results and the increased package of
clinical data CeNeS is actively seeking partners for the further
development of this potential drug.

Pharmaceutical Services

As part of the restructuring plan CeNeS is in the process of
reducing its commitment to the 3 revenue generating businesses
that formed this division, namely Cambridge Cognition, CeNeS Drug
Delivery and Channelwork. All 3 businesses have continued to
develop in 2001 but the combined requirement for further capital
funding and the increased complexity they add to CeNeS'
organization means they have become non-core assets.

CeNeS Cognition, the neuropsychological testing business
continued to grow its revenues and extend its product range
during 2001. In July 2001 CeNeS merged the business of Management
Dynamics with its own cognition division and established
Cambridge Cognition as a subsidiary with a separate management
team. CeNeS is currently talking to interested parties regarding
the sale of the cognition business.

CeNeS Drug Delivery had a difficult 2001. The UK sales for
Moraxen since its launch in late 2000 were disappointing and the
new U.K. and European partner, Bioglan Pharma, entered
administration. The contract drug delivery business also
experienced slower growth than forecast despite making progress
on several of its commercial contracts. Under the restructuring
plan, CeNeS is exiting drug delivery and is in the process of
divesting its drug delivery assets.

CeNeS Channelwork, the contract electrophysiology and ion-channel
high throughput screening technology business has been re-
organized and the team continues to make progress in developing
the next generation of the technology. CeNeS is seeking partners
to continue the development and commercialization of the
technology. In 2001 this division made significant progress in
its development of an automated method of patch clamping based on
its proprietary Interface Patch-Clamp(TM) methodology. In 2001, 5
systems were installed at GSK's research laboratories, 3 in the
UK and 2 in the USA. In Nov. 2001 CeNeS announced the 2nd sale of
US$1.2 million of AutoPatch systems to Wyeth Aerst.

In contrast to conventional patch-clamp technology, AutoPatch
does not require the use of a microscope or three-dimensional
micro-manipulation. In addition, because it is fully automated
and mechanically robust the technology has the potential for
further miniaturization and parallelization to a high-throughput
device capable of around 1000x the screening rate of conventional
electrophysiology.

For inquiries, please contact Noonan Russo at telephone number
+44 20 7726 4452 or call +44 (0)1223 266466 Alan Goodman/Neil
Clark of CeNeS Pharmaceuticals plc, Cambridge; or call Veronica
Sellar/Dr. Douglas Pretsell of Noonan Russo Ltd. at telephone
number +44 (0)20 7726 4452, for more information.


CENES PHARMACEUTICALS: Will Finance 2002 Operations by Itself
-------------------------------------------------------------

Restructuring CeNeS Pharmaceutical PLC says it doesn't need any
financial aid from outside sources as it has more than enough
savings to maintain current operations until 2003.

Chairman Alan Goodman told AFX News recently that the radical
restructuring instituted by the company in October last year has
paid dividends, with cash burn radically reduced.  

Mr. Goodman said the sweeping restructuring scheme that included
the closure of its U.S. research operations and the repatriation of
all development work to the U.K. saved the company GBP2.2 million
by the end of 2001.

The company implemented the program after treading dangerously
over troubled waters last year.  The cash crunch forced it to
spin off its lead pain drug candidate "M6G" into a joint venture
with Elan Pharmaceuticals PLC's Medipad drug delivery technology.

Turnover for 2001 fell to GBP5.3 million from GBP6.6 million a
year earlier mainly because of a fall in contract and out-
licensing revenues from the drug delivery division, the report
says.  


CLAIMS DIRECT: 2001 Losses Top Projections Due to Poor 2nd Half
---------------------------------------------------------------

Claims Direct Plc, the personal injury compensation specialist,
admitted recently that its projected second half improvement did
not materialize, causing it to book a higher net loss last year.

The company said overall losses in 2001 will likely tip the
scales at GBP22 million compared to a pre-tax loss of GBP20.2
million in 2000.

According to Ananova, the group is now expecting improvement in
trading performance during the first quarter of the new financial
year that starts this month.

"The recent acquisition of Claimline, the launch of the new
business model, and the other developments referred to, are all
building the platform from which we can re-establish Claims
Direct's business and restore its profitability and reputation,"
said Chief executive Ronnie Henderson.

The company plans to develop a new customer contact center
capable of handling 2,000 calls per day, the report said.


ENRON CORPORATION: Absence of Guarantee Spoils U.K. Asset Sale
--------------------------------------------------------------

Centrica Plc has cancelled an all-cash tender offer for all of
NewPower Holding's outstanding stock, after the latter failed to
secure a guarantee that it won't be answering any Enron
liability.

According to Ananova, both sides are now considering alternatives
such as the purchase of business assets, instead of common
stocks.

The report says the failure to secure from a U.S. court handling
Enron's bankruptcy proceedings an order prohibiting claims
against NewPower necessitated the cancellation of the offer.

Under the proposed merger agreement, Centrica's Windsor
Acquisition unit would have offered an all-cash tender for all of
NewPower's outstanding common stock at US$1.05 per share.

Enron holds a 44% stake in NewPower.  The bankrupt firm was
expected to receive US$56.5 million from Centrica for the shares.


ITV DIGITAL: Wales Worries Impending 900-job Loss in Call Center
----------------------------------------------------------------
  
Some 900 employees at the Pembroke Dock call center in Wales
could end up staying now that ITV Digital is under
administration, says The Times Monday.

According to the report, the center faces closure unless Deloitte
& Touche, the administrator of ITV Digital, can reach a
compromise on the digital-TV's three-year bind with the Football
League.

The report says the call center industry is an important source
of jobs for Wales, where it employs about 24,000 people at 120
sites.  Losing jobs at the center would strike a serious blow on
its efforts to ease unemployment in Wales.

Most staff at the Pembroke Dock center, which handles calls from
ITV Digital's 1.2 million subscribers, are supplied by Manpower,
the employment agency.


ITV DIGITAL: Expects Football League to Reconsider Contract Claim
-----------------------------------------------------------------

Under administration ITV Digital said Monday that it expects the
Football League to soften its stand on a three-year broadcasting
rights contract.

The company said a meeting scheduled yesterday would expose the
weaknesses of the League's legal contention.  The troubled firm
maintains that the rights deal was only ever signed as a "short-
form" contract and did not contain guarantees from its parent
companies, Carlton and Granada.

The League, however, insists that ITV Digital's original bid
document to televise the game contained these guarantees and that
the company constantly frustrated attempts by the league to
conclude a full-length legal contract which would have set out
Carlton and Granada's obligations, the report says.

League chairman Keith Harris and CEO David Burns were expected
yesterday to lead the presentation of the group's legal arguments
during the meeting, attended by 24 First Division chairmen.

Details of the meeting had yet to surface as of this writing, but
many believe the League ultimately stood by its decision to force
ITV to pay the GBP179 million remaining balance of the GBP315
million contract.

The company earlier said that it is only willing to pay GBP50
million.  The League has promised to sue the company if it
reneged on its obligations.


NTL INCORPORATED: Wittingly Cancels US$ 100MM Interest Payout
-------------------------------------------------------------

Bankruptcy-bound cable-TV operator NTL Incorporated deliberately
missed paying a US$100 million interest due Monday, reinforcing
beliefs that a breakthrough has been achieved in its
restructuring talks with bondholders.

According to the Telegraph, the company purposely withheld
interest payment on the US$1.3 billion debt at the request of
bondholders, who want controlling stakes in the company in
exchange for writing off debts.

In a statement, the cable operator clarified that it had
"sufficient liquidity to make the current interest payments and
trade obligations, given its existing liquidity and the expected
net proceeds of approximately US$300 million from the anticipated
closing in Australia of the sale of NTL's Australian broadcast
business."

The payment delay gives both sides 30 days to firm up a decision
on the restructuring proposal.  Reports have surfaced that the
payment delay is a pre-cursor to filing for Chapter 11 protection
in the U.S. any time this week.  

The company accordingly hopes to re-launch the business after the
completion of a debt-restructuring scheme during the period
covered by the protection.


RAILTRACK PLC: Will Ask Gov't to Relax Rules on Property Ventures
-----------------------------------------------------------------

Network Rail, the bidder poised to snatch Railtrack Plc, is
eyeing the lucrative property portfolio of the rail operator to
earn GBP1 billion annual profits in five years.

According to The Observer, the government-backed bidder will ask
the lifting of the "claw-back" imposed by the government on
property profits.  

The policy skims off any profit above GBP200 million on deals
involving real estate. The idea is to prevent stripping the
network operator of valuable real estate assets

Railtrack is UK's biggest landowner, with land holdings valued at
GBP5 billion, the paper says.  Accordingly, many have criticized
it for being too slow in developing its vast assets.

Last year, the company sold off real estate worth only GBP16
million, to the frustration of a property industry eager to build
offices above stations, says the report.

Answering critics who regard property development as a future
hindrance in expansion if valuable lands are sold off, Network
Rail managing director Iain Coucher said: "Our core business is
to operate, maintain and renew the rail network, and we won't
take our eye off the ball."

He said the new operator would only act as a sleeping partner in
deals with big developers.

                                   ***********

      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
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