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/raid1/www/Hosts/bankrupt/TCREUR_Public/020430.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 Tuesday, April 30, 2002, Vol. 3, No. 84 ********* * B E L G I U M * SN BRUSSELS: Resumes Flights to Africa Using ex-Sabena Routes * F I N L A N D * SONERA CORPORATION: Exercises Put Option to Convert Eliska Shares * G E R M A N Y * ADVANCED MEDIEN: Releases Revised Financial 1999 & 2000 Figures ARTHUR ANDERSEN: Ernst & Young Adds German Practice to Network COMDIRECT BANK: Appoints New Chairman for Management Board CONSORS DISCOUNT-BROKER: Moves AGM From May 29 to July 18 DEUTSCHE TELEKOM: To Ink Pact With DeTe-Immobilien Buyer Today EM.TV MERCHANDISING: Sells Tyson-Lewis Screening Rights to BSkyB FAIRCHILD DORNIER: EADS Not Interested in Insolvent Plane Maker FAIRCHILD DORNIER: U.S. Workers File Involuntary Bankruptcy Plea KIRCHMEDIA: Axel Springer to File EUR 530MM Damage Suit KIRCHMEDIA: Minority Shareholders Alter Approach KIRCHMEDIA: Settles Row With Bundesliga Over Broadcast Rights KIRCHMEDIA: Meets With Hollywood Representatives in Munich PHILIPP HOLZMANN: Bidder Comes Forward for 'International' Unit * I R E L A N D * ARTHUR ANDERSEN: KPMG Takes Away Local Unit to Secure 2nd Place EIRCOM PLC: Management Buyout of Profitable IT Division Rejected ELAN CORPORATION: To Keep Status Quo at Management, Board Set-up * P O L A N D * ELEKTRIM SA: BRE Shareholders, Investors Threaten to Desert Bank * S W E D E N * LM ERICSSON: Battered in Market Last Week Due to Weak Outlook * U N I T E D K I N G D O M * BIG FOOD: Escapes Fine From FSA, But Slammed for Misleading Data BIG FOOD: Retail Chain Replies to FSA Announcement CONSIGNIA: Set to Record Huge Losses Due to Restructuring Cost ITV DIGITAL: Microsoft Among Potential Buyers, Reports Say ITV DIGITAL: BSkyB Sees Futility in Trying to Rescue Network MARCONI PLC: Banks Threaten to Take Reins From Current Management ============= B E L G I U M ============= SN BRUSSELS: Resumes Flights to Africa Using ex-Sabena Routes ------------------------------------------------------------- SN Brussels Airline, which replaced former Belgian flag carrier Sabena that went bankrupt, re-launched limited flights to Africa last Friday, boosting its projected recovery this year. According to BBC News, the flights were mostly for routes formerly held by the bankrupt predecessor, which still has a loyal customer base despite competition from rivals Air France and British Airways. "We chose the ones that were most profitable at the time of Sabena, (because) there were a lot of people using them and there's a lot of demand from African countries," France Nivelle of Brussels Airlines told the BBC's World Business Report. The routes that will be served by the company are those from Brussels to Entebbe in Uganda, Nairobi in Kenya, Kinshasa in the Democratic Republic of Congo, Kigali in Rwanda, Dakar in Senegal, Banjul in Gambia, Conakry in Guinea and Monrovia in Liberia. Beginning June 21, the airline will also serve Yaounde and Douala in Cameroon as well as Luanda in Angola. Some routes that have not been served since November, however, will not be resumed. "Unfortunately we cannot do everything, there are a few destinations we won't be flying," said Ms. Nivelle, referring to Bamaco in Mali, Ouagadougou in Burkina Faso, Lagos in Nigeria, Lome in Togo and Abidjan in Ivory Coast. With the re-opening of flights to Africa, the company hopes to reach its target of positive cash flow by the last quarter of this year, says Ms. Nivelle. ============= F I N L A N D ============= SONERA CORPORATION: Exercises Put Option to Convert Eliska Shares ----------------------------------------------------------------- Sonera Corporation received the FCC (Federal Communications Commission) approval to exercise the put option to convert its Eliska Wireless Ventures shares to approximately 2.8 million Deutsche Telekom shares. Sonera received the shares as part of the VoiceStream/Powertel share sales to Deutsche Telekom. Sonera sold the received shares through a bought deal on Friday executed by Dresdner Kleinwort Wasserstein. The shares were sold at an average price of approximately EUR15.50. The proceeds from the Deutsche Telekom share sales amount to approximately EUR43 million. This completes the sale by Sonera of its entire interest in Deutsche Telekom. Sonera will use the proceeds to strengthen its financial position. Sonera Corporation is a leading provider of mobile and advanced telecommunications services. Sonera is growing as an operator, as well as a provider of transaction and content services in Finland and in selected international markets. For more information, contact Sonera Corporation through Esko Rytkonen, Senior Vice President by Phone: +358 2040 58632 or by e-mail: esko.rytkonen@sonera.com ============= G E R M A N Y ============= ADVANCED MEDIEN: Releases Revised Financial 1999 & 2000 Figures --------------------------------------------------------------- The revision of the financial statements of Advanced Medien AG's, the movie production and film rights business, fiscal years 1999 and 2000 is closed, a company statement announced Friday. According to the new financial statements, the company recorded revenues of EUR11.26 million in 1999 (previously: EUR 33.16 million). Earnings before interest, taxes, depreciation and amortization (EBITDA) according to IAS were EUR 4.71 million (previously: EUR 25.5 million). Earnings before interest and taxes (EBIT) were minus EUR10.34 million (previously: EUR 3.65 million). Earnings before taxes (EBT) were minus EUR 11.06 million (previously: EUR 2.93 million). The net loss for fiscal year 1999 was minus EUR 11.09 million (previously: net income of EUR 1.29 million). As the accounting for 1999 followed the provisions of the German Commercial Code (HGB), the figures were reconciled with IAS to improve comparability. In fiscal year 2000, Advanced Medien recorded revenues of EUR 14.22 million (previously: EUR 14.26 million). In the original financial statements for fiscal year 2000, significant cancellations and valuation allowances for some of the transactions in fiscal year 1999 had been made. They were corrected accordingly in the revised financial statements. As a result, the loss decreased in comparison to the originally published results. The company recorded negative earnings before interest, taxes, depreciation and amortization (EBITDA) according to IAS of minus EUR 4.71 million (previously: minus EUR 12.31 million) and negative earnings before interest and taxes (EBIT) of minus EUR 22.98 million (previously: minus EUR 37.47 million). Earnings before taxes(EBT) were negative at minus EUR 23.25 million (previously: minus EUR 37.38 million). The net loss for fiscal year 2000 now amounts to minus EUR 23.00 million (previously: minus EUR 36.70 million). At the financial statements press conference in mid-May, the management will discuss not only the results for fiscal year 2001 but also the financial statements for 1999 and 2000. The reported financial results may be summarized as follows: Key figures (T Euro) 1999 new HGB 1999 new IAS 2000 new IAS Revenues 11,322 11,260 14,221 EBITDA 2,572 4,714 4,714 EBIT -12,777 -10,335 -22,976 Financial result -722 -722 -274 EBT -13,500 -11,057 -23,250 Result f.ordin.operat. -12,156 -11,087 -23,250 Net incom -13,530 -11,087 -23,003 Net incom/shar in Euro -0.81 -0.67 -1.38 ARTHUR ANDERSEN: Ernst & Young Adds German Practice to Network -------------------------------------------------------------- The German affiliate of Arthur Andersen will merge with accounting firm Ernst & Young LLP, Dow Jones Newswires said Sunday citing German news agency VWD. Ernst & Young completed negotiations with Andersen Deutschland early last week. Partners of Ernst & Young approved the merger Saturday, the report said. Details of the merger have yet to be released by either side. COMDIRECT BANK: Appoints New Chairman for Management Board ---------------------------------------------------------- The supervisory board of Comdirect Bank on April 26, 2002, named Dr. Rer. pol. Achim Kassow as the new chairman of the board of managing directors effective June 1, 2002. The appointment is still subject to the approval of the German Federal Banking Supervisory Office. Dr. Kassow, born in 1966 in Hanover, studied business administration and economics in Cologne. Since 1993, he has worked for the Deutsche Bank Group, rising to the post of member of the board of managing directors of Deutsche Bank 24. Bernt Weber, who played a leading role in making Comdirect into Germany's and Europe's leading online broker and was involved in the bank's development right from the outset, is resigning from its board of managing directors. He was responsible on the board for strategy and development, and also corporate communications and investor relations. Klaus-Peter Muller, chairman of the board of managing directors of Commerzbank and chairman of Comdirect's supervisory board, thanked Mr. Weber for his great efforts on behalf of the bank. In addition, the annual general meeting of Comdirect bank on May 10 in Hamburg is being requested to elect Martin Blessing, the Commerzbank management board member responsible for retail banking, to the supervisory board. Once elected, he will take over from Klaus-Peter Muller as chairman of the supervisory board. Contact: Comdirect Bank AG Dr. Andre Carls Mathias Hajek Phone: 04106 704 1315 CONSORS DISCOUNT-BROKER: Moves AGM From May 29 to July 18 --------------------------------------------------------- Due to the ongoing selling process, the AGM of Consors Discount- Broker AG -- http://www.consors.de-- scheduled for Wednesday, May 29, 2002, has been moved to Thursday, July 18, 2002. According to a press statement Friday, Consors said the venue will be at the Meistersingerhalle in Nuremberg. The invitations will be posted to shareholders and guests in good time. The online broker is being sold by its parent, Schmidtbank, which owns about a 64% of Consors. Earlier this year, Commerzbank said it had put a bid for the online brokerage company. However, latest reports indicate that its chief financial officer Klaus-Peter Mueller is no longer interested in buying Consors. DEUTSCHE TELEKOM: To Ink Pact With DeTe-Immobilien Buyer Today -------------------------------------------------------------- Deutsche Telekom has allegedly found a buyer for its 49% stake in DeTe-Immobilien, the real estate unit that it tried but failed to sell last year due to its exorbitant price tag. According to the Berliner Zeitung, the debt-laden German telecom giant intends to reach a definitive sale agreement with Anglo- American firm Trammel Crow Savills today. Trammel Crow Savills is a joint venture between Trammel Crow Co of the US and FPD Savills of the U.K., the report said. EM.TV MERCHANDISING: Sells Tyson-Lewis Screening Rights to BSkyB ---------------------------------------------------------------- Restructuring EM.TV & Merchandising AG sold its rights to broadcast the boxing match of heavyweights Lennox Lewis and Mike Tyson due to the uncertainty of its schedule, Dow Jones Newswires said last week. The fight has been postponed a number of times now. Recently, the play date was scheduled for June 8 and will take place in Memphis, Tennessee. The German firm says it sold the rights to British Sky Broadcasting Group Plc and expects sales of a low, double-digit U.S. million-dollar from an arrangement with the British broadcaster. EM.TV originally owned the television rights outside North America and the Caribbean. The company is currently rebuilding after teetering on the brink of collapse early last year. FAIRCHILD DORNIER: EADS Not Interested in Insolvent Plane Maker --------------------------------------------------------------- More and more industry players are shying away from Fairchild Dornier, raising doubts that it can find a new partner to rescue it from insolvency, Handelsblatt says. French-German-Spanish aerospace and defense group EADS Chief Rainer Hertrich told the German daily recently that his firm is not interested in the stricken regional plane-maker. He says EADS does not see any opportunity in the market where Fairchild operates, pointing to intense competition and limited demand. At present, Brazil's Embraer and Canada's Bombardier slug it out for only 450 new orders a year along with Fairchild. Mr. Hertrich says his company will, instead, focus on developing its new Airbus A380 superjumbo, which is accordingly set to be a great success. Last week, aircraft manufacturer Boeing also dropped plans to invest in the company. Industry insiders interviewed by Handelsblatt believe the American firm was merely interested in the company's blueprints. FAIRCHILD DORNIER: U.S. Workers File Involuntary Bankruptcy Plea ---------------------------------------------------------------- Ex-workers of Fairchild Dornier in the U.S. filed last week an involuntary bankruptcy petition against the German plane-maker to enforce their severance package, which the company had failed to honor. According to ATWonline.com, the petition is now pending before the U.S. Bankruptcy Court for the Eastern District of Virginia. Workers from Fairchild's offices in Herndon, Va. and San Antonio alleged they were sacked without their employment contracts or corporate severance obligations being honored. In a statement, plaintiff attorney James Campbell said the company terminated all severance policies for US employees not covered by individual contracts without notifying executives or the human resources representative in Herndon. "Although company policy provides that the severance policy can be changed without prior notice, we believe that the parent company in Germany illegally modified the policy without advising the officers and directors of the American subsidiaries," Mr. Campbell said. He said the involuntary bankruptcy petition was only necessary and apt to "protect the interest of the employees." KIRCHMEDIA: Minority Shareholders Alter Approach ------------------------------------------------ Unconfirmed rumors have it that the minority shareholders who dropped their EUR800 million-rescue offer for KirchMedia awhile back are now pitching the same salvage package. According to Sole 24 Ore/FT Information, Rupert Murdoch's media group News Corporation, the Italian holding company Fininvest, the Saudi billionaire Al Waleed and other investors have told KirchMedia's receivers that they are willing to re-capitalize the bankrupt group. Last month, rescue efforts along the same line broke down when the above shareholders failed to come to terms with creditor banks that had wanted them to take part of a bridging loan for the troubled media rights unit. The failure to reach a definitive agreement forced Bayerische Landesbank, HVB Group, Commerzbank and DZ Bank to file insolvency in behalf of KirchMedia. Citing unnamed sources, the report says minority shareholders will only renew the offer if they are allowed to view the Kirch accounts in detail. KIRCHMEDIA: Axel Springer to File EUR 530MM Damage Suit ------------------------------------------------------- The board of Axel Springer will have plenty to think about today as CEO Mathias Dopfner is expected to seek its endorsement for a EUR530 million suit against KirchMedia, says the Financial Times. The paper says the board will likely back the suit, seen as the final attempt to recover the money owed to it by the insolvent Kirch unit when the German publisher exercised a put option in January. The EUR767 million cash claim was for Axel Springer's 11.85% stake in ProSiebenSAT.1, a German TV broadcaster. People close to Axel says the amount in the damage suit corresponds to the size of the original claim minus the EUR240 million market value of the ProSiebenSAT.1 stake, which the publisher would now retain. Although the suit could take years to settle, it may create a bargaining chip in talks about the future of KirchMedia, the report says. The unit's minority shareholders have asked Axel Springer to take a stake in the business but the publisher has been reluctant to inject cash and has instead tried to swap its claim against KirchMedia for a bigger stake in ProSiebenSat1. KIRCHMEDIA: Settles Row With Bundesliga Over Broadcast Rights ------------------------------------------------------------- KirchMedia will pay the EUR21 million to air the final two games of the season, placating the German football league Bundesliga, which had earlier threatened to boycott KirchMedia last week. According to BBC News, the games will be shown live in Premiere World, the loss-making pay-TV channel of KirchMedia. The league said the new development will keep the broadcast rights with the network in the meantime. In a statement, the league said talks with KirchMedia would continue next week about the payment of the rest of a EUR100 million installment, which is due in the middle of May. KirchMedia inked a four-year contract with the Bundesliga just before the 2000-2001 season. At the beginning of April, the league tried taking back the rights and putting them on the market, but there were no buyers. KIRCHMEDIA: Meets With Hollywood Representatives in Munich ---------------------------------------------------------- KirchMedia management was expected to host executives from Hollywood studios yesterday in Munich to discuss the terms of a debt-for-equity swap, the Financial Times said yesterday. According to the paper, Rupert Murdoch's British Sky Broadcasting and Bertelsmann were also expected to be present in the meeting, which will primarily tackle KirchMedia's various contractual commitments. The insolvent media rights unit, according to an initial review by outside auditors, owed studios EUR500 million at the end of 2001 and has about EUR900 million to EUR1.3 billion this year. With output deals signed for free-to-air and pay-TV up to 2006, the commitments amounted to nearly EUR4 billion, one person who has seen the estimates told the Financial Times. Film studios are reportedly being offered equity in return for the films and TV programs that KirchMedia is under contract to pay over the next few years. The report says the renegotiation of these obligations is key to KirchMedia's recovery from insolvency and preventing Premiere World from suffering the same fate. Some say a definitive rescue initiative must be had in the next 10 days for Premiere to avoid insolvency. PHILIPP HOLZMANN: Bidder Comes Forward for 'International' Unit --------------------------------------------------------------- A construction company outside Europe has reportedly begun due diligence on Philipp Holzmann International (PHI), the subsidiary holding the firm's activities outside Germany. According to Frankfurter Allgemeine Zeitung, the bidder, who wants to remain anonymous in the meantime, got attracted to PHI because of its vast market operation, generating EUR120 million output in 2000. PHI focuses on large infrastructure projects in Southeast Asia, the Far and Middle East and South America. Save for the U.S., Austria and Middle and Eastern European countries, PHI controls all Holzmann activities outside Germany. Meanwhile, Dutch Heijmans group is reportedly close to a deal with Holzmann's administrator over the company's operations in Germany, the Netherlands, and Eastern Europe. An agreement is expected to be inked soon, but not before the insolvency filing has officially been completed. But the deal could be sealed even before negotiations are completed by transferring parts of the company beforehand, people privy to the deal say. According to a company spokesman, the part in which Heijmans is interested had output of around EUR500 million and employed 2,000 staff. The same spokesman told the paper that the Dutch construction firm is not willing to assume Holzmann's rental guarantees that stem from project business. The price for Holzmann's headquarters in Germany was not yet negotiated, he said, adding that Heijmans was not prepared to pay more than EUR100 million. ============= I R E L A N D ============= ARTHUR ANDERSEN: KPMG Takes Away Local Unit to Secure 2nd Place --------------------------------------------------------------- Partners of Andersen Ireland have voted to merge with KPMG after unsuccessful negotiations with Ernst & Young and Deloitte & Touche, the Irish Times said Sunday. The combined group will have a turnover of EUR144 million, 66 partners and 1,430 employees, according to the paper. More importantly, the tie-up also secures KPMG's hold to second place in Ireland behind PricewaterhouseCoopers. "The combined firm will be a very powerful force in the Irish professional services marketplace," KPMG Managing Partner Jerome Kennedy told the Irish Times. "By combining the strengths of both firms in terms of the quality of our people, the exceptionally high service levels and outstanding business solutions for our clients, we believe that this merged firm can offer major benefits to both our clients and our people," said Mr. Kennedy, who will head the merged entity. Andersen's Managing Partner Roddy Ryan, meanwhile, will resign his post to join the board of Glen Dimplex as an executive director. The merger is still subject to certain conditions including regulatory clearance. There will be no redundancies as a result of the merger. EIRCOM PLC: Management Buyout of Profitable IT Division Rejected ---------------------------------------------------------------- A management buyout of Eircom's information technology is out of the question, as the proposal allegedly does not meet the conditions set by CEO Philip Nolan. According to The Sunday Business Post, the chief wants such proposal to involve a meaningful reduction in overall IT cost, the purchase of all of Eircom's IT assets, the re-engineering of business processes to allow a substantial headcount reduction, and the transfer of up to 600 staff to the successful bidder. It is not certain whether the proponent of the management initiative failed to meet any or all of these requirements. IT industry sources estimate that Eircom's IT unit spends approximately US$30 million a year, with assets valued at US$40 million. It employs around 750 people. The company is in talks with IBM and EDS for the outsourcing of this division, the report says. Since its takeover by Valentia, the company has declared the outsourcing of non-core assets as its strategy to put itself back on firm footing. The new owner wants to focus on the company's fixed line business, but plans to offer DSL and Internet services. ELAN CORPORATION: To Keep Status Quo at Management, Board Set-up ---------------------------------------------------------------- There won't be any shakeup in the senior management and board of directors at Elan Corporation despite a growing support for it, says Chairman and CEO Donal Geaney. The Irish pharmaceuticals group has lost more than 70% of share value this year, primarily due to the probe launched by the U.S. Securities and Exchange Commission on allegations that the firm inflated its earnings. This inquiry is scrutinizing the joint ventures inked by the company with other pharmaceutical groups ostensibly to develop new products. Critics say these ventures were actually vehicles to disguise the costs to Elan of its research programs and therefore inflate profits. The company has admitted that profits last year would have been substantially lower if two off-balance sheet vehicles had been consolidated into the accounts. The firm has a total of 55 joint ventures for research into new drugs. Many compare these vehicles with those discovered at Enron, the bankrupt US energy group. Mr. Geaney told the Financial Times that he is not about to split his role, saying that the arrangement is common in the pharmaceutical industry. "It is the norm for our industry to have the chairman also act as chief executive," Mr. Geaney told the paper. He also pointed out that the board had a "clear majority" of non- executive directors and only two executives, thus investors and shareholders should not be wary. On the management side, Mr. Geaney says there is no reason for a shuffle now that the company has a number of senior managers with significant exposure in the industry, including Daniel Welch, the former Sanofi-Synthelabo executive who is now president of the pharmaceuticals division. He says the group would maintain the controversial research joint ventures, but would not sign any new agreements. Shares in Elan, which reports first quarter results on Thursday, closed at US$11.99 on Friday, down from US$45.06 at the start of the year. =========== P O L A N D =========== ELEKTRIM SA: BRE Shareholders, Investors Threaten to Desert Bank ---------------------------------------------------------------- The collapse of Elektrim S.A. last week threatens to bring down BRE Bank, the aggressive institutional investor that upped its interest just before the company filed for bankruptcy last week. Shareholders are allegedly threatening to desert the bank, while some depositors are considering drawing their money for fear that it will collapse as well, says the Warsaw Business Journal. The company has a PLN80 million investment in Elektrim, the paper says. Leading investors on the stock exchange, such as investment and pension funds, are allegedly unhappy over the banks aggressive, but often unclear strategy. The failure of Elektrim is expected to tarnish the bank's glowing net profit forecasts of PLN408 million, the paper says. =========== S W E D E N =========== LM ERICSSON: Battered in Market Last Week Due to Weak Outlook ------------------------------------------------------------- LM Ericsson's "B" shares shed 32% and yields of its bonds rose significantly last week as fears swept through investors following the firm's bleak market outlook, says the Financial Times. The company warned last week that it will end the year in red and will only recover next year. The company blamed the continuing slump in the market for the gloomy prospects. Analysts say it didn't help that the company also failed to disclose any detail of a planned SEK30 billion rights issue later this year. "They need to give exact details of what they need the money for," DWS fund manager Britta Unterberg told the Financial Times. Due to the cloud over the rights issue, some credit analysts, including ABN Amro's Roger Appleyard, believe the company is in so much trouble than it is willing to admit. "It is not impossible to imagine a SEK5 billion a quarter cash outflow over the next 18 months, so the rights issue may only be buying time," Mr. Appleyard told the Financial Times. Peculiar among Sweden's big companies, Ericsson has a system that grants "A" shares 1,000 times the voting rights of "B" shares, the report says. This arrangement has allowed two Swedish shareholders -- Investor, the holding company of the Wallenberg family, and Industrivarden, which is linked to the bank Svenska Handelsbanken -- to control the group, even though they only hold 7% of Ericsson's capital. This has irked other institutions for a while now. Despite holding 47.5% of Ericsson's capital, foreign investors only had 1.6% voting rights at the end of last year. Only new "B" shares will be issued in the rights offering, the paper says. =========================== U N I T E D K I N G D O M =========================== BIG FOOD: Escapes Fine From FSA, But Slammed for Misleading Data ---------------------------------------------------------------- The Financial Service Authority accused last week the Big Food Group of misleading investors about its prospects by delaying disclosures of trade slumps in 2000. The British finance watchdog said the company violated stock market listing rules by failing to admit a slump in mid-December 2000 following a poor Christmas trading season that year. The company also failed integrity guidelines by giving a misleading market briefing, even when aware that trade had "deteriorated significantly," BBC News said. The news channel says the frozen food firm declared in a December 13, 2000 announcement that "Iceland's management remains positive on the group's future prospects." This despite internal data that "indicated that actual profits were 51.1% below budget." "If a private investor had bought Iceland shares on December 14, they would not have had full information," an FSA spokesman told the BBC News. "This is a serious breach of our rules," the spokesman said, noting that Iceland eventually issued a profit warning at the end of January. Investigators from the Department of Trade and Industry are also looking into the sale by former Chairman Malcolm Walker of Iceland shares a few weeks before the release of the January 2001 warning, and his resignation the same day. Despite this revelation, Big Food is not going to be meted out a financial penalty, as the Authority can only impose unlimited fines for breaches of listing regulations committed after December 2001. BIG FOOD: Retail Chain Replies to FSA Announcement -------------------------------------------------- The Big Food Group plc, U.K. retail chain group, notes the announcement made by the Financial Services Authority that it has concluded that Big Food contravened paragraphs 9.2 and 9.3A of the Listing Rules in relation to timing and content of an announcement issued by Big Food on December 13, 2000 and the failure to make an announcement on or before January 2, 2001 in relation to the Company's financial performance. The company, under its new senior management team appointed from 2nd January 2002, co-operated fully with this inquiry. As an integral part of the recovery program of the retail company that the new management team has put in place, a review of internal controls and reporting procedures was carried out and appropriate improvements implemented. Big Food notes that in paragraph 16, the announcement read: "The Company has informed the FSA that following significant senior management changes within the Company during January 2001 improved reporting procedures and internal controls have been introduced and the FSA also noted steps taken by present directors of the Company to ensure future compliance with the Listing Rules." Commenting on the FSA announcement George Greener, Chairman, said: "We have co-operated fully with the FSA's inquiry. A new and strong management team is in place, having implemented improved controls and reporting procedures within the Group, and is now focusing on the recovery of the business." CONSIGNIA: Set to Record Huge Losses Due to Restructuring Cost -------------------------------------------------------------- British post operator Consignia is expected to report huge losses next month due to various exceptional charges mostly related to its restructuring program, says The Times. According to some observers, the group could absorb as high as GBP1.3 billion in losses, of which GBP400 million will reflect the cost of shedding 30,000 staff and the closure of some 3,000 urban post offices. Asset write-downs at the loss-making Parcel Force will account for the balance. There is still no word from the postal regular Postcomm whether it will accede to the plea by Consignia to slow down the liberalization of Britain's postal network. The report says the regulator is also expected to publish a bulletin next month where it will bare its decision on the request. The paper says the decision is critical and a number of foreign postal groups are also waiting for its publication. Among them are TPG, the Dutch postal giant, and Germany's Deutsche Post, both keen on increasing their operations in the British market. Business Post, the UK-listed parcel-delivery service, also has an interest in Postcomm's decision. Observers say the regulator could make concessions, one of them allowing Consignia to increase the amount of money it charges competitors for access to its network. Consignia, in turn, would have to improve service levels. The level at which network- access charges are set is crucial to Consignia's future profitability, the paper says. ITV DIGITAL: Microsoft Among Potential Buyers, Reports Say ---------------------------------------------------------- American software giant Microsoft is reportedly in the process of assembling a consortium to rescue ITV Digital from liquidation, BBC News said Sunday. Citing a report by The Observer, the news channel said Microsoft is believed to be eager to enter the interactive TV market following its acquisition of stakes at NTL and Telewest. A Microsoft spokeswoman has refused to comment on the speculation, the report says. Meanwhile, according to the same account, the network can still continue operating until early next week. The report says Deloitte & Touche, the interim administrator, has enough money to keep the company running and air the Football League play-offs over the weekend. The company faces liquidation in a few days if a buyer does not come forward. ITV DIGITAL: BSkyB Sees Futility in Trying to Rescue Network ------------------------------------------------------------ There is little to gain from helping ITV Digital up its feet again, says BSkyB CEO Tony Ball in rejecting calls to help save the troubled digital network, which has only days to live if not rescued. BBC, a digital content provider faced with the likely possibility of a limited channel for this type of programs, had asked the cable firm last week to join a rescue consortium. BBC director general Greg Dyke was quoted by the Telegraph last week as saying that "the only candidate likely to make pay DTT [digital terrestrial television] work is BSkyB, who have the content, the scale, the expertise and the cash to give it a chance." The paper says Mr. Ball is of the opinion that there is nothing to be gained in managing a competitor. Sky was thrown out of the original digital terrestrial television consortium by EU competition authorities. To reverse that would require a big legal effort for little return, the paper says. Meanwhile, if the absence of a buyer won't lead the company into liquidation, content providers will. According to the paper, ITV Digital is set to renew contracts with Sky, Disney and the Viacom-owned MTV. Sky's contract was up for renewal yesterday, while MTV today. If they refuse to continue to supply channels, ITV Digital could be switched off immediately, with the license to broadcast withdrawn by the Independent Television Commission, the paper says. MARCONI PLC: Banks Threaten to Take Reins From Current Management ----------------------------------------------------------------- Banks are threatening to takeover the management of Marconi Plc if the company's top brass remain unclear about their salvage plans for the troubled telecom equipment maker. City sources told The Observer recently that some or all of the company's officials could be forced to step down by a banking syndicate owed more than GBP2.5 billion. "Unless the banks [headed by HSBC and Barclays] are convinced by a management rescue plan within the next week, resignations at the top of Marconi are inevitable," one financier told The Observer. Accordingly, banks are increasingly irritated by the lack of direction in the current rescue efforts. Confidence in the team headed by Chairman Derek Bonham, CEO Mike Parton and CFO Steve Hare is said to be at its lowest level. The banks have already expressed desire to have a debt-restructuring specialist appointed to the board. The current rescue plan involves selling U.S. assets, such as Fore Systems and Reltec, which were acquired by Marconi for billions of pounds at the height of the telecoms boom. There's also the option of a debt-for-equity swap, in which creditors agree to write off loans in return for shares in Marconi. Creditors also have the option to put the company into insolvency, although some say this is not yet imminent. *********** 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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *