/raid1/www/Hosts/bankrupt/TCREUR_Public/020517.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Friday, May 17, 2002, Vol. 3, No. 97
Headlines
* B E L G I U M *
SN BRUSSELS: Wants to Cut Short Tie-up Arrangements With Virgin
* C Z E C H R E P U B L I C *
CESKA SPORITELNA: Delisting, Buyout by Austrian Near Completion
KTP QUANTUM: Exec Behind Demise Now Under Custody, Awaiting Trial
* F R A N C E *
COMPLETEL EUROPE: Inks Restructuring Pact With Bondholders
LM ERICSSON: Will Cut 239 Jobs in French Division
* G E R M A N Y *
ARTSTOR AG: High-end Hardware Maker Applies for Insolvency
GIB SA: Liquidator to Make First Cash Distribution on June 30
HERLITZ AG: Insolvency Could Be Wrapped up as Early as June 30
PHILIPP HOLZMANN: Algerian Firm Gains First Base on International
MAN AG: Interim Report for Three Months Ending March 31, 2002
* I T A L Y *
FIAT SPA: Books Half-a-billion Loss in First Quarter
FIAT SPA: Puts on the Block Three Units Worth EUR 3BB
FIAT SPA: To Talk With Unions on Layoff to Affect 6,000
* N E T H E R L A N D S *
KPNQWEST NV: Admits Cash-crunch After Banks Cut Access to Credit
KPNQWEST NV: Wins Deal to Connect Yugoslavia to EuroRings Network
UNITED PAN-EUROPE: Gains Modest Core Profit in First Quarter
* N O R W A Y *
KVAERNER ASA: First-Quarter Results Reveal Improved Operations
* P O L A N D *
NETIA HOLDINGS: Arrangement Proceedings Open in Warsaw
* U N I T E D K I N G D O M *
BRITISH TELECOM: To Take EUR 1.8BB Charge for European Units
CONSIGNIA: Leighton Admits Record Loss This Year, to Hike Stamps
ITV DIGITAL: League Claims EUR500 MM in Suit vs. Carlton, Granada
MARCONI PLC: Disclosure on Preliminary Statement 2001/2002
MARCONI: Will Not Update Public Regarding Restructuring Plans
MARCONI PLC: Wins GBP 10MM Contract to Expand Telia's Network
TELEWEST COMMUNICATIONS: Microsoft Withdraws Three Directors
=============
B E L G I U M
=============
SN BRUSSELS: Wants to Cut Short Tie-up Arrangements With Virgin
---------------------------------------------------------------
SN Brussels Airline, the successor of bankrupt Sabena SA, is
considering cutting short its cooperation with Virgin Express
Holdings Plc, says Dow Jones Newswires.
The code-sharing and other tie-ups pact will end in March 2003
yet. The cooperation allowed the two airlines to share
operations at Brussels Zaventem airport as well as share routes
to Copenhagen, London Heathrow, Madrid, Barcelona, Rome and Nice,
the report says.
"We are considering taking over these routes with our own
planes," SN spokesperson France Nivelle told the newswire. He
said a final decision will be made in October.
Analysts have seriously doubted that the Belgian market is big
enough to support operations of SN Brussels, Virgin and Ryanair
Holdings Plc, which operates from Charleroi, south of Brussels.
Mr. Nivelle says the airline plans to buy new planes to run the
Virgin routes or ink code-sharing arrangements with other
airlines.
For its part, Virgin says it won't be affected by the move,
pointing out that its business model does not compete with that
of SN Brussels. Virgin operates as a low-fare airline in
contrast with SN Brussels' full-service model.
"The market is working in our direction. More and more people
prefer low-fare travel, and we are much stronger economically
than we were a year ago," Virgin spokesman Yves Panneels told the
newswire.
Virgin once held talks with SN Brussels over a merger arrangement
when the latter was still teetering on the brink of bankruptcy.
It broke off negotiations in February when Virgin's owner Sir
Richard Branson was told that he wouldn't be running the new
company.
===========================
C Z E C H R E P U B L I C
============================
CESKA SPORITELNA: Delisting, Buyout by Austrian Near Completion
---------------------------------------------------------------
The de-listing of the Czech Republic's second-largest bank, Ceska
Sporitelna, from the Prague Stock Exchange is nearly certain as
Anteilsverwaltungssparkasse (AVS) and Erste Bank now control more
than the required stakes to seal this decision.
According to the Prague Business Journal, both have a combined
80.35% control over the bank, more than enough the 75% needed to
pass a resolution supporting the delisting during the annual
general conference on May 22. In addition, they also can now
make a mandatory buyout offer for the remaining shares not in
their control.
AVS, an Austrian savings bank foundation, says shareholders
controlling about 23.9% or 33.64 million shares had already
accepted its voluntary offer for ordinary shares. The offer made
in late March gives a 22% premium at CZK375 (US$11.16) per share.
According to the Troubled Company Reporter-Europe, AVS wants to
have full control of the company before taking it private. The
buyout will cost AVS some CZK23 billion, the journal says.
Key to AVS' success in gaining the necessary stake to force the
delisting of the company was the recent decision of European Bank
for Reconstruction and Development (EBRD) to give up its 5.9%
interest.
In a statement issued last week, EBRD's First Vice President,
Noreen Doyle said: "Ceska Sporitelna, having performed well in
recent years following the purchase of a majority stake by Erste
Bank, is now in a strong position to move forward without EBRD
involvement and to provide a top quality universal banking
service to its clients in the Czech Republic."
Moody's rated Ceska Sporitelna "D+" in January with a stable
outlook, largely due to restructuring success undertaken by Erste
Bank since it took majority control of the Czech lender.
AVS is also the largest shareholder at Erste Bank, controlling
41%.
Ceska had total assets of CZK474 billion (EUR13.5 billion) at
end-September 2001.
KTP QUANTUM: Exec Behind Demise Now Under Custody, Awaiting Trial
-----------------------------------------------------------------
Karel Takac, a leading executive behind the collapse of brokerage
firm KTP Quantum, was arrested late last week and is now awaiting
charges in relation to several anomalies unveiled at the company.
According to the Prague Business Journal, Mr. Takac maintains his
innocence, claiming that there's nothing wrong with the books of
the company. But bankruptcy administrator Jiri Sehnal insists
there's widespread fraud in the company's accounts costing
clients hundreds of millions of Czech crowns. Because of this,
he thinks clients won't get any of their money back.
In late March, the brokerage firm was declared bankrupt after
months of speculation over the future of some CZK2.2 billion
worth of assets belonging to about 28,000 clients.
The company's problems began when the Czech Securities Commission
fined the firm CZK2.5 million in August last year for promising
guaranteed returns of 14.5% and then 9.5%. Offering fixed
returns is banned under Czech securities law, says the journal.
An agreement was eventually reached between the two under which
KTP Quantum promised to improve the company's liquidity and cease
offering fixed returns, with deadlines of between six months and
one year to comply. But in February, the company broke these
undertakings, forcing the Commission to launch administrative
proceedings against it and threatening further fines of up to
CZK100 million.
By then, allegations had also surfaced that the company was
operating a pyramid scheme and that it didn't have the money to
pay its clients. The firm's woes turned for the worse when it
was discovered that its shares in spa company Lazne Jachymov had
been seized by Slovak company Penta Investments for failure to
meet payments on a loan worth CZK80 million.
The commission eventually ordered the freezing of the company's
assets, which forced it into bankruptcy. Analysts say the real
value of KTP Quantum is CZK1.6 billion.
===========
F R A N C E
===========
COMPLETEL EUROPE: Inks Restructuring Pact With Bondholders
----------------------------------------------------------
Completel http://www.completel.com/announced Wednesday that it
has signed an agreement with an ad hoc committee of holders of
Completel Europe NV senior notes (the Committee) in support of a
recapitalization plan for the Company (Recapitalization).
The Committee collectively owns over 75 % of the Company's
combined outstanding Senior Notes and Senior Discount Notes (the
Notes). The Recapitalization will involve a debt for equity swap
in respect of the Notes and the return to the holders of the
Senior Notes of the escrow funds established at the time of the
Senior Notes issuance.
Two of the Company's major shareholders (Meritage Private Equity
Funds and DeGeorge Telecom Holdings) have agreed to provide EUR
30 million in new capital upon the successful closing of the
Recapitalization, and certain of the existing bondholders on the
Committee have agreed to re-invest in the Company EUR 8 million
of cash, reflecting a portion of the escrow funds.
Post-Recapitalization, Meritage, DeGeorge and the bondholders
will own 96.6 % of Completel, with the existing shareholders
being diluted to the remaining 3.4%.
The Recapitalization will substantially deleverage the Company's
balance sheet and is expected to fund the Company to cash flow
breakeven. The Committee is unanimously supporting the Company's
proposed recapitalization, which would have the effect of
converting all of the Company's outstanding Notes into equity
securities.
The Recapitalization
The Company intends to effect the Recapitalization by means of a
pre-arranged Netherlands restructuring plan proceedure known as
an Akkoord. To avail itself of this proceeding, in the next two
weeks Completel Europe NV, the group's holding company, would
file for protection from its creditors, which consist almost
entirely of holders of the Notes. At the same time it would
submit to the Dutch courts a composition plan whereby bondholders
would receive an amount in Ordinary and Convertible Preferred B
shares in the ratios set forth below.
Senior Notes as of April 15, 2002 Number of shares received:
EUR 121,870,000 face value of 14% Per EUR 1,000 of principal
amount
Senior Notes due 2010 4,094 Convertible Preferred
B shares
4,094 Ordinary shares
EUR 105,300,000 accreted value Per EUR 1,000 of accreted
value of 14% Senior
Discount Notes
4,402 Convertible Preferred B
shares due 2009 4,402 Ordinary shares (face
value US$ 120,500,000,
accreted value
US$94,074,350)
The Recapitalization, which is subject to the support of the
holders of at least 75 % of the Notes and the sanction of the
Netherlands courts, would be binding on all bondholders,
effectively eliminating the Company's outstanding indebtedness
while permitting the Company's operating subsidiaries to continue
operations without disruption. The Company believes it has
obtained the level of commitments from the holders of its Notes
that would be required by the Netherlands courts to approve the
Recapitalization and retirement of all of its outstanding Notes.
Bondholders wishing to obtain additional information regarding
the terms of the Recapitalization are recommended to contact
bondholders' counsel, James Terry of Bingham Dana LLP, on +44 (0)
20 7375 9770 as soon as possible.
The aggregate amount of shares to be issued as part of the
Akkoord represents approximately 42.6 % of the Company's shares
that would be outstanding at the close of the Recapitalization on
an as-converted basis.
The new capital of EUR 30 million and the re-invested escrow of
EUR 8 million would receive Convertible Preferred A shares and
Ordinary shares representing approximately 42.6 % and 11.4 %,
respectively, of the then outstanding shares on an as-converted
basis, with the remaining shares (3.4 %) being held by existing
shareholders.
Post-Recapitalization, the Company's Supervisory Board would be
reconstituted as a six-member board comprised of two designees of
the Convertible Preferred A shares, two designees of the
Convertible Preferred B shares, and two independent directors
mutually acceptable to the investor group and the bondholder
group.
In accordance with their respective terms, in the event of a
liquidation of the Company, the Convertible Preferred A shares
will rank senior to the Convertible Preferred B shares, which
will rank senior to the Company's Ordinary shares. In addition,
upon liquidation, the Convertible Preferred A and B shares will
be entitled to receive, prior to any distribution in respect of
the Ordinary shares, an amount in cash equal to EUR 0.03 per
share.
As an alternative to an Akkoord, if the Company concludes that a
significant majority of bondholders support the Recapitalization,
it may pursue an out of court restructuring effected by means of
an unregistered exchange offer on substantially the same terms as
the Akkoord. This offer would take advantage of the exemption
from registration under the Securities Act provided by Section
3(a)(9) and could achieve a recapitalization much faster than
under an Akkoord. In addition, the Company may pursue a pre-
arranged U.S. Chapter 11 filing to accomplish the
Recapitalization.
Completion of the Recapitalization, which is expected to close
during the third quarter, is subject to approval of a share
capital increase by the Company's existing shareholders, the
closure or sale of the Company's UK operations, and other
customary conditions. The Company believes that it has obtained
the required level of commitments from its existing shareholders
to vote in favor of the capital increase and other required
actions.
After considering a range of options, the Board of Completel
voted unanimously to approve this transaction. The implementation
of the Recapitalization will allow the Company to focus its
management and resources on its French operations. Upon
completion of the transaction and the concurrent closing of the
issuance of new capital, the Company expects that its cash
balances, together with anticipated cash flow from operations,
will provide the Company with sufficient capital to fund its
operations through to cash flow breakeven.
Financial Advisors
In support of the Company's efforts to restructure and
recapitalize, Greenhill & Co., LLC, has acted as principal
financial advisor to the Company since January 2002.
Reverse Share Split
Subject to shareholder and regulatory market authority approval,
Completel is also anticipating a reverse share split in order to
maintain orderly trading, with this reverse split occurring
concurrent with the closing of the Recapitalization.
Q1 2002 Highlights:
-- Retail revenue grew by 18% to EUR 18.1 million relative to Q4
2001.
-- The adjusted EBITDA loss for the first quarter narrowed to EUR
9.8 million, a 41% (EUR 6.7 million) improvement over Q4 2001,
which itself followed a 33% improvement over the previous
quarter.
-- Completel's French cities collectively continue to be adjusted
EBITDA positive in Q1 2002, with Nice the eighth city to turn
positive this quarter.
-- Quarterly cash deployment was EUR 25 million in Q1 2002, a
reduction of 39% relative to the EUR 41 million underlying cash
outlay in the prior quarter. Quarter end cash stood at EUR 81.2
million, of which EUR 56.2 million is unrestricted.
-- Gross margin attained 29.7% for the quarter, versus 16.5% in
the prior quarter.
-- Selling, general and administrative expense was EUR 18.4
million, a decrease of 13% as opposed to Q4 2001, and represents
63% of revenue for the quarter.
Summary Financial Information
Q1 2002 Q1 2001 Growth Q4 2001 Growth
In EUR Millions Q1 02/ Q1 02/
Q1 01 Q4 01
Revenue 29.1 19.7 48% 28.0 4%
Gross Margin 8.6 1.0 760% 4.6 87%
Adjusted EBITDA (9.8) (24.3) 60% (16.5) 41%
Note: Adjusted EBITDA in Q1 2002 and Q4 2001 excludes expensed
restructuring, impairment and other charges of EUR 1.9 million
and EUR 161.2 million.
Tim Samples, CEO, stated, " We have launched a comprehensive
restructuring of our balance sheet that we expect will position
the Company to be fully funded through to free cash flow
positive. The restructuring strategy put forward by Completel is
in the best interest of all stakeholders, generates a minimum of
EUR 38 million in new cash resources and virtually eliminates the
Company's debt, positioning Completel to maintain its leading
role in the French CLEC market.
The restructuring now under way is made possible by the support
of a broad majority of bondholders, and by various existing major
shareholders, who see the Completel business plan as offering
attractive prospects post restructuring of the Company."
Q1 2002 results show 41% decrease in adjusted EBITDA loss
compared to Q4 2001 Completel announced continued growth in the
first quarter of 2002, coupled with a decrease of 41% in its
adjusted EBITDA loss for the quarter to EUR 9.8 million, and a
39% reduction in its quarterly cash outlay to EUR 25.2 million.
Completel also saw its eighth French city, Nice, turn adjusted
EBITDA positive.
The improvement in Completel's adjusted EBITDA margin for Q1 2002
over Q4 2001 resulted from planned reductions in selling, general
and administrative expense, which declined by 13% to EUR 18.4
million. This reduction was coupled with lower interconnection
costs and planned network efficiency gains that saw gross margin
rise to 29.7% from 16.5%. Completel's cash balance stood at EUR
81.2 million at the end of the quarter, after EUR 9 million for
capital expenditures primarily related to the connection of
client sites.
Completel made solid operational progress in Q1 2002 in its
retail business, with customer connections of 191 site additions
compared to 130 site additions in the same quarter a year
earlier. Retail customer ARPU for the first quarter was EUR
4,400, a 7% increase from EUR 4,100 in Q4 2001.
French revenue grew to EUR 23.0 million in Q1 2002
The French business, on which Completel will focus going forward,
accounted for 79% of the consolidated revenue for the first
quarter of 2002. Retail revenue in France grew 16% compared to
the fourth quarter of 2001, and now represents 65% of total
French revenue compared to 59% in the prior quarter.
Despite difficult market conditions, French wholesale carrier
services revenue grew 9% compared to Q4 2001, due in part to
continued increases in demand for voice traffic termination
services.
French ISP dial up services declined by 27% relative to Q4 2001.
This business line is gradually becoming less prominent within
the markets served by Completel.
German revenue held at EUR 5.3 million in Q1 2002
Overall German revenue did not change significantly from that of
the previous quarter, while the refocusing of operations helped
increase margins. Germany's adjusted EBITDA loss narrowed from
EUR 2.5 million in the fourth quarter 2002 to EUR 1.0 million in
the first quarter 2002.
Revenue Breakdown Q1 Q1 Growth Q4 Growth
In EUR Millions 2002 2001 Q1 02/ 2001 Q1 02/
Q1 01 Q4 01
Retail: Voice 13.7 5.9 132% 11.6 18
Retail: Internet & Data 4.4 1.9 132% 3.7 19 %
Carriers 5.4 2.8 93% 5.7 (5)%
ISP Dial Up Termination4.0 6.9 (42%) 5.3 (25 %)
IDC and Other 1.6 2.2 (27%) 1.7 (6 %)
Total Revenue 29.1 19.7 48% 28.0 4%
Note: Total Revenue for Q1 2002 and Q4 2001 include Estel
revenue, consolidated as of June 1, 2001.
Jerome de Vitry, COO, commented, "We now have the necessary
resources with which to move Completel ahead and remain a leading
fibre based business CLEC in France. Activity has been supported
by sound retail growth, with a sustained pace of new retail sites
connections, even under challenging market conditions. We expect
to continue to raise our penetration of higher value and national
retail accounts in France over the year ahead, while also seeing
the margin benefits of penetrating previous voice services
markets, as well as data markets, with our recently launched LAN
to LAN and IP VPN services.
Completel's gross margin improvement, to 29.7% in Q1 2002 from
16.5% in Q4 2001, reflects improved leverage on interconnection
costs as anticipated by management in late 2001. Gross margin
is expected to continue to improve as new customers are added to
the network. Selling, general and administrative expense
dropped to 63% of revenue, from 76% in the prior quarter, as the
result of overall cost reductions that are likely to prove
sustainable thanks to restructuring measures now well under way."
Lyle Patrick, CFO, added that, "Completel's cash outlays for the
quarter were again significantly reduced - by 39% in terms of
operating cash outlays. Our capital expenditures were reduced by
over 50% compared to the prior quarter. We continue to
capitalize on the advantage of having completed our city builds
faster than planned in 2001. With most of these expenditures
behind us, future asset deployment will be approximately 80%
success based and our cash deployment is being actively managed
to maximize early returns".
During the first quarter 2002, Completel also recognized a non-
cash charge of EUR 1.9 million to reflect balance sheet
restructuring costs.
German/UK Operations
On May 10, 2002 the Company sold its German operations (Completel
GmbH) to Arques AG, a German holding company of equity financing
with a business focus on the acquisition and development of
enterprises in redevelopment situations. Reciprocal commercial
agreements for voice and data services will be created allowing
Completel to serve its French customers that have, or will
develop, operations in Germany.
Additionally, the Company has reached an agreement to sell its UK
operation (iPcenta Limited) to a group led by Green Grove
Enterprises Limited. The sale is expected to be completed this
month.
These transactions and the implementation of the ongoing
restructuring will allow the Company to focus its efforts
entirely on its French operations, while significantly reducing
its cash commitments, as is further discussed below. (Note: The
attached condensed financial statements are consolidated as of
March 31, 2002 as both the German and UK entities were operating
at that time).
Funding and Outlook
While the Company previously estimated its funding gap (that is,
the additional financing required to bring it to cash flow
breakeven) to be approximately EUR 60 million to EUR 90 million,
in light of
(i) the anticipated elimination of interest payments
(estimated at EUR 30 million) upon exchange or
retirement of the Company's Notes pursuant to the
Recapitalization,
(ii) the cash savings from the sale of the German and UK
operations (estimated at approximately EUR 20 million),
(iii) better than previously anticipated adjusted EBITDA and
CAPEX results in the first quarter (estimated at
approximately EUR 5 million), and (iv) headquarters cost
reductions (estimated at EUR 5 million), the Company
currently estimates its funding gap to be approximately
EUR 30 million.
The Company expects that the EUR 38 million equity infusion to be
effected as part of the proposed Recapitalization will fully fund
its restructured operations to cash flow breakeven.
Completel believes that the trends of strong demand for its
retail services in France will continue in line with its
experience over the past year. This revenue growth, coupled with
increasing margins and cash management of CAPEX and all expenses,
will drive the Company to adjusted EBITDA breakeven in the
first quarter of 2003 and to free cash flow positive in the first
quarter of 2004.
Personnel Changes
Finally, effective May 17, 2002, Tim Samples, Chief Executive
Officer, and Lyle Patrick, Chief Financial Officer, will be
leaving Completel. Jim Dovey, Chairman of the Supervisory Board,
noted that " Tim and Lyle have been critical in transitioning
Completel to this point of a restructured and fully funded
company, and we wish them well as they pursue new opportunities.
We thank them for their successful efforts on behalf of
Completel."
Dovey further noted "that as we focus on the new Completel, the
Board has appointed former Chief Operating Officer Jerome De
Vitry to the position of Chief Executive Officer. Mr. De Vitry
has been a critical part of the management team and has led the
French operation since its inception and we are confident in his
leadership in these challenging times in the telecommunications
business." Mr. Dovey also announced the continuing roles of
Marie-Laure Ducamp Weisberg and Alexandre Westphalen as Senior
Vice President and General Counsel and Vice President of Finance,
respectively.
Completel is a facilities-based provider of fiber optic local
access telecommunications and Internet services to business end-
users, carriers and ISPs with activities predominantly located in
France.
LM ERICSSON: Will Cut 239 Jobs in French Division
-------------------------------------------------
The French division of Telefonaktiebolaget LM Ericsson, the
Swedish telecom equipment manufacturer, announced a
restructuring plan that will affect 239 of its French
operation's workforce.
This decision results from the crisis in the French telecom
sector, Wednesday's issue of Le Monde reported.
Ase Lindskog, the group's media relations director said
Ericsson's parent company in Sweden announced in May that it
plans to layoff 10,000 employees worldwide this year.
He adds that the group intends another 10,000 in redundancies
next year.
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G E R M A N Y
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ARTSTOR AG: High-end Hardware Maker Applies for Insolvency
----------------------------------------------------------
ArtStor AG files an application with the Local Court of Hamburg -
Court for Insolvency Proceedings - for insolvency proceedings due
to the company's inability to pay its debts, the company
announced Tuesday.
The group's subsidiary, Zeta AG in Munich, remains unaffected and
will continue its regular activities without restrictions.
Together with the court's insolvency administrator, the chairman
of ArtStor AG will continue intensive negotiations with strategic
investors aiming to secure the company's continuance.
As of December 31, 2001, the group's assets totaled EUR 30.1
million, while it posted EUR 27.8 million liabilities in the same
period.
A copy of Artstor's Dec. 31 financial disclosures may be viewed
at: http://www.artstor.de/investor/content/pdf/ArtStor_2001e.pdf.
For further information, contact: ArtStor AG, Siegfried
Briglmeier, VP, Tel.: +49 (0)89 31787-140, briglmeiers@zeta-
computer.de
GIB SA: Liquidator to Make First Cash Distribution on June 30
-------------------------------------------------------------
GIB SA shareholders are in line to receive the first liquidation-
related cash distribution on June 30, with a second one to occur
on December 31, says L'Echo.
The succeeding cash distribution will be made at least once a
year by the liquidator of the company, according to the report.
The report says the company is selling its 50% interest in
Disport to the other 50% holder, Sports Soccer of the UK. The
restaurateur is also seeking buyer for its wholly owned cafeteria
chain Lunch Garden, which could be snapped up by Carestel, the
paper says. Natural food restaurants Exki and computer outlets
Gecotec are also up for grabs.
As regard the 57.8% stake in listed unit Quick Restaurants,
management is still considering two options: to distribute the
Quick shares to GIB shareholders or sell it to a single buyer,
says the paper.
The group will hold an extraordinary general meeting on June 19
to formalize the decision to liquidate the company, the Troubled
Company Reporter-Europe said late last month.
According to said report, the firm opted for liquidation because
it on longer finds any opportunity for the company.
"The firm sees little economic justification for a holding
company with a diversified profile because of the traditional
discount to share valuation of such companies and low stock
market capitalization," the distressed-company newsletter said.
GIB's pro forma balance sheet for the quarter ending March 31
showed investments of EUR61.8 million, a subordinated loan of
EUR33.5 million to Quick, net cash of EUR1.372 billion,
shareholders equity of EUR1.227 billion and provisions for
liabilities and charges of EUR145.5 million, bringing total
assets and liabilities to EUR1.372.6 billion.
HERLITZ AG: Insolvency Could Be Wrapped up as Early as June 30
--------------------------------------------------------------
German stationery manufacturer Herlitz AG could exit from
insolvency proceedings as early as the end of June, says Financial
Times Deutschland/FT Information.
The firm will reportedly present its restructuring plan to
creditors by the end of this week, which means that an end-of-
June exit from the proceedings is feasible. The report says
chances of approval for the plan by creditors are favorable.
Leonhardt & Partner, the firm handling the company's insolvency
procedure, believes Herlitz will attract more interest once the
insolvency plan is cleared.
Herlitz has debts of EUR400 million, of which EUR300 million is
owed to a banking consortium led by Bayerische Hypo- und
Vereinsbank. The company could turn in a profit this year if the
proceedings are concluded swiftly and most of the debts erased,
says the report.
The company reported losses of roughly EUR52 million in 2001. It
petitioned the court for temporary creditor protection on April
2.
PHILIPP HOLZMANN: Algerian Firm Gains First Base on International
-----------------------------------------------------------------
Insolvent construction group Philipp Holzmann AG has reportedly
signed a preliminary agreement to send Holzmann International to
Algerian counterpart El Khalifa Group for still undisclosed
amount.
According to The Deal, a final pact is in the works, which could
be announced within days. Holzmann International handles the
group's operations outside Germany, except in the U.S., Austria
and Central and Eastern Europe. The unit generated sales of
EUR120 million in 2000 and is involved in infrastructure projects
in Asia and the Middle East.
The report did not state the advisers for the sale or how much
the Algerian group offered for the unit. Backed by Algerian
investors who plan to build a new city in the Algerian desert,
the group posted turnover of FRF7 billion (US$1 billion) in 2001.
Headed by CEO Rafik Abdelmounem Khalifa, the company is the third
largest in Algeria and operates Khalifa Airways. It is also
active in the pharmaceuticals, automobile rental and banking
sectors, says Frankfurter Allgemeine Zeitung.
Meanwhile, according to The Deal, due diligence is also currently
ongoing on the J.A. Jones unit, which is based in Charlotte,
North Carolina. Several German and international groups have
signaled interest in the unit, but Hochtief AG and Bilfinger
Berger AG are reportedly the frontrunners. Both have substantial
interests in the U.S. market.
A third unit is also up for grabs. HSG Technischer Service GmbH
is reportedly being courted by 10 to 15 bidders, including
internal management, which is contemplating a buyout, says
Financial Times Deutschland. The unit had worldwide revenue last
year of about EUR200 million.
Sources of The Deal told the paper that British PE company 3i
Group is among the bidders for the facilities management
business. It is reportedly offering EUR80 million for the asset.
Holzmann has yet to confirm this information. Hochtief and
Bilfinger Berger are also involved in this particular bid and
have already begun due diligence, the report adds.
The group collapsed and sought refuge in a German bankruptcy
court in March. It has debts of EUR1.6 billion and plans to pay
this up by selling assets.
Dutch rival Heijmans NV was the first to annex three of its units
last week. The three are: Dutch subsidiary Dubbers Malden BV,
Hanover-based Franki Grundbau GmbH, and Holzmann's branch in
Grafenwohr near Munich.
Dubbers-Malden specializes in tunnels, bridges and civil
engineering and employs 110 workers. It posts annual sales of
around EUR30 million, says the paper. Civil engineering firm
Franki, on the other hand, has 160 employees and generates annual
sales of around EUR40 million.
Active in servicing main customers in the U.S. military, the
Grafenwohr unit employs 130 staff and posts annual sales of
around EUR20 million, the report says.
Holzmann is also currently talking with German-Austrian road
builder Strabag AG, among others, for Holzmann's road-building
unit, Deutsche Asphalt, The Deal says.
Court-appointed insolvency administrator Ottmar Hermann is
temporarily managing the group.
MAN AG: Interim Report for Three Months Ending March 31, 2002
-------------------------------------------------------------
As predicted, business performance in MAN AG http://www.man.de
declined during the first quarter of 2002, the group said in a
statement released Wednesday.
Sales reached EUR 3.1 billion, 7% less than in the first quarter
of 2001 and new orders dropped by 18% to EUR 3.5 billion.
The earnings position reflected the particularly weak inflow of
new orders during the autumn of 2001, especially in those
divisions involved in quick-turnaround business, and was, as
expected, negative due to losses in the Commercial Vehicles and
Industrial Equipment and Facilities sectors.
However, MAN Technologie unexpectedly suffered from significant
extraordinary effects following losses at the European space
company, Arianespace and the insolvency of Fairchild Dornier.
Consolidated earnings before interest and taxes (EBIT) amounted
to EUR -38 million, after EUR 138 million, and before taxes to
EUR -75 million after EUR 91 million. This represented a loss of
EUR 0.24 (profit of EUR 0.35) per share.
In spite of lower figures compared with the very good first
quarter of 2001, demand recovered against the extremely weak
months of September to November 2001 and in most cases results
were within the scope of our budget for 2002.
The company hit its target for 2002 of reaching both new orders
and sales of between EUR 15.5 and EUR 16 billion and of improving
pre-tax earnings compared with 2001 (EUR 213 million).
Based on current estimates, the group's goal of improving
earnings fell subject to greater initial pressure than expected
at the beginning of the year, due to the unpredicted
extraordinary effects.
Although demand is still subdued in most areas, an upward
tendency is evident in the case of trucks. Based on the current
project status, the group added that MAN AG shall be in a
position to make up for most of the shortfall recorded in the
case of major orders.
=========
I T A L Y
=========
FIAT SPA: Books Half-a-billion Loss in First Quarter
----------------------------------------------------
Italian industrial group Fiat SpA bared Tuesday first-quarter
losses of EUR529 million, a complete reversal of last year's
EUR193 million net income for the same period, says CNN Europe.
As expected, Fiat Auto accounted for most of the drag, posting an
operating loss of EUR429 million for the quarter compared to only
EUR16 million a year ago. The poor performance of the unit was
also reflected in car sales, which dropped 11.2% in the quarter
as rivals like Peugeot won market share, the report says.
As a result, Fiat Chairman Paolo Fresco said the group will float
part of Ferrari, its prized sport and racing car business. The
group holds 90% of the unit, while the Ferrari family retains the
rest. The report says Fiat intends to maintain control of the
high-end car brand. The flotation will be made later this year.
The industrial group also plans to raise additional funds for its
combine harvesting and tractor manufacturer CNH Global. The
company also said it will "accelerate" asset disposals in the
first half of this year.
"We expect these two transactions to generate proceeds of at
least EUR1 billion euros and, in case of Ferrari, a large capital
gain," Mr. Fresco told shareholders.
Mr. Fresco says the recovery plan should return the auto unit to
profit by 2004. This will be made possible partly through a
total of EUR2 billion in synergies from its alliance with General
Motors, which owns 20% of Fiat Auto.
Analysts believe the continued slump in the auto division, which
also forced the group into the red for the first time last year,
makes it likely the shipment of the entire business to General
Motors by 2004.
Fiat holds an option to sell its 80% stake to the American auto
giant anytime between 2004 and 2008.
"The end game is to sell out to GM," Hilary Cook of Barclays
Private Clients told CNN.
Group debt ballooned to EUR6.6 billion in the first quarter, up
by about EUR570 million from end of 2001, the report says. Fiat
is targeting a debt level of EUR3 billion by year's end.
FIAT SPA: Puts on the Block Three Units Worth EUR 3BB
-----------------------------------------------------
Industrial group Fiat SpA, which recently reported losses of more
than half-a-billion for the first quarter, is peddling its Comau
tooling business for more than EUR900 million.
According to the Financial Times, the Italian conglomerate is
inviting venture capitalists to buy the unit along with Teksid,
its specialist foundry operations and parts of Magneti Marelli,
the captive components supplier. All in all, the disposal is
worth EUR3 billion.
The decision to sell Comau, regarded as one of the world's
leading makers of vehicle robotics and specialist assembly
equipment, follows the scrapping of an earlier plan to float it.
The paper says the initial plan was abandoned due to lack of
interest from trade buyers.
Meanwhile, the planned flotation of Ferrari will be made in two
stages. Citing an unnamed source, the paper says the initial
step will only involve a capital hike, which will be used partly
to finance its Formula One racing team and the expansion of its
Maserati sister-brand.
The second offering will involve floating part of Fiat's 90%
stake in Ferrari. Proceeds of this offering will be used to pay
some of the group's debt. The timetable for this transaction is
still unknown, but it might be revealed today when the company
briefs industry analysts, the paper says.
FIAT SPA: To Talk With Unions on Layoff to Affect 6,000
-------------------------------------------------------
Up to 6,000 workers could be laid off as a cost-cutting measure,
most of them in Italian plants, press sources of Ananova say.
Chief Executive Officer Paolo Cantarella says: "We intend to use
all available means of flexibility allowing us to confront the
drop in demand in the most painless way."
Fiat SpA, which employs 198,000 globally, including 100,000 in
Italy, said the demand for cars in Italy has fallen sharply in
the first four months of the year.
The car maker's meeting with its unions comes a day after a
shareholders' meeting where the group reported losses of US$ 482
million in the first quarter of 2002.
The poor result were attributed to the company's weak performance
at Fiat Auto, the group's core auto division.
Fiat Auto is 20% owned by U.S. company General Motors Corp.
=====================
N E T H E R L A N D S
=====================
KPNQWEST NV: Admits Cash-crunch After Banks Cut Access to Credit
----------------------------------------------------------------
Gasping KPNQwest NV, the Dutch provider of Internet access to
companies, admitted early this week that it doesn't have enough
cash to sustain operations this year.
This is a complete turnaround from the firm's pronouncement in
March, when it claimed that the year is fully covered, Bloomberg
notes.
"Under present circumstances, without sufficient additional
financial support from shareholders, strategic buyers or third-
party investors, KPNQwest is unable to draw further funds from
the existing credit facility in order to meet its funding
requirements for all of 2002," the company said in an e-mailed
statement.
News of the admission immediately sent the company's shares on a
tailspin, shedding as much as half their value, says Bloomberg.
Analysts also changed their rating overnight from "hold" to
"sell."
"It's even worse than I thought. They said in March they were
fully funded; now they say they may go under. One has to wonder
how things can go wrong this fast," Effectenbank Stroeve analyst
Philip Scholte told Bloomberg. He rates KPNQwest "sell."
The company also admitted that "there is substantial risk that
there may be no underlying value to either [the company's] debt
or equity securities."
The company has debts of about EUR1.8 billion and had already
started talks with banks and major shareholders on reorganizing
this obligation before the admission this week. The company says
the discussions will continue.
Compounding the firm's woes is the lack of compulsion on the part
of Qwest to extend financial help on the ailing joint venture
with former Dutch monopoly Royal KPN NV. The American telecom
operator holds a 47% stake in the business.
In a PR Newswire statement, Qwest said it will only extend a
lifeline if "it makes sense for [Qwest] shareholders."
Royal KPN NV, on the other hand, has repeatedly said that it had
already extended "maximum exposure" to the venture, referring to
EUR700 million total investments, which includes EUR150 million
in cash.
Analysts believe the company now has three options: lower debts,
sell assets or find a buyer. The latter, however, is unlikely,
they say.
"As no one will want to buy them right now, all they can do is
threaten bondholders with bankruptcy proceedings to force them to
swap debt into new shares," Bank Insinger de Beaufort analyst
Martijn den Drijver told Bloomberg. He also rates the firm
"sell."
KPNQwest's US$450 million of 8 1/8 percent bonds maturing in 2009
were recently trading at 7 cents on the dollar, compared with 70
cents in January, according to prices quoted on Bloomberg. Its
stocks have already lost 90% their value this year, losing as
much as 50 euros cents to 49 cents on Wednesday, says the news
outfit.
KPNQWEST NV: Wins Deal to Connect Yugoslavia to EuroRings Network
-----------------------------------------------------------------
Despite its gloomy outlook, KPNQwest NV has managed to corner a
deal with Yugoslavian firms ISP EUNet Yugoslavia and DNS Europe,
industry paper Total Telecom reports.
The deal commissions the Dutch telecom network operator to
install an ATM/IP E3 line that will connect the East European
country to the EuroRings network. The deal also includes a joint
marketing component that will promote KPNQWest's other IP-based
services.
The company says it has a total capacity of 34 Mbps and takes
Yugoslavian data traffic directly onto the carrier's 25,000-km
pan-European network.
"This unique partnership with KPNQwest will significantly enhance
the performance and speed of Internet connection for all
Yugoslavian Internet users," Mirjana Rosic, general manager of
EUNet Yugoslavia, told Total Telecom.
"It also gives our national businesses access to a tried and
tested set of world-beating IP and ATM services, with support at
both a national and international level. In addition, this
partnership will offer considerable international connection
opportunities to our government, the banking institutions and
large corporations throughout Yugoslavia," the manager said.
EUNet has 80,000 end-user customers and 10,000 business users,
says Total Telecom.
UNITED PAN-EUROPE: Gains Modest Core Profit in First Quarter
------------------------------------------------------------
Just weeks after Arthur Andersen expressed doubts on United Pan-
Europe Communications NV's ability to move on as a going concern,
the group reported positive first-quarter core profits.
According to Reuters, the Dutch cable operator had core profits
of EUR55 million as revenues for the quarter grew to EUR346
million from EUR333.4 million a year ago. The profit also
reversed last year's EUR61 million core loss before interest,
taxes, depreciation and amortization.
The company, however, did not give a financial outlook for the
succeeding quarters or the entire year, says the news agency.
Andersen, the embattled accounting firm now facing trial for
obstruction of justice in the U.S., noted in a Securities and
Exchange Commission filing recently that the company's survival
is doubtful.
"The company has suffered recurring losses from operations and
has a net capital deficiency that raises substantial doubt about
its ability to continue as a going concern," Andersen wrote.
The company is currently negotiating a debt-for-equity swap with
bondholders holding EUR7.5 billion worth of securities. Liberty
Media, owned by cable tycoon John Malone, is expected to take
control of the company after this transaction. He bought most of
the cable operator's bonds last year at pennies on the dollar.
Full-year results for 2001 showed losses of EUR4.4 billion, more
than the EUR2 billion the company lost the year before. It also
recorded a write-down of EUR1.5 billion on the value of its fixed
assets.
===========
N O R W A Y
===========
KVAERNER ASA: First-Quarter Results Reveal Improved Operations
--------------------------------------------------------------
Kvaerner, the international oil services, engineering and
construction, and shipbuilding Group, today announced its results
for the three months ending March 31, 2002.
Operating profit for the Kvaerner Group in the first quarter of
2002 amounted to NOK 160 million, compared to a loss of NOK 345
million in the previous quarter. Coming out of a difficult year
in 2001, the Group has restored profitability.
In the first quarter of 2002, three of the four business areas
reported operating profits. Including NOK 31 million of non-
recurring costs related to the integration of former Aker
Maritime units, operating profit in Aker Kvaerner was NOK 81
million. Aker Maritime units were consolidated with effect from
March.
Kvaerner E&C (Engineering & Construction) reported an operating
profit of NOK 18 million, and Shipbuilding, NOK 137 million.
Kvaerner Pulp & Paper had an operating loss of NOK 55 million
during the period.
The financial restructuring of the Group was successfully
completed in the first quarter. Net interest-bearing debt was NOK
940 million at the end of March, reduced from NOK 6.3 billion at
the end of 2001.
Correspondingly, the equity ratio at the end of March 2002 was
22.9 % compared with 7.0 % at the beginning of the year.
Inclusive of subordinated debt, the adjusted equity ratio at the
end of the first quarter was 35.5 %.
Several changes to the operational structure of the Group were
completed, including the combination with the oil and gas units
of Aker Maritime, the establishment of a jointly owned shipyard
management company, and the move of the head office from London
to Oslo.
In May, further changes were introduced. Motivated by a wish to
service its global and regional customers more effectively,
Kvaerner announced that the oil and gas activities of Kvaerner
E&C in Houston and Asia Pacific would be integrated with Aker
Kvaerner. The change will allow Kvaerner E&C to address more
clearly the needs of its customers and concentrate its efforts on
improving its existing global operations.
At the end of March, the combined order reserve of the Group was
NOK 47.5 billion, an increase of NOK 10.9 billion since the
beginning of the year.
The former Aker Maritime companies joined in March with a
combined reserve of NOK 13.2 billion. The order intake for Aker
Kvaerner was exceptionally good in the first quarter this year,
with significant new orders relating to the Kristin field
development project and long-term maintenance and operation
contracts in Norway.
Meanwhile, the order reserve in the Shipbuilding and Kvaerner E&C
business areas declined through the first quarter and new orders
are required.
The new financial and industrial structure of the Group
represents a sound foundation for continued operational
improvement. Management is spending much time with key customers
to ensure that Group priorities are aligned with customer
requirements.
Internally, management is focusing on making improvements for
health, safety and environmental issues, reducing costs,
improving productivity, and a strengthening of the risk
management culture throughout the Group.
Operational performance is expected to remain relatively strong
in Aker Kvaerner for the rest of the year, while the position in
Kvaerner E&C and Kvaerner Pulp & Paper is expected to gradually
improve. The Kvaerner shipyards will produce varying results in
the coming quarters.
Kvaerner group's activities are organized in four core business
areas: Aker Kvaerner (Oil & Gas), E&C (Engineering &
Construction), Pulp & Paper, and Shipbuilding.
Following the merger between Aker Maritime and Kvaerner's Oil &
Gas business, the Kvaerner Group expects to have revenues in 2002
approaching US$ 6 billion, with some 42,000 permanent staff
located in more than 30 countries throughout Europe, Africa, Asia
and the Americas.
To download the press release and presentation (including
consolidated key figures for the Group and key figures for the
business areas) visit http://www.kvaerner.com.
===========
P O L A N D
===========
NETIA HOLDINGS: Arrangement Proceedings Open in Warsaw
------------------------------------------------------
Netia Holdings S.A., Poland's largest alternative provider of
fixed-line telecommunications services, announced Wednesday that
the court in Warsaw on May 15 opened an arrangement proceeding
with respect to the company, following its motion filed on
February 20, 2002, with the deadline for verifying creditors'
claims set for June 18, 2002.
As previously announced, filings for opening of arrangement
proceedings were also made on February 20, 2002 by two of Netia
Holdings S.A.'s subsidiaries, Netia Telekom S.A. and Netia South
Sp. z o.o.
On April 22, 2002, arrangement proceedings were opened for Netia
Telekom S.A. and the announcement by the court of the decision
regarding opening proceedings for Netia South Sp. z o.o. is
scheduled for May 20, 2002.
The arrangement proceedings for Netia Holdings S.A., Netia
Telekom S.A. and Netia South Sp. z o.o. are occurring in the
context of the Restructuring Agreement reached on March 5, 2002
with Netia's bondholders and certain of its creditors.
===========================
U N I T E D K I N G D O M
===========================
BRITISH TELECOM: To Take EUR 1.8BB Charge for European Units
------------------------------------------------------------
The restructuring British Telecom was expected to announce yesterday
a GBP1.8 billion write-down on its European assets in its
fourth-quarter results for the year, says the Independent.
The charge relates specifically to its fixed-line operations in
Germany, the Netherlands and Ireland. Analysts expected the bulk
of the write-down to relate to Viag, the company's unit in
Germany.
These units -- Telfort in the Netherlands and Esat in Ireland --
fall under the loss-making Ignite division. These are the
leftover businesses when the company demerged mm02, the mobile
phone company that took over all its mobile phone operations
abroad last autumn.
Analysts at Dresdner Kleinwort Wasserstein believe the company
could announce a write-down of BT Ignite Europe. This unit is
currently valued at about GBP1.5 billion on the company's balance
sheet, says the paper.
CEO Ben Verwaayen had recently threatened to shutdown
unprofitable units, particularly those under the Ignite label.
He has set his sights on getting the British telecom giant back
on course, targeting a 15% growth each year and breaking even, on
an EBITDA basis, by next March.
CONSIGNIA: Leighton Admits Record Loss This Year, to Hike Stamps
----------------------------------------------------------------
Ailing British postal operator Consignia is planning an urgent
hike in first- and second-class stamps in order to compensate the
expected record loss of the group for the year.
The one-penny increase will make first-class stamps cost 28p
apiece and second-class stamps 20p each. Chairman Allan Leighton
doesn't see any hindrance to the plan.
"I happen to think that 27p for a first class stamp is probably
one of the best value items that anybody can purchase any day of
their lives. And do I still believe that is the case at 28p? Yes
I do, and therefore that is why I think we can put the price
increase through," Mr. Leighton said during a "File on 4" program
of BBC Radio 4.
During the same program, the chairman refused to confirm that the
group is in line to suffer a GBP800 million loss this year.
Consignia is also expected to report a record deficit later this
month in its 2001 accounts.
"You'll have to wait and see for the results. Without any doubt
they will be the Post Office's worst results ever," Mr. Leighton
said.
Similarly, Mr. Leighton also did not provide updates on the
group's GBP600 million investment in European postal companies.
The program, however, revealed details on one deal in Sweden,
which raises questions on Consignia's foray abroad.
File on 4 discovered that Consignia had invested GBP25 million in
a Swedish company, which it sold back to the founder 18 months
later for only one pound. The businessman later re-sold the
stake to the Norwegian Post Office for GBP5 million.
Mr. Leighton said the investment program was carried out before
his time as chairman. He said he is now reviewing the group's
investment strategy.
"In the scheme of things I can understand absolutely the
strategy, though certainly the execution could have been better,"
he said.
"For me at the moment it's let's get back to our core business;
it's let's look after our people; let's improve our service
levels. If we want to invest in things we want a return... and
we have got to be much more conscious of the money that we
spend," he added.
ITV DIGITAL: League Claims EUR500 MM in Suit vs. Carlton, Granada
-----------------------------------------------------------------
The Football League decided to take Carlton Communications and
Granada, the ITV Digital co-owners, to court Tuesday for GBP500
million in damages.
The league, represented by John Verrill of the law firm Lawrence
Graham, told the court that the two media groups are liable for
paying the remaining GBP178.5 million owed by ITV Digital on a TV
deal.
The plaintiffs argue that the co-owners cannot escape liability
simply by claiming absence of "parent company guarantees" because
its joint-venture agreement mandates that any commitment of more
than GBP10 million would require the unanimous approval of the
pair.
The disputed three-year broadcasting contract with the League is
worth GBP315 million.
"Clearly, the Football League deal was done in accordance with
the joint venture agreement. It must have done [so], because any
expenditure of more than GBP10 million required the approval of
Carlton and Granada," solicitor Verrill told the Financial Times.
For a while now, Carlton and Granada have refused to honor the
contract by claiming that they did not sign adequate "parent
company guarantees." Oddly, though, it tried to settle the row
with the League, when the channel was still under administration.
On Tuesday, the two broadcasters, represented by Lord Grabiner QC
and Gordon Pollock QC both of Slaughter & May law firm, again
reiterated their position and boasted that the league had no
case.
"The advice has been double-checked and triple-checked. It is
robust. So we look forward to seeing the League in court,"
Granada told the Financial Times.
MARCONI PLC: Disclosure on Preliminary Statement 2001/2002
----------------------------------------------------------
Marconi plc, the London-based telecoms equipment manufacturer,
announced Thursday its financial results for the twelve months
ending March 31, 2002.
The group summarized the financial highlights as follows:
* Group Sales GBP4.6 billion, of which GBP3.1 billion in
the Core
* Group and joint venture operating loss (before
exceptional
items and goodwill amortization): GBP 463 million;
significant operating cost savings achieved during the
year offset by gross margin decline
* Pre-tax loss: GBP 5,664 million (after exceptional items
and goodwill amortization)
* Operational Review targets, set by the new management
team in September, achieved
- Core business operating expenses at year-end
consistent with GBP 1 billion annualised target
- All major Capital business disposals completed; cash
proceeds over GBP 1.5 billion since September
(including Medical Systems)
- Net debt GBP2.9 billion well within target range
* GBP 365 million operating cash inflow since September 1,
2001
* Mobile Division to be transferred to Capital and managed
for value; planned IPO of Strategic Communications
announced
* Debt restructuring discussions ongoing with syndicate
banks and certain bondholder representatives regarding
the appropriate capital structure for the Group; could
lead to a dilution of value for existing shareholders
Commenting on the results, Mike Parton, chief executive, said:
"The last year has been an extremely challenging period across
the telecommunications sector and our disappointing full year
results reflect this. However, the Board believes Marconi has
made considerable progress over the last seven months of the year
in refocusing around our Core business and in reducing net debt
and our cost base. Most importantly, we have generated
significant operating cash during the period.
"Our on-going three-way restructuring discussions with our
syndicate banks and bondholders have entered a new phase and are
being conducted in a focused and constructive environment.
The conference call can be accessed on our web-site or by
dialling +44 (0)20 8896 4300 (in the UK) or +1 617 801 9702 (in
the US) and quoting "Marconi Annual Results".
A replay facility will be available on our web-site or by
dialling +44 (0) 1296 618 700, access code 586263 (in the UK) or
+1 617 801 6888, access code 42996 (in the US).
Contact Information:
David Beck/Joe Kelly Heather Green
Public Relations Investor Relations
+44 (0) 207 306 1771 +44 (0) 207 306 1735
joe.kelly@marconi.com investor.relations@marconi.com
A full version of the company's latest financial disclosure may
be viewed at:
http://www.marconi.com/html/investors/corporatenews.htm
MARCONI: Will Not Update Public Regarding Restructuring Plans
-------------------------------------------------------------
Marconi plc announced Wednesday that its discussions with its
bank and bondholder creditors have entered a new phase.
Tripartite discussions are now underway and have been
constructive in nature. In these circumstances, it has been
agreed between the three parties that it would be helpful if no
new information material to these discussions is published at
this time.
This is why the Company has not presented its business plan on
Thursday, May 16, 2002, as previously indicated.
Marconi plc is a global telecommunications equipment and
solutions company headquartered in London. The company's core
business is the provision of innovative and reliable optical
networks, broadband routing and switching and broadband access
technologies and services.
MARCONI PLC: Wins GBP 10MM Contract to Expand Telia's Network
-------------------------------------------------------------
Marconi will supply its new range of high capacity transport
systems and digital cross connects to Telia, the Swedish telecoms
operator, in a new one-year GBP10 million frame contract,
renewable for an additional year.
Marconi's SDH solutions will help Telia to respond to the demands
of advanced, multiservice broadband communications, strengthening
the core of its Nordic and International networks.
The frame contract covers SDH systems such as high capacity
transport equipment up to 40Gbit/s and latest generation digital
cross connect equipment, including new products in the pipeline
as these become available. It will enable Telia to maximize its
existing SDH systems, providing more technology and greater
functionality per pound invested and reducing operating costs.
Telia International Carrier supplies service to other operators
across Europe and globally, with a 40,000 Km international
backbone linking 50 cities in Europe and North America.
The company has a strong record of innovation and was one of the
first customers for SDH in 1992. Over 10,000 units of Marconi SDH
equipment have already been installed in the Telia network. The
frame contract covers products which are currently being
launched, and Telia will be among the first to benefit from their
enhanced features in their network.
The new products are designed to extend the life and capacity of
existing SDH investment, whilst seamlessly integrating with next
generation photonics equipment, providing a natural upgrade path
to expand their network layer between SDH and DWDM.
Marconi is a leader in the European SDH market with approximately
25% market share, according to a recently published report by
RHK*, a leading telecom market research firm.
"These products are a key investment in the development of our
multiservice, broadband business. We chose Marconi again because
of the strength of its SDH offering and the new products it is
introducing this year will help enhance our core network at a
time when maximising our investment in our existing assets is of
the utmost importance," said Mattias Fridstrom of Telia
International Carrier.
"This is an exciting example of how Marconi delivers innovative
solutions to an innovative customer," commented John Wanklyn,
international managing director at Marconi. "The relationship
with Telia as an early adopter has always been one of close co-
operation and these new products are designed with such customers
in mind. Telia will be able to protect and maximise its existing
SDH investment and at the same time continue to move its network
toward the all-optical next generation. This is a timely
confirmation that Telia continues to rely on Marconi equipment
and networks, as it has done since 1992, for the backbone of its
transport business."
Telia's wholly owned subsidiary, Telia International Carrier,
provides IP, Capacity, Voice, Infrastructure services and carrier
neutral co-location solutions. The company is the leading
European carrier of transatlantic IP traffic to the USA.
Its wholly owned multi-fibre optic network - the Viking Network -
provides high capacity bandwidth and offers end-to-end
connectivity round the world.
The network is a giant investment-intensive venture designed to
expand Telia International Carrier to cover Scandinavia, Europe
and the USA. The infrastructure in Europe is designed as a multi-
duct network connecting all significant cities with
communication, supporting IP, Voice and Data. The network covers
40,000 route kilometers throughout Europe and the USA, connecting
50 major cities.
TELEWEST COMMUNICATIONS: Microsoft Withdraws Three Directors
------------------------------------------------------------
Telewest Communications http://www.telewest.co.ukon Wednesday
said that Microsoft Corporation on May 14, 2002, informed the
group it was withdrawing its three non-executive directors -
Henry Vigil, Salman Ullah and Dennis Durkin - from the board of
the company, effective today.
Microsoft holds 23.6 % of Telewest's issued share capital and has
the right to nominate up to three representatives to the board
under corporate shareholder agreements with the company.
Microsoft said: "At present we believe that we will be in a
better position to manage our relationship with, and investment
in, Telewest without board representation. Microsoft expects to
continue to evaluate Telewest on an ongoing basis and, in that
regard, will continue to consider, among other things, purchasing
or selling Telewest securities or engaging in possible strategic
transactions involving Telewest. Microsoft has no current plan
regarding any such transactions, but reserves the right to change
its plans at any time."
Contact Information:
Telewest
John Murray
Director of Policy & Communications
Telephone: 0207 299 5888
Microsoft:
Katy Fonner/Waggener Edstrom
Telephone: (001) 503 443-7000
Email: kfonner@wagged.com
Curt Anderson
Microsoft Investor Relations
Telephone: (001) 425 706-3703
***********
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.
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