/raid1/www/Hosts/bankrupt/TCREUR_Public/020523.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

                 Thursday, May 23, 2002, Vol. 3, No. 101


                            Headlines

                          *********

* F R A N C E *

MOULINEX SA: Civil, Criminal Inquiries on Demise Launched

* G E R M A N Y *

ADVANCED MEDIEN: Film Licensing Group Reveals 2002 Q1 Results
KIRCHMEIDIA: Prosiebensat1 Defers Conversion of Preferred Stock  
KIRCHMEIDIA: ProsiebenSat1 Chairman, Vice Resigns From Board
NORDDEUTSCHE LANDESBANK: Financial Strength Rating Slips to C-
STADTSPARKASSE KOELN: Financial Strength Rating Weakened to B-

* I R E L A N D *

DATALEX PLC: SAA Uses IT Group's Travel Booking Technology

* I T A L Y *

FIAT SPA: Turin Judge Orders Recall of 40,000 Faulty Cars

* N E T H E R L A N D S *

KPN NV: Restructuring Makes 35% Dent on First-quarter Losses
UNITED PAN-EUROPE: Default Costs 22% Control in UPC Germany

* S P A I N *

CABLEUROPA S.A.: Moody's Doubts Ability to Support Rapid Growth

* U N I T E D   K I N G D O M *

BIOCOMPATIBLES INTERNATIONAL: Notification of Interests (Lehman)
BRITISH AIRWAYS: Ends in Red for the First Time in 15 Years
CLAIMS DIRECT: Legal Services Firm Sells Sailpool for GBP1.65MM
CORUS GROUP: Will Hike Steel Prices Effective July 1
ENODIS PLC: Sell Austral for GBP7.5MM to Reduce Debt
ITV DIGITAL: Commission Extends Bidding Deadline for Licenses
KIRKLAND & ELLIS: Hires Norley to Head U.K. Insolvency Practice
MARCONI PLC: Brings in Two Well-known Turnaround Specialists
MARCONI PLC: Partners With Mott McDonald on Info Service Venture
ONO FINANCE: Suffers Cuts Due to Parents' Weak Financial Outlook
SCIPHER PLC: Preliminary Results for Year Ending March 31, 2002
SCIPHER PLC: Property Rights Group Secures GBP 7.0MM Funding
UK COAL: Chairman's Statement at Annual General Meeting
VIATEL INC.: Judge Gives Nod on US$2.7 MM Debt Restructuring


===========
F R A N C E
===========


MOULINEX SA: Civil, Criminal Inquiries on Demise Launched
---------------------------------------------------------

Two inquiries have been launched to look into the circumstances
surrounding the collapse of French household appliances group
Moulinex SA last year, says Les Echos/FT Information.

The commercial court in Nanterre is reportedly spearheading the
civil inquiry upon the request of company receivers.  The purpose
of this particular exercise is to ascertain whether insolvency
could have been declared before September 7, 2001.  

The other inquiry wants to determine whether Moulinex's accounts
were tampered with and whether or not the bankruptcy was
fraudulent, the report says.  Nanterre deputy public prosecutor
Jean-Francois de Valbray is leading this criminal probe.

The group had debts of EUR818 million in September last year.  
Overcapacity is being blamed for its woes.


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


ADVANCED MEDIEN: Film Licensing Group Reveals 2002 Q1 Results
-------------------------------------------------------------

Advanced Medien AG said Wednesday the film rights licensing
company's sales revenues totaled EUR 5.85 million for the first
quarter of fiscal year 2002 (previous year: EUR 0.67 million).

The sales increase compared to the same period of last year was
primarily due to U.F.O. Unified Film Organization L.L.C., Los
Angeles, a film production company in which Advanced Medien AG
holds a 51% stake. U.F.O. accounted for 95% of the Group's sales
revenues. The course of consolidation set out in the previous
year is reflected in the result of the first quarter of 2002.

Compared to the same period of last year, the loss war reduced
significantly. Earnings before interest, taxes, depreciation and
amortization according to IAS were minus EUR 4.45 million
(previous year: minus EUR 1.93 million).

The loss before taxes was reduced by EUR 1.83 million. It came in
at minus EUR 1.28 million compared to  EUR -3.11 million in the
same period last year.

The management board will announce details regarding the
quarterly figures at the financial statements press conference on
May 22, 2002. The detailed quarterly report will be available for
download at http://www.advanced-medien.defrom May 31, 2002.

in TEuro                    Q1 2002 IAS  Q1 2001 IAS
Revenues                          5,847          674
EBITDA                            4,450       -1,930
EBIT                             -1,004       -2,935
Financial result                   -269         -170
EBT                              -1,274       -3,106
Res.f.ordin.operations           -1,276       -3,106
net loss for the period          -1,357       -2,963
Loss per share (Euros)            -0.08        -0.17


KIRCHMEIDIA: Prosiebensat1 Defers Conversion of Preferred Stock  
---------------------------------------------------------------

Majority shareholder of Kirch Media informed the Executive and
Supervisory Boards of ProSiebenSat.1 Media AG Tuesday saying
that, at present, KirchMedia would not support the conversion of
preferred stock to common stock.

Against this background, the Supervisory Board decided against
putting the conversion on the agenda of the upcoming annual
shareholders' meeting on July 9.

The Executive and Supervisory Boards at the same time agreed to
adhere to the decision of converting preferred stock into common
stock at the earliest possible opportunity.

On April 8, 2002, KirchMedia filed in Munich Local Court for
insolvency under self-administration, and was assigned an interim
management.

KirchMedia explained that with regard to the ongoing insolvency
proceedings it is currently in no position to make a decision
about the conversion of preferred stock, since such a change
might affect the interests of its creditor banks and investors.

KirchMedia management said it still advocates the project in
principle, but will not be able to support it until KirchMedia's
shareholder structure has been clarified.

Before the company filed for insolvency KirchMedia  had
originally announced on February 22, 2002, that it would support
the conversion at the next annual shareholders' meeting.


KIRCHMEIDIA: ProsiebenSat1 Chairman, Vice Resigns From Board
------------------------------------------------------------

Dr. Dieter Hahn, Chairman of the Supervisory Board of
ProSiebenSat.1 Media AG, resigned Tuesday from his seat on the
Board as of June 21, 2002, as did Vice-Chairman Thomas Kirch, Mr.
Jan Mojto, and Dr. Klaus Piette.

At the annual meeting on July 9, the Supervisory Board will
propose three managing directors of KirchMedia - Mr. Wolfgang van
Betteray, Mr. Norbert Deigner and Mr. Fred Kogel - as new members
of the Board, along with Mr. Wolfgang Hartmann, a member of the
Executive Board of Commerzbank AG.

For additional information, at ProSiebenSat.1 Media AG, contact
Dr. Torsten Rossmann, Company Spokesman by phone+49 89 95 07-11
80


NORDDEUTSCHE LANDESBANK: Financial Strength Rating Slips to C-
--------------------------------------------------------------
      
The involvement of Norddeutsche Landesbank Girozentrale's, also
known as NordLB, in the acquisition of Bankgesellschaft Berlin
caused Moody's to cut its ratings Monday.

The ratings agency said the acquisition present a "major
integration challenge" for the bank, whose earning power has
continued to decline over the years.  Moody's also said that the
bank "would potentially need to find a new strategic partner,
should the acquisition be pursued but not materialize [sic]."

Moody's notes, though, that the bank's overall asset quality is
still good.  This despite "somewhat higher loan loss provisioning
needs in the current economic environment in Germany as well as
the bank's exposures in the Eastern German states."

This is now the new rating of the bank:

-- Financial strength rating to C- from C.

Considered as Germany's tenth largest bank with total assets of
EUR196 billion as of June 30, 2001, the bank is headquartered in
Hanover, Germany.

For more information, contact:

London
Samuel S. Theodore
Managing Director
Financial Institutions Group
Moody's Investors Service Ltd.
44 20 7772 5454

London
Otto Dichtl
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service Ltd.
44 20 7772 5454


STADTSPARKASSE KOELN: Financial Strength Rating Weakened to B-
--------------------------------------------------------------

The weak German economy has caused Moody's to change the B
financial strength rating of Stadtsparkasse Koeln to B-.  
According to Moody's, the rating downgrade reflects the "bank's
marginally weaker financial performance and the need for higher
loan loss provisions."

The bank's deposit and debt ratings, however, remain unchanged   
at Aa3/P-1, with a stable outlook, "reflecting the public support
mechanisms of Anstaltslast and Gewaehrtraegerhaftung provided to
Stadtsparkasse Koeln by the City of Cologne."

"Moody's [still] continues to consider Stadtsparkasse Koeln as a
leading regional retail bank in Germany, with a strong franchise
and dominant market share in the Cologne area," the ratings
agency said in a press statement.

"Moody's note[s] that additional cost savings opportunities are
being pursued in cooperation with other large savings banks in
Germany, offering more meaningful cost savings potential over the
medium to longer term.  As such, the outlook for the new
financial strength rating is stable," the statement read.

This is now the new financial strength rating of the bank:

-- Financial strength rating to B- from B.

These ratings remain unchanged:

-- Long-term senior and subordinated debt and deposit ratings at
   Aa3;

-- Short-term debt and deposits at Prime-1.

Stadtsparkasse Koeln, headquartered in Cologne, Germany, had
total assets of EUR21 billion at year-end 2001.

For more information, contact:

London
Samuel S. Theodore
Managing Director
Financial Institutions Group
Moody's Investors Service Ltd.
44 20 7772 5454

London
Otto Dichtl
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service Ltd.
44 20 7772 5454


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


DATALEX PLC: SAA Uses IT Group's Travel Booking Technology
----------------------------------------------------------

Datalex, a leading provider of technology solutions for the
global travel industry, announced to the media Wednesday that it
has signed an agreement with South African Airways enabling them
to sell their products and services via a network of independent
travel portals using Datalex booking technology.

M-Web, the largest consumer portal in South Africa, is the first
site to partner with SAA on this venture, providing M-Web users
exclusive access to all South African Airways worldwide services
and special on-line fares.

"Using this model, South African Airways will extend their reach
to new consumer markets, while enhancing the level of service to
their existing customers," said Aidan Brogan, VP International
Sales, Datalex. "Our booking technology, which powers South
African Airways own Web site, flysaa.com, is designed to support
multiple storefronts and to enable this co-branding capability
with other portals."

M-Web is the first of many independent consumer portals that will
partner with South African Airways to offer their products and
services in the coming months. The Datalex BookIt! Consumer
booking engine offers a cost effective alternative solution for
these portals to provide their own consumer online reservations
system without the financial or technological commitments
associated with implementing their own booking technology

"This new relationship forms part of our continued efforts
towards excellent customer service and providing our passengers
with modern technology and products. We are excited about this
new venture that promises service excellence to our passengers,"
said Andre Viljoen, SAA President and CEO.

Datalex is a leading provider of technology solutions for the
global travel industry. Founded in 1985, the company is
headquartered in Dublin, Ireland, and maintains offices
throughout the world: Europe (Amsterdam, Frankfurt, Paris,
Manchester); USA (Atlanta, Petaluma. Minneapolis); and Asia-
Pacific (Melbourne, Singapore).

For more information, please visit the company's Web site at
www.datalex.com.

South African Airways is Africa's leading airline, serving many
destinations on the continent. On April 1, 1999 South African
Airways - formerly a division of Transnet - entered a new era of
privatisation and was renamed South African Airways (Pty) Ltd.
For more information, please visit the company's Web site at
www.flysaa.com.

For more details, contact:

Connor Dempsey                  
Slattery PR, Dublin             
+ 353 1 6614055                 
cdempsey@slatterypr.ie     

David Smith       
Datalex, USA          
+ 770 255 2459           
david.smith@datalex.com  

Mary Rose MacAllister
Datalex, Ireland
+ 353 27 60989
maryrose.macallister@datalex.ie


=========
I T A L Y
=========


FIAT SPA: Turin Judge Orders Recall of 40,000 Faulty Cars
---------------------------------------------------------

Embattled Italian industrial group Fiat SpA has been ordered to
recall some 40,000 faulty Lancia Dedra cars, which have been
found by a Turin-based judge to emit exhaust fumes inside the
vehicle.

According to AFX News, Judge Ombretta Salvetti handed the recall
order contained in a 23-page document.  The company is given
until July 30 to contact car owners and make the necessary
repairs.

Fiat was not immediately available for comments.  The company
recently bared more than half a billion losses for the first
quarter, of which EUR429 million was accounted by Fiat Auto, the
loss-making automobile unit.

The division has continued to lose grip of key markets, including
Italy.  Last month, sales slipped by 13%, the fourth consecutive
decline in as many months, says the Troubled Company Reporter-
Europe.

Overall, the group had debts of EUR6.6 billion in the first
quarter, up by about EUR570 million from end of 2001.  Fiat
targets a debt level of EUR3 billion by year's end.  The company
is now lining up assets to dispose and heads to cut in order to
accomplish this goal.


=====================
N E T H E R L A N D S
=====================


KPN NV: Restructuring Makes 35% Dent on First-quarter Losses
------------------------------------------------------------

Debt-laden KPN NV revealed significant progress Monday in its
restructuring efforts, reporting losses of only EUR348 million in
the first quarter, says CNN Europe.

Though still in the red, the recent figure is an encouraging
sign, according to CEO Ad Scheepbouwer.  His company ended the
same three-month period last year with losses of EUR539 million.

"The results... clearly show a further positive response to the
new strategy... with a clear focus on cash and margin," Mr.
Scheepbouwer said in a statement.

EBITDA for the quarter -- a measure of a debt-laden company's
profitability -- rose by a third to EUR1.059 billion, the news
channel says.  This is well above analysts' expectations, an
indication that the company is making progress.  The company sees
EBITDA growth of at least 12% for the entire year and "low
single-digit" revenue growth.

The other significant inroad the company gained was at its debt
level.  KPN's debt now stands at EUR15.4 billion, down from
EUR15.7 billion.  The company forecasts net debt of EUR14.5
billion by year's end.

Last year, the firm's debts reached as high as EUR23.2 billion,
says CNN Europe.  This forced the company to bring in Mr.
Scheepbouwer, who took his post in November and initiated a EUR5
billion capital hike that made a substantial dent on it debt-
pile.

Meanwhile, the worsening condition at KPNQwest, a joint venture
with US-based Qwest, forced the company to take a charge of
EUR477 million for its 40 percent stake.  KPN has a maximum
exposure of EUR700 million in the ailing operator.

Like other European telecom giants, KPN also spent billions of
dollars on acquisitions and high-speed mobile phone licenses
during the telecom boom two years ago.  This is largely
responsible for its current woes.


UNITED PAN-EUROPE: Default Costs 22% Control in UPC Germany
-----------------------------------------------------------

Dutch cable operator United Pan-Europe Communications NV recently
admitted that a minority holder at its German unit had taken 22%
of outstanding shares due to its failure to pay certain interest
payments.

Citing a document filed before the U.S. Securities and Exchange
Commission Tuesday, Dow Jones Newswires says the group as of May
15 has failed to meet the interest payments on its 10.875% senior
notes due 2007 and 2009; 11.25% senior notes due 2009 and 2010;
and 11.5% senior notes due 2010.

The company clarified, though, that none of the defaults have
caused material adverse effects on its operations or its
subsidiaries' operations, or its relationships with customers,
suppliers and employees.  In addition, neither the trustees for
the notes nor the number of holders of the notes has accelerated
the payment of principal and interest under those notes.

The Dutch company owns 51% of UPC Germany.


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


CABLEUROPA S.A.: Moody's Doubts Ability to Support Rapid Growth
---------------------------------------------------------------

Moody's lowered Tuesday the ratings of Cableuropa S.A., the
holding firm of the ONO group of companies, due to doubts
regarding the operability of its current business plan.

The ratings cut affected approximately EUR1.7 billion of debt
instruments.  The senior secured banking facility of Cableuropa
is now rated B3 from B1.

Moody's says the cut reflects its heightened concern regarding
the group's "considerable debt leverage and the ability of the
company to increase penetration and average revenue per user
(ARPU) rates to the extent necessary to allow [the group] to
adequately service its debt burden."

The ratings agency notes the slow rate of the company's
residential customer ARPU growth the past two years -- EUR47.5 in
Q1 2002 versus EUR43.7 for the period two years prior to Q1 2000
-- despite price increase for CATV and an increased weighting
toward broadband versus narrowband Internet subscribers.

"While Moody's expects [the group's] strong revenue growth to
continue going forward, the magnitude of required increases in
the context of the relatively limited scale afforded by [the
group's] franchise areas remains of considerable concern.

"Furthermore, overall revenue growth for the company's business
services has been slower than Moody's originally expected and
penetration growth for residential customers was fairly limited
over the past year (30.7% in Q1 2002 versus 29.0% in Q1 2001),"
the ratings firm says.

"While Moody's expects that ARPU and penetration growth rates
will increase as the company approaches completion of its network
build (and the company is able to increase its relative focus on
marketing and benefit from the continued "aging" of homes
marketed), the company's requisite growth requirements appear
increasingly challenging, in Moody's opinion."

The agency says the company could face a sizeable funding gap
should it prove unable to meet its aggressive growth targets.  To
avoid this, it must increase its EBITDA rapidly in order to
maintain availability of its bank facility in 2003 and 2004 (when
a number of EBITDA-related covenants take affect).

Moody's says the new B3 rating of the company's senior secured
bank facility reflects its strong covenant and collateral
packages, as well as joint and several guarantees from its
subsidiaries (excluding Portuguese subsidiary and ONOlab, the
company's Internet subsidiary).

Cableuropa is based in Madrid, Spain.  It is the holding firm for
a group of operating companies involved in owning and developing
cable communications franchises.

For more information, contact:

London
Christian Rauch
Senior Vice President
European Corporates
Moody's Investors Service Ltd.
44 20 7772 5454

London
Ted Barac
Vice President - Senior Analyst
European Corporates
Moody's Investors Service Ltd.
44 20 7772 5454


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


BIOCOMPATIBLES INTERNATIONAL: Notification of Interests (Lehman)
----------------------------------------------------------------

The company received notification on May 20, 2002 that as at the
close of business on May 16, 2002, Lehman Brothers International
(Europe) had an aggregate interest in 12,189,728 ordinary 10p
shares of Biocompatibles International Plc, representing 8.53% of
the total issued share capital.


BRITISH AIRWAYS: Ends in Red for the First Time in 15 Years
-----------------------------------------------------------

British Airways slipped into the red for the first time since
privatization in 1987, reporting Monday a EUR200 million pre-tax
loss for the year to March, reports The Guardian.

The national flag carrier pointed to the global economic crunch,
the foot and mouth disease and the terrorist scare following
September 11 as responsible of its worst performance in years.
Analysts, however, took the results positively, noting that the
losses were way below their expectations.

"They should be on an upward curve now - they've gone through a
very bad time, like most airlines.  But barring any further
terrorist attacks or crashes, they should recover," Gert
Zonneveld, a transport analyst at WestLB Panmure, told The
Guardian.

The company recorded a modest recovery in the fourth quarter,
aided by 7,000 job cuts.  In the three months to March, the
company was able to cut costs by 12.8%, limiting per passenger
expenses to just 2.8%, as it succeeded in cutting its expenditure
faster than it reduced capacity.  Nonetheless, its fourth quarter
operating profit of GBP380 million a year ago is now a GBP110
million loss, the paper says.  

"It's the first time we've been in the red since privatization.
But we take heart from the performance in the fourth quarter,"
CEO Rod Eddington said told The Guardian.

BA made an exceptional profit of GBP98 million on the sale of Go,
its low-cost airline, to a management team for GBP110 million.  
Mr. Eddington maintains that last year's sale was "the right
decision for BA at the time," even if Go was recently resold to
EasyJet for GBP375 million.

Meanwhile, the chief denies that the company is planning a rights
issue, saying that the airline has enough cash to service its
GBP6 billion debts without any capital boost.


CLAIMS DIRECT: Legal Services Firm Sells Sailpool for GBP1.65MM
---------------------------------------------------------------

Claims Direct -- www.claimsdirect.com -- is pleased to announce
the disposal of Sailpool Ltd. Sailpool, a non-trading subsidiary
of Claims Direct, will be sold for the consideration of GBP 1.65
million cash after costs.

According to the group's statement announced Wednesday, the net
asset value of Sailpool at the date of sale was zero. Claims
Direct will use the proceeds from the sale for working capital
purposes.

Ronnie Henderson, Chief Executive of Claims Direct commented:

'We are delighted to complete the sale of Sailpool and the
injection of cash will be used as working capital for a number of
ongoing projects.'


For further information, at Claims Direct plc, please contact
Ronnie Henderson, Chief Executive by phone: 01952 284800


CORUS GROUP: Will Hike Steel Prices Effective July 1
----------------------------------------------------

Corus Group PLC, will again implement a price increase steel
products in the U.K. and mainland Europe beginning July 1, the
company confirmed  last week, the AFX News reports.

The steel company, which announced the increases to the trade on
April 25, declared it would lift prices by EUR35 a ton in
mainland Europe and by 15.00 sterling a ton in the U.K.

The latest increases follow similar rises of GBP15.00 and EUR35-
40 a ton made earlier in the year.

The increases reflects a "more positive trading climate and a
brighter economic outlook," a corus representative said. The
price changes will affect Corus's hot rolled and cold reduced
products, hot dipped galvanized steel and electro-zinc coated
coil.


ENODIS PLC: Sell Austral for GBP7.5MM to Reduce Debt
----------------------------------------------------

Enodis plc, the world's leading food service equipment
manufacturer, announces that it has sold Austral Refrigeration
Pty Limited for a net cash consideration of GBP7.5 million.

In its statement addressed to the media Tuesday, the
consideration, less expenses, will be used to reduce debt.

Austral, a Sydney based manufacturer of refrigeration equipment,
is being purchased by a newly formed company backed by RMB
Ventures.

As at March 30, 2002, Austral had a net asset value of GBP5.9
million (excluding goodwill and inter company balances). In the
year to March 30, 2002, the business contributed GBP36.3 million
to sales and GBP1.2 million to operating profit.

Commenting on the sale, Andrew Allner, Chief Executive Officer,
said:

"This transaction, following the disposal of Sammic in December
2001 and Belshaw last month, will allow us to focus on our core
businesses.
Our aim is to consolidate and extend our position as the world's
leading manufacturer of heavy core commercial food service
equipment through product, distribution and service excellence."

For inquiries, at Enodis, contact: Andrew Allner, Chief Executive
Officer by phone: 020 7304 6006; at Financial Dynamics, contact
Richard Mountain by phone: 020 7269 7291


ITV DIGITAL: Commission Extends Bidding Deadline for Licenses
-------------------------------------------------------------

The bidding period for the licenses of ITV Digital has been
extended for another two weeks after only a handful of companies
submitted expressions of interest last week.

Only half a dozen parties beat the deadline Thursday.  Among
those that have submitted bids are MGt, BBC, Crown Castle, and
SDN.  The original plan had outlined a May 30 deadline for the
submission of detailed financial plans before the Independent
Television Commission.  The winner would have been known by June
13.  

Due to the extension, the new deadline for submission of
financial plans is June 13. The winning bidder will be announced
on July 4, says BBC News.  According to the Commission, it
extended the deadline due to requests from a number of firms
considering a tender.


KIRKLAND & ELLIS: Hires Norley to Head U.K. Insolvency Practice
---------------------------------------------------------------

Kirkland & Ellis announced Tuesday it has added Lyndon Norley, an
accomplished insolvency and restructuring lawyer, as a partner in
its London office, and the head of its U.K.- based insolvency
practice.

Norley, 38, who is qualified to practice U.K. law, comes to
Kirkland from the London office of Cadwalader, Wickersham & Taft,
where he has worked since 1997. He previously worked at Clifford
Chance.

"I am delighted with the opportunity to bring my restructuring
and insolvency practice to Kirkland & Ellis' London office,"
Norley said. "The Firm's strong U.S. and international reputation
in complicated bankruptcies, insolvencies and restructurings
makes clear that we will work brilliantly together; I think we
agree the move offers sterling opportunities, both for me and for
Kirkland. The Firm has played a leading role in some of the most
complex insolvency and restructuring situations in the United
States and beyond, and it advises regularly on bond
restructurings for troubled leveraged buyouts in Europe. From day
one, I believe we will be able to develop the synergies between
the practice across international borders and expand the scope
and reach of our work."

Norley has advised on the acquisition and disposal and
reorganization of many stressed and distressed businesses,
particularly insurance companies and insurance service providers.

He advised the KWELM insurance companies and the ACC insurance
companies on their insolvencies, and has also worked on bond
restructurings, including advising groups of bond holders on the
Barings collapse, One Finsbury Circus, Alpha Shipping, Cammell
Laird, and Essar Steel.

He pioneered the use of solvent schemes of arrangement for
insurance companies, including Scottish & Commonwealth, Osiris,
and Trent.

His practice also has a significant international element, as he
worked with companies in Southeast Asia and was involved in the
restructuring of more than US$1 billion of debt of PT Semen
Cibinong, an Indonesian cement company.

Norley's addition comes on the heels of other major growth in
Kirkland's worldwide insolvency practice in the last year.
Matthew A. Cantor joined the New York office as a partner in
October, with associate Jonathan S. Henes; both were formerly of
New York's Weil, Gotshal & Manges LLP. Last June, the Firm added
substantially to the restructuring group in Los Angeles, with a
five-lawyer group headed by Richard L. Wynne, former name partner
of a well-known insolvency boutique.

The Firm's Restructuring, Workout and Bankruptcy practice group
now numbers more than 50 lawyers. The office and Firm are also
known for their strong corporate, private equity, general
commercial litigation, intellectual property, tax, and trusts and
estates expertise.

Internationally, Kirkland & Ellis' insolvency group has handled
significant representations for such clients as TWA, Chiquita
Brands, Inc., Zenith Electronics Corp., United Artists Theatres,
Teligent, and W.R. Grace, Inc., Exide, and the bondholders'
committee of Williams Communications.

"Lyndon's talents are well-known around The City and
internationally," said Stuart L. Mills, a senior partner in the
Firm's London office.

"He has a long history of satisfied clients, and is at the top of
his profession, having worked on some of the most complex
restructurings in Europe and further afield. Lyndon has a
fabulous pedigree, having trained at Clifford Chance and worked
with the very fine insolvency lawyers at Cadwalader."

"He has unique skills that I know will complement us well--
especially given the growing trend for many transactions to
include an element of restructuring. He is also a team player,
and we look forward to his becoming our partner," Mills added.

Kirkland & Ellis is an 850-attorney law firm handling litigation,
transactional, insolvency, and intellectual property matters from
its offices in Chicago, London, New York, Los Angeles and
Washington, D.C.

The London office practices U.S., English, German and
international law and has been primarily engaged in private
equity and capital markets transactions, including equity and
high yield debt offerings, and also works in the intellectual
property, mergers and acquisitions and arbitration fields.

For more information, please contact Stuart L. Mills by phone:
0207-816-8750; Lyndon Norley by phone: 0207-816-8851


MARCONI PLC: Brings in Two Well-known Turnaround Specialists
------------------------------------------------------------

Marconi Plc officially acknowledged early this week that it has
hired corporate turnaround expert John Talbot to help in the
ongoing salvage efforts, says The Guardian.

The paper says Mr. Talbot is expected to play a leading role in
planning the company's financial restructuring, which currently
revolves around a debt-for-equity swap.  He is one of the
founders of Talbot Hughes, a corporate recovery specialist.

Currently involved in the restructuring of Energis Plc, Mr.
Talbot's is known for his uncanny ability to see "what there is
rather than what there could have been."  He made his name Arthur
Andersen, where he was involved in several of the highest-profile
corporate collapses in recent memory, says the paper.

Bankers sought his services in restructuring Transtec, the
Midlands-based engineering firm founded by former paymaster
general Geoffrey Robinson when the business collapsed in 1999.  
He also acted as joint administrative receiver of Leyland DAF,
the truck and van empire that ran into difficulties in 1993, and
was one of the administrators that picked over Robert Maxwell's
empire, says The Guardian.

In addition to Mr. Talbot, Marconi also brought in as non-
executive director, Allen Thomas, a 62-year-old American lawyer
who chairs insurance group Ockham Holdings and a non-executive
director at computer games developer Eidos.  

Mr. Thomas is widely credited for the financial restructuring of
heavily indebted financial information group Dialog and had
played a part in the financial rescue of New York City in the
1970s.  He was general counsel to the Municipal Assistance
Corporation, which bailed out the city, the report says.


MARCONI PLC: Partners With Mott McDonald on Info Service Venture
----------------------------------------------------------------

Marconi and Mott McDonald on Monday's statement announced a new
partnership that will work with the MATTISSE consortium, a group
of eight Midlands' local authorities (Birmingham, Leicester,
Coventry, Solihull, Walsall, Wolverhampton, Sandwell and Dudley),
to help reduce travel problems in the Midlands.

Marconi will lead the partnership to deliver a breakthrough
traveller information service, part of the Central Government's
vision for traffic and travel information services.

The Midlands has a population of some five million and some of
the U.K.'s most severe transport problems. The MATTISSE system
will provide advanced regional traveller information covering the
motorway network, urban roads and public transport.

The information will be made available via the media, the
Internet, on street information kiosks, on mobile phones and on
interactive public telephones. Data for the system will be
collected from a range of existing sources including the police,
public transport operators and the local highway authorities.

The system will also provide the basis to allow travellers to
access a complete on-line trip planning service for all transport
methods. Transport timetables and disruption information services
will be made available via automated computer links, provided by
public transport operators. Additional links provide information
from Traffic Control Centres across the regions and also the West
Midlands Police Force's Command and Control Centre.

"Having conceived and nurtured MATTISSE in the public sector we
are now delighted to be working with Marconi and Mott MacDonald
for the full delivery of a driver and passenger information
service that will once again put the Midlands at the forefront of
developments in Integrated Transport Systems," said Councilor
Stewart Stacey - Chair of the West Midlands Planning and
Transportation Committee.

Commenting on the agreement John Glen, Business Development
Software Systems Integration said, "The joint-venture agreement
between Mott MacDonald and Marconi will manage the transition of
MATTISSE from a public sector service to a combined public and
private sector business, whilst ensuring that the quality of
information provided benefits the travelling public, whatever
their chosen means of travel. We hope to expand the MATTISSE
concept to other areas outside of the Midlands in the future."

Stephen Harris, Director of Marconi's Transportation Division,
part of the Marconi Integrated Systems group added, "This 10 year
partnering agreement marks a major step forward for industry and
local government in working together to deliver public benefit,
whilst creating a self-sustaining business enterprise. Our
intimate knowledge of the transport industry, together with our
unparalleled expertise in the fields of information technology
and telecommunications, means we will help position MATTISSE as a
"one stop" source of accurate and timely travel information," he
said.

"Marconi will provide the communications, business development
and project management skills, whilst the Mott MacDonald Software
Systems Integration team will supply the core software
development," said Peter Eccleson, Business Development Director
for Marconi's Transportation Division. "Our local authority
partners will provide key institutional stability and a
definition of the public sector's deliverables," he added

MATTISSE is the Midlands Advanced Transportation and Telematics
Information System and Strategies in Europe. For more information
see the Mattisse website here.

Mott MacDonald is one of Britain's leading multi-disciplinary
engineering companies with offices in 22 centres throughout the
UK and over 50 countries worldwide. Its Software Systems
Integration specialists provide software and database design
services to the transport sector.

They designed and developed MATTISSE, which began life as part of
an EU research project focusing on integrated road transport
environments. Other projects include a network management system
for the Midlands Driver Information system and QMISS a database
system, which receives data from motorway signals and message
signs, and disseminates it to Value Added Service Providers
(VASPS) via the Internet.

Marconi Transportation is an integrated communications business
with over 30 years of transportation experience. Its professional
staff is currently delivering a number of high profile
communications projects that continue to set standards in the
Rail, Road and Air industries.

Its consultants and design engineers are committed to delivering
tailored solutions based on complex network integration, high
performance service provision and best of breed products. Its
customer services division is committed to providing the best
possible support for our customers' systems and networks on a
24x7x365 basis.

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. The company's aim is to help fixed and
mobile telecommunications operators worldwide reduce costs and
increase revenues.

The company's customer base includes many of the world's largest
telecommunications operators. The company is listed on both the
London Stock Exchange and NASDAQ under the symbol MONI.


ONO FINANCE: Suffers Cuts Due to Parents' Weak Financial Outlook
----------------------------------------------------------------

Doubts over the ability of parent Cableuropa S.A. to increase
revenues to support its rapid growth spilled over U.K.-based ONO
Finance Plc, which similarly suffered cuts Monday.

Moody's assigned the finance conduit these new ratings:

- Senior implied rating to B3 from B2

- Senior unsecured issuer rating to Caa3 from Caa2

- Senior unsecured bond ratings to Caa2 from Caa1

"The Caa2 rating of ONO's senior unsecured notes reflects the
contractually subordination of the notes to senior liabilities,
including the company's bank facility and trade payables,"
Moody's explains.

For more information, see related story or contact:

London
Christian Rauch
Senior Vice President
European Corporates
Moody's Investors Service Ltd.
44 20 7772 5454

London
Ted Barac
Vice President - Senior Analyst
European Corporates
Moody's Investors Service Ltd.
44 20 7772 5454


SCIPHER PLC: Preliminary Results for Year Ending March 31, 2002
---------------------------------------------------------------

Scipher plc -- www.scipher.com --, the technology development and
licensing company, announces its results for a year of strong
commercial progress.

HIGHLIGHTS

Business developing according to plan

  * Total revenue increased by 32% to GBP21.0m
  
  * Second half revenue GBP13.5m; up 78% over first half and up
    37% on second half last year
  
  * New business revenues up by 42% to GBP16.5m, now 78% of total  
    revenue
  
  * Licensing revenue represents 31% of the total (2001: 26%)
  
  * Reduced EBITDA loss of GBP6.4m (2001: GBP9.3m)
  
  * Efficiency programme produces GBP7.0m annualised cost
    reduction
  
  * Cash flow and EBITDA positive in Q4
  
  * Funding in place; bank facilities of GBP7.0m; heads of terms
    signed for sale and leaseback of headquarters building

Strong performance from New business
  
  * PicVue Electronics confirms (May 2002) its plans to construct  
    a high volume microdisplay plant in Taiwan based on Scipher's      
    technology - scheduled to be completed by end 2003
   
  * Patent Licensing technology portfolio up 600% to 154 with
    additions from new clients including KPN and Toyota. Since
    year's end, Deutsche Telekom increases portfolio by 96
  * Major new contract wins for Secure Identification business
  
  * New, long-term 3D Sound licence signed with Analog Devices
  
  * Two acquisitions completed; FRI extends Scipher's business  
    model into North America
  
  * Microdisplay technology licensed to new Scipher spin-out.   
    Panavision is its first customer
  
  * Q1 FY2003 orders in Monox confirm business contribution     
    underway
   
Dr Ken Gray, Chairman of Scipher, said:

"I am delighted with the commercial progress achieved by Scipher
during the year. The advances made by our businesses reflect the
changes put in place to improve Scipher's commercial performance.
Scipher has delivered strong revenue growth and I confirm that we
have brought forward the point at which we will be cash
generative."

FINANCIAL SUMMARY

Total revenue grew by 32% for the year ended 31 March 2002, a
strong increase over the 22% growth last year. Of particular note
was the acceleration in growth in the second half, where revenue
rose 37% over the second half last year to GBP13.5m (2001:
GBP9.8m)

The following table details the source of Scipher's revenues:

                       12 months   6 months   6 months  12 months
                                         to         to           
                       to March 31 to March 31  Sept30   March 31
                              2002        2002    2001       2001   
                       unaudited  unaudited  unaudited    audited
                         GBP'000    GBP'000    GBP'000    GBP'000
New business              16,458     10,915      5,543     11,576
Mature business            2,540      1,321      1,219      2,107
R&D                        2,006      1,216        790      2,280
Total                     21,004     13,452      7,552     15,963

New business represents turnover from activities that have been
established since Scipher became independent from EMI in 1996.
Mature business includes sales from products mainly developed
more than 10 years ago. Research and development represents
income from customers for early-stage R&D.

The operating loss of GBP11.0m (2001: GBP10.0m) reflected
continued investment in technology and business infrastructure.
Annualised indirect costs were reduced from GBP25.0m to GBP18.0m
at a one-off cost to the Company of GBP2.8m.

This efficiency improvement programme, alongside the accelerating
turnover growth in the second half, allowed Scipher to be cash
positive in the fourth quarter. The improvement in operating
results is expected to bring Scipher's sustainable
cash-positive position forward to mid-FY2003, earlier than
originally planned.

GBP'000     Full         2002     1st       Full   2001       1st
            year                 half       year            half
                    unaudited                     audited        
                    2nd half                      2nd  half        
                                                                     
EBITDA*      (6,416)   (1,365) (5,051)    (9,250) (3,725) (5,525)
Depreciation (1,296)     (636)   (660)      (702)   (427)   (275)
                                                                     
Amortisation   (557)     (474)    (83)       (11)     (1)    (10)
                                                                     
Non-recurring(2,765)   (1,218) (1,547)       -       -       -
items                                                                
                                                                  
Operating loss(11,034) (3,693) (7,341)    (9,963) (4,153) (5,810)

* Earnings before interest, tax, depreciation, amortisation and
non-recurring items

The Board considers the banking facilities available to the
Company, totaling GBP7.0m, are sufficient for the Company's
ongoing requirements. To provide further headroom, heads of terms
have also been signed in relation to the planned sale and
leaseback of the Company's headquarters building.

The Board will make a further announcement setting out the
details of the transaction on signing of the contract.

A full view of the company's Preliminary Results, including its
latest Profit and Loss and Balance Sheet financial statements for
the year ending March 31, 2002 may be viewed at:
http://www.scipher.com/press/archives/index.htm.

Scipher plc is the largest technology development and licensing
company of its type in Europe. Scipher delivers value from
intellectual property (IP) in two
principal ways:

  * It commercializes patent-protected products developed by its  
    own R&D resources, through licensing or sale into high-growth  
    markets around the world.
   
  * Using its extensive expertise in IP management it creates  
    value from clients' IP assets by providing a complete licence  
    revenue-generating service.
   
Scipher's impressive portfolio of advanced technology products
and know-how covers the markets for 3D Sound, Displays,
Communications, Sensors and Secure Identification. Almost two-
thirds of Scipher's revenues are earned outside the UK in over 50
countries.

Scipher is backed by more than 70 years in advanced R&D including
developments of such historic importance as stereo recording,
television broadcasting and the medical CT scanner, which won a
Nobel Prize for its inventor. These continuing achievements have
recently been underlined by the 2001 MacRobert Award, the highest
UK accolade for innovation, awarded for Scipher's outstanding 3D
Sound technology.

For inquiries at Scipher plc, contact Investor Relations by phone
at 020 8848 6444; at Financial Dynamics, contact James Melville-
Ross by phone: 020 7831 3113

Registered Office
Scipher plc
Dawley Road
Hayes
Middlesex
UB3 1HH

Tel: +44 (0)20 8848 6555
Fax: +44 (0)20 8848 6677
Email: info@scipher.com


SCIPHER PLC: Property Rights Group Secures GBP 7.0MM Funding
------------------------------------------------------------

The Board of Scipher plc announced that the Bank of Scotland last
week has sent a credit committee approval for a banking facility
amounting to GBP7.0 million.

The Scottish Bank has also agreed to the terms for the new and
increased banking facilities, which the Board considers to be
sufficient for the Company's ongoing requirements.

The Board can also confirm that heads of terms have been signed
with one of the world's leading owners of real estate, in
relation to the planned sale and leaseback of the Company's
headquarters building.

The Board will make a further announcement setting out the
details of the transaction on signing of the contract.


UK COAL: Chairman's Statement at Annual General Meeting
-------------------------------------------------------

The Chairman of UK Coal made the following statement at the coal
mining group's Annual General Meeting held Tuesday:

Sales volumes in the first four months of 2002 were 6.7 million
tons (2001: 7.0 million tons). Coal stocks increased in the
period by 0.6 million tons (2001: reduction by 0.8 million tons).

Deep mine production in the period was 5.9 million tons (2001:
4.7 million tons) benefiting from improved performances at Daw
Mill, Rossington and Thoresby, and from Ellington being in full
production throughout the period.

The new longwall coalface at Daw Mill Colliery commenced
production in April and is now building to full production in a
5-meter section of the Warwickshire Thick coal seam.  

The size and configuration of the equipment in use is a first
for the Company and among the largest worldwide.  In consequence,
commissioning and build up will take longer than more traditional
coalfaces.

The initial start up on the face has been successful with outputs
around 14,000 tons per week. The program to ramp up production is
now ongoing and will take several weeks due to the complexity of
the new systems. Full production rates should be achievable by
July.

In January the Company announced the closure of the Prince of
Wales Colliery, which is programed to end production in August.  
Redundancy costs associated with the closure will be included in
the interim results.  Redundancy costs to date are GBP3 million.  

The total cost will depend on the number of employees to whom we
are able to offer employment to at other collieries, but is
likely to be in the range of GBP9 to GBP12 million.

The Company announced in April that it was undertaking a review
of the mining prospects in the Selby complex.  That review is
drawing to a close and the Company expects to announce its
conclusion in June.

The unions representing the mining supervisors have rejected the
annual wage increase accepted by 85% of employees and are
currently balloting for selective industrial action in support of
an enhanced offer.  The ballot result will be known in early
June.

After the initial research and analysis stage Project 105 is now
four months into the implementation plan and is already showing
positive effects. The Company is focused on achieving the target
of 105p p/gj by the end of 2003.

Surface mines produced 1.4 million tons (2001: 1.3 million tons)
despite operations suffering from persistent rainfall in the
early part of the year.

Planning approval for 2.6 million tons was gained, and two new
sites commenced in April.

The Property and Estates business has made further progress with
outline planning approvals being received for 100 acres for the
development of 1.53 million sq ft of business space at Waverly,
near junction 33 of the M1. A joint venture has been formed with
Yorkshire Forward for the development of an Advanced
Manufacturing Business Park on the site.

The market for coal in the U.K. remains very competitive and coal
burn volumes are expected to fall back from the high levels of
2001.  In the first half of 2002 incremental sales are being
constrained by customers' stock overhang. In the second half of
the year progress on new sales is anticipated by displacing
imports and at prices competitive with world market prices.

The sharp fall in electricity prices in the U.K., coupled with
fluctuations in gas prices and the on-going effect of NETA, has
increased competition between power producers and volatility
within the market for coal. Coal consumption indicators for the
early months of 2002 show that coal burn is holding up better
than market forecasts and steam coal import levels have reduced
by 23% compared to the same period last year.

The Company's drive to improve productivity and reduce costs
continues to make good progress, some of this being demonstrated
by the increased deep mine production in the first four months of
the year.  The focus of management attention is on the continued
improvements in unit costs to create a long-term business that is
competitive with imports in our home market.

For more information, at UK Coal, contact: Gordon McPhie, Chief
Executive by phone: 01302 751 751; at Gavin Anderson & Co
Financial, contact Liz Morley/Fiona Grant Duff by phone:  020
7554 1400


VIATEL INC.: Judge Gives Nod on US$2.7 MM Debt Restructuring
------------------------------------------------------------

The U.S. Bankruptcy Court for the District of Delaware approved
Tuesday the US$2.7 billion debt-for-equity restructuring of
Viatel Inc., the European broadband network operator under
Chapter 11 protection in the U.S.

The approval marks the exit of the company from the proceedings,
which began more than a year ago.  The stocks in the new company
will be distributed to about 5,000 creditors, led by large
institutional investors such as Morgan Stanley Investment
Management and Alliance Capital Management Corp., The Deal says.

The company's assets are valued US$1 billion.  It emerges from
bankruptcy with its 6,500-mile European network that will be sold
mainly to national European carriers and large corporate clients.  
The company will no longer sell its long-distance voice services
or own any U.S. assets.  Creditors are expected to recover about
2.9% of their original holdings.

A new Bermuda holding company will replace Viatel Inc., whose
unsecured creditors and U.S. subsidiaries will have pro-rata
share of the 10,560,000 shares in Viatel Holding (Bermuda), said
the Troubled Company Reporter-Europe last week, citing Total
Telecom.  

Viatel forecasts revenues of US$9.8 million for 2002, US$33.5
million for 2003 and US$69.7 million for 2004, The Deal says.
This new company will be valued US$80 million and will be debt-
free.  It does not, however, expect a full recovery before 2006,
as it projects a cash shortfall of US$12.8 million in 2004-2005.

The company filed for creditor protection in the U.S. in May last
year, with debts of about US$2.1 billion.  Its European
operations, mostly based in the United Kingdom, similar went into
administration in June.  NTL eventually snapped up the U.K. unit
for GBP15 million, and the U.K. residential and SME business was
acquired by Telco Global Communications, TCR-Europe said.

Gregory Milmoe of Skadden Arps Slate Meagher & Flom LLP
represented Viatel in bankruptcy court; Richard Mason of
Wachtell, Lipton, Rosen & Katz represented the creditor's
committee, The Deal says.

                                  ***********

      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.


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