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/raid1/www/Hosts/bankrupt/TCREUR_Public/020527.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Monday, May 27, 2002, Vol. 3, No. 103 Headlines * G E R M A N Y * ADVANCED MEDIEN: Continues Process of Consolidation ADVANCED MEDIEN: Studies Suit Versus Former Managers, Says Report BANKGESELLSCHAFT BERLIN: Sells Stake in Czech Bank Separately DEUTSCHE TELEKOM: Bond Issue Delayed as Moody's Modified Outlook E.MULTI DIGITAL: Files for Creditor's Protection HEIDELBERGER ZEMENT: Cut to Baa2 as Market Condition Stymies Plan HERLITZ AG: Administrator Says Banks Might Forgive EUR100 MM Loan KIRCHPAYTV GMBH: Gets CHF6 Million for 40% Stake in Swiss Partner LANDESBANK HESSEN-THUERINGEN: Moody's Reviews Strength Rating LANDESBANK RHEINLAND-PFALZ: Strength Rating Faces Likely Cut LANDESBANK SACHSEN: Slump in Banking Sector Prompts Rating Review TRIUS: Annual Accounts, Opening Balance Sheet of Liquidation * N E T H E R L A N D S * GAP INTERNATIONAL: Moody's Revises Prospects to "Negative" KPNQWEST N.V.: Company Profile KPNQWEST: Data Carrier Files for Moratorium Under Dutch Law KPNQWEST: Announces Resignation of Group's Supervisory Board KPNQWEST NV: In Takeover Talks With Five Telecom Giants * P O L A N D * ELEKTRIM SA: Consortium Cancels Credit for Plant Modernization * S P A I N * REPSOL YPF: Negotiates Sale of 23% Stake in Gas Natural REPSOL YPF: Fails to Appoint CEO, Won't Name One Soon * S W E D E N * ICONMEDIALAB: Announces Full Subscription of New Share Issue * U N I T E D K I N G D O M * ALBERT FISHER: Appoints KPMG Administrative Receivers COLT TELECOM: Appoints Mark A. Jenkins to Board of Directors ITV DIGITAL: Administrator Speeds up Sale as Cash Horde Dwindles PACE MICRO: NTL Settlement Won't Avert Job Cuts, Says Chief THUS GROUP: Internet Service Provider Proposed Board Changes ============= G E R M A N Y ============= ADVANCED MEDIEN: Continues Process of Consolidation --------------------------------------------------- In fiscal year 2002, Advanced Medien AG will continue on the course set out in 2001, said Otto Dauer, chief executive officer of Advanced Medien AG. According to Dauer, the goal is to create a solid foundation for future development based on a healthy corporate structure and transparent organizational processes. The speedy conclusion of this process is a key prerequisite for the success of the company's ongoing search for a partner. Advanced Medien aims to conclude the process of consolidation before the end of this year. Dauer also hopes to finalize the search for a partner during 2002. The improvement of the company's result in the first quarter shows that Advanced Medien is pursuing the right strategy, said Dauer. Earnings before interest, taxes, depreciation and amortization improved to 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 minus EUR 3,11 million in the same period last year. The loss reduction is mainly due to the strict cost-cutting course adopted by the company. Because of the restrained attitude in the film purchasing sector in the past fiscal year, Advanced Medien recorded sales revenues of EUR 5,85 million in the first quarter (previous year: EUR 0,67 million). 95% of this total is attributable to the subsidiary U.F.O. Still Dauer's outlook regarding the further operating performance of Advanced Medien was guarded. Advanced Medien AG systematically worked on streamlining its corporate structures during the past year. To this end, the company restructured its collaboration with its subsidiary U.F.O. Unified Film Organization LLC, Los Angeles, during the past fiscal year. Following an evaluation of all corporate divisions, the loss- making film distribution division was closed down at the end of the year. Comprehensive renegotiations of film purchasing agreements resulted in total savings of multimillion amount. Furthermore, Advanced Medien was able to collect outstanding receivables in the amount of about EUR 4,0 million. The liabilities to banks owed by the German group companies were reduced as agreed to EUR 11.3 million in 2001 (previous year: EUR 14.2 million). The complete and thorough investigation of all business transactions which had led to the severe drop in sales and earnings in fiscal year 2000 was yet another key task during 2001. As a result of this investigation, the financial statements for fiscal years 1999 and 2000 had to be prepared anew. Dauer mentioned the conclusion of current settlement negotiations as a further important aspect in the ongoing search for a partner. In May of this year, Advanced Medien AG was able to achieve a first major success by settling the legal dispute with Wolfgang Petersen. Chief Executive Officer Otto Dauer is optimistic with regard to Advanced Medien's future development: "We have made big strides on our way of restructuring the company during the past year and we will aggressively continue this course in 2002." Key figures in thousand euros 2001 2000 1999 IAS IAS IAS new new Revenues 19,513 14,221 11,260 EBITDA 10,811 4,714 4,714 EBIT -15,966 -22,976 -10,335 Financial result -1,299 -274 -722 EBT -17,265 -23,250 -11,057 Result from ordinary operations -17,260 -23,250 -11,087 Net loss for the year -17,450 -23,003 -11,087 Loss per share (euros) -1.00 -1.38 -0.67 Q1 2002 Q1 2001 IAS IAS Revenues 5,847 674 EBITDA 4,450 -1,930 EBIT -1,004 -2,935 Financial result -269 -170 EBT -1,274 -3,106 Result from ordinary operations -1,276 -3,106 Net loss for the period -1,357 -2,963 Loss per share (euros) -0,08 -0.17 ADVANCED MEDIEN: Studies Suit Versus Former Managers, Says Report ----------------------------------------------------------------- Former managers of Advanced Medien AG, a German film rights traders, could end up in court as the company mulls suit against them, Suddeutsche Zeitung/FT Information said. Company chief Otto Dauer, however, declined to give any details - - including the names of the ex-manager -- during an interview last week, said the paper. If pursued, the action will follow the case filed against founder Herbert Jovy, who is accused of bogus business that led to losses of EUR27.5 million between 1999 and 2000. The company recently reported sales of EUR5.85 million for the first quarter compared with just EUR0.67 million last year. BANKGESELLSCHAFT BERLIN: Sells Stake in Czech Bank Separately ------------------------------------------------------------- Bankgesellschaft Berlin is selling its 85.16% stake in Zivnostenska Banka separately, according to the Prague Business Journal. The development makes the oldest and currently the eighth largest Czech bank attractive to buyers who had earlier thought the stake would be part of the package that the city-state of Berlin is getting rid of. The city is selling its 81% stake in Bankgesellschaft after injecting money last year that staved off insolvency for the bank. But many believe the Berlin-based bank is not a good buy considering its problems and its near-collapse last year. "There is not likely to be a great deal of interest in [Bankgesellschaft], as it has a lot of problems, so the fact that it will be sold off separately is definitely good news for Zivno," a leading manager at one the major Czech banks, who asked not to be named, told the Journal. There are at least eight parties interested in Zivno, the former leader in the local banking industry: GE Capital Bank, HVB Bank, Volksbank, Bayerische Landesbank and three Italian banks -- Banca Intesa, Sanpaolo-IMI and Unicredito Italiano, which failed in its bid to buy the state's majority stake in Komercni Banka last year. Citibank is also rumored to be bidding. Of the eight, Unicredito is seen as the most likely to bid aggressively for the bank, says the Journal. Analysts point out that Unicredito is the only well-prepared bank to make an offer because of its long-term ambition to make acquisitions in the region. After failing to get Komercni Banka, it is likely to be looking for another target, they say. "Unicredito is very strong in Poland and Bulgaria, it's the largest bank in Croatia and they have a small bank in Slovakia, so basically what's missing in their regional coverage is the Czech Republic and Hungary," Raiffeisenbank bank analyst Jiri Stanik told the Journal. "It's a high priority for them to fill this gap, especially after losing [Komercni Banka]," he said. But despite Unicredito's apparent advantage, many believe the bidding will be fierce. The bank was founded in 1868, the first bank in the Austro- Hungarian Empire created using exclusively Czech capital. During the First Czechoslovak Republic it became the country's largest bank and even after the post-Communist era, it retained this distinction. In 1992, however, the bank was privatized and later sold to Bankgesellschaft in 1998. Soon after, the bank's woes began. Hit by scandals last year over questionable property loans and its links to Berlin political circles, Bankgesellschaft failed to meet Zivno's requests for an equity increase of CZK2.6 billion to improve its competitiveness, says the Journal. Today, the bank's market share is only 2% and its assets total some CZK51 billion. It's clean record, however, makes it an attractive prospect, say analysts. "From the point of view of its loan portfolio, it's in good shape," said Jan Slaby, an analyst at Wood & Company. "With a new owner and a clear strategy Zivno could have some good opportunities for growth." Observers told the Journal that with a foothold in the Czech Republic, anyone seeking to enter the market will use Zivno as a platform for further development and that this is what makes it such an appealing prospect. This may also push the bidding beyond the expected price. "Every bidder is going to work out what their return on investment could be and it depends on their plans for the bank," an analyst at a London bank told the Journal. "And banks like Unicredito have a budget set aside for acquisitions in the region, so the size of the bids will depend on what Zivno and its presence on the Czech market is worth to whoever wants it," he said. Analysts predict the going price for the stake could range between EUR150 million to EUR200 million. Schroder Salomon Smith Barney is advising Bankgesellschaft on the sale. Interested parties have until today to submit written expressions of interest. DEUTSCHE TELEKOM: Bond Issue Delayed as Moody's Modified Outlook ---------------------------------------------------------------- Moody's changed late last week the stable outlook of Deutsche Telekom to negative, derailing its EUR5 billion bond issue, whose pricing was postponed as a result of the agency's action. The Financial Times says Salomon Smith Barney, one of the lead managers of the transaction, confirmed Thursday that the pricing was delayed until Friday to assess the effect of the outlook change. The company is rated Baa1 by Moody's. "We communicate to the market as soon as we perceive that we have a change of view. It is even more critical when there is an imminent bond issue," Moody's analyst Aidan Fisher told the Financial Times in defending the timing of the move. News of the agency's action sent shares to an all-time low of EUR11.76 in early trading Thursday. The company was also forced to offer higher yields on the bonds to prop up demand. Moody's pointed to the 16% fall in first-quarter earnings at T- Com, as its reason for assigning a negative outlook on the company. The fixed-line business is the company's biggest cash contributor. Moody's said radical restructuring measures would be required for the group to reach its debt reduction target. The company has a EUR67 billion debt-pile. The German incumbent has pledged to raise sales by a double-digit percentage this year and to deliver EBITDA in a range of EUR15.9 billion to EUR16.9 billion. E.MULTI DIGITAL: Files for Creditor's Protection ------------------------------------------------- E.multi Digital Services AG -- www.emulti.de -- filed for insolvency Thursday at the district court in Karlsruhe. The move comes after the group was unable to find investor to shoulder the company's liabilities. Due to its restructuring, numerous long-term contracts of workers may be dissolved. The payments due to the affected employees will be secured by a loan from a new investor. However, up to May 23, 2002, no payments were released. After the order of a provisional insolvency manager, the executive committee will immediately clarify whether for June 11, 2002 the planned general meeting will nevertheless take place. HEIDELBERGER ZEMENT: Cut to Baa2 as Market Condition Stymies Plan ----------------------------------------------------------------- Approximately US$2.4 billion of debt securities of Heidelberger Zement AG were affected Friday when Moody's cut its senior debt rating to Baa2 and confirmed its short-term debt at Prime-2, with both having a negative outlook. "The downgrade reflects the outlook for weak operating performance expected for some of HZ's key markets, especially in Germany, and substantial execution delays in management's original de-leveraging strategy," Moody's said in a press statement. "The negative outlook considers risk of delay in debt reduction due to the slow progress in asset disposals," the agency added. Moody's said the company raised substantial debt between 1999 and 2000 in connection with various acquisitions (e.g. Scancem, CBR). These acquisitions were aimed at broadening the geographical presence of the group and thus playing a more active role in the industry's move towards consolidation. "However, implementation proceeded markedly slower than originally indicated, due to a lackluster appetite for investments in the industry and to low valuations as a result of the protracted cyclical slump in the several West European construction/building material markets," the agency noted. "Additionally, HZ's operating performance has come under pressure from weak construction activity in its core markets and severe price competition developing in Germany. The overall effect of this [is] a considerable deviation - both in terms of amount and time horizon - from the original cash flow forecasts and management's debt reduction plan," Moody's said. The downgrade affected these ratings: Heidelberger Zement AG -- Baa2 (from Baa1) for senior unsecured MTN Heidelberger Zement AG -- Baa2 (from Baa1) for senior unsecured bank loan Heidelberger Zement Finance B.V. -- Baa2 (from Baa1) for sr unsecured debt guaran'd by HZ Heidelberger Zement Financial Services AB -- Baa2 (from Baa1) for sr unsecured debt guaran'd by HZ Ratings confirmed: Heidelberger Zement AG -- Prime-2 for short-term debt Heidelberger Zement Finance B.V. -- Prime-2 short-term debt guaranteed by HZ Heidelberger Zement Financial Services AB -- Prime-2 short-term debt guaranteed by HZ Heidelberger Zement AG, headquartered in Heidelberg, Germany was founded in 1873 and is publicly traded. The company produces cement as well as building materials and building chemicals. Fiscal 2001 group revenues were EUR6.7 billion, Moody's said. For more information, contact: Frankfurt Wolfgang Draack Senior Vice President European Corporate Moody's Deutschland GmbH +49 69 707 30 700 Frankfurt Heiko Neumann Vice President - Senior Analyst European Corporate Moody's Deutschland GmbH +49 69 707 30 700 HERLITZ AG: Administrator Says Banks Might Forgive EUR100 MM Loan ----------------------------------------------------------------- Peter Leonhardt, the insolvency administrator of office supplies maker Herlitz AG, expressed optimism recently that creditor banks will waive more than EUR100 million in debts to pave the way for insolvency proceedings to begin next month. Suddeutsche Zeitung/FT Information recently chanced upon Mr. Leonhardt, who said an early start of formal insolvency proceedings would be advantageous to the company, now that many have signified interest in acquiring the firm. In Germany, formal proceedings normally start three months after the declaration of bankruptcy. During the interstice, the administrators are given the chance to weigh between liquidation and keeping the company as a going concern. Herlitz filed for bankruptcy on April 2. It is understood that the company had met its creditors two weekends ago to present its restructuring plan. Leonhardt & Partner, the firm handling the company's insolvency procedure, said then that the company can 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, the Troubled Company Reporter-Europe said recently. The company reported losses of roughly EUR52 million in 2001. Recently, however, the company has shown promising development, with higher earnings and turnover than earlier expected. KIRCHPAYTV GMBH: Gets CHF6 Million for 40% Stake in Swiss Partner ----------------------------------------------------------------- Insolvent KirchPayTV allegedly netted CHF6 million when it recently sold its 40% stake in Swiss pay-TV broadcaster Teleclub, says Suddeutsche Zeitung/FT Information. The company invested in the Swiss holding in 1984, its first venture into the pay-TV business. The report did not name the buyer of the shares. KirchPayTV filed for insolvency on May 8, becoming the third casualty in the ongoing financial turmoil at the German media empire. It followed the collapse of KirchMedia and TV.Berlin. The insolvency proceeding is presently handled by the Munich district court and covers six other related businesses and holding companies. Joseph Fuchsl, a bankruptcy specialist from the law firm Dr. Joseph Fuchsl & Kollegen, is the interim administrator for the main holding company and two subsidiaries of KirchPayTV. LANDESBANK HESSEN-THUERINGEN: Moody's Reviews Strength Rating ------------------------------------------------------------- International ratings agency Moody's placed Friday the "C+" financial strength rating of Landesbank Hessen-Thueringen on review for possible downgrade due to the increasingly difficult operating environment faced by German banks, and Landesbanken in particular. "Costs and revenues have been under pressure for some time, affecting further [its] already modest profitability," Moody's said in justifying its decision. "Moody's cautioned that the short- to medium-term outlook for a material improvement in profitability and financial strength is not very encouraging. In this context, Moody's review will assess the appropriateness of the existing financial strength ratings for the Landesbanken." The rating agency says this banking sector "faces strategic challenges in the years ahead, as the support mechanisms will fall away after 2005, and the bank will feel even stronger pressures regarding profitability for the years thereafter." Landesbank Hessen-Thueringen Girozentrale is based in Frankfurt/Main. Its assets amounted to EUR137.6 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 Gabriele Baur VP - Senior Credit Officer Financial Institutions Group Moody's Investors Service Ltd. 44 20 7772 5454 LANDESBANK RHEINLAND-PFALZ: Strength Rating Faces Likely Cut ------------------------------------------------------------ International ratings agency Moody's placed Friday the "C+" financial strength rating of Landesbank Rheinland-Pfalz on review for possible downgrade due to the increasingly difficult operating environment faced by German banks, and Landesbanken in particular. "Costs and revenues have been under pressure for some time, affecting further [its] already modest profitability," Moody's said in justifying its decision. "Moody's cautioned that the short- to medium-term outlook for a material improvement in profitability and financial strength is not very encouraging. In this context, Moody's review will assess the appropriateness of the existing financial strength ratings for the Landesbanken." The rating agency says this banking sector "faces strategic challenges in the years ahead, as the support mechanisms will fall away after 2005, and the bank will feel even stronger pressures regarding profitability for the years thereafter." Landesbank Rheinland-Pfalz Girozentrale is based in Mainz and reported assets of EUR69.8 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 Gabriele Baur VP - Senior Credit Officer Financial Institutions Group Moody's Investors Service Ltd. 44 20 7772 5454 LANDESBANK SACHSEN: Slump in Banking Sector Prompts Rating Review ----------------------------------------------------------------- International ratings agency Moody's placed Friday the "C" financial strength rating of Landesbank Sachsen Girozentrale on review for possible downgrade due to the increasingly difficult operating environment faced by German banks, and Landesbanken in particular. "Costs and revenues have been under pressure for some time, affecting further [its] already modest profitability," Moody's said in justifying its decision. "Moody's cautioned that the short- to medium-term outlook for a material improvement in profitability and financial strength is not very encouraging. In this context, Moody's review will assess the appropriateness of the existing financial strength ratings for the Landesbanken." The rating agency says this banking sector "faces strategic challenges in the years ahead, as the support mechanisms will fall away after 2005, and the bank will feel even stronger pressures regarding profitability for the years thereafter." Landesbank Sachsen Girozentrale (without Saechsische Aufbaubank GmbH), headquartered in Leipzig, had assets of EUR51.7 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 Gabriele Baur VP - Senior Credit Officer Financial Institutions Group Moody's Investors Service Ltd. 44 20 7772 5454 TRIUS: Annual Accounts, Opening Balance Sheet of Liquidation ------------------------------------------------------------ In the last shorted business year (01-05-2001 to 12-11-2001), day before decision of liquidation) TRIUS-Group posted revenues of 1.1 million EURO and EBIT of EURO -4,1 million. Characteristic numbers of the Opening balance sheet of liquidation (13-11-2001) are: - in million EURO - ASSETS Noncurrent assets = 2.45 Current assets = 19.80 Prepaid expenses = 0.06 Total assets = 22.31 RESERVES, LIABILITIES, OWNERS EQUITY Subscribed capital = 2.67 Capital reserves = 23.18 Loss brought forward = -7.50 Owners equity = 18.35 Reserves = 3.20 Liabilities = 0.76 Total R, L, O = 22.31 This balance sheet is based on the method of value for a company in liquidation. Main results of this are according to reserves and assets. Annual accounts and opening balance sheet are attested by the chartered accoutant and subject to closing by the General meeting. ===================== N E T H E R L A N D S ===================== GAP INTERNATIONAL: Moody's Revises Prospects to "Negative" ---------------------------------------------------------- Gap International B.V. suffered last week the consequence of Moody's decision to change the stable outlook of Gap Inc., its California-based parent. Dutch unit's Eurobonds, guaranteed by Gap Inc., are rated Ba3 by Moody's. The agency says the change in outlook was necessary to reflect the true state of the company's financial prospects. Moody's is concerned that Gap may not meet its profit expectations in 2002 and the possibility that the new Chief Executive Officer could make changes that might require currently unanticipated expenditures, charges or revisions in operations. In addition, the agency also notes the negative comparable store sales. Incumbent CEO Mickey Drexler has announced that he is stepping down as soon as the Board finds a replacement. Moody's anticipates that the new chief would likely adopt measures to stem the company's poor performance, a move that will surely lead to expenses that will "adjust the timing or the magnitude of currently expected returns." Moody's says this possibility does not measure up to the current "stable" outlook, more so when compared with store sales that have been negative since May 2000. The agency acknowledges, though, that the company has indeed executed a number of initiatives to boost sales and profitability, which include new assortments and new advertising campaigns. Buy Moody's points out that "it will be some time before it is evident whether these merchandising changes are gaining traction with the customer." Despite the outlook change, Moody's still maintains the group's ratings. This as liquidity remains fine since bolstered by the issuance of US$1.38 billion of convertible notes in February. Gap also has a US$1.4 billion senior secured bank credit agreement, the agency notes. These are the ratings affected by Moody's latest action: (1) Gap Inc. -- Senior implied at Ba2. -- Senior unsecured intermediate term Notes and convertible notes, issued under Rule 144A at Ba3. -- Senior unsecured notes at Ba3. -- Commercial paper and extendible commercial notes at Not Prime. (2) Gap International B.V. -- Eurobonds, guaranteed by Gap Inc., at Ba3. (3) Gap (Japan) K.K. -- Senior Notes, guaranteed by Gap Inc., at Ba3. Headquartered in San Francisco, Gap Inc. operates about 4,171 stores in the U.S., Canada, the U.K., France, Germany and Japan and an Internet business. For more information, contact: New York Angela Jameson Managing Director Corporate Finance Moody's Investors Service JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 New York Elaine E. Francolino VP - Senior Credit Officer Corporate Finance Moody's Investors Service JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 KPNQWEST N.V.: Company Profile ------------------------------ Name: KPNQwest N.V. Headquarters South Point F Building Scorpius 60 P.O. Box 2010 2130 GE Hoofddorp The Netherlands Phone: +31 23 568 7676 +31 23 568 7900 (fax) E-mail: media relations: media@kpnqwest.com investor relations: investor@kpnqwest.com sales information: sales@kpnqwest.com Web site: http://www.kpnqwest.com/ SIC: Data communications and hosting company Employees: 2,000 (2001) Revenues: EUR729.8 million (2001) Net Loss: EUR266 million (2001) Total Assets: EUR3,485.22 million (2001) Total Liabilities: EUR2,429.89 million (2001) Type of Business: Founded by KPN and Qwest, KPNQwest is a pan- European data communications and hosting company which delivers a full range of carrier and corporate networking solutions as well as hosting, multimedia and Internet services to European businesses through its own fiber optic network, the EuroRingsTM. KPNQwest's network is the fastest, most advanced fiber optic backbone network in Europe, spanning 25,000 kilometers connecting 60 cities in 18 countries, 28 hosting centers and 14 high-capacity metro area networks. Altogether this results in the most extensive IP coverage in Europe. The network is also connected directly to Qwest's fiber infrastructure in North America and Asia resulting in a seamless global network of 300,000 kilometers. Qwest holds 47% stake in KPNQwest, KPN owns 40%, while the public has 13% ownership in the company. Trigger Event: KPNQwest has acquired some operations of Global TeleSystems. Even after the consolidation of KPNQwest with GTS, which made KPNQwest the leading IP data communications provider in Europe, a lack of demand for services and a heavy debt load led the company to seek bankruptcy protection. President & Chief Executive Officer: Jack McMaster EVP & Chief Financial Officer: Jeff von Deylen EVP & Chief of Corporate Affairs: Christopher Hall KPNQWEST: Data Carrier Files for Moratorium Under Dutch Law ----------------------------------------------------------- KPNQwest N.V. -- www.kpnqwest.com -- announced Thursday that it is filing for protection under Dutch moratorium law, as it continues its dialogue with strategic investors and works with its banks and advisors to find funding alternatives. The Company continues to believe that there is substantial risk that there may be no underlying value to either its debt or equity securities. KPNQwest, a leading pan-European data communications and hosting company, delivers a full range of carrier and corporate networking solutions, hosting and Internet services across an 18- country 25,000 km European footprint, interoperable with the 300,000km Qwest global network. The group owns and operates the EuroRings, the fastest, most advanced fibre-optic backbone in Europe, which connects 60 cities, 14 of them with extensive Metropolitan Area Networks and a network of 28 ultra-secure hosting facilities, the KPNQwest CyberCentres. For further information, please contact: Piers Schreiber Corporate Communications - KPNQwest Telephone: +31 23 568 7612 Email: piers.schreiber@kpnqwest.com Jerry Yohananov Investor Relations - KPNQwest Telephone: +31 23 568 7602 Email: jerry.yohananov@kpnqwest.com KPNQWEST: Announces Resignation of Group's Supervisory Board ------------------------------------------------------------ KPNQwest N.V. today announced Thursday the resignation of the company's Supervisory Board, with immediate effect. The Supervisory Board was made up of two representatives of Qwest, two independent directors and one KPN representative. The Company continues to discuss a standstill agreement with its senior bank group. The bank group has insisted that making certain asset sales in a timely manner would be a requirement to any standstill agreement and the Company has also not been able to conclude these asset sales to date. The banks hold a substantial portion of the Company's assets as collateral, including most of its remaining cash. There can be no assurance that any agreement will be reached. KPNQWEST NV: In Takeover Talks With Five Telecom Giants ------------------------------------------------------- There are at least five telecoms companies reportedly talking with KPNQwest NV, the Dutch alternative telecoms carrier that filed for creditor protection Thursday, says the Financial Times. "Teams are coming in to look at the books, hold discussions with management and really get under its skin," one person close to KPNQwest told the paper late last week. The source said discussions are still in early stage and, while the company viewed a takeover as its best option, the outcome is still far from certain. The parties allegedly involved in "intensive and constructive discussions" are US operators Verizon and AT&T, Telefonica of Spain, Cable and Wireless and British Telecom of the UK. Analysts, however, believe the company can only fetch less than EUR360 million, which is the value of its senior debt. This is a far cry from the company's market capitalization that stood at EUR4 billion two years ago. The company blames its woes on a dramatic slump in demand for wholesale data capacity, which it supplies to other telecom carriers. This segment in the balance sheet represents 55% of revenues, the paper says. The report says several parties are also eyeing the firm's eastern European assets, which had been part of Global TeleSystems, a U.S. network operator that KPNQwest bought from the brink of bankruptcy in March. These assets are expected to command bids worth EUR100 million. An agreement could be sealed as early as this week, says the paper. The company filed for court protection after the five members of its supervisory board resigned and after it failed to secure short-term cash injection. It has a month to consider its options before entering liquidation. =========== P O L A N D =========== ELEKTRIM SA: Consortium Cancels Credit for Plant Modernization -------------------------------------------------------------- The Management Board of Elektrim S.A. announced Wednesday that Elektrownia Patnow II (power plant), 100% subsidiary of Zespol Elektrowni Patnow-Adamow-Konin S.A. (PAK) of which Elektrim S.A. holds 38.46%, received a letter cancelling the credit agreement dated August 6, 2001 for a credit in the amount of US$392 million. The letter was sent by the Consortium of Banks to arrange a syndicated facility to finance the project of Patnow II Power Plant modernization. In a separate letter the Consortium of Banks offered further co- operation in putting forward the project while restructuring the facility. Zespol Elektrowni Patnow-Adamow-Konin S.A. would like to announce that no drawdowns have been effected at present under the above mentioned credit agreement and the project has been carried out basing on PAK's own funds. The cancellation of the credit agreement is caused, among others, by the prolonged composition proceeding of Elektrim S.A. The Management Board of Elektrim S.A. believes that as soon as the agreement with creditors is signed the Elektrim Group will be able to source further funding for the modernization of Patnow II Power plant. ========= S P A I N ========= REPSOL YPF: Negotiates Sale of 23% Stake in Gas Natural ------------------------------------------------------- The Board of Directors of Repsol YPF, at its meeting of May 14, 2002, has approved, among other things, to authorize its President to negotiate the sale of a block of shares of Gas Natural SDG, S.A. consisting of up to 23% of the capital stock of such company, equivalent to 102,988,486 shares, par value f l.00 per share. To date, the Repsol YPF Group owns 47.042% (210,643,172 shares) of the capital stock of Gas Natural, accordingly, upon closing the sale, Repsol YPF's stake in Gas Natural will be 24.02% A. Characteristics of the Sale The sale of the aforementioned shareholding participation will be implemented through a transaction with the following characteristics: Target of the Offering The offering will only be targeted at one Institutional Group consisting solely of institutional investors, which could either be institutional investors domiciled in Spain (such as Pension Funds, Insurance Companies, Credit Institutions, Brokerage Agencies, Real Estate Investment Companies, Real Estate Investment Funds, entities authorized pursuant to articles 64 and 65 of the Securities Market Law to administer investment portfolios of third parties and other companies whose activity is the continuous holding of variable income portfolios) or nondomiciled in Spain, at which an institutional offering is directed in accordance with international market practice and applicable laws. Mechanics of the Offering The placement of the Private Offering of Sale of Shares will be implemented through the accelerated bookbuilding method, which is expected to last two business days, as described in the respective Summarized Prospectus (Follero Informntivo Reducido) B: Shareholders' Agreement Upon closing the sale, the agreements between the two main shareholders of Gas Natural will be as follows: Concurrently with the reduction of Repsol YPF's participation in the capital stock of Gas Natural, Repsol YPF and "la Caixa" have entered into an agreement amending the shareholders' agreement dated as of January 11, 2000, which regulated their respective shareholdings m Gas Natural and Enagas, S.A., their representation in the governance bodies of both companies and established certain industrial management guidelines. In the amendment, both parties commit to maintain the transparency, independency and professionalism in the management of Gas Natural and confirm the adherence to the "joint control" structure of Gas Natural as recognized by the Directorate General of Economic Policy for the Defense of Competition on March 10, 2000. The conduct principles contained in the agreement of January 11, 2000 are incorporated and updated in the new agreement, as required. With regard to the management of Gas Natural, it is expected that its board of directors will consist of twelve members, of which Repsol YPF will nominate four members, "la Caixa" will nominate another four members and the remaining four will be independent members to be nominated by both Repsol YPF and "la Caixa". "La Caixa" will nominate the person to be appointed as Chairman, while Repsol YPF will nominate the Vice Chairman. C: Economic Impact and Use of Proceeds Economic Impact Upon closing of the sale pursuant to the Private Offering, the Repsol YPF Group expects to recognize an after-tax net gain of EUR1.060 million and write off approximately EUR52 million of goodwill. The change in the consolidation method of Gas Natural, which thereafter will be made by the proportional integration method instead of the global integration method used until now, is expected to reduce Repsol YPF's financial debt by approximately EUR2.890 million as well as minority interests outstanding by approximately EUR2.335 million. Use of Proceeds The proceeds obtained through the sale pursuant to the Private Offering, will be principally used in the reduction of Repsol YPF's financial debt. In this regard, total reduction in financial debt, including the effect of the sale pursuant to the Offering and the change in consolidation method, is expected to be around EUR4.900 million. Consequently, the debt-to-book ratio is expected to decrease from 43.4% to 37%, increasing, at the same time, net liquidity by EUR1.067 million. Note: the amounts indicated above have been calculated based on the average price of Gas Natural shares on May 14, 2002. REPSOL YPF: Fails to Appoint CEO, Won't Name One Soon ----------------------------------------------------- Spanish-Argentine oil and energy group Repsol-YPF SA is not going to name a chief executive officer any time soon, dismissing reports that it is about to appoint one. A company spokeswoman said last week that Chairman Alfonso Cortina will continue to act as the company's CEO, aside from heading the boardroom. But according to Dow Jones Newswires, a board decision on the naming of a chief executive was postponed because of a lack of agreement among board members, particularly those representing bank BBVA. The decision to appoint a CEO is part of the group's efforts to strengthen its management team to combat a very difficult year. Since its founding in 1985, the company never had one. Investors have hurled criticisms at management after Repsol's shares fell 19 percent this year as the oil producer shed assets to offset a drop in earnings from its Argentine business. Critics say the difficulties facing the oil and gas group in Argentina require greater efforts at management level. One of the candidates being considered for the post is former Banco Santander Central Hispano SA deputy chairman and CEO Angel Corcostegui. The post could also go to one of Repsol YPF's existing top managers, said Troubled Company Reporter-Latin America recently. CONTACT: REPSOL YPF Paseo de la Castellana 278 28046 Madrid, Spain Phone +34 91 348 81 00 Home Page: http://www.repsol.com or Av. Roque S enz Pe a, 777. C.P 1364. Buenos Aires Argentina Contacts: Alfonso Cortina De Alcocer, Chairman Ramon Blanco Balin, Vice Chairman Carmelo De Las Morenas Lopez, CFO =========== S W E D E N =========== ICONMEDIALAB: Announces Full Subscription of New Share Issue ------------------------------------------------------------ As expected, IconMedialab's fully underwritten new share issue with preferential rights is completed with SEK 181.9 million (EUR 19.9 million) before issue costs. A total of 51,974,716 shares were subscribed. The new share issue increases the number of shares in IconMedialab to 155,924,149. Following the new share issue the share capital in IconMedialab will amount to 12,473,931.92 SEK. In addition, 1,039,494 shares have been issued to the underwriter of the new share issue. The new shares are traded on the O-list of Stockholmsborsen (Stockholm Stock Exchange). "The fully subscribed new share issue provides us with the financial backing to implement our action plan in the short term and build a solid foundation for future success," says Robert Pickering, CEO, IconMedialab International. "We will focus these resources on the specific key markets we have identified as the most likely to provide the best return on our investment, that includes the Netherlands, Germany, the United States, Spain/Portugal, Italy, Denmark, Finland, Switzerland and Belgium. We have every confidence that we are on the right track to achieve our financial targets that we set since the merger with Lost Boys earlier this year." IconMedialab and Lost Boys merged in January 2002 to become one of the world-leading IT professional service providers. The group operates with approximately 900 employees in 10 countries throughout Europe and the U.S. The company provides user-driven solutions through innovative technology for all digital channels - with a global reach and local expertise. The group's stocks are traded on the Stockholm Stock Exchange O-list (ICON). For more information, visit the groups' Web sites at: www.iconmedialab.com and www.lostboys.com =========================== U N I T E D K I N G D O M =========================== ALBERT FISHER: Appoints KPMG Administrative Receivers ----------------------------------------------------- Mick Mcloughlin and Jim Tucker of KPMG Corporate Recovery were Wednesday appointed joint administrative receivers to The Albert Fisher Group PLC -- http://www.fisherfoodsgroup.com--, Fisher Foods Limited and their subsidiaries following a request by the company's directors. The business turned over GBP458.8 million to September 1, 2001 and is a major "own label" supplier of fresh and frozen vegetables, seafood, chilled salad and fruit to the major supermarkets in the U.K. Approximately 3,000 full and part-time people are employed in nine U.K. locations, which include: Gosforth (340 employees), Redditch (250), Fraserburgh/Peterhead (770): Seafood, fresh, frozen and processed products. Kings Lynn (400): Frozen vegetables, including 30% of the UK pea crop. Wisbech (310), Methwold (660): Chilled fruits and salads. Birmingham (50): Seafood trading York (280): Dressed salads Mick McLoughlin, KPMG Corporate Recovery Partner and joint administrative receiver said: "Albert Fisher has a history of developing and maintaining strong customer relationships and from the outset, we will be in discussions with those major customers, suppliers and trade creditors and employees to ensure their ongoing support." "We are continuing to trade the business as normal. Given the strong market position of the company, we are hopeful of concluding a sale of each of the businesses quickly to secure as many jobs as possible." The subsidiaries also include operations in the U.S. and Europe which are not in any form of insolvency process. The U.S. operations are currently in the midst of a sale process and the receiver will be looking at the sale options for the European operations in Spain, Belgium and Holland. KPMG Corporate Recovery has over 400 professional staff in 22 offices around the U.K. and provides two distinct types of service: advice and assistance to insolvent companies, their creditors, and their otherstakeholders (known as Insolvency Services); and restructuring advice to companies who are underperforming or experiencing liquidity problems (known as Restructuring Services). For inquiries, contact: Judith Dow KPMG Corporate Communications Telephone: 0207 694 6187/07786 197 718 KPMG Press Office Telephone: 020 7694 6344 COLT TELECOM: Appoints Mark A. Jenkins to Board of Directors ------------------------------------------------------------ COLT Telecom Group plc, a leading European provider of business communication services, announced Thursday the appointment of Mark Jenkins, Group Director Legal Services and Secretary, to the Board of Directors as an executive director. Jenkins has not held any previous directorships in any other publicly quoted Company at any time in the previous five years. He joined COLT in 1998 as Group Director Legal Services and Secretary. Prior to joining COLT he held senior legal positions at a number of U.K. companies. He qualified as a barrister in 1981 and practiced at the bar from 1981 to 1985. COLT has over 13,000 network services and eBusiness customers with high bandwidth local networks in 32 European cities in thirteen countries supported by a series of Internet Solution Centres and inter-linked by a 15,000 route kilometer high capacity fibre-optic long distance network. COLT Telecom Group plc is listed on the London Stock Exchange (CTM.L) and Nasdaq (COLT). Information about COLT and its products and services can be found on the web at www.colt.net For further information, contact: John Doherty Director Investor Relations Email: jdoherty@colt.net Telephone: +44 20 7390 3681 ITV DIGITAL: Administrator Speeds up Sale as Cash Horde Dwindles ---------------------------------------------------------------- Creditors owed millions of pounds were dismayed to learn late last week that ITV Digital only have GBP9 million left in the bank, while bills are still mounting, says The Guardian. In a letter to creditors, administrator Nick Dargan said the bankrupt digital-TV network has unpaid bills of about GBP296 million. This includes GBP1.2 million so far racked up by Deloitte & Touche since its appointment as administrator seven weeks ago. Lawyers hired by ITV Digital to defend it against the GBP500 million-lawsuit filed recently by the Football League have also billed the network GBP650,000 in fees. This is expected to go up further as the case drags on. The news was expected to appall BSkyB, the Football League and transmission business Crown Castle, which are owed millions following the collapse of the network, says the paper. Mr. Dargan says he has now accelerated the sale of the company's assets, as it appears now that the company does not have the cash to maintain the administration proceeding for long. "Since 1 May 2002, there has been considerable interest in ITV Digital's assets, including its customer database, stocks of set top boxes, broadcasting equipment, the rights in and stocks of the Monkey character and the Plymouth call center. While at the stage of this report no material sales... have been completed, negotiations continue with interested parties," Mr. Dargan said in his letter. The company's woolen mascot is a hit among TV audiences and there are at least two companies interested in enlisting its services. But the paper doubts the administrator can command a good price in a fire sale. The database contains detailed information on 1.2 million pay-TV subscribers, making it likely to attract several bids. Mr. Dargan has set a creditors meeting in London on June 13 to apprise them of the sell-off. PACE MICRO: NTL Settlement Won't Avert Job Cuts, Says Chief ----------------------------------------------------------- Pace Micro Technology Plc may have settled its row with NTL over the delivery of 300,000 set-top boxes, but it does not change the dire state of its finances, says CEO Malcolm Miller. "We are a company whose expenses are driven by people rather than capital equipment. It is likely to lead to some job losses," Mr. Miller told The Guardian late last week. He said more than 100 jobs would probably go between now and July, when the company reports its full-year results. This as digital TV companies are still delaying orders for new kits, keeping the last 6 months of its financial year in the red. The company has about 950 employees, three-quarters of which are based in the U.K. It has already issued four profit warnings in the last eight months. In March, shares shed two-thirds of their value as the group halted supply to NTL because it could not get credit insurance for the boxes owing to NTL's parlous financial state, The Guardian said. NTL accounts for about a third of its total sales. Pace's shares, worth over GBP5 each a year ago, yesterday gained just a quarter of a penny to 89p. The company expects sales for the year to end May 2002 to be GBP350 million, in line with its latest profits warning, the paper said. THUS GROUP: Internet Service Provider Proposed Board Changes ------------------------------------------------------------ THUS plc, the Glasgow-based internet service provider, said Thursday a number of proposed changes to its Board of Directors. Mr Charles Berry, currently Chairman, and Mr David Nish, a Non- executive Director, have both informed the Board of their intention to stand down from their positions at the conclusion of the Company's next Annual General Meeting, due to take place on July 10, 2002 and not to offer themselves for re-election. Mr Roy Brown, currently a Non-executive Director, of the Company has agreed to become Chairman, following the AGM. The Board also announces its intention to appoint a further Non- executive Director to the Board in due course. Commenting on the announcement, Charles Berry, Chairman, said: "Now that THUS has successfully completed its demerger from ScottishPower David and I both consider that, as ScottishPower representatives, it is now appropriate that we stand down from the Board. "We will continue to follow the significant progress that THUS has made with considerable interest with ScottishPower remaining an important customer to the Company. I have every confidence that the Company will grow from strength to strength and that Roy will be an outstanding new Chairman. We wish him and the Company well over the years ahead." Bill Allan, Chief Executive, added: "Charles and David have each made a substantial contribution to the development of THUS and they leave with our best wishes for the future. I am delighted that Roy Brown has agreed to become our Chairman. His significant business experience has already been a tremendous asset and I look forward to working with him over the years ahead." Charles Berry and David Nish were appointed to the Board as ScottishPower's representative Non-executive Directors to the Board. Roy Brown jointed the Board of THUS on January 4, 2001. His biographical details are set out below: Mr Brown is also a Non Executive Director of GKN Plc, Brambles Industries plc and BUPA. He was previously a main Board Director of Unilever, prior to his retirement in May 2001. He joined Unilever in 1974 and was most recently responsible for a division operating in 15 European countries with a turnover of GBP5 billion. Prior to this role he was Regional Director of Unilever's Africa, Middle East, Central and Eastern Europe division. Mr Brown was educated at University College, London and Harvard Business School where he gained an MBA. For Further Information: THUS Group plc Ian Hood Director of Corporate Communications Telephone: 07786 171959 Kathryn Rhinds Investor Relations Manager Telephone: 07974 160013 Smithfield Financial Mark Woolfenden Telephone: 020 7360 4900 *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Kimberly MacAdam, Larri-Nil Veloso and Maria Lourdes Reyes, Editors. Copyright 2001. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$575 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *