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/raid1/www/Hosts/bankrupt/TCREUR_Public/020603.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, June 3, 2002, Vol. 3, No. 108 Headlines ********* * D E N M A R K * EICON NETWORKS: Files Bankruptcy Petition in Copenhagen Court * F R A N C E * COMPLETEL NV: Commences Akoord Composition Plan Proceedings * G E R M A N Y * BAYERISHCE LANDESBANK: Plan Stake Buy in Formula 1 Owner SLEC CARGOLIFTER AG: Applies for Insolvency to Gain Breathing Room CARGOLIFTER AG: Company Profile DEUTCHE TELEKOM: Up to Telefonia Takeover Talks Despite Debts GRUNDIG AG: Thomson to Acquire Grundig UK's Set-Top-Box Activity KIRCHMEDIA GMBH: Alarmed Shareholders to Plot Move This Week MOBILCOM AG: CEO Holds on to Seat Despite Vote of No Confidence SACHSENRING AG: Will Continue to Operate Despite Bankruptcy SCHNEIDER TECHNOLOGIES: Administrator Closes Shop in Bavaria SCHNEIDER TECHNOLOGIES: Company Profile * I T A L Y * ALITALIA SPA: Chances of Re-capitalization to Get EU Nod High FIAT SPA: Agnelli Family Not Against Selling Car Unit, Says Paper * N E T H E R L A N D S * KPNQWEST NV: Files for Bankruptcy After Talks Collapsed Friday KPNQWEST NV: Unable to Reach Agreement With Potential Buyers KPNQWEST NV: Almost Shutoff 25% of European Web Traffic Last Week LAURUS NV: Inks Financial Restructuring With Casino, Banks LAURUS NV: Jelgersma Assures to Continue Operations * N O R W A Y * FOSEN MEKANISKE: Faces Liquidation as Creditors Want Money Back S P A I N AVANZIT SA: Files for Bankruptcy After Banks Junked Debt Proposal AVANZIT SA: Company Profile * S W E D E N * SONG NETWORKS: Secures Five-year Contract From Visma Provider * S W I T Z E R L A N D * 4M TECHNOLOGIES: Q1/2002 Results Reveal Net Loss of CHF 4.13MM * U N I T E D K I N G D O M * BIG FOOD: Turns Huge Deficit in 2000 to GBP12.8 MM Profit in '01 CENES PHARMACEUTICALS: Spins Off Cognitive Testing Division INVENSYS PLC: Reports GBP858 Million Pre-tax Loss in 2001 INVENSYS PLC: Appoints Ed Mulvey to Lead Service Delivery KINGFISHER PLC: Rejects De-merger Plan of French Unit Castorama PACE MICRO: Ships IP500 Home Gateways to Technology Partners RAILTRACK PLC: Lawyers Say Private Shareholders Have Strong Case ============= D E N M A R K ============= EICON NETWORKS: Files Bankruptcy Petition in Copenhagen Court ------------------------------------------------------------- The board of directors of Eicon Networks Research A/S (formerly known as Lasat A/S) disclosed recently that it has filed for bankruptcy before the Maritime and Commercial Court in Copenhagen. The board of directors of Eicon Networks Research A/S has proposed solicitor Jorgen B. Elmer to become the supervisor of the estate that had not been touched when the company was granted "suspension of payment." The company did not succeed in realizing assets under the suspension of payments in order to procure necessary capital to pay the salary for April and May to the company's employees, which subsequently resulted in the petition for bankruptcy. The company suspended its payments on May 16, 2002. Eicon Networks is i-data international's largest subsidiary. The group is a vendor of ISDN customer premises equipment and an emerging vendor of ADSL customer premises equipment. Eicon -- www.eicon.com <http://www.eicon.com>--is also the vendor of X.25 WAN communication cards worldwide and has significant product offerings in the media gateway and VPN markets. Eicon sells its products in more than 80 countries worldwide, through a network of telecommunication companies, Internet service providers, distributors, resellers, and retail. For more information, please contact: Carl-Erik Nielsen, Senior Vice President, tel. (+45) 44 36 60 00 or (+45) 44 36 61 03 (direct) or (+45) 40 55 87 81 (mobile). Email: cen@i-data.com . =========== F R A N C E =========== COMPLETEL NV: Commences Akoord Composition Plan Proceedings ----------------------------------------------------------- Completel N.V. announced on May 30 that as a next step to the re-capitalization plan announced on May 15, 2002, it has commenced Akkoord composition plan proceedings in the Netherlands with respect to Completel Europe N.V., its holding company. The re-capitalization plan is supported by an ad hoc committee of holders of Completel Europe NV senior notes (Committee). The Committee and Note holders that have subsequently adhered to the Restructuring Agreement collectively own over 82% of the Company's combined outstanding Senior Notes and Senior Discount Notes. The re-capitalization will involve a debt for equity swap in respect of the Notes and the return to the holders of the Senior Notes of the escrow funds established at the time of the Senior Notes issuance. Two of the Company's major shareholders (Meritage Private Equity Funds and DeGeorge Telecom Holdings) have agreed to provide EUR30 million in new capital upon the successful closing of the re-capitalization, and certain of the existing bondholders on the Committee have agreed to re-invest in the company EUR9.9 million of cash, reflecting a portion of the escrow funds. Completel is effecting the re-capitalization by means of a voluntary pre-arranged Netherlands composition proceeding known as an Akkoord. To avail itself of this proceeding, on May 29, 2002, the holding company CompleTel Europe N.V., filed with the Dutch courts for protection from its creditors, which consist almost entirely of holders of Notes. The Dutch Courts will appoint an administrator whose consent will be required for certain actions of the company. At the same time that Completel Europe NV filed for protection from its creditors, it submitted to the Dutch courts a composition plan whereby the holders of the Notes would receive convertible preferred B shares and ordinary shares as described in the re-capitalization plan announced on May 15, 2002. The composition plan provides for other unsecured and non-preferred creditors getting the same consideration as the holders of the Senior Discount Notes. This composition plan, once approved by a creditors meeting including the Noteholders with the majorities required under Dutch law and the Dutch courts, would be binding on all the Noteholders and other creditors affected by the plan of composition, and would effectively eliminate all of Completel Europe N.V.s outstanding indebtedness. These measures affect only Completel Europe NV, the group's holding company, and will permit Completel SAS and Estel, the group's operating subsidiaries, to continue operations without disruption and with no impact to any service or obligation to customers, suppliers or other existing creditors of those operating subsidiaries. The Company anticipates that the Akkoord plan review by the Netherlands courts may be completed early in the third quarter of 2002, and that the recapitalization plan would be effected shortly thereafter. Completel is a facilities-based provider of fiber optic local access telecommunications and Internet services to business end-users, carriers and ISPs in France. For inquiries, contact: Stefan Sater Director Completel N.V. Investor Relations Telephon: +33-1-72-92-20-43 Email: s.sater@completel.fr ============= G E R M A N Y ============= BAYERISHCE LANDESBANK: Plan Stake Buy in Formula 1 Owner SLEC ------------------------------------------------------------- A consortium of banks including Bayerische Landesbank, J.P. Morgan and Lehman Brothers agreed on a plan to acquire a stake in Formula 1 holding company SLEC for several years, Frankfurter Allgemeine Zeitung (FAZ) reports, citing persons close to the banks. In 2001, the three banks granted a US$1.6 billion loan to Kirch Beteiligungsgesellschaft to acquire 58% of SLEC, according to FAZ. The said credit falls due at the end of June. However, Kirch is most likely unable to repay the loan. The banks could begin exploiting the Formula 1 stake, the paper explained. The banks can also gain control over 16.7% stake in SLEC held by media group EM.TV, which is still part of the collateral to the loan of the three banks. Werner Schmidt, Bayerische Landesbank Chairman, estimated the total value of Formula 1 at EUR 4 billion ($3.73 billion) to EUR 5 billion in May. Bernie Ecclestone, SLEC's founder, currently holds over 25% in the company. Several hurdles have still to be overcome before the automotive industry, Mr. Ecclestone and banking consortium may resolve this matter. Believed to be the largest obstacle, the paper explained, is the so-called Concorde Agreement with the car manufacturers, which expires in 2007. Negotiations regarding a 10-year extension of the deal is currently under way. CARGOLIFTER AG: Applies for Insolvency to Gain Breathing Room ------------------------------------------------------------- Airship maker Cargolifter allegedly sought creditor protection last week after rescue talks with the state government of Brandenburg and investors bogged down. AFX News said negotiations will continue to keep the company operational. The company has not been able to meet payments to creditors and salaries for its 500 employees. In its May 15 issue, the Troubled Company Reporter-Europe disclosed that the company had asked for a EUR50 million bridge loan or a federal/state government guarantee of EUR35.8 million. CARGOLIFTER AG: Company Profile ------------------------------- Name: Potsdamer Platz 10 D-10785 Berlin, Germany Phone: +49-30-5-9003-2000 Fax: +49-30-5-9003-2009 Website: www.cargolifter.com <http://www.cargolifter.com> SIC: Airship Manufacturing Employees: 456 (2001) Net Loss: 94.2453 EUR or $88.3 (Aug 2001) Total Assets: 121.115 EUR or $113.5 Total Liabilities: 25.1819 EUR or $23.6 Type of Business: Cargolifter is a company that provides air delivery, freight & parcel services. CargoLifter's business uses airships for the worldwide shipping of oversized and heavy cargos that generally demand more than one mode of transport. With operations in a half-dozen locations in Germany and the US, CargoLifter wants to develop a worldwide logistics network that will use its CL 160 airships, dubbed "flying cranes," which are designed to carry payloads of up to 160 metric tons. The company has been developing the smaller CL 75 airship, which is pulled by a truck and can lift up to 90 metric tons. Trigger Event: Cargolifter AG declared itself insolvent after talks on a rescue package with the local Brandenburg state government and investors collapsed. It was unable to secure new capital from the government and investors. Currently, the company is still continuing to find the extra capital that could be used to make due payments both to creditors and for the salaries of its employees. Chairman of the Supervisory Board: Heinz Herrmann Chairman of the Management Board and CEO: Carl-Heinrich von Gablenz Finance Officer: Karl Bangert DEUTCHE TELEKOM: Up to Telefonia Takeover Talks Despite Debts ------------------------------------------------------------- Deutsche Telekom (DT) remain interested in taking over Telefonia Dialog (TD) from copper concern KGHM. Negotiations have come to a halt, however, as the German phone operator's debts reached nearly EUR70 billion, according to Wednesday's edition of the Warsaw Business Journal. DT, which has a minority stake in Polska Telefonia Cyfrowa, remains interested in breaking into the Polish telecom market. Rafa Gebicki, investment advisor, said talks were suspended a few weeks ago after parties failed to agree about the sum of money DT will pay for the Polish company. Analysts value TD, which has a PLN1.23 billion debt, at US$200 million. GRUNDIG AG: Thomson to Acquire Grundig UK's Set-Top-Box Activity ---------------------------------------------------------------- Thomson and Grundig AG announced that they signed a definitive agreement for Thomson to acquire 100% of the Digital Intermedia Systems (DIS) business, Grundig's set-top box activity. Under this agreement, Thomson will acquire Grundig's high quality set-top-box manufacturing operations located near Cardiff (Llantrisant, United Kingdom), and its set-top-box hardware and software development divisions. The transaction is subject to regulatory approval. Financial details are not disclosed. Through its Broadband Access Products and Systems (BAPS) activity, Thomson develops and markets cable modems, DSL modems and digital set-top boxes as well as digital video headend equipment and integration services. BAPS delivers broadband solutions for every type of network, including satellite, cable, telecommunications and terrestrial networks. The proposed transaction on Thursday enhances Thomson's leadership in broadband access products by expanding its product and customer portfolio. Grundig's DIS business has established a leadership position in the UK market through its relationship with BSkyB, the leading provider of digital TV in Britain and Ireland. The transfer of this relationship, supported by SkyB, consolidates Thomson's worldwide leadership in satellite set-top boxes by adding BSkyB to its client portfolio. BSkyB is a key player in the European digital TV market with 5.9 million subscribers and targets 7 million subscribers in 2003. In addition, this agreement incorporates Thomson's supply of set top boxes for Grundig's key retail market. The proposed acquisition will also expand Thomson's set-top-box portfolio with new free-to-air products. These emerging markets are rapidly growing in Europe and will be an important element of set-top-box market economics in 2003. Already the leader in digital television, Thomson will leverage its position in the retail CE market to be a key player in this new category. "We are excited to increase our key client portfolio with the addition of BSkyB. Also, DIS' product portfolio will allow us to address promising segments such as Free-to-Air and the proliferation of News Corp platforms throughout the world" said Enrique Rodriguez, Executive Vice-President, Broadband Access Products and Systems at Thomson. With sales of EUR 1,281 Million in 2001 and 5,383 employees (as end of Dec., 01) Grundig is one of the leading CE-Companies in Europe. Grundig has factories in Austria, Germany, Great Britain and Portugal. The product range focuses on TV-sets, Satellite Reception Technology, DVDs/Video Recorders, Hi-Fi, Audio Portables, Car Infotainment, Office Communications, Telecommunications, Hotel Communications. With sales of EUR 10.5 billion (U.S. $ 9.3 billion) in 2001 and 73,000 employees in more than 30 countries, Thomson multimedia, provides a wide range of video (and enabling) technologies, systems, finished products and services to consumers and professionals in the entertainment and media industries. To advance and enable the digital media transition, Thomson multimedia has five principal activities: Digital Media Solutions, Displays and Components, Consumer Products, Patents and Licensing, and New Media Services. The company distributes its products under the THOMSON, RCA and TECHNICOLOR brand names. For more information: www.thomson <http://www.thomson>- multimedia.com. Contact Information: Thomson Press relations: Marc Meyer, 331.41.86.5003 meyerm@thmulti.com Jean-Loup Bourgois, 331 41.5590 bourgoisj@thmulti.com Dave Arland, 317/587-4832 (United States) arlandd@tce.com Investor relations: Pierre Villadary, 331.41.86.6888 villadaryp@thmulti.com KIRCHMEDIA GMBH: Alarmed Shareholders to Plot Move This Week ------------------------------------------------------------ KirchMedia shareholders are reportedly becoming queasy over the mounting possibility that outside bidders might be able to snatch the company after weeks of "mutual disagreements," says the Financial Times. The paper says shareholders will meet this week to try to secure assets of the insolvent media rights business, KirchGruppe's erstwhile core unit. These shareholders include Rupert Murdoch's News Corp. and Italian Prime Minister Silvio Berlusconi's Mediaset and Fininvest. Advisors to the insolvent group say the shareholders "have been paralyzed by diverging interests," raising the likelihood that outside parties will move in on KirchMedia's assets. According to the paper, the company will send this week so-called teaser documentation describing the unit's 28 companies, including a 52.5% stake in ProSiebenSAT.1, Germany's largest free-TV broadcaster. More than 50 parties are being targeted. It is understood that investors are just waiting for due diligence reports to be finished, before they decide on what steps to take next. Creditor banks are looking for investors who are willing to re-launch the business. Since filing for insolvency, new management has tried to renegotiate its US$1.7-billion in liabilities to entice outsiders to invest. MOBILCOM AG: CEO Holds on to Seat Despite Vote of No Confidence --------------------------------------------------------------- MobilCom shareholders blasted CEO Gerhard Schmid and gave him a resounding vote of no confidence last week during its annual shareholders' meeting in Hamburg, the Financial Times says. But despite the scolding, the company founder refused to step down, stating that he wants to see his fight against France Telecom to the end. He, however, apologized for paying his wife for using her shares in MobilCom to underpin a stock option scheme. Speaking before the general assembly, MobilCom supervisory board Chairman Klaus Ripken said the transaction violated German securities laws and Mr. Schmid had "infringed his duties as chief executive." According to the report, a special independent audit conducted by auditors BDO found that Mr. Schmid had failed to inform his chief financial officer about the transaction, acted without due care and overpaid for the stock. The investigation also revealed that part of the payment of EUR68 million by a MobilCom subsidiary to Mrs. Schmid's firm Millennium for options on 3.6 million shares owned by Millennium was made before there was a proper contract for the deal. Mr. Schmid insists, though, that everything was above board and had not harmed the company. "I'm sorry. I didn't realize. I regret what ha[d] happened... but this is not the right time to step down from my position as CEO," he said. "I will bring to an end the France Telecom issue." Mr. Ripken said the probe found no evidence of insider trading. Nevertheless, the stock option program would be cancelled. In addition, Mr. Schmid would no longer be allowed to sign contracts by himself. SACHSENRING AG: Will Continue to Operate Despite Bankruptcy ----------------------------------------------------------- German carmaker Sachsenring AG, which manufactures Communist-era Trabant cars, declared insolvency Thursday, just days after rumors spread that it was on the brink, says AFX News. The news agency says the petition was filed before the local court in Chemnitz, eastern Germany and had the blessing of creditor banks Commerzbank AG and Dresdner Bank AG, along with the state of Saxony. In a statement, the company said operations will continue, pointing to a "solid backlog of orders." It added that no jobs will be cut from the 1,425-strong workforce. "Sachsenring...was able to complete in the past months new projects, triggering investments, which for the moment cannot be fully financed," the statement read. Subsidiary Sachsenring Fahrzeugtechnik GmbH was the only other unit that also filed for insolvency, along with its parent. NAW Nutzfahrzeuge AG, Sachsenring Tatry, Sachsenring East and Sachsenring Fahrzeugbau GmbH Bremen (formerly Trasco) are not affected by the insolvency filing. The company said it will continue to supply auto parts to customers like Volkswagen AG and DaimlerChrysler AG. Following the insolvency filing, CEO Ulf Rittinghaus asked the supervisory board to discharge him from his post, the German daily Handelsblatt says. It adds that the company needs an immediate EUR31 million cash injection to survive. Creditors, however, are not expected to extend any more loans to the company. Mr. Rittinghaus, together with his brother Ernst, bought the Trabant plant in 1993 during the rapid privatization of the holdings of communist-East Germany, Handelsblatt says. Neuer Markt-listed Sachsenring, which reported a pre-tax loss of EUR12.7 million for 2001 after heavy losses at its armored vehicles unit TRASCO Fahrzeuge Bremen, said last week it was looking for a strategic partner. The company has postponed the annual shareholders meeting scheduled for June 6. SCHNEIDER TECHNOLOGIES: Administrator Closes Shop in Bavaria ------------------------------------------------------------ Schneider Technologies AG was expected to halt production at the end of last week, affected 275 workers at its electronics unit in Tuerkheim, Bavaria, says Financial Times Deutschland. The paper did not state the reason behind the decision, but it sourced the information from interim administrator Michael Jaffe. Just last month, the insolvent electronics maker announced that it will auction 6.3 million new shares as part of its recovery plan. According to the Troubled Company Reporter-Europe, the company had hoped then that the share issue will raise at least EUR12 million. The Germany paper said the business has attracted interest from India's BPL, Turkey's BEKO and China's ACDC. Meanwhile, the laser business of Schneider is up for sale and there are at least 27 companies reportedly interested, the paper said. SCHNEIDER TECHNOLOGIES: Company Profile --------------------------------------- Name : Schneider Technologies AG Address : Silvastrabe 1 86842 Turkheim Germany Phone : +49 -8245 -51 -0 Fax : +49 -8245 -51 -323 Website: <http://www.schneider-ag.de/> SIC : Electronics Manufacturing Employees: 659 Net Loss: DM3.3 million/US$1.6 million (12/31/00) Total Assets: DM326.7 million/US$145.3 million (12/31/00) Total Liabilities: DM158.4 million/US$70.4 million (12/31/00) Type of Business: Schneider Technologies AG, formerly known as Schneider Rundfunkwerke AG, is enganged in the manufacture, sales and distribution of televisions, audio systems, digital telephones, answering and fax machines and the development of laser-display technology. Schneider has subsidiaries in Germany, France, the Netherlands, Switzerland, Finland, Spain and Hong Kong. Trigger Event: After banks refused to provide further funding, Schneider Technologies filed for insolvency on January 28 in a local court in Memmingen, Swabia. The government has criticized Schneider Technologies management for not acting on the state's advice called for on its rescue plan of cutting jobs and focus on quality. Instead, it boosted its workforce and pushed up its sales revenue, but not its earnings. Chairman Board Of Management: B. Niemeyer Member Board Of Management: H. Leinauer Member Board Of Management: H.L. Stamm Chairman Supervisory Board: H. Haibel Vice Chairman Supervisory Board: F.J. Schwarzmann Temporary Insolvency Administrator: Michael Jaffe Outstanding Shares: 12.7 million Last published in TCR-EUR: June 3, 2002 ========= I T A L Y ========= ALITALIA SPA: Chances of Re-capitalization to Get EU Nod High ------------------------------------------------------------- The European Union will likely approve the EUR1.43 billion re-capitalization plan of cash-strapped Italian carrier Alitalia SpA, Dow Jones Newswires said in a report last week. Citing local press reports, the newswire said the European Commission will also allow the delivery of the third tranche of a previously approved EUR893 million re-capitalization during its next meeting on June 19. This last installment is part of the 1997 state-aid authorized by the Commission. The new re-capitalization plan will be divided between the Economy Ministry, which controls Alitalia through a 53% stake, and the market, giving it a slight hue good enough to be distinguished from a state aid. According to the newswires, the E.U. makes a distinction between state aid and governments investing as other shareholders in their airlines. This latest re-capitalization is a key part of a wider restructuring plan and will involve a share issue and a convertible bond component. But to execute this plan, the company must accomplish EU-imposed conditions -- cut routes, ground planes, slash jobs and sell-off non-core assets. The capital increase "is expected to be completed by July 2002," the company's board said in a statement last week, according to the newswire. Meanwhile, the newswire said Alitalia had shipped its reservation services unit Sigma to the US company Cendant Corp. for EUR105 million. This transaction is still part of its strategy to raise cash by selling non-core assets, especially in its leisure division. Properties included in this division are Eurofly, a charter company, and tour operator Italiatour SpA. Earlier this month the company disclosed that it had received 19 expressions of interest for Italiatour. FIAT SPA: Agnelli Family Not Against Selling Car Unit, Says Paper ----------------------------------------------------------------- Contrary to earlier reports, the Agnelli family, which controls Italian industrial group Fiat SpA, is open to the idea of selling Fiat Auto, the hemorrhaging car-making unit. "The stake (in Fiat Auto) is presently considered strategic, but what's strategic is not necessarily permanent," Umberto Agnelli told Dow Jones Newswires in an interview last week. Mr. Agnelli is vice chairman of IFI SpA and chairman of IFIL SpA, the family holding companies that control Fiat. This is the first time that any member of the family has hinted the possibility of selling the automotive unit. Earlier accounts said that the family is the remaining obstacle to shipping the unit to General Motors, which already owns 20% of the company and has an option to takeover the entire business beginning 2004. "For the first time they're admitting that Fiat Auto may have to be sold," a trader commented when informed by Dow Jones Newswires. Mr. Agnelli's comments fueled speculations last week that General Motors may end up with full control of Fiat Auto soon. Last Friday, the Troubled Company Reporter-Europe quoted a news account that indicated the No.1 carmaker may not wait until 2004 to exercise its option. ===================== N E T H E R L A N D S ===================== KPNQWEST NV: Files for Bankruptcy After Talks Collapsed Friday -------------------------------------------------------------- The administrators and the management board of KPNQwest N.V. announced Friday that they have continued to negotiate a transaction whereby a substantial part of the business of KPNQwest NV would be sold. These negotiations are still ongoing and it may still be possible for a substantial part of the business to be sold. The efforts to try and sell certain non-critical assets in order to secure sufficient cash proceeds to meet the ongoing obligations of the company have not been successful. This situation is not expected to change over the next 24 hours. This being the case, the administrators and the management board of KPNQwest N.V. have no other choice than to request the District Court of Haarlem, The Netherlands, to convert the moratorium into a bankruptcy for KPNQwest NV. This request was filed Friday. At the same time, requests for a moratorium of certain of the Dutch group companies will be filed with the District Court of Amsterdam. A number of KPNQwest subsidiaries across Europe will also file for protection in their local jurisdictions, with the exception of the Central European subsidiaries, KPNQwest Portugal Telecomunicaoes Lda and KPNQwest Italy SA among others. The Company is working with its customers to facilitate the implementation of contingency plans, should the current situation result in instablility or a total shut-down of the KPNQwest EuroRings network. 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 (NASDAQ & ASE: KQIP), 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 300,000 km Qwest global network. The Company owns and operates the EuroRingsT, 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 CyberCentresT. For more information please visit the KPNQwest website at: www.kpnqwest.com According to the Financial Times, the company's total debts amount to EUR2 billion (US$1.8 billion). Two years ago it had an enterprise value of EUR41 billion. It financial crisis began after its parents, KPN of the Netherlands and US operator Qwest, cut funding support, and a consortium of lenders, which holds most of the group's assets, refused to advance further cash. The group's convertible bonds and its shares, which peaked at EUR89.40 in February 2000, were suspended on the Euronext exchange in Amsterdam for the remainder of Friday. Euronext said the shares are to be removed from the AEX index on June 6, the Financial Times said. For further information, please contact: Piers Schreiber Corporate Communications - KPNQwest Tel: +31 23 568 7612 Email: piers.schreiber@kpnqwest.com Jerry Yohananov Investor Relations - KPNQwest Tel: +31 23 568 7602 Email: jerry.yohananov@kpnqwest.com KPNQWEST NV: Unable to Reach Agreement With Potential Buyers ------------------------------------------------------------- The administrators and the management board of KPNQwest N.V. -- www.kpnqwest.com <http://www.kpnqwest.com>-- announced on May 30, 2002 that they have not yet been able to reach agreement with potential buyers on a transaction involving the sale of a substantial part of the KPNQwest Group. The negotiations will continue, but it is not likely that final agreement will be reached within less than 3 to 5 weeks. In order to be able to meet the most urgent of the company's ongoing obligations the administrators and the management of KPNQwest N.V. are negotiating a transaction whereby certain non-critical assets are sold. It is envisaged that this transaction will be concluded by close of business, Friday May 31, 2002. If so, this will most likely secure the continuity of the network for the immediate future. The company also confirms that there are advanced discussions with parties interested in purchasing its Central European business on a stand-alone basis as a going concern. In the interest of maintaining customers' business and network continuity, the Company is advising customers that they may wish to put in place contingency plans with other providers in the event of a significant deterioration in the performance of the KPNQwest EuroRings network. KPNQwest is proactively working with its customers to assist with these plans. 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, is a pan-European data communications and hosting company supplying a full range of carrier and corporate networking solutions, hosting and Internet services across European 18 countries through its Qwest global network. The Company 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 NV: Almost Shutoff 25% of European Web Traffic Last Week ----------------------------------------------------------------- KPNQwest NV shocked network users and competitors late last week when it came within minutes of shutting down its operating center in Brussels. Only an 11th-hour intervention by the works council averted the meltdown, but sources told Total Telecom that some of the Nordic network was shut off. According to the industry paper, news of the close call sent corporate users and service providers scrambling for alternative network provider, for fear that services could go dark at any moment. KPNQwest carries as much as 25-30% of Europe's IP data traffic. Managers at major carriers including BT Ignite said they had no warning that KPNQwest would start to shut down network operations so quickly. "This is unprecedented," one told Total Telecom. "Carrier1 and Viatel were broken up, but they never shut off customers." Network users interviewed by Total Telecom say the news was disgusting, given that the company had assured them that services won't be interrupted despite its tight financial fix. "We were told that circuits will remain in place for four to six weeks," said John Goodwin, the IS manager at Emap Communications, publisher of Total Telecom. "This thing is much bigger than just another telecoms collapse," one network manager at a U.K.-based operator told Total Telecom. "These guys carried serious traffic and their demise will affect businesses across Europe." KPNQwest's European customers include Dell, Hewlett-Packard, Cap Gemini and Nokia, the industry paper says. Meanwhile, sources told the paper that AT&T has allegedly offered to buy the entire business for US$200 million. In addition, Sprint has also entered the picture, but its offer has yet to be known. It is believed that newly appointed European President Christian Moeller had a hand in the Sprint offer. He comes from Ebone, a company KPNQwest had just acquired. Any offer, however, does not necessarily mean that the company will survive, says the Total Telecom. This because any proposals still need agreement from creditor banks. It is understood that AT&T would need at least six weeks to execute its offer. In the meantime, KPN may be prepared to provide up to US$35 million a month to help KPNQwest keep its network running and service some of its debts, sources told Total Telecom. LAURUS NV: Inks Financial Restructuring With Casino, Banks ---------------------------------------------------------- Signed on May 21, 2002 Casino, Laurus and the Banks (ABN AMRO Bank, ING Bank and Rabobank Nederland) have signed the Master Agreement with respect to the proposed transactions set forth in the joint press releases issued on March 7, 2002 and April 29, 2002. In connection with the signing of the Master Agreement an opinion from Morgan Stanley was received stating that the minimum number of shares that the existing shareholders will hold following the transaction is fair from a financial point of view to such shareholders. As not all the schedules to this Master Agreement have been fully agreed upon and finalized yet, the parties have agreed to sign all these remaining schedules on June 3, 2002, or such other date as the parties may agree upon. These schedules include among others the documentation with respect to the rescheduling of the finance agreements with the Banks, the Technical Assistance by Casino to Laurus and the future articles of association of Laurus. The signed Master Agreement further provides to Casino and the Banks certain rights to terminate this agreement in case of, inter alia, serious claims, significant delay of the Closing of the transaction, non-approval by the shareholders meeting of Laurus and non-compliance of Laurus with the provisions of the Master Agreement. After signing of all definitive agreements (which is foreseen on June 3, 2002) a Laurus shareholders meeting will be convoked and the 2001 annual report will be published. A date for this meeting has not yet been fixed. LAURUS NV: Jelgersma Assures to Continue Operations --------------------------------------------------- Laurus N.V., after consultation with Mr. E.Th.A.C. Albada Jelgersma who resigns from Supervisory Board Wednesday, announces that the following: Mr. Albada Jelgersma, who is, through various companies controlled by him, major shareholder of Laurus NV, is also highly committed to the continuity of the company. Notwithstanding that Mr. Albada Jelgersma is of the opinion that the proposed transaction with Casino is not the best solution for the shareholders, he will not oppose the proposed transaction when the shareholders meeting has to decide on it, if not a more attractive alternative will be available in time. =========== N O R W A Y =========== FOSEN MEKANISKE: Faces Liquidation as Creditors Want Money Back --------------------------------------------------------------- Norwegian shipbuilder Fosen Mekaniske Verksteder sought the help of Tndelag bankruptcy court last week in renegotiating its NOK270 million debt, which is now being recalled by 7,000 creditors. According to Lloyd's of London Press Limited, the shipyard that built ResidenSea's resort ship "The World" could face liquidation if creditors refuse to enter renegotiations. The report says Fosen entered troubled waters after booking a loss on "The World" following a dispute with the owner over the ship's quality. ========= S P A I N ========= AVANZIT SA: Files for Bankruptcy After Banks Junked Debt Proposal ----------------------------------------------------------------- Spanish electrical work contractor Avanzit SA filed for receivership late last week after talks with creditor banks to restructure some EUR286 million outstanding debts failed. AFX News says the company's subsidiary Avanzit Telecom SLU was also included in the filing. Following the petition, stock market regulator CNMV suspended trading of the company's share. Just last month the company disclosed that it had secured a syndicated loan from Banco Santander Central Hispano SA to restructure its debts. Last week, however, reports surfaced that the situation at Avanzit had gotten worse and that absent a pact with banks in the short-term can force it into bankruptcy. In its latest profitability analysis on the company, Wright Investor's Service noted that the profit margin of the company has gone down below the level achieved in 2000, when the company gained 7.1% on sales. In 2001, earnings before extraordinary items were at (negative) - EUR52.85 million, or -11.5% on sales. "The company's return on equity in 2001 was -18.1%. This was significantly worse than the already high 60.8% return the company achieved in 2000," Wright said. For the 52 weeks ending May 24, 2002, the company's stock shed a total of 74% to EUR3.29, losing 47.1% during the last 13 weeks. The company has not paid dividends the last six fiscal years. The company currently employs 3,611, with sales of EUR459.60 million (US$426.71 million). It has operations in Portugal, Morocco, Mexico, Guatemala, El Salvador, Argentina, Chile, Peru, Brazil and Jamaica. The company's market capitalization is EUR102.15 million (US$94.84 million). The capitalization of the floating stock (i.e., that which is not closely held) is EUR53.05 million (US$49.25 million), Wright said. AVANZIT SA: Company Profile --------------------------- Name: Avanzit SA Vda. de Leganes 28924 Alcorcon Madrid Spain Phone: +34 91 643 00 48 Web site: <http://www.avanzit.com> SIC: Telecommunications, energy, and technology services company Employees: 3,611 Total Assets: EUR 785.278 or US$735.7 (Dec. 2000) Total Liabilities: EUR 484.047 or US$453.4 (Dec. 2000) Type of Business: Avanzit SA, formerly known as Radiotronica SA, offers products and services to the following sectors: TELECOMMUNICATIONS: telephonic and remote control installations, cable TV networks, communication systems; ENERGY: electrical energy distribution, systems using electric, magnetic and optical fibre signals, gas distribution networks; TRANSPORTATION: security and safety systems for motorways and roads, systems for aiding shipping, air-traffic control networks; TECHNOLOGIES: development of the electronic application, information, distribution of electronic component and freeway divisions. The group has operations in Portugal, Morocco, Mexico, Guatemala, El Salvador, Argentina, Chile, Peru, Brazil and Jamaica. Trigger Event: The company, with ambitions to expanded beyond its traditional cable and telecommunications network and electrical systems installations, acquired several media and technology companies. However, a slump in the telecom sector and cutbacks in spending by main customer Telefonica have caused Avanzit's phone sales to plummet. The company is trying to get its debt restructured by 42 creditors, including Spain's largest bank, Santander Central Hispano. The restructuring would help Avanzit advance with plans to acquire more media companies. Construction firm Acciona owns 22% of Avanzit but plans to sell its stake. Avanzit has also reduced its operations and workforce. Chairman: Rafael Martin Sanz Vice-Chairman: Adrian de la Joya Ruiz de Velasco Chief Executive: Agustin Fernandez Munoz =========== S W E D E N =========== SONG NETWORKS: Secures Five-year Contract From Visma Provider ------------------------------------------------------------- Song Networks Holding AB -- www.songnetworks.net <http://www.songnetworks.net>-- announced Wednesday that Song Networks AS, Song Networks' Norwegian subsidiary, has won a 5-year contract for the operation of Visma Provider's ASP platform. The parties have also signed a framework agreement for the supply of infrastructure and communication services for a period of 3 years. With the growth that Visma Provider is anticipating, the value of the contract comes to around SEK 49 million. Visma Provider, a company in the Visma group, supplies ASP solutions to markets in the Nordic countries and Great Britain. This contract means that Visma Provider's ASP platform, which links companies within the Visma group, their Norwegian and overseas partners and customers into a common infrastructure, will be run and monitored through Song Networks' secure DataCenter in Oslo. The solution is scalable and customized for Visma Provider's growth forecasts. The delivery of infrastructure is exclusive, comprising an IP/VPN network and services to Visma's ASP platform. "The contract with Song Networks has a long-term perspective and our goal is to grow together," says Nils Jakob Kringlebotn, Managing Director of Visma Provider. Song Networks was able to offer a scaleable and flexible solution to run our ASP platform. Security is very much the focus of our services, and this is very well managed by Song Networks' solution. Their IP/VPN service portfolio was also the most comprehensive," adds Kringlebotn. "The contract with Visma Provider is strategic to Song Networks, and goes hand in glove with our core areas. Also, in our partnership, we have placed the emphasis on defining clear areas of responsibility and dividing duties between the parties. We are doing our utmost to meet Visma's needs for flexible custom-made solutions," says Ketil Kivedahl, Managing Director of Song Networks AS. Tormerly Tele1 Europe, Song Networks is a rapidly expanding data and telecommunications operator with activities in Sweden, Denmark, Finland and Norway. The Company provides comprehensive solutions for data, Internet, hosting and voice, to businesses in the Nordic region. Song Networks is currently the only pan Nordic operator investing in local access networks with broadband capacity. The Company has built local access networks in the largest cities in the Nordic region. The access networks, which are linked by a long-distance network is one of the fastest data and internet super-highways in Europe, with an initial capacity for customers of up to one gigabit. The Company was founded in 1995 in Sweden and has approximately 1,000 employees. The head office is located in Stockholm and there are an additional 34 offices located in the Nordic region. For further information, please contact: Song Networks AS Ketil Kivedahl, Managing Director Phone: +47 21 50 24 50 Mobile: +47 400 00 450 Email: ketil.kivedahl@songnetworks.no Song Networks AS Lill Jakobsen, Head of PR Phone: +47 21 50 24 02 Mobile: +47 400 00 402 Email: lill.jakobsen@songnetworks.no Song Networks Holding AB Jenny Moquist, Investor Relation Manager Phone: +46 8 5631 0219 Mobile: +46 701 810 219 Email: jenny.moquist@songnetworks.net ===================== S W I T Z E R L A N D ===================== 4M TECHNOLOGIES: Q1/2002 Results Reveal Net Loss of CHF 4.13MM -------------------------------------------------------------- Yverdon-les Bains-based manufacturer of machinery for production of compact disks and DVD disks, announced Thrusday that a minimum overhead structure was retained while finalizing negotiations for recapitalization of the company. In that framework, the realized net turnover of CHF 0.814 million corresponds only to the sales of spare parts, whereas operating costs relate to the minimum structure maintained and produced a net loss of CHF 4.13 million. On March 27, 2002, the share capital was increased to CHF 80 million by conversion of CHF 41 Million debt by a group of investors and the provision of a cash injection of CHF 25 million. This was paid in an amount of CHF 18 million by private investors (some of whom directly participate in the restructuring of the 4M Group) and in an amount of CHF 7 million by existing shareholders and the Public. As of March 31, 2002, the cash and cash equivalents of the company amounted to CHF 27.40 million and short-term debts were reduced to CHF 4.45 million. The Swiss operational company, Multi Media Masters & Machinery SA, had its Moratorium definitively homologated on March 12, 2002. The composition arrangement, finalized in early April, will impact the consolidated financial statements as of Q2/2002, by an additional income of CHF 7.4 million. The company is now clearly focused on the future. Having completed the company's financial restructuring only by the end of the first quarter 2002, it will take at least two quarters to reconstitute the manufacturing, procurement and sales channels, before producing any tangible results. Contact Information: 4M Technologies Holding Corporate Communications Martine Pillard Avenue des Sports 42 CH-1400 Yverdon-les Bains Tel: ++41 (0) 24 4237 111 Fax: ++41 (0) 24 4237 177 Email: martine.pillard@4m-inc.ch =========================== U N I T E D K I N G D O M =========================== BIG FOOD: Turns Huge Deficit in 2000 to GBP12.8 MM Profit in '01 ---------------------------------------------------------------- Frozen food specialist Big Food reversed its dismal performance last year when it registered late last week pre-tax profits of GBP12.8 million, a huge improvement from the GBP121.4 million loss in 2000. Excluding exceptional charges and goodwill, the company's pre-tax profits reached GBP42.9 million, said the Telegraph Friday. CEO Bill Grimsey, who is instrumental in this big turnaround, boasted that the recovery plan he had introduced is right on target. He pointed to the current GBP404 million debt-pile, which is GBP100 million less than a year ago. He also claimed success in early trials of new Iceland store formats. The report says trials of four new formats -- ranging from downmarket frozen food shops to more upmarket supermarkets -- had produced sales uplifts of up to 31%. Mr. Grimsey plans to roll out about 50 new format stores this year and 100 next year and the one after. A few weeks ago, the company announced that it had conditionally agreed to sell and leaseback 31 of its properties to AXA for a total cash value of approximately GBP129.3 million. The sale and leaseback will be effected by selling Montwell Limited, a Jersey subsidiary of The Big Food Group, which owns the portfolio of 31 properties and leases them to operating subsidiaries of The Big Food Group. The sale is conditional, inter alia, on approval of the Sale and Leaseback by shareholders and there being no material increase in the borrowing requirements of the Group prior to completion, said the Troubled Company Reporter-Europe in its May 22 issue. The properties that are the subject of the sale and leaseback comprise 12 cash and carry premises, 3 distribution centers and offices and 16 retail shops, and are leased to operating subsidiaries of The Big Food Group under occupational leases. AXA was selected as the purchaser of Montwell Limited after a competitive tender process. The group also announced that it was developing detailed financing proposals involving refinancing and reducing The Big Food Group's senior credit facilities from the current levels through a sale and leaseback transaction and debt from banks and capital markets. Since the announcement on March 6, Big Food has made considerable progress in implementing its refinancing strategy. The refinancing strategy developed by the Board consists of three components: * Sale and Leaseback: approximately GBP129.3 million will be raised from the Sale and Leaseback. * New Senior Debt: Big Food has entered into a GBP300 million new senior debt facility with its bankers, led by Barclays Capital and The Royal Bank of Scotland plc. The Big Food Group's ability to borrow under the New Senior Debt Facility will be subject to, among other things, the Sale and Leaseback taking place (which requires the approval of the shareholders) and the issue of the High Yield Bonds. CENES PHARMACEUTICALS: Spins Off Cognitive Testing Division ----------------------------------------------------------- CeNeS Pharmaceuticals plc announced Friday the spin-off of its cognitive testing division as part of the ongoing restructuring program, which was initiated in October 2001. CeNeS' cognition division has been sold to its management team funded by a syndicate of investors advised by Yorkshire Fund Managers. The new company will be called Cambridge Cognition. Under the terms of the agreement CeNeS will receive up to GBP 1 million. Of this total consideration, GBP 700,000 is in upfront and stage payments and a further GBP 300,000 is dependent on certain milestones. Under the restructuring plan, CeNeS is focusing on its core business in the development, marketing and sale of drugs for the treatment of disorders of the CNS and pain, which has entailed reducing or disposing of non-core activities. CeNeS' cognition division was acquired in early 1997 and achieved revenues of over GBP1 million in 2001.The current management team was assembled in mid-2001 in preparation for the planned disposal that has completed today. Commenting on the disposal, Neil Clark, Chief Operating Officer and Finance Director of CeNeS, said: "The disposal of the cognition division is another successful step under our restructuring program. CeNeS' board started the planned spin out process in mid-2001 and we are pleased that the cognition division's management have obtained backing from a syndicate of investors who will support the further growth of the company and validation of the cognitive testing expertise." CeNeS is a biopharmaceutical company specialising in the development and commercialization of drugs for CNS disorders and pain control. The company currently markets four products, and has research and development assets targeting pain and CNS disorders. In addition it has a unique automated patch clamping technology called AutoPatch(TM). The company is based in Cambridge, England. Cambridge Cognition has a range of products aimed at the monitoring and evaluation of CNS disorders. The range includes CANTAB, an automated battery of cognitive tests, which is being increasingly used by pharmaceutical, biotechnology and genomic companies. For more information, please contact: CeNeS Pharmaceuticals plc Alan Goodman Neil Clark Tel: +44 (0)1223 266466 Fax: +44 (0)1223 266467 Noonan Russo Presence EURO RSCG Veronica Sellar Dr Douglas Pretsell Tel: +44 (0)20 7726 4452 Fax: +44 (0)20 7726 4453 INVENSYS PLC: Reports GBP858 Million Pre-tax Loss in 2001 --------------------------------------------------------- British engineering group Invensys Plc reported late last week full-year losses of GBP858 million, a sharp contrast from last year's GBP150 million pre-tax profit, the Financial Times says. Operating profit also dipped to GBP549 million against GBP934 million last year, on sales down by 11% at GBP6.97 billion, the report adds. The company blamed "severe market conditions," principally in the US industrial and global IT and telecoms sectors, for the 33% decline in revenues in its power systems division. Despite the dismal performance, CEO Rick Haythornthwaite believes the company's restructuring, began in September last year, is still on track. He pledged to complete asset disposals by the end of the current financial year. "We expect the first benefits of our strategy to become apparent in the second half. Provided economic conditions do not deteriorate, we aim to offset the dilution from our recent disposals," Mr. Haythornthwaite told the Financial Times. The company said it was able to cut its GBP3.3 billion debt as of September to just GBP3 billion on account of asset disposals that has already raised about GBP750 million so far. Under its survival plan, the company aims to dispose GBP1.5 billion worth of non-core assets. The company proposed a final dividend of 1p against 5.2p last year, the paper says. INVENSYS PLC: Appoints Ed Mulvey to Lead Service Delivery --------------------------------------------------------- Invensys plc, a global leader in the management of production and energy resources, announced Thursday the appointment of Edward (Ed) Mulvey as Senior Vice President of the Service Delivery performance initiative in support of the overall organization. He will report to Rick Haythornthwaite, Chief Executive, and will be a member of the Executive Management Team. He will be based in Foxboro, Massachusetts, and takes up his post on June 1. Mulvey joins Invensys from Honeywell where he was Vice President, Strategy and eBusiness, Aerospace Services. He has extensive experience in services development and delivery with several world-class companies. At Honeywell his responsibilities included global strategic planning, mergers and acquisitions, business development and eBusiness activities. Prior to this, Ed was with Cambridge Technology Partners, as a Service Line Leader, Interactive Solutions and previously he spent fifteen years in varied roles with AT&T. Rick Haythornthwaite said: "In this newly created role, Ed and his team will provide the structure to support world class standards of customer satisfaction and drive innovation for our service businesses globally. The team will ensure that service offerings become a significant proportion of our total revenues and a prime source of customer loyalty. They will also help our divisions to develop new cross-business offerings. "As I announced in February, the service delivery initiative is one of our key opportunities to make our new strategy a reality for customers." Invensys plc, an international production technology and energy management group, specializes in helping companies to improve efficiency, performance and profitability. Invensys is headquartered in London, England. The group's Production Management businesses work closely with customers in order to drive up performance of their production assets and maximize the return on investments in product technologies. The division includes Foxboro, Wonderware, Triconex, APV, Eurotherm and Baan and it addresses the oil, gas and chemicals; food beverage and personal healthcare; and discrete and hybrid manufacturing sectors. Our Energy Management businesses actively work with clients involved in both the supply and consumption of energy, developing systems using innovative technologies that improve the reliability and security of power supplies. The division includes Energy Solutions, Metering Systems, Appliance, Home and Climate Controls and Power Systems and focuses on markets connected with power and energy infrastructure for industrial, commercial and residential buildings. Contact Information: Victoria Scarth/Duncan Bonfield Telephone: +44(0) 20 7821 3529/3515 Invensys Simon Holberton Telephone: +44(0) 20 7404 5959 KINGFISHER PLC: Rejects De-merger Plan of French Unit Castorama --------------------------------------------------------------- Kingfisher Plc formally rejected last week the de-merger proposal of Castorama, the object of its GBP3.2 billion hostile takeover bid that has so far cost it a stable rating from Fitch. The Telegraph quoted Chairman Francis Mackay saying that a demerger is "not in the interests of either Kingfisher or Castorama's shareholders." Mr. Mackay made the comment during the publication of the group's first-quarter results. Kingfisher reported total retail profit of GBP115 million on sales up 6.6% to GBP2.4 billion. Figures for its electrical and furniture business were not as encouraging, with sales dropping 5% from last year's tally. It is planning to de-merge this unit. Fitch recently revised the stable outlook of the company's "BBB+" senior unsecured and "F2" short-term ratings, citing uncertainty of the bid's outcome. PACE MICRO: Ships IP500 Home Gateways to Technology Partners ------------------------------------------------------------ Pace Micro Technology plc announced Thursday that it has begun shipping its IP500 home gateways to members of its IPTV Partner Program. The IP500 is Pace's next-generation IPTV home gateway (set-top box) for broadband IP network operators. The following companies - representing all the major IP-based interactive TV equipment manufacturers, network equipment, middleware developers, application developers, encoder providers, video server providers and content security solutions - will begin interoperability testing and/or porting their software onto Pace's IP500: Alcatel, Advanced Fibre Communications, ANT, ATI Technologies Inc., BarcoNet srl Italy, BitBand Technologies, Citrix Systems Inc., Cyber-Consult, Envivio, Equator Technologies Inc., FutureTV, Harmonic Inc., Hwacom Systems Inc., iMagicTV, IMAKE Software and Services, Inc., Inovia Telecoms (ECI Telecom Company), Irdeto Access, Kasenna, MASE (a Neos company), MaxiSat-Yhtiot, M.P. Technologies Inc., Minerva Networks, Myrio Corporation, nCUBE, Occam Networks Inc., On2 Technologies, Optibase, Orca Interactive, SecureMedia, Skystream, Thales Broadcast and Multimedia, Tandberg Television, Thirdspace, VBrick Systems, Inc., Viaccess S.A., Vicinium, VideoTele.com, Widevine and Yes Television. Additionally, these companies will receive Pace's IPTV Gateway Control Architecture (GCA), which includes guidelines to Pace's SDK (software development kit) for porting and developing software, and an open, fully documented Application Programming Interface (API) to ensure a smooth process for application development, integration and testing of the IP500. Pace's GCA provides total control of its Linux-based IPTV gateway environment for developing electronic program guides, games, 3D graphics, security solutions, controlling peripherals, or playing and recording to the hard disk drive. According to industry analyst firm IDC, worldwide revenues for IP services are expanding at 48% annually, and are projected to climb as high as US$25 billion by 2004. Andrew Clifforth, managing director of Pace's IPTV Division, emphasizes, "Network operators are recognizing the tremendous market opportunity for deploying interactive television solutions over IP broadband networks." He continues, "Our mission with this initial shipment of the IP500 is to ensure that Pace delivers the highest quality home gateway that is compatible with all the leading IP-based equipment and software providers in this space to ensure that customers can quickly deploy new turnkey, revenue-generating home entertainment services." A major new advancement with the IP500, which will be available to Pace's customers next quarter is the support for new streaming protocols to address the limited bandwidth issues inherent with the larger RBOCs (Regional Bell Operating Company) in delivering multichannel video service. The architecture for the IP500 was designed to support all broadcasters who are exploring IP-based interactive TV distribution systems regardless of distribution medium (cable, telco, satellite, fiber to the home). Key benefits to the IP500 include: support for low bit-rate streaming protocols, allowing network operators to unicast or multicast video streams at a very reasonable 500-800 Kbps; support for multiple televisions, enabling operators to deliver services to more people within the home; home networking capabilities to support the delivery of voice, video and data to other household devices; superior security features for copyright protection of digital content; hard disk drive support for PVR (Personal Video Recorder) functionality and to allow operators to feed content from the network to the set-top box during off-peak hours; and a 3D graphics engine and high-speed processor using the Linux operating system to ensure the delivery of state-of-the-art applications. Pace Micro Technology plc is a pioneer of digital technology for the home and has helped build the global market for pay television services. Using this expertise, Pace is evolving the set-top box into a sophisticated home gateway to enable revenue-generating services for TV and the networked home. In this networked home, the Pace home gateway is the portal for entertainment and interactive communications around the home and with the outside world. Pace analog and digital technology has been installed in over 14 million homes worldwide since it was founded in 1982. The company is now actively involved in all digital platforms - satellite, terrestrial, cable and IP - through relationships with broadcasters, network operators and technology partners in the U.K., USA, France, Europe, Latin America, Australasia and the Far East. These achievements were made possible through the commitment of Pace's 1,000-strong workforce, over half of whom are research and development engineers, dedicated to the development of digital technology for the home and small and home office markets. Pace's head office is in Shipley West Yorkshire, with further offices in Bracknell, Cambridge, the USA and Hong Kong. The company's shares are traded on the London Stock Exchange (PIC). Pace's U.S. operations are based in Boca Raton, Fla. For further information, please visit Pace's web site at <http://www.pace.co.uk>. Contact Information: Terry May/Tammy Snook HighTech Public Relations, Inc. Pace Micro Technology Orlando, FL Telephone: 904/387-3899, 407/667-9355 Email: terrymay@hightechpr.net or tammysnook@hightechpr.net RAILTRACK PLC: Lawyers Say Private Shareholders Have Strong Case ---------------------------------------------------------------- A group of private shareholders in Railtrack are scheduled to meet with officials of Railtrack Group to present their argument against the settlement being offered by the government. The Railtrack Private Shareholders' Action Group believes shareholders can still get more than the present GBP2.50 per share offer of the government by pursuing legal action. Although the actual amount of compensatory and exemplary damages cannot be quantified just yet, pending the opening of Railtrack's data room, the group claims it could exceed easily the government's proposal. But even if institutional shareholders and Railtrack Group, the holding company of Railtrack Plc, which is currently under administration, will accept the offer, the action group will still push ahead with the legal action. Lawyers for the group claim that private shareholders have distinct rights above and beyond those of the company. The private shareholders had recently been assured by Edwin Coe solicitors and a team of barristers led by Michael Crystal QC that the private shareholders have a claim of malfeasance -- use of power by a government officer in bad faith on behalf of the government and causing loss to the claimant -- and a potential claim under the Human Rights Act, which protects an individual's right to property, says the paper. The group argues that former Transport Secretary Stephen Byers used the administration process unlawfully to begin a process of re-nationalizing the railways. Accordingly, administration gave the government possession of Railtrack assets and these were combined with statutory and political powers to complete the re-nationalization. A letter is expected to be distributed among shareholders this week, containing the recommendation of Railtrack Group regarding the offer. An extraordinary meeting could take place as little as two weeks later to vote on the offer, the paper 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. * * * End of Transmission * * *