/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/020604.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Tuesday, June 04, 2002, Vol. 3, No. 109 Headlines * F R A N C E * TELECOM CITY: Court Places Firm Under Observation for Six Months * G E R M A N Y * CARGOLIFTER DEVELOPMENT: Files Temporary Insolvency Petition CONSORS AG: Olivier Le Grand, Karl Matthaus Schmidt Joint-CEO EM.TV: Continues Restructuring in First Quarter of 2002 PHILIPP HOLZMANN: Insolvency Proceedings Begin at Imbau, Holzmann TELESENSKSCL AG: Bank of Scotland Disapproves Cash Transfer * I R E L A N D * AER LINGUS: Grounded Until Wednesday, As Carrier Mulls Options * N E T H E R L A N D S * KPNQWEST NV: Data Communications Group Files for Bankruptcy KPNQWEST: Removed From AEX Index, Amsterdam Telecom Sector Index LANDIS GROUP: Datatec Ltd Will Buy Networking Distribution Unit UNITED PAN-EUROPE: Creditors Extend Repayment Deadline to June 17 VERSATEL TELECOM: Removed From Amsterdam Midkap Index * S W E D E N * LM ERICSSON: Major Owners Examine Leveling of Voting Rights * S W I T Z E R L A N D * SWISSAIR GROUP: Invitations to Creditors' Meeting Sent Out * U N I T E D K I N G D O M * ALBERT FISHER: KPMG Offer Food Supplier's Assets for Sale BRADFORD CITY: Kroll Buchler Phillips Offer Club for Sale CHESTER BARRIE: Applies for Receivership Due to Business Slump CORDIANT COMMUNICAITONS: Denies GBP 1BB Offer of Rival Havas EQUITABLE LIFE: Wants Annuity for With-profits Policies Lowered ITV DIGITAL: League Admitted Lack of Guarantees, Says Telegraph JOHN LAING: Construction Group Announces Directorate Change KINGFISHER PLC: Bank to Referee Bid to Be Known This Week SCOOT.COM PLC: CEO, CFO, Directors Drained Coffers Before Exit TELEWEST COMMUNICATIONS: Bondholders to Force Debt Restructuring =========== F R A N C E =========== TELECOM CITY: Court Places Firm Under Observation for Six Months ---------------------------------------------------------------- Telecom City, a reseller of mobile telephony subscription services, was recently forced into compulsory administration and is now under observation for six months, says Les Echos/FT Information. The company was declared insolvent and granted "suspension of payment" on May 24. The commercial court in Bobigny has scheduled a hearing for July 10 to consider whether Telecom City will be able to propose a recovery plan or whether it will have to close shop. The report says the company is planning a radical restructuring plan that includes the sale of stores and redundancies. ============= G E R M A N Y ============= CARGOLIFTER DEVELOPMENT: Files Temporary Insolvency Petition ------------------------------------------------------------ CargoLifter Development GmbH, a 100% subsidiary of CargoLifter AG, filed a petition for insolvency at the local court Cottbus Friday. CargoLifter AG and its other subsidiaries did not. Prof. Rolf-Dieter Moenning was appointed as temporary insolvency administrator. Because CargoLifter Development GmbH is predominantly concerned with the development and production of the CL 160 transport airship, the insolvency (of this unit) will enable a fundamental restructuring of the Cargolifter Group. CargoLifter will focus on the production and sales of the transportation balloon CL 75 AirCrane and continue research and development in order to acquire new market areas for this product. CargoLifter AG will continue to maintain the existing core operations to build the transportation airship CL 160 as soon as financing may be secured. Despite the plan to reorganize, the CargoLifter Group, will continue its contacts with the federal government. CONSORS AG: Olivier Le Grand, Karl Matthaus Schmidt Joint-CEO ------------------------------------------------------------- The Supervisory Board of Consors Discount-Broker AG appointed Olivier Le Grand as CEO together with Karl Matthaus Schmidt. Olivier Le Grand, current Chairman of Cortal (BNP Paribas' online broker unit), is now also current CEO of the recently created Executive Committee of CortalConsors. Karl Matthaus Schmidt, Benot Gommard, Patrick Miron de L'Espinay, Dr. Uwe Schroeder-Wildberg, Jean-Phillippe Huguet and Franz Baur are also Members of this Committee. The Executive Committee makes the decisions concerning the integration process for both companies. Karl Matthaeus Schmidt is the son of the former SchmidtBank chairman Karl Gerhard Schmidt, According to AFX news. In April, the news group said SchmidtBank agreed to sell its 64.5 % stake in ConSors to BNP for EUR 287 million. EM.TV: Continues Restructuring in First Quarter of 2002 ------------------------------------------------------- EM.TV announced Friday that in the first quarter of 2002, EM.TV & Merchandising AG achieved a significant improvement in consolidated operating earnings on an adjusted basis. This is attributable to considerable reductions in all major areas of costs and expenditures. As expected, consolidated sales of the licensing and merchandising company were muted in the first three months, reflecting an unchanged difficult environment in the media and advertising market. Werner E. Klatten, CEO: "The first quarter was no easier for EM.TV than for any other media company. Our core businesses of licensing and merchandising suffered from continuing weak economic conditions and uncertainties arising from the current radical changes in media markets both at home and abroad. Nonetheless, we pushed on the restructuring of the group. This has produced a strong reduction in costs. "The restructuring program we introduced in 2001 is taking effect. We expect an upturn in trading conditions in the markets relevant for us during the second half of 2002, especially in the fourth quarter." Because of effects of deconsolidation and extraordinary items, the IAS-based consolidated profit and loss statement for the first quarter of 2002 is not directly comparable with that for the same period last year. In the course of 2001, EM.TV disposed of numerous shareholdings in part or in full. A factor of decisive influence was the interest in the Formula 1 Group (Speed/ SLEC), that was consolidated by 50% up to March 30, 2001, 100% from March 31 to the beginning of September 2001, and since then treated as a financial asset. In addition, last year, a considerable one-off profit accrued to EM.TV's subsidiary Jim Henson Company due to an asset swap. Consolidated sales in the first three months of the current year were EUR41.8 million. This is a fall of 60.9 % compared with the figure of EUR 107.0 million reported last year. However, compared with last year's sales of EUR 58.6 million for the adjusted portfolio base, the fall was 28.7 %. Consolidated operating earnings before depreciation and amortization (EBITDA) from January to March 2002 were EUR 0.4 million, following EUR 80.7 million in the same period last year. Eliminating deconsolidation effects and special items, the EBITDA for the first quarter of 2001 would have been minus EUR 5.9 million, so that, calculated on a comparable basis, this is a considerable improvement (EUR 6.3 million). It is attributable to major reductions in materials expenditure (69 % down, to EUR 20.5 million), personnel (38% down, to EUR 10.1 million) and other operating expenditure (68 % down, to EUR 13.2 million). The substantial cost reduction is not least a consequence of the tight cost management introduced in 2001. Depreciation fell from EUR 55.4 million in the same quarter last year to EUR 15.0 million this year. To a certain degree this is due to exceptional write-offs concerning intangible assets in the 2001 annual accounts, with the consequent relieving effects of lower current depreciations in subsequent years. EM.TV's earnings before interests and taxes (EBIT) are disclosed at EUR -14.6 million (last year: EUR 25.2 million, or EUR -32.5 million on an adjusted basis). The financial result improved, mainly as a result of the deconsolidation of the Formula 1 Group and the drastic reduction of borrowings of the parent company, from EUR -47.9 million to EUR -9.9 million. Earnings before tax (EBT) were EUR -24.5 million compared with EUR -22.7 million in the same period last year. The quarterly loss after tax and minority shareholdings was EUR 24.5 million, following EUR -50.2 million last year. It should be noted that a high level of deferred tax needed to be disclosed in the first quarter of 2001, while the present quarter includes a small tax reimbursement. The liquidity position of the EM.TV Group evolved as budgeted in the first three months. At March 31, liquidity funds (cash and short-term papers) were EUR 130.7 million compared with EUR 129.0 million at the end of 2001. As announced, the last two installments of the loan to finance the shareholding in the Junior.TV joint venture fall due later this year. To generate the required liquidity, the executive board is still planning a major des-investment. Consolidated shareholder's equity at the end of March 2002 was EUR 441.7 million (end of December 2001: EUR 465.7 million). This leads to an equity ratio of 34.9 % (end of December 2001: 35.9 %). Short-term liabilities to banks were EUR 168.6 million compared with EUR 165.7 million at the end of 2001. For inquiries, contact: Frank Elsner Kommunikation fur Unternehmen GmbH Telephone: +49 - 5404 - 91 92 0 Fax: +49 - 5404 - 91 92 29 Mobile: +49 - 170 - 48 15 181 E-mail: info@elsner-kommunikation.de PHILIPP HOLZMANN: Insolvency Proceedings Begin at Imbau, Holzmann ----------------------------------------------------------------- By order of the local court in Frankurt/Main, dated June 1, 2002 the insolvency proceedings with respect to Philipp Holzmann AG imbau Industrielles Bauen GmbH, a subsidiary of Philipp Holzmann AG, has been started. Mr. Ottmar Hermann has been appointed as insolvency administrator of Philipp Holzmann AG -- http://www.philipp-holzmann.de/--, while Mrs. Angelika Amend has been appointed as insolvency administrator of imbau. Philipp Holzmann Aktiengesellschaft's principal activities include building and civil engineering operations. The Group is also active in technical developments and environmental protection. Contact Information: Philipp Holzmann AG Taunusanlage 1 60329 Frankfurt am Main Germany Telephone: +49 69 2 62-1; +49 69 2 62-433 TELESENSKSCL AG: Bank of Scotland Disapproves Cash Transfer ----------------------------------------------------------- On May 31, 2002, the Management Board of TelesensKSCL AG was informed by Royal Bank of Scotland, a former shareholder in and long-term banker of TelesensKSCL AG's Scottish subsidiaries, that due to insufficient loan securities in favor of the bank, a transfer of money from the subsidiary TelesensKSCL Ltd. to TelesensKSCL AG will not be permitted. The Management Board thereupon has given instructions to immediately prepare a separate liquidity status for TelesensKSCL AG http://www.TelesensKSCL.com. For more details, contact: Nina von Moltke Investor Relations Email: investor@telesenskscl.com TelesensKSCL AG Global Solutions Ferdinand-Porsche-Strasse 1 51149 Cologne Telephone: +49 2203 91 28 888 Fax: +49 2203 91 28 150 ============= I R E L A N D ============= AER LINGUS: Grounded Until Wednesday, As Carrier Mulls Options -------------------------------------------------------------- Embattled Irish national airline Aer Lingus will not return to the skies until tomorrow, despite reaching agreement with the pilots' union to return to the negotiating table. According to BBC News, both sides met Sunday to consider proposals to end the impasse. The company, however, says it is not possible to resume operations earlier than Wednesday. The company refuses to say the basis for this position. Peter McLoone, secretary general of IMPACT, the protesting pilots union, told the BBC News that the threat of industrial action had been lifted while negotiations were taking place. "I cannot understand why passengers should continue to be inconvenienced... The only thing stopping planes from taking off is management's bizarre attitude," he said. Ireland's Labor Relations Commission has already drawn up detailed recommendations to resolve the standoff. Both sides agreed to this arrangement after talks before Dublin's Labor Court broke up early Sunday, following 11 hours of negotiations. The carrier told BBC News that it is still considering its options. The source of the stalemate is the new working practices, which the management wants implemented ostensibly as part of its survival plan. This plan includes shortening the rest period for pilots between flights and redundancies that have already claimed more than 2,000 jobs. IMPACT went on strike Thursday after seven member-pilots were suspended for refusing to stick to the new work schedules. The company grounded planes the next day. Estimates put daily losses at EUR2 million. The company implemented the current restructuring plan beginning October, following heavy losses caused by the foot-and-mouth crisis and the drop in passenger traffic as a result of the September 11 terrorist attacks. ===================== N E T H E R L A N D S ===================== KPNQWEST NV: Data Communications Group Files for Bankruptcy ----------------------------------------------------------- The administrators and the management board of KPNQwest N.V. announced Friday that continued attempts to sell a substantial part of the business and non-critical assets of KPNQwest NV were unsuccessful. 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 at the court Friday, May 31, 2002. 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 instability 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 the its debt or equity securities. KPNQWEST: Removed From AEX Index, Amsterdam Telecom Sector Index ---------------------------------------------------------------- Following the news that KPNQwest has gone into receivership, AEX index and Amsterdam Telecom Sector index announces that KPNQwest will be removed from the AEX index as from Thursday June 6, 2002. KPNQwest will also be removed from the Amsterdam Telecom Sector index as from the same date. Euronext Indices B.V. will use the last price quoted for KPNQwest on Euronext's non-official market to calculate the AEX index until the close of the markets on Wednesday June 5, 2002. After the close of the markets on Wednesday June 5, 2002, an operational reweighting of the AEX index will take place, whereby the value of the index will be proportionally distributed among the other 24 constituents based on their percentage weighting, after which the new weightings will be rounded off. The new weightings will apply with effect from Thursday June 6, 2002. The same procedure will be carried out for the Amsterdam Telecom Sector index. After the close of the markets on Wednesday June 5, 2002, Euronext Indices B.V will announce the new weightings of the remaining 24 constituents in the AEX index and the remaining 4 constituents in the Amsterdam Telecom Sector index. KPNQwest options will continue to be listed so long as the underlying shares are traded on Euronext Amsterdam Stock Market N.V. However, Euronext Amsterdam Derivative Markets N.V. will not introduce any more series from June 1, 2002. LANDIS GROUP: Datatec Ltd Will Buy Networking Distribution Unit --------------------------------------------------------------- Johannesburg-listed Datatec Ltd announced Monday it has signed a formal letter of intent with Landis Group N.V., a Netherlands company listed on the Amsterdam Stock Exchange. Under terms yet to be finalized, Datatec will acquire the complete networking distribution activities of Landis, which comprise operations in 10 countries in Europe (Austria, Belgium, Denmark, France, Germany, Netherlands, Norway, Spain, Sweden and the United Kingdom). A combination of cash, Datatec or unlisted Westcon Group Inc. shares will be used to effect payment. Landis' distribution business is one of the largest in continental Europe with annual revenues exceeding EUR 450 million and approximately 600 employees. Datatec intends combining the distribution assets and businesses of Landis with its own leading subsidiary, Westcon, to form the industry's largest data and voice networking distributor concern. The enlarged Westcon Group will become the single largest industry player in Europe in this sector, complementing its existing market leading position in the USA, South America, Asia Pacific, South Africa and the Middle East. The major vendors of both companies are completely complementary. Like Westcon, Landis' major vendor sales comprise products from Cisco Systems (CSCO), Nortel Networks (NT), 3 Com (COMMS) and Avaya Communications (AV). Commenting on the announcement, Datatec CEO Jens Montanana said, "We have been working on this for some time and there is compelling logic for both Landis and ourselves to enter into this transaction. "The distribution assets of Landis overlay almost perfectly with the footprint of Westcon's operations. In one single transaction Westcon will go from being a large but regional player in Europe to a market leader, with a presence in 10 countries and with revenues far exceeding the next closest competitor. "The chances of Westcon being able to consolidate its market leading position and reach revenues around US$ 3 billion in the near future are beginning to appear a real possibility. No pure play competitor of ours has the geographical footprint to match us nor the leverage with the industry's leading vendors, especially when it comes to technologies in the convergence space." UNITED PAN-EUROPE: Creditors Extend Repayment Deadline to June 17 ----------------------------------------------------------------- Heavily indebted Dutch cable group United Pan-Europe Communications heaved a big sigh of relief over the weekend after it successfully negotiated the extension of debt repayments. According to the Financial Times, the waivers that were triggered by the company's default on interest payments have been extended to June 17. They would have expired Monday, said the paper. The company said the extension was granted because of the progress that has been made in negotiations between United GlobalCom, its U.S. parent company, and an ad-hoc committee representing holders of is senior notes and senior discount notes. The company is presently negotiating a debt-for-equity swap involving EUR7.5 billion worth of bonds and convertible preference shares. Liberty Media, owned by cable tycoon John Malone, holds the bulk of these notes. The company, which has seven million cable TV customers in Europe, recently reported its first top-line profit, despite recording total liabilities of more than EUR11 billion. Its woes are mainly caused by costly acquisitions, which it has struggled to integrate. The expense of upgrading its network to allow the delivery of digital services also contributed to its financial drain, the paper says. VERSATEL TELECOMS: Removed From Amsterdam Midkap Index ------------------------------------------------------ Euronext announced on May 31, that from Wednesday, June 5, 2002 Versatel will be removed from the Amsterdam Midkap index as a consequence of the listing measure imposed on March 5, 2002. Euronext previously stated that in accordance with the index ground rules, Versatel would continue to be included in the Amsterdam Midkap index for up to three months following the imposition of the listing measure. After the close of the markets on Tuesday June 4, 2002, an operational reweighting of the Amsterdam Midkap index will take place, whereby the value of the index will be proportionally distributed among the other 24 constituents based on their percentage weighting, after which the new weightings will be rounded off. The new weightings will apply with effect from Wednesday June 5, 2002. Euronext will announce the new composition of the Amsterdam Midkap index after the close of the markets on June 4, 2002. =========== S W E D E N =========== LM ERICSSON: Major Owners Examine Leveling of Voting Rights ----------------------------------------------------------- In connection with the upcoming B-share rights offering, Ericsson's two largest shareholders, Investor AB and AB Industrivarden, as well as other large owners Alecta, Robur Fonder, Nordeas fonder, AMF Pension, Skandia, Fjarde AP-fonden, SEB Fonder, Forsta AP-fonden, Andra AP-fonden, Handelsbanken Fonder, SEB Trygg Liv, Tredje AP-fonden, SPP Livforsakring AB, Handelsbankens Pensionsstiftelse and Pensionskassa, Sjatte AP- fonden are in agreement on the following: That business interests are the key determining factor for participation in the rights offering. However, with respect to the importance of the question of voting rights for all share holders and with regard to compensation for A-shareholders, the above-named major owners and large owners wish to examine how a leveling of the difference in voting rights from a thousand to one to ten to one can be accomplished. Therefore the above named shareholders have assigned Ericsson's Chairman of the Board Michael Treschow to lead the task to find forms for leveling the differences in voting rights. Major owners Investor and Industrivarden and the above named large owners will be involved in the process. A proposal is to be presented in good time prior to the AGM's of Ericsson, Investor and Industrivarden in 2003. "Now, the most important issues are the legal conditions, compensation to A-shareholders and that, the question of voting rights is not mixed up with the ongoing process of the rights offering," said Ericsson's Chairman of the Board Michael Treschow. Ericsson is shaping the future of Mobile and Broadband Internet communications through its continuous technology leadership. Providing innovative solutions in more than 140 countries, Ericsson is helping to create the most powerful communication companies in the world. For further information, please contact: Pia Gideon, Vice President, External Relations; Telephone: +46 8 719 2864, +46 70 519 2864; E-mail: pia.gideon@lme.ericsson.se ===================== S W I T Z E R L A N D ===================== SWISSAIR GROUP: Invitations to Creditors' Meeting Sent Out ---------------------------------------------------------- The Administrator of Swissair Group, Mr Karl W�thrich, of Wenger Plattner, and his team will have sent out all invitations to the meetings of creditors of SAirGroup (June 26, 2002), SAirLines and Flightlease AG (both on June 27, 2002) by the end of the current week. The documentation mailed to creditors with the invitation includes the agenda, the Administrator's comments on the meeting of creditors, the last two interim reports published by the Administrator dated March 12, 2002 and May 10, 2002 and the draft version of the debt restructuring agreement. Attendance of the meetings of creditors not essential over the past few days the Administrator has been repeatedly asked by creditors whether they would lose their creditor status if they did not attend the meeting of creditors. This is not the case. The meeting of creditors is an information event at which the Administrator will mainly report on activities to date and comment on the draft version of the debt-restructuring agreement. The liquidator and members of the Creditors' Committee are also to be elected at the meeting. Any creditor not attending the meeting of creditors will remain a creditor of the company. In accordance with the pertinent legal provisions, he or she will still be entitled to a dividend and can take part in the vote on the debt-restructuring agreement. Voting documents will be sent to creditors a number of days after the meeting of creditors. For further information, contact the administrator of SAirGroup, SAirLines, Flightlease AG and Swissair Schweizerische Luftverkehr AG: Filippo T. Beck, Wenger Plattner -- www.sachwalter- swissair.ch --; Telephone 01 914 27 70, fax 01 914 27 88 =========================== U N I T E D K I N G D O M =========================== ALBERT FISHER: KPMG Offer Food Supplier's Assets for Sale --------------------------------------------------------- The Joint Administrative Receivers, Jim Tucker and Mick McLoughlin, offer for sale the business and assets of The Albert Fisher Group Plc and Fisher Foods Limited. The group's Seafood Division is for sale. The division is leading UK supplier of chilled and frozen value added seafood in 2001. It posted a sales of GBP115 million plus GBP35 million sales from its seafood training unit With about 1,400 employees, the Seafood Division trades from production facilities in Fraserburgh, Peterhead, Gosforth (leasehold), Redditch and Birmingham (leasehold). Also for sale, The Fisher Group's Chilled Food Division, with 1,300 employees, is leading UK supplier of prepared/dressed salads and prepared fruit salads. It achieved GBP73 million in sales last year. The unit trades from freehold production facilities in Methwold, York and Wisbech. Included in the sale is the group's Frozen Foods Division, which employs about 350 employees. The unit is a leading supplier of frozen vegetable and potato products in the UK. It recorded GBP108 million in sales last year. The Frozen Foods Division trades from a freehold production facility in Kings Lynn. Finally, the group's Head Office in Hemel Hempstead, (leasehold) with approximately 40 employees providing financial, operational and administrative support, is also for sale. Interested parties should contact: Mike Pink or Tony Rudkin of KPMG at the Group's head office: Focus 31 North Wing Mark Road Hemel Hempstead HP2 7BW Telephone: 01422 898 806 Fax: 01422 898 890 Email: mike.pink@kpmg.co.uk Email: tony.rudin@kpmg.co.uk BRADFORD CITY: Kroll Buchler Phillips Offer Club for Sale --------------------------------------------------------- The Joint Administrators of Bradford City AFC (1983) Limited, Peter Holder or Graham Wild of Kroll Buchler Phillips, offers for sale the Club which is based in West Yorkshire. The club is a currently registered member of the Nationwide Football League Division 1. It owns a state-of-the-art 25,000- seater freehold stadium with extensive conference and banqueting facilities. It has approximately 8,000 season ticket holders and maintains a catchment area of over 2 million. Bradford City AFC owns three sporting retail outlets based in West Yorkshire. For further information, please contact: Peter Holder or Graham Wild Kroll Buchler Phillips Fax: 0113 244 9305 CHESTER BARRIE: Applies for Receivership Due to Business Slump -------------------------------------------------------------- Upscale clothing manufacturer Chester Barrie has succumbed into receivership after "significant sums" of investments from its parent failed to counter the effects of the global economic downturn. BBC News says Deloitte & Touche has been appointed receiver of the group, which employs 250 staff at its factory in Crewe. "We will work alongside the receiver in an attempt to secure the future of Chester Barrie and keep the company, and as many jobs as possible, in Crewe," Ian Wilson, managing director of Chester Barrie, told the news channel. Deloitte & Touche says it has received "a serious expression of interest from a party whose intention would be to continue manufacturing and retain the majority of the workforce." Luxury Lifestyles bought Chester Barrie from Austin Reed two years ago. Aside from the present economic slump, the company is also blaming its woes to competition from foreign manufacturers. CORDIANT COMMUNICAITONS: Denies GBP 1BB Offer of Rival Havas ------------------------------------------------------------ Cordiant Communications Group Plc has denied reports that its board is in talks with rival Havas Advertising SA over a takeover proposal, says AFX News. "As far as we know there have been no such talks," a spokesman for Cordiant told the news agency. But despite the denial, the market is still abuzz over the prospects, which first surfaced in an Observer report that quoted an unidentified source who said that the advertising giant is hording as much as GBP1 billion for the bid. The source told the Observer that Cordiant's board has welcomed the offer, which may be announced within two weeks. The purchase would boost Havas' sales by about 42% and add clients such as Nokia Oyj, says Bloomberg. According to Bloomberg, the report appears credible, given the current consolidation in the market. Just recently, French rival Publicis Groupe SA agreed to buy Bcom3 Group Inc. to become the world's fourth-biggest advertising company. WPP Group Plc also acquired 30 companies last year, including Tempus Group Plc, to boost businesses such as ad-time buying. Analysts noted the fund-raising activities of Havas last month that raised EUR450 million out of bonds convertible to shares. "The bond sale, coming at a time when the company has no urgent refinancing needs, confirms the chance of acquisitions," quoted Bloomberg of one note sent by analysts at Exane to investors recently. Cordiant is a good target because of its recent financial performance. The London-based firm, which created the "M&M's melt in your mouth, not in your hands" campaign, lost GBP278 million in 2001. The company's shares have also shed 60 percent, while more than 1,000 employees have already lost their jobs. In April, the company also admitted losing a second contract with Hyundai Motor Co., South Korea's largest automaker and its biggest client. Cordiant has been looking for a buyer for several months, analysts told Bloomberg. EQUITABLE LIFE: Wants Annuity for With-profits Policies Lowered --------------------------------------------------------------- Equitable Life, the stricken British insurer, is asking its 55,000 with-profits annuity policyholders to allow the firm to lower their annuity bonuses to be more in line with current growth assumptions. At the moment, the society offers with-profits holders 7.5% bonus payments a year. According to pension experts, this rate is no longer sustainable in today's climate of low investment returns. "By assuming a lower growth rate, with-profits annuitants would take a cut in monthly income, with the hope that annuity rates in the future would exceed their assumptions and begin to grow again," the Telegraph said. "If we were to give pensioners the choice to 'rebase' annuities, there would have to be a significant level of interest. There would be no compulsion to do it - it would be offered as an option," an Equitable Life spokesman clarified. But to Philip Rose, of independent financial adviser Wentworth Rose, the option "is a choice of two evils -- death by strangulation or execution." "Equitable has said there is very little difference in real terms of agreeing to change initial bonus assumptions. Either your income falls steadily over a period of time, or you take it on the chin in one go," Mr. Rose told the Telegraph. Danny Cox, from IFA Hargreaves Lansdown, disagrees: "A number of other insurers are already offering pensioners the chance to rebase their policies, so they are more in line with actual bonus rates. "By assuming a lower bonus rate of 4% instead of 7.5%, there is a greater chance that actual bonus rates will exceed assumed rates. When this happens, annuities will increase," Mr. Cox told the Telegraph. ITV DIGITAL: League Admitted Lack of Guarantees, Says Telegraph --------------------------------------------------------------- Did the Football League acknowledge at one time that its contract with ITV Digital does not carry guarantees from Carlton Communications and Granada? This appears to be the case, according to the British daily Telegraph, which claimed Sunday to have seen two letters that showed the League recognizing that the ITV Digital co-owners did not guarantee the GBP315 million broadcasting contract inked two years ago. One letter said: "The Football League must now look for parent company guarantees from Granada and Carlton. This was envisaged in ONdigital's [which later became ITV Digital] bid document and so will come as little surprise." The Telegraph says six weeks later, on January 21, the League wrote: "Whilst our current agreement does not provide guarantees, I believe the agreement is not entirely silent on the issue in that it provides for any long form contract being negotiated with reference to the provision of the initial bid document." The League currently has a pending GBP500 million damage suit against ITV Digital's co-owners before the High Court in London. The case is based upon a claim that the two broadcasting firms have an obligation to assume payment of the GBP178.5 million, which ITV Digital still owes out of a three-year contract to air league games. In its claim the League asserts that Carlton and Granada offered to guarantee the obligations of ITV Digital in the initial bid document for the TV rights in 2000. A short form contract was eventually signed but did not mention guarantees. League CEO David Burns acknowledges that its position is relatively weak, but nevertheless valid: "We don't have formal guarantees. We have them by implication. The weakness of the League's case is that there isn't a formal guarantee document." JOHN LAING: Construction Group Announces Directorate Change ----------------------------------------------------------- John Laing plc advised the public on May 31, that Mr Derrick Ardern has retired as an executive Director of the Company. Following Mr. Ardern's retirement, the company also announced the appointment of Baroness Sheila Noakes DBE and Paul Meredith to the Board as non-executive directors with effect from June 1, 2002. Following the appointment in April 2002 of Tim Boatman as a non- executive director, this completes the appointment of new non- executive directors to the Board, a commitment made by the new Executive Chairman Bill Forrester. From 1970 to 2000, Baroness Sheila Noakes DBE (52), was at KPMG working predominantly on public sector matters including the privatisation of the railway, the Post Office and the restructuring of the civil nuclear industry. Her role as a partner at KPMG included leading KPMG's international public sector practice. Noakes has also held a wide variety of part-time public appointments, including non-executive director of the Court of Directors at the Bank of England from 1994 to 2001 and senior non-executive from 1998 - 2001. In addition, she served as a member of the Takeover Panel from 1999 to 2000. Noakes's current directorships include non-executive director of Hanson plc and Carpetright plc. She is also a Board Member of the English National Opera. Paul Meredith (56) worked at Phillips & Drew and UBS between 1979 and 1999. He was Chairman and Chief Executive of Phillips & Drew from 1990 to 1999 and, in UBS, a member of the London and European Executives, and ultimately of the Group Managing Board. He also served for five years as a non-executive director of IMRO. Meredith is currently non-executive director of the Industrial Finance Group and Investment Adviser to two public sector pension funds. Bill Forrester, Chairman of John Laing, commented: "We are delighted to have secured the advice and services of two such eminent and respected members of their fields. Together with Tim Boatman, their combined wealth of experience in industry, the public sector and the City will be invaluable to the Group." For inquiries, contact: Bill Forrester Chairman John Laing plc Telephone: 020 8906 5600 Ailsa Emerson Group Director of HR John Laing plc Telephone: 020 8906 5667 Faeth Birch Finsbury Group Telephone: 020 7251 3801 KINGFISHER PLC: Bank to Referee Bid to Be Known This Week --------------------------------------------------------- The bank that will determine whether the GBP3.2 billion bid of Kingfisher for French Do-it-yourself chain Castorama is fair was expected to be known yesterday, says the Independent. Accordingly, the British firm was to pick either of these banks: Dresdner Kleinwort Wasserstein, NM Rothschild, JP Morgan, Morgan Stanley and Lazards. A shortlist of three banks acceptable to both Kingfisher and Castorama was expected to be submitted to the Paris Commercial Court yesterday with the winner announced later that afternoon. Kingfisher, which owns 555 of Castorama, recently offered to buy the rest of the stakes for EUR67 a share. But Castorama opposed, claiming that it could easily fetch EUR70 per share. Under an agreement inked four years ago, Kingfisher appointed Schroder Salomon Smith Barney to provide a "fairness opinion" on the bid. The bank concurred with the bid of Kingfisher, which was thereafter questioned by Castorama, citing conflict of interest. Castorama pointed out the bank's role as financial adviser to Compass, the catering group also chaired by Francis Mackay, Kingfisher's chairman. Meanwhile, senior Castorama executives have expressed opposition to the possibility of Sir Geoff Mulcahy becoming interim chief executive of the enlarged group should Kingfisher's offer succeed. "Their [Castorama executives'] experience with him [Sir Geoff] to date hasn't been very good and they feel very strongly that he's the wrong man for the job," one source told the Independent. Sir Geoff is currently the CEO of Kingfisher, but there are reports that Mr. Mackay is looking for his replacement. Gerry Murphy, the CEO of Carlton Communications, is reportedly being considered, says the paper. SCOOT.COM PLC: CEO, CFO, Directors Drained Coffers Before Exit -------------------------------------------------------------- Five former executives of troubled online directories firm Scoot.com appeared to have known that the company was about to collapse and adequately provided for their exit with hefty payouts. British daily The Guardian has learned that the executives, which include ex-CEO Robert Bonnier, received salaries and bonuses for 2001 worth almost half the company's market value. The firm, once worth GBP2.5 billion, is now worth less than GBP5 million, the paper said. The Guardian said Mr. Bonnier, who founded Scoot by reversing his Freepages telephone directories business into a listed shell company in 1996, received a total package for the year to end December 2001 of GBP349,000. This includes GBP222,000 for loss of office caused by his resignation in June as the firm's precarious financial footing became apparent. Finance Director Ronald Dorjee, who also quit his post at the same time, received GBP403,000 including GBP210,000 of severance pay and a performance bonus of GBP50,000. This does not include a further GBP403,000 he received for his role in the sale of Loot despite the fact that Scoot received less than a third of the price it originally paid for the classified ads paper. Loot was purchased for GBP190 million, including GBP178 million of cash in June 2000, but was sold for only GBP45 million to Daily Mail & General Trust last August. Jon Molyneux, another Scoot director, also got a bonus last year of GBP167,000 for his part in organizing the sale of the Loot business. His remuneration of GBP621,000 included a GBP264,000 performance bonus, said the Guardian. Charles Webb and Mark de Smedt, also former directors, received bonuses as well. Mr. Webb's total pay of GBP99,000 in 2001 included a GBP41,000 bonus while Mr. De Smedt's GBP222,000 package included a GBP90,000 severance payout and a bonus of GBP45,000, The Guardian disclosed. The company is rumored to be up for sale as it recently admitted that its cash horde could only sustain it until August. TELEWEST COMMUNICATIONS: Bondholders to Force Debt Restructuring ---------------------------------------------------------------- Holders of about 50% of Telewest's bonds have reportedly closed ranks to pressure management to hasten its plan to restructure the cable group's GBP6 billion debt, says the Independent. The report says the group of bondholders has appointed UBS Warburg and insolvency lawyers Cadwalader Wickersham & Taft to advise them. Accordingly, they have also formed a committee that has reportedly sought an audience with CEO Adam Singer to discuss the issue. The form of restructuring that the group is backing is yet unknown, says the paper. But if it's any indication, their advisers are the same people behind the debt-for-equity swap to be undertaken in rival cable group NTL Incorporated. The company has GBP4 billion worth of bonds. Hobbled by concerns regarding its ability to service debts, the company's stocks have fallen from a high of 563p during the tech boom, to just 5p at present. The group's most imminent obligation is a debt repayment for a GBP293 million convertible bond due to Deutsche Telekom in late 2003. The company is currently valued GBP143 million. The report says the company has dragged its feet on the issue of restructuring, although in its first-quarter results announced earlier this month, it admitted "exploring options to address its funding requirements." The company is rumored to be selling assets such as Flextech, its TV content arm. Another option could be a rescue deal from Liberty Media, the company headed by U.S. cable tycoon John Malone, which has a 25% stake in the company. *********** 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. 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