/raid1/www/Hosts/bankrupt/TCREUR_Public/020611.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 11, 2002, Vol. 3, No. 114
Headlines
* G E R M A N Y *
CARGOLIFTER AG: Airship Maker Begins Insolvency Proceedings
KIRCHMEDIA: Consortium Unveils EUR 2BB Takeover Offer
MOBILCOM AG: Under Threat of Bankruptcy as CEO Holds on to Seat
MUHL PRODUCT: To Cut Workforce in Thuringia by Half, Says Paper
RTV FAMILY: Under Threat to Liquidate After Kirch Collapse
SUBA BAU: A Hundred Jobs to Go in Financing Firm's Liquidation
TELESENSKSCL AG: IT Group's Chief Gerke Resigns From Board
* I R E L A N D *
ELAN CORPORATION: Analyst Questions Cash Position, Fire Sale Move
ELAN CORPORATION: Streamline Operations, Strengthen Governance
* N E T H E R L A N D S *
KPNQWEST NV: U.K.-based Colt Telecom Inherits EUR 1BB Contract
KPNQWEST NV: Two Phone Operators, Clients Offer to Save Network
* P O L A N D *
DAEWOO-FSO: MG Rover to the Rescue, Talks to Takeover Plant
ELEKTRIM SA: Court Order on Suit Filed by Law Debenture Trust
* S W E D E N *
LM ERICSSON: In Talks With Infineon on Possible Asset Divestment
LM ERICSSON: Board Authorized to Decide Upon Rights Offering
LM ERICSSON: Supplies MMS Technology to Swisscom
* S W I T Z E R L A N D *
SWISSAIR GROUP: Administrator Faces Billions in Claims
* U N I T E D K I N G D O M *
ALBERT FISHER: Administrators to Fire Employees This Week
BIOCOMPATIBLES INTERNATIONAL: Notification of Interest in Shares
CONSIGNIA: Lay-off Plan to Affect 30,000 Will Cost GBP 700MM
CORDIANT COMMUNICATIONS: Shareholders Group to Seek Shakeup
KINGFISHER PLC: Holders Approve Castorama Offer, Rights Issue
KINGFISHER PLC: Search for Mulcahy's Successor Speeds Up
NTL INCORPORATED: To Add 25 More Channels to Protect Bottom Line
RAILTRACK PLC: Transport Department to Unveil Rescue This Week
TELEWEST COMMUNICATIONS: Shareholders to Boycott CEO Re-election
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G E R M A N Y
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CARGOLIFTER AG: Airship Maker Begins Insolvency Proceedings
-----------------------------------------------------------
For reasons of insolvency, the CargoLifter AG Board of Managing
Directors filed Friday an application for the opening of
insolvency proceedings on the assets of CargoLifter AG at the
Cottbus District Court.
With this step, the management bodies are fulfilling their legal
duties in line with 92 of the German Company Act
(Aktiengesetz).
At the same time, the scope of the new insolvency legislation is
to be used to order and streamline the group structure together
with a reputable and experienced insolvency administrator.
A solution for preserving the company is to be developed and
implemented with a focus on the Brand location in the State of
Brandenburg.
With the closure of the office in the USA, which has already
taken place and the move of the entire Berliner office to the
hangar site Brand, the first steps have already been initiated.
The objective of the insolvency petition is the reorganization of
the insolvent legal entity. The key focus is the interests of the
some 72,000 shareholders who have supported the project in such a
marvelous manner. Prof. Rolf-Dieter Moenning has been appointed
by the court as the interim administrator of CargoLifter AG.
In the now following phase of the insolvency procedure, the group
now gets a breathing space. This is to be used for an assessment
of the current situation in terms of technology and methodology
within the framework of so-called technical due diligence.
From the information derived in this procedure, further steps for
the rapid launch of the transportation balloon CL 75 AC and the
further development of the "flag ship" of the company, the
transportation airship CL 160, are to be shown. The question of
strengthening and developing Germany's leading position in this
technology sector is also important, something which has been
achieved not least by the development work at the CargoLifter
Group.
The company is strengthened in this estimate by the repeated
interest expressed in recent days in the implementation of a
long-term working relationship with CargoLifter AG at the hangar
location in Brand by well-known and large corporations such as
Boeing.
Encouraged and grateful, the company accepts the offers of
support of many academic institutions, especially from the chairs
of German universities in the areas of aviation and aeronautics.
A network of national and international experts will help to
solve existing problems more quickly and to intensify the
research in the area of airship development and production and
deployment applications of "Lighter-than-Air" systems.
At the same time this demonstrates that new technologies have a
chance in Germany and in the "neue Lander" in particular.
The Board of Managing Directors stands by its legal and economic
responsibility. CargoLifter AG will do everything is its power to
secure the technology and the location and to develop further.
A great deal has been done in a short time. Every day more than a
thousand visitors from all over Germany and aboard are witness to
this.
Without external assistance it does not seem possible to secure
the infrastructure in the short-term. The development of a long-
term on-going perspective requires that the financing is secured
until the generation of company revenues from the sale of the CL
75 AC and the Open Air Premiere of the transportation airship CL
160.
This is to be done together with the State of Brandenburg, the
federal government and the capital markets. Participation offers,
which have already been made are being carefully examined.
The Dahme-Spreewald district is planning to establish a "Lighter
than Air" research and technology center at the Brand hangar
site. This project too should help securing the unique plant in
Brand as technology focus in the area of airship technology.
KIRCHMEDIA: Consortium Unveils EUR 2BB Takeover Offer
-----------------------------------------------------
A consortium composed of Commerzbank, publisher WAZ Gruppe and
Hollywood studio Columbia TriStar has reportedly come up with a
EUR2 billion rescue package, reports Handelsblatt.
The German daily says the plan unveiled late last week received
favorable response from creditors. Under the plan, Commerzbank
and WAZ Gruppe would each take a stake of 40% in KirchMedia,
while Columbia TriStar takes the rest. Sources told the paper
that all creditors seemed to be satisfied with this arrangement.
The report says the company only needs EUR2 billion to settle all
its debts without having to sell off its most important foreign
shareholding interests. It is expected that the entry of WAZ,
which has a strong capital base, and Columbia TriStar, part of
Sony Corp., will open up promising partnership opportunities for
the company.
"If the creditors' committee accepts the WAZ/Commerzbank/
Columbia TriStar bid, all of Kirch Media's valuable parts will be
removed from the insolvency process. The insolvency proceedings
could then at last be opened for all the loss-making parts of the
group," Handelsblatt said.
KirchMedia is the former core business of KirchGruppe,
specializing in media rights trading. It owns Europe's largest
film rivalry and also controls broadcasting rights to major
sporting events. It also controls more than 50% of
ProsiebenSat.1, the country's No.1 free-TV network.
MOBILCOM AG: Under Threat of Bankruptcy as CEO Holds on to Seat
---------------------------------------------------------------
MobilCom is, now more than ever, under the threat of bankruptcy,
as founder and CEO Gerhard Schmid refused last week to step down,
a move seen as critical for the firm's survival.
According to the Financial Times Deutschland, Mr. Schmid remains
obstinate that he had not done anything detrimental to the
company's interest. This includes the infamous deal with his
wife, which was called by the supervisory board unethical.
Troubled Company Reporter-Europe recently learned that France
Telecom, a major shareholder, has pledged to pay Mr. Schmid for
his stake and support the company's debt restructuring plan only
if the feisty chief executive resigns.
MUHL PRODUCT: To Cut Workforce in Thuringia by Half, Says Paper
---------------------------------------------------------------
Insolvent Muhl Product & Services announced last week that it is
shedding half of its 300 employees in the State of Thuringia.
They will be reinstated, though, when the situation in the
company improves, says Frankfurter Allgemeine Zeitung.
During its peak, the company had close to 4,000 employees. Now
the entire business is for sale. The company declared insolvency
in March.
In April, the company expressed confidence that it can continue
operations as a going concern and secure the approval of a
restructuring plan from creditors.
German daily Handelsblatt said then that the building supplier
does not foresee any hitch to getting creditors' support for the
insolvency plan prepared by Deloitte & Touche.
The report said it is almost certain that creditor bank
Bayerische Landesbank will back the plan. Accordingly, it was
the bank's idea to hire the accounting firm and draw a strategic
plan even before the company thought of filing for insolvency.
"We are expecting to be able to retain 3,000 of our 3,800 jobs,"
assured CEO Thomas Wolf in an interview with Handelsblatt.
Mr. Wolf said his company had been in talks with banks for six
months before it filed for insolvency. He expected a
breakthrough in the negotiations following the company's
insolvency procedure.
The plan reportedly called for new investors. Mr. Wolf said the
company had hired Equinet AG and Corporate Value Associates to
find potential investors. At the time, Mr. Wolf said the company
was in contact with a financial investor and has a funding volume
of some EUR300 million at its disposal.
He said a preliminary accord had already been signed
between the two companies. He estimated that the amount of
capital needed to secure the company's liquidity stands in the
lower two-digit millions of euros.
The company succumbed to insolvency after defaulting on
an interest payment for its EUR250 million debt. The company
operates in Eastern Germany and has approximately 100,000
clients.
It booked EUR700 million in sales revenue last year. It has yet
to provide profit-and-loss details, but with restructuring
reserves and value adjustments, a net loss of around EUR60
million can be expected, said Handelsblatt.
RTV FAMILY: Under Threat to Liquidate After Kirch Collapse
----------------------------------------------------------
RTV Family Entertainment's continued operation is under threat
after the insolvency of parts of the German media giant
Kirchgruppe, a major customer.
Creditor banks of the TV group and Ravensburger AG, German games
manufacturer and parent company of RTV Family Entertainment will
decide the future of RTV within the coming week, a report
according to the Frankfurter Allgemeine Zeitung and FT
Information say.
The report adds that RTV owes about EUR 33 million to its two
creditor banks, Deutsche Bank and BW-Bank.
Although no date is mentioned, Ravensburger, with 56 % stake in
the film company, intends to sell its holdings.
A proposed plan on the continuation of RTV, which produces
children's films, have been submitted to the parent company and
the two banks, sources of Frankfurter Allgemeine Zeitung and FT
Information say.
SUBA BAU: A Hundred Jobs to Go in Financing Firm's Liquidation
--------------------------------------------------------------
An estimated 100 jobs will be affected in the possible
liquidation of the holding company of Suba Bau, the German
residential construction financing company, the Frankfurter
Allgemeine Zeitung and FT Information reports.
Jobst Wellensiek, Suba Bau's administrator, perceives no chance
of a successful restructuring and therefore decides that the
Holding company be wound up in the course of insolvency
proceedings.
The paper adds, although the level of possible claims has not yet
been calculated, liabilities up to EUR 225 million is estimated.
The cost of job cuts, which led to substantial bank debts
contributed to the construction financing group's collapse to
insolvency, the paper said.
About 400 employees in subsidiaries remain unaffected by the
parent's insolvency.
TELESENSKSCL AG: IT Group's Chief Gerke Resigns From Board
----------------------------------------------------------
The Supervisory Board of TelesensKSCL AG--- www.TelesensKSCL.com
--- announced June 7, that its Chief Executive Officer (CEO),
Moritz Gerke, has resigned from the Management Board with
immediate effect, in agreement with the Supervisory Board.
The Supervisory Board expresses its gratitude end appreciation
for Moritz Gerke's contribution.
The other Management Board members, in close cooperation with the
Supervisory Board members, will continue the business of
TelesensKSCL AG and the concrete discussions with several
investors or bidders.
Cologne-based TelesensKSCL develops and implements software
products for convergent voice and data services for mobile and
fixed networks in the telecommunication industry.
Its modular, component-based product portfolio supports
technologies such as IP, wireline, GSM, GPRS and UMTS (3G). The
company also offers one of the first usage-based billing
solutions for broadband services such as ATM and IP as well as a
state-of-the-art Intercarrier billing system (Interconnect).
With its unique range of products for the international
telecommunications market, the company meets the demands of the
entire range of OSS (Operational Support Systems) and BSS
(Business Support Systems).
Contact Information:
Nina von Moltke
Investor Relations
TelesensKSCL AG, Global Solutions
Telephone: +49 2203 91 28 888
Email: investor@telesenskscl.com
=============
I R E L A N D
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ELAN CORPORATION: Analyst Questions Cash Position, Fire Sale Move
-----------------------------------------------------------------
Shares of Elan Corporation shed 55p to 467.5p Friday in London
after an analyst cast doubts on the company's cash horde and
trained a light into the registration of Isis Pharmaceuticals for
a possible sale.
According to The Guardian, David Maris, an analyst at Credit
Suisse First Boston, last week estimated in a research note to
investors that the company needs US$2 billion to pay debts in the
next three years and US$1.8 billion over the next two years. He
also described the company's use of special purpose entities as
"shrouded in mystery and additional potential debt."
These special vehicles or joint ventures account for a third of
the company's US$3 billion debts and are guaranteed but not owned
directly by the firm. The U.S. Securities and Exchange Commission
has a pending probe into these off-balance sheet special purpose
entities, the second in three years.
Mr. Maris also brought to light the sale registration of Isis
Pharmaceuticals.
"We are puzzled by the registration for sale of these
investments. Is Elan selling assets to maintain liquidity? Buying
shares at nearly US$30 and selling them two months later at
US$8.04 does not appear to be an attractive business
proposition," he wrote.
"We are registering in order to maintain flexibility. We are not
necessarily going to sell. It is better to have a missile ready
to launch than broken up and in bits around your country," an
Elan spokesman told The Guardian.
The company's share fell almost 21% to US$6.89 in New York
Thursday, a nine-year low, says the paper.
ELAN CORPORATION: Streamline Operations, Strengthen Governance
--------------------------------------------------------------
Elan Corporation, plc announced Monday that its board of
directors has approved management's action plan and has taken a
number of significant steps to strengthen its corporate
governance practices.
"As a follow up to the action plan announced in May along with
our first quarter results, we are now reorganizing the structure
of Elan's business, enabling us to focus on core areas that will
drive the future growth of the company. This will also make it
easier for our shareholders to track the progress of our
business.
In addition, Elan and its board are committed to ensuring the
company's corporate governance practices continue to meet the
rigorous standards applicable to a global company. The
significant steps taken, including the appointment of a Lead
Independent Director and the establishment of a separate
Nominating Committee, is indicative of that commitment." said Mr.
Donal Geaney, Elan's chairman and chief executive officer.
ACTION PLAN KEY HIGHLIGHTS
Mr. Geaney continued "Elan recognizes that it faces a number of
significant challenges in the short term including regaining its
credibility with shareholders and other stakeholders. Elan is
committed to delivering on its action plan and achieving its
strategic objective of becoming a market leader in terms of
market share and product pipeline, in each of the company's core
therapeutic areas of neurology, pain management and autoimmune
diseases."
Following is a summary of the key components of the company's
action plan. Management will be providing additional detail on
this action plan and its implications, including a comprehensive
presentation at the company's annual general meeting to be held
on July 31, 2002.
Elan's action plan has the following objectives:
* Focus management and resources on its fully integrated
pharmaceutical operations and core therapeutic areas of
neurology, pain management and autoimmune diseases
* Simplify operations through divestitures
* Reduce complexity of balance sheet
Focus on three core therapeutic areas
Going forward, the company will focus on three core therapeutic
areas where it is fully integrated and possesses world-class
science: neurology, pain management and autoimmune diseases.
Elan's fully integrated activities in neurology and pain
management will encompass the discovery, development,
manufacturing and marketing of novel therapies for the treatment
of pain management and of new disease modifying therapies for
disorders of the nervous system, including diseases such as
Alzheimer's disease, Parkinson's disease and epilepsy. In the
autoimmune area, Elan will pursue novel treatments for disorders
of the immune system such as multiple sclerosis, Crohn's disease
and rheumatoid arthritis.
In its core therapeutic areas, Elan's strategic objective is to
be a market leader in terms of market share and product pipeline
in the United States and major European markets.
Outside of these core therapeutic areas, the company will
continue to capitalize on its existing strong market position in
areas such as acute care and dermatology in the United States and
oncology in Europe. This will enable Elan to continue to realize
the value it has created with its commercial presence in these
areas.
In neurology, pain management and autoimmune diseases, the
company will continue to pursue the acquisition of in-market
products with sales potential of greater than $100 million for
the U.S. market and $50 million for European markets. However,
Elan's objective to retain maximum financial flexibility and
liquidity will temper its acquisition program. Elan also
continues to monitor the industry for molecules in development
that could be in-licensed to further enhance its existing strong
development pipeline within its core therapeutic areas.
With respect to investment in research and development, Elan
seeks to maximize the potential return on its key development
programs such as Prialt and Antegren as well as the product
enhancement activities and application of its drug delivery
technologies to several of its marketed products such as
Zonegran, Myobloc, Zanaflex, Skelaxin and Sonata. The company is
also committed to the advancement of its broad Alzheimer's
programs with Wyeth and Pharmacia, its cell trafficking program
with Wyeth and its internal discovery programs in the core
therapeutic areas of neurology, pain management and autoimmune
diseases.
Elan is a world leader in the provision of drug delivery services
and technologies to the biotechnology and pharmaceutical
industry. Elan is repositioning its contract drug delivery
service business to be a stand alone discrete business within
Elan operating from a single site (King of Prussia, Pennsylvania)
focused primarily on the provision of NanoCrystal and
complementary drug delivery technologies to its client base. Elan
recognizes the value of its drug delivery technology and know-how
for enhancing its own marketed and pipeline products. Those drug
delivery resources that are integral to Elan's own development
and product enhancement activities will be integrated into Elan's
global research and development organization based primarily in
Ireland; Gainesville Georgia; and San Diego and San Francisco,
California.
Create Elan Enterprises, a new stand-alone business unit
Elan is creating a discrete business unit called Elan Enterprises
with its own dedicated management team led by Seamus Mulligan,
executive vice president, business and corporate development.
Elan Enterprises has two objectives:
1. To optimize the value of Elan's business ventures. Elan has
approximately 50 business ventures with approximately 30 products
in clinical development, four in Phase III/pivotal trials.
Business venture products in Elan's core therapeutic areas will
continue to be evaluated and positioned for launch by Elan. Those
products outside Elan's core therapeutic areas will, on an
ongoing basis, be evaluated for further investment and eventual
out-licensing to suitable marketing partners. Elan and its
business venture partners will be very active in seeking
marketing partners to ensure full value is derived from this
valuable pipeline of products. Elan is committed to all of its
business venture partners and will continue to collaborate very
closely with them in the development and future marketing of
these products.
2. To divest non-strategic businesses and assets. In the 5 year
period from mid 1996 to mid 2001, Elan acquired 15 different
companies in the US and Europe. As a result, Elan has over 26
sites worldwide and an overly complex geographic and business
structure. Elan Enterprises will reduce the complexity of Elan's
operations over time by divesting businesses and assets that are
not strategic to Elan's long-term goals in neurology, pain
management and autoimmune diseases. The company's divestiture
plans will significantly reduce the number of sites that Elan has
worldwide and streamline the business operations. Overall this
program should have a beneficial impact on Elan's financial
performance. The creation of Elan Enterprises with its dedicated
management team will enable Elan's executive and operational
management to focus on the company's core pharmaceutical
business.
Elan is committed to reducing the complexity of its balance sheet
and is carefully examining and determining, with its advisors,
the optimal financial structure in the context of the
implementation of its action plan. Elan will focus on maintaining
strong cash balances and supplementing these cash resources with
proceeds from the sale of non-strategic businesses and assets.
CORPORATE GOVERNANCE HIGHLIGHTS
The company's board of directors has also taken a number of steps
to strengthen and enhance its corporate governance practices.
These include:
-- Creation of a position of Lead Independent Director,
which will be filled by The Honorable Richard Thornburgh, a
current Elan Director and former Governor of Pennsylvania,
Attorney General of the United States and Under-Secretary General
of the United Nations. Shareholders and the financial community
increasingly value the stewardship that Lead Independent
Directors provide a company.
Moreover, appointing a Lead Independent Director furthers
Elan's long-standing commitment to conforming to evolving best
governance practices.
-- Establishment of a separate Nominating Committee, chaired
by Mr. Thornburgh and comprised entirely of Independent
Directors.
The Nominating Committee will take the responsibility for
Nominating directors and monitoring compliance with Elan's newly
enhanced governance guidelines. The Nominating Committee is a
new separate and distinct committee from the previously created
Compensation Committee that is also comprised entirely of
independent Directors. As Lead Independent Director and
chair of the Nominating Committee, Mr. Thornburgh will be
responsible for leading the board functions relating to the
company's corporate governance policies.
In addition to the separate and distinct Nominating Committee and
Compensation Committee, Elan's board has an Audit Committee that
is also comprised entirely of Independent Directors and is
responsible for the appointment of Elan's external auditors. The
Audit Committee oversees the company's accounting and reporting
practices and periodically reviews the effectiveness of the
system of internal financial control. It monitors the adequacy of
internal accounting practices, procedures and controls and
reviews all significant changes in accounting policies. It also
addresses all issues raised and recommendations made by the
external auditors.
The board also approved a proposed amendment to the company's
charter so that all directors, including the Chairman will stand
for election by rotation. The proposal will be presented for
shareholder approval at Elan's next Annual General Meeting. If
adopted, this amendment will take effect at the company's 2003
annual general meeting.
With respect to the overall composition of the board, Elan has a
clear majority of Independent Directors with a total of 14
Directors, 11 of whom are independent.
"The board of directors and the company's chairman and chief
executive officer have always been committed to ethical practices
that promote shareholders' interests. The creation of the
position of Lead Independent Director and the other positive
initiatives taken by the board are indications of our continuing
commitment to this goal," said Mr. Thornburgh.
"Best practices in corporate governance continue to evolve, and
we are pleased that the company and the board reviewed and
updated our governance practices. Our actions and the proposals
submitted to shareholders should reassure them that Elan is
committed to delivering on its promise and potential," said Mr.
Geaney.
Elan is a global, fully integrated biopharmaceutical company
headquartered in Ireland, with its principal facilities located
in Ireland and the U.S.
Elan is focused on the discovery, development, manufacturing,
selling and marketing of novel therapeutic products in neurology,
pain management and autoimmune diseases and the development and
commercialization of products using its extensive range of
proprietary drug delivery technologies. Elan shares trade on the
New York, London and Dublin Stock Exchanges.
=====================
N E T H E R L A N D S
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KPNQWEST NV: U.K.-based Colt Telecom Inherits EUR 1BB Contract
--------------------------------------------------------------
Insolvency data carrier KPNQwest NV has shipped EUR1 million
worth of contracts to British alternative carrier Colt Telecom
Group Plc, says Bloomberg.
Colt will now assume the obligation of the troubled carrier to
provide faster Internet services to customers of former Dutch
phone monopoly Royal KPN NV. The report says some 30 corporate
customers of KPN will be transferred to Colt's network.
"We've won more than EUR30 million of new business since the end
of May. In about a week, 16 carriers and seven major corporate
customers have switched their data networks to us," Colt Managing
Director Hugh Wilson told Bloomberg in an interview.
KPNQwest owns Europe's largest fiber-optic network, which spans
60 cities. Colt, on the other hand, does business in 13 European
countries, providing voice and data services to businesses.
Meanwhile, the company will be forced to shutdown its network
this week if it cannot raise sufficient funds, court-appointed
trustees told Bloomberg late last week.
KPNQwest has about EUR1.8 billion debts, amassed while building
its vast network just before prices for Internet services
collapsed, says Bloomberg.
KPNQWEST NV: Two Phone Operators, Clients Offer to Save Network
---------------------------------------------------------------
People close to KPNQwest say a number of its blue-chip customers
have expressed interest to keep the company going, while two
European telecom operators are willing to provide short-term
funding.
The Financial Times sources did not reveal the names of the
interested parties, but pointed out that their concerns center on
keeping the company's Belgian network running. This unit
controls the key E-Bone Internet protocol network, which carries
most of the data that passes through KPNQwest's fiber-optic
lines.
The sources said the telecom operators are also willing to ink a
short-term lease on the Belgian operations, which almost
triggered the biggest Internet crush in Europe last week, after a
Belgian bankruptcy court on Thursday ruled that all employees had
to be dismissed for lack of funds.
Meanwhile, the Financial Times says the company just needs only a
small number of blue-chip multinationals and the support of as
few as 200 customers to keep its network running. The company
has about 100,000 corporate clients.
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P O L A N D
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DAEWOO-FSO: MG Rover to the Rescue, Talks to Takeover Plant
-----------------------------------------------------------
British carmaker MG Rover is interested in the factory of Daewoo-
FSO, the Polish unit of bankrupt South Korean Daewoo Motors,
which was recently acquired by General Motors.
BBC News recently interviewed MG Rover Public Relations Director
Steve McKee who disclosed that the two companies are deep in
negotiations, which center on co-producing MG Rover models and
Daewoo cars at the plant.
"We think production could begin within 6 to 12 months," Mr.
McKee told the British news channel. He said the factory is the
best chance for his company to enter the Eastern European market
where it hasn't established a foothold yet.
"Poland and the eastern markets are important for MG Rover. It
is a region where we are not strongly established and we now have
a chance to enter the Polish market," he said.
Poland Deputy Economy Minister Maciej Lesny says the British
carmaker can eventually make five car models in Warsaw.
The government owns 10% of the factory, while the South Korean
parent owns the rest. At the moment, some of the plant's most
valuable assets are being transferred into a "New Small Company,"
a scheme hatched to prevent the local plant from slipping into
insolvency.
Daewoo-FSO owes about US$300 million to Polish and Korean banks,
US$700 million to Daewoo Motor, and US$60 million in unpaid taxes
to the Polish government.
Under the rescue plan, creditors will be given shares in the new
company in exchange for writing off their loan. Mr. Lesny says
the government will eventually sell its new stakes.
"The treasury will exchange its debt for equity [in the new firm]
but we will not be a shareholder forever. We do not want to
renationalize the automotive sector. We want to eventually sell
our stake," he told BBC News.
The report says MG Rover could either buy a stake in the new
company, or it could operate it on a license, Mr. McKee said.
General Motors recently took over most of the operations of
Daewoo, but did not include the Polish investments in its
acquisition. The Polish factory had been Daewoo's largest
foreign investment, with US$1.4 billion poured into the country
during the mid-1990s.
Falling car sales is one of the major reasons for the
deterioration of Daewoo-FSO. In March, sales fell 72% from the
previous year to just 1,808 cars, as customers feared the company
would not survive the three-year warranties it
was giving out on the cars, Troubled Company Reporter-Europe said
in its April 1 issue.
Daewoo's market share has slid from 19.8% to just 8.2% and it has
been forced to sack 60% of its staff, leaving just 3,250 workers
at the plant, TCR-Europe said.
ELEKTRIM SA: Court Order on Suit Filed by Law Debenture Trust
-------------------------------------------------------------
The Management Board of telecom and power conglomerate Elektrim
S.A. announces that on June 6, 2002 it received a copy of the
order of The High Court of Justice, Queen's Bench Division,
Commercial Court, Royal Courts of Justice of May 17, 2002
relating to the proceeding initiated by The Law Debenture Trust
Corporation p.l.c. (Trustee of the exchangeable bonds) on January
11, 2002 against Elektrim S.A. and Elektrim Finance B.V.
The Court entered judgement for The Law Debenture Trust
Corporation p.l.c. and ordered payment of the following amounts
by Elektrim S.A. and Elektrim Finance B.V.:
1. EUR 494,597,025.80 (principal amount - EUR 479,332,721.80
plus EUR 15,264,304 in interest as of May 17, 2002) - due
under the issued exchangeable bonds;
2. GBP 438,777.30 (principal amount - GBP 432,397.45 plus GBP
4,379.53 in interest as of May 17, 2002) - due as refund of
expenses incurred by the Trustee in relation to the
performance of its duties under the Trust Deed;
3. USD 230,246.68 (principal amount - USD 228,728.87 plus USD
1,517.81 in interest as of May 17, 2002) - due as refund of
expenses incurred by the Trustee in relation to the
performance of its duties under the Trust Deed.
4. GBP 10,000 - refund of court and legal services costs.
The Company's Management Board also informs that discussions
aimed at reaching a final agreement in relation to the claims
under the issue of exchangeable bonds are being held with the
bondholders.
===========
S W E D E N
===========
LM ERICSSON: In Talks With Infineon on Possible Asset Divestment
----------------------------------------------------------------
As a consequence of speculations in media about a possible
divestment of Microelectronics, Ericsson confirms that it is in
discussions with German Infineon regarding its Microelectronics
division. Ericsson has no more information at the time being.
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.
LM ERICSSON: Board Authorized to Decide Upon Rights Offering
------------------------------------------------------------
At Ericsson's Extraordinary General Meeting held June 6, 2002, it
was resolved to authorize the Board of Directors to decide upon
the rights offering, during the period until the Annual General
Meeting of Shareholders in 2003.
The issuance of shares will give preferential rights for the
Shareholders whereby shares, regardless of class of shares, shall
carry right to subscribe to shares of series B.
At the Extraordinary General Meeting it was confirmed that the
Board of Directors intend to finalize the rights offering as soon
as the Board so finds suitable.
LM ERICSSON: Supplies MMS Technology to Swisscom
------------------------------------------------
Multimedia Messaging Service (MMS) has arrived in Switzerland,
where the delivery of Ericsson MMS technology has permitted the
successful implementation of multimedia services on the Swisscom
Mobile network. Swisscom Mobile offers MMS services as of June
2002.
"We are very pleased to be the supplier to Swisscom Mobile and
Switzerland's first MMS system. This agreement is a culmination
of the successful partnership that our two organizations have
built up over the years," says Kristian Te"r, President of the
Ericsson Market Unit for Germany, Austria and Switzerland.
"The introduction of MMS is an important step in the further
development of mobile data communications. We are convinced that
our customers will be as enthusiastic as we are about the
exciting possibilities offered by these new multimedia services,"
says Urs Schaeppi, Head of Connectivity Services at Swisscom
Mobile.
Ericsson is a forerunner in MMS. Ericsson has supplied more than
80 test systems worldwide, and has already secured over 20 orders
to supply commercial MMS systems.
=====================
S W I T Z E R L A N D
=====================
SWISSAIR GROUP: Administrator Faces Billions in Claims
------------------------------------------------------
According to the Administrator of the Swissair Group, Karl
Wuthrich of Wenger Plattner, on Friday, the group's debt
restructuring terms have been prolonged.
The Administrator has been confronted with claims from creditors
amounting to billions of Swiss francs in the case of all three
companies. The companies themselves, however, acknowledge only a
fraction of the sums claimed.
The claims will only be assessed in the course of the collocation
procedure. Depending on the assessment made, the SAirGroup
dividend will come to something between 4% and 12%, SAirLines
dividend to between 3% and 48%, and the Flightlease AG dividend
to between 1% and 7%.
At the Administrator's request, the debt restructuring judges in
Zurich and Bulach ruled, on June 3, 2002 to prolong the debt
restructuring terms of SAirGroup, SAirLines, Flightlease AG and
Swissair Schweizerische Luftverkehr AG by six months each, namely
up to December 5, 2002 inclusive.
These rulings have become legally final and non-appealable. Thus
one of the conditions has been fulfilled for the estate
liquidation procedure or if no debt restructuring agreement is
reached with one of the companies, the bankruptcy liquidation
procedure will begin in autumn
2002.
In the near future, the Administrator and his team will be busy
preparing the forthcoming creditors' meetings. Unless something
unforeseen occurs, there will be no weekly reports for the next
two weeks. The next notice to creditors and the media will go out
on June 28, 2002.
Updates on the status of SAirGroup, SairLines and Flightlease AG
per October 5, 2001's insolvency filing may be found at the
administrator's Web site -- www.sachwalter-swissair.ch.
===========================
U N I T E D K I N G D O M
===========================
ALBERT FISHER: Administrators to Fire Employees This Week
---------------------------------------------------------
KPMG, the administrator of collapsed food group Albert Fisher, is
expected to announce redundancies this week, as takeover talks by
potential buyers continues to drag.
The company employs about 3,000 staff, according to BBC News.
The administrators did not say how many will be sent home. KPMG
also said Friday that it had decided to mothball the company's
frozen foods division, while it reviews its trading position as a
result of several failed attempts to sell the company.
A breakthrough is, however, expected next week, says the report.
Accordingly, offers might be put on the table around that time
for the company's seafood and chilled foods operations.
A major supplier of frozen products to UK supermarkets, the
company was forced into administration last month after failing
to seal a rescue pact with creditors. Once a hot commodity in
the stock market, the company is now reeling from price drops of
fish and frozen foods and a series of severe setbacks on abortive
disposal and takeover operations.
During the 1980s, the company reached a market value of GBP784
million, says BBC News. But the heydays are over. Last month,
joint administrative receivers Jim Tucker and Mick
McLoughlin offered for sale the group's Seafood Division. This
unit posted sales of GBP115 million and GBP35 million from its
seafood training unit, Troubled Company Reporter-Europe said in
its June 4 issue.
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 a 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.
The group's Frozen Foods Division, which employs about 350
employees, is also up for grabs. 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, TCR-Europe said.
BIOCOMPATIBLES INTERNATIONAL: Notification of Interest in Shares
----------------------------------------------------------------
On June 7, 2002, J O Hambro Capital Management Limited and ORYX
International Growth Fund Limited submitted a concert party
notification, pursuant to Section 204 of the Companies Act 1985.
At that time, JOHCM confirmed that it was interested in 3,650,000
Ordinary 10p shares of Biocompatibles International Plc (the
'Company'), while ORYX confirmed that it was interested in
750,000 shares.
These amounts represent 2.55% and 0.52% of the total issued share
capital of the Company respectively. These shares are held as
follows:
HSBC Global Custody London Limited 750,000
Goldman Sachs International TNA 2,160,000
Goldman Sachs International THO 1,105,000
Goldman Sachs International THT 385,000
Total 4,400,000 shares = 3.08%
CONSIGNIA: Lay-off Plan to Affect 30,000 Will Cost GBP 700MM
------------------------------------------------------------
State-owned postal operator Consignia needs about GBP700 million
to implement its 30,000 redundancy plan, said the Sunday Times
without citing a source.
The company, which will publish annual results on Thursday, has
announced that it will cut 15,000 initially and about 17,000 more
in order to achieve profitability by 2005. This will allow the
company, which is losing GBP1.5 million a day, to scale down its
postal counters by 3,000.
Meanwhile, according to the report Chairman Allan Leighton is
expected to bare total losses of GBP1.2 billion last year and the
resignation of CEO John Roberts, who is blamed for most of the
post office's present woes.
In addition, Mr. Leighton is also expected to announce the return
to the Post Office brand, the name of the company before last
year's costly adoption of Consignia. Citing the Independent in
its May 24 issue, the Troubled Company reporter-Europe said the
re-branding cost GBP2 billion to implement.
CORDIANT COMMUNICATIONS: Shareholders Group to Seek Shakeup
-----------------------------------------------------------
Active Value, an activist shareholder fund known for achieving
its aims in companies where it takes stakes, is expected to push
for a shakeup in the management of Cordiant Communications Group
Plc, says The Times.
The British daily said over the weekend that the group now has
4.5% control of the company after buying heavily the stocks of
the troubled advertising agency during the past few weeks. Last
week alone, the shareholders group bought 6.1 million shares,
which brings to 18.5 million the number of share it now owns.
Cordiant will hold an annual meeting on June 26. Analysts say
the fund, run by Julian Treger and Brian Myerson, could seek the
shakeup during this assembly and even call for the resignation of
CEO Michael Bungey, seen as responsible for much of the firm's
woes.
The paper says among those that bear the imprint of the fund's
influence on management composition and corporate governance are
Pilkington, the glassmaker, and Novar, the building materials
group.
Two years ago, Cordiant's shares traded at 406p, before it
dropped 54p last year.
Recently, rumors have surfaced that rival Havas Advertising SA is
preparing a takeover tender for the company. The market has been
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.
KINGFISHER PLC: Holders Approve Castorama Offer, Rights Issue
-------------------------------------------------------------
Kingfisher received shareholder approval at its Extraordinary
General Meeting Friday for its proposed purchase of the 44.5%
minority interest in Castorama Dubois Investissements SCA that it
does not already own.
Subject to the receipt of a satisfactory fairness opinion
(certificat d'equite), and the necessary regulatory approvals,
the minority shareholders will be offered EUR 67 per share,
valuing the minority interests of Castorama at GBP3.2 billion.
Also approved at the EGM was the increase in Kingfisher's
authorized share capital required for the proposed GBP2.0 billion
rights issue with which Kingfisher intends to part-fund the
acquisition. The remainder of the purchase consideration will be
met out of new bank debt facilities.
The EGM resolutions, both passed by overwhelming majorities,
followed confirmation by the Paris Commercial Court (Tribunal de
Paris) that Rothschild et Cie has been formally appointed as the
independent investment bank responsible for delivering a fairness
opinion in respect of the proposed offer price of EUR 67 per
share.
The improvement and electrical and furniture retailer anticipate
the fairness opinion being delivered by early July.
Before proceeding formally to launch its offer, Kingfisher is
required to obtain:
a satisfactory fairness opinion on the price offered by
Kingfisher;
clearance by the competition authorities; and
the approval of the offer by the French stock market
authorities (Conseil des marches financiers).
Accordingly, Kingfisher now expects that, subject to receipt of a
satisfactory opinion on the price offered by Kingfisher and the
necessary regulatory clearances, it will be able to make a formal
offer to Castorama's minority shareholders during August.
Francis Mackay, Chairman of Kingfisher, said: "The Board
considers EUR67 per share to be a full and fair price and we
believe this has been supported by the market's reaction to the
offer. The offer represents a premium of 20% over the Castorama
share price prior to the onset of current speculation and
particularly when taking into account the substantial premium
paid for co-control in 1998."
Commenting on objections to the current offer that have been
raised by the A Commandites, and alternative proposals by them to
restructure Castorama via a demerger, Mr Mackay said: "It is
important to remember that the A Commandites are not in a
position to claim they represent the views of all Castorama
minority shareholders.
"In addition, the alternatives to Kingfisher's cash offer
which they have proposed to our largest shareholders are clearly
unacceptable. We are pleased that our shareholders have voted
overwhelmingly in favor of the proposed cash offer."
Francis Mackay added that the process now underway was agreed in
1998 by the A Commandites and Castorama shareholders. He
considered it "unfortunate that the A Commandites had chosen to
engage in tactics aimed at delaying or frustrating the offer
being put to Castorama's minority shareholders. The uncertainty
caused was not in the interests of the business, employees or
shareholders."
He concluded: "It is clearly important that we remove this
uncertainty as soon as possible so that everybody can concentrate
fully on realising the tremendous potential within Europe's
leading home improvement retailer."
Kingfisher is Europe's leading home improvement retailer, and is
ranked number three in the world. The company operates more than
580 home improvement stores in 11 countries, and enjoys market-
leading positions in the U.K., France and Taiwan.
Sales for the Home Improvement sector for the year to February 2,
2002 were more than GBP5.8 billion, with retail profit in excess
of GBP430 million.
Kingfisher Electrical & Furniture operates more than 820 stores
in nine countries. It is Europe's third largest electricals
retailing business by sales and number two by retail profit.
As well as holding the leading position in France and the number
two position in the U.K., Kingfisher also enjoys leading
positions in Belgium and in the Czech and Slovak Republics. Sales
for the year to February 2, 2002 were more than GBP3.7 billion,
with retail profit of GBP184 million.
KINGFISHER PLC: Search for Mulcahy's Successor Speeds Up
--------------------------------------------------------
Kingfisher Plc has sped up its search to find a successor to its
chief executive, Sir Geoff Mulcahy and is bent on appointing a
new chief executive within the next six months.
According to the Independent, "the company is determined to
choose a successor who can integrate Castorama into its own
business if its contested o3.2bn bid to take full control of the
French DIY retailer succeeds, possibly as early as August."
The paper reported that in a shareholder meeting held June 7,
Francis Mackay, Kingfisher's chairman revealed that "Sir Geoff
was 'driving forward' the search for a new chief executive."
Mackay also revealed that during the extraordinary general
meeting, 150 shareholders approved Kingfisher's plan to buy the
44.5 per cent of Castorama and a related o2bn rights issue to
part fund the deal, the Independent said.
The deal however, still met dissent from some of Kingfisher's
investors who regard it as something that would likely "stifle
the value of Kingfisher's shares for a long time and would even
destroy shareholders value."
In the end, the result of the contested deal lies on the ruling
of Rothschild et Cie, the French merchant bank that was recently
appointed arbiter of offer which would be announced next month.
NTL INCORPORATED: To Add 25 More Channels to Protect Bottom Line
----------------------------------------------------------------
NTL Inc., the British cable group under Chapter 11 bankruptcy in
the U.S., is stepping up efforts to stem the number of customers
jumping to rival British Sky Broadcasting Plc, says Bloomberg.
Citing The Observer, the report says the firm is planning to add
25 more channels to its already 150-channel offering. The
company has just acquired the subscribers' list of ITV Digital
and plans to use this to boost sales.
Since filing for bankruptcy, the company has reportedly loss a
number of cable subscribers to competition.
"We're making our digital TV product a real competitor... You can
go to Sky or you can come to us, and we don't want to make that a
difficult choice," COO Stephen Carter was quoted by The Observer
as saying.
The company is also adding 17 new channels to its digital radio
services, the newspaper said. The company said last month it
may make its first-ever net profit in 2002 after it emerges from
Chapter 11 bankruptcy protection later this year.
RAILTRACK PLC: Transport Department to Unveil Rescue This Week
--------------------------------------------------------------
Newly appointed Transport Secretary Alistair Darling is expected
to formally announce this week the buyout terms that will lift
Railtrack Plc from bankruptcy, says Bloomberg.
Citing the Sunday Telegraph, the news agency said Mr. Darling,
who replaced Stephen Byers, will announce the payment of GBP500
million by Network Rail, the not-for-profit, government-backed
vehicle that will replace the troubled rail and tracks company.
Railtrack Group, the parent firm that is not in administration,
will also receive GBP375 million for the channel tunnel rail link
and GBP350 million from its network business, which will allow it
to pay shareholders between 240p and 250p a share.
Part of the rescue package is a GBP9 billion emergency loan,
which will be provided by nine banks and guaranteed by the
Strategic Rail Authority, the report says.
TELEWEST COMMUNICATIONS: Shareholders to Boycott CEO Re-election
----------------------------------------------------------------
The National Association of Pension Funds, Britain's biggest
shareholder group, has urged members to abstain from re-electing
Adam Singer as CEO of Telewest Communications Plc, says the
Telegraph.
The company will hold its annual meeting today. The report says
the group, which controls 20% of the UK stock market, has also
urged abstention on the re-appointment of Finance Director
Charles Burdick, who was awarded a controversial GBP283,000 bonus
despite the company's poor performance in the market.
The group is likely objecting to the debt-restructuring plan
currently being considered by management. A debt-for-equity
swap, which is being pushed by bondholders who are also behind
the same move at rival NTL Inc., will wipe out current
shareholders.
The report says the group is also particularly concerned that
executive pay packages will not be put to a vote. Last year,
Telewest bosses pocketed "performance-related bonuses" of
GBP690,000, despite debt ballooning to GBP5 billion and the
shares tumbling 40%.
"Big bonuses should reflect high-quality performance. We
disapprove of high rewards for failure," spokesman for the group
told the Telegraph.
Also subject of a boycott is Non-executive Director Miranda
Curtis, who is president of Telewest's 25% shareholder Liberty
Media.
"Although she has responsibilities as an independent director,
she isn't independent as far as we are concerned," said the
spokesman.
************
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 2002. 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 * * *