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/raid1/www/Hosts/bankrupt/TCREUR_Public/020619.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 Wednesday, June 19, 2002, Vol. 3, No. 120 Headlines * F R A N C E * LANDTEL FRANCE: To Cite Unfair Sanctions of Regulator in Appeal * G E R M A N Y * CARLOGILFTER AG: Rebuffed British Rival Now Bidding for Factory GRUNDIG AG: Partners With Fujitsu for Car InterMedia System KIRCHMEDIA: Insolvency Procedure Opens, Search for Investors On MOBILCOM AG: CEO Expects Less Than EUR22-bid From France Telecom RTV FAMILY: Banks, Shareholders Have No Restructuring Plan SCIPHER PLC: Suit v. Taiwan Partner Doesn't Have Direct Bearing TEAMWORK INFORMATION: Austrian Investor Increases Share to 22.1% * N E T H E R L A N D S * UNITED PAN-EUROPE: Wins Extension on Waivers From Senior Lenders * P O L A N D * NETIA HOLDINGS: Local Phone Company Launches New Internet Service STOCZNIA SZCZECINSKA: Enters Bankruptcy Monday * S W E D E N * LM ERICSSON: Slips to Baa3, Prime-3 Ratings Due to Falling Orders LM ERICSSON: Will Supply MMS to Swiss Mobile Operator Sunrise * U N I T E D K I N G D O M * ALBERT FISHER: Receivers Agree to Sale of Kings Lynn Plant ALLDAYS PLC: Sales Improving But Bank Debts Stunting Growth ANTISOMA PLC: Phase I Data for DMXAA Presented at Conference BRITISH AIRWAYS: To Take Over Heathrow Slots of Virgin Atlantic ICI: Troubled Chemicals Group Agrees to Sell Huntsman Stake PACE-MICRO: Pace Extends Board With New Executive Director PACE MICRO: Notification of Major Interests in Shares SSL INTERNATIONAL: Sale of Continence Care Business to Coloplast TELEWEST COMMUNICATIONS: Bondholders Responds to Liberty Offer THUS PLC: Management Team Target of Attractive Offers From Rivals THUS PLC: Urges Telecom Regulator to Make More Changes in Sector =========== F R A N C E =========== LANDTEL FRANCE: To Cite Unfair Sanctions of Regulator in Appeal --------------------------------------------------------------- Landtel France, the local radio loop operator, is going to appeal a decision last week that ordered its liquidation, says Les Echos. The company will bring the case up to the country's highest administrative court, the council of state, and cite the behavior of telecom regulator ART as ground for reversing the order last week. The company, which holds licenses for seven French regions, claims the regulator singled out the firm in imposing stiff sanctions, which eventually led to its financial ruin. A commercial court in Paris forced the firm into administration in January. ============= G E R M A N Y ============= CARLOGILFTER AG: Rebuffed British Rival Now Bidding for Factory --------------------------------------------------------------- An airship rival based in the U.K. had approached Cargolifter AG for a partnership just before it went bust, AFX News learned recently. Citing Financial Times Deutschland, the news agency said Advanced Technologies Group had asked the German counterpart to pool their resources, but the company refused. Now the British firm is back and bidding for the production hall of Cargolifter in Berlin for use as factory for its own models. In an interview with AFX News, ATG Chief Roger Munk confirmed the attempt, and added that it was Cargolifter Chairman Carl von Gablenz himself, who turned down the offer. Cargolifter commenced insolvency hearing on June 7 before the Cottbus District Court. Yesterday, Troubled Company Reporter- Europe also said that subsidiaries CargoLifter World GmbH, CargoLifter MAP GmbH, CargoLifter Airship Operations GmbH and CargoLifter Industrial Logistics GmbH had also applied for the opening of insolvency proceedings Friday last week. Prof. Rolf-Dieter Moenning will act as the group's interim insolvency administrator. GRUNDIG AG: Partners With Fujitsu for Car InterMedia System ----------------------------------------------------------- After several months of negotiations, Grundig AG has chosen a strategic partner for Grundig Car InterMedia System (GCIS), Grundig said in a statement last week. Fujitsu Ten Limited (FTL), the Japan-based manufacturer of car radios, navigation systems and other electronic car equipment, and Grundig AG (GAG) agreed to establish a strategic partnership in the field of Car Multimedia. The collaboration activities are being established on a worldwide basis, for the purpose of development, production and marketing between FTL and GCIS who develops and manufactures car multimedia products. The contract on this agreement was signed by Dr. Werner Saalfrank, board member for Development, Production and Procurement at Grundig AG, and Takamitsu Tsuchimoto, President and Chief Executive Officer (CEO) of Fujitsu Ten Limited, in Kobe (Japan). FTL obtains a 25.1 % share of GCIS from GAG to strengthen the partnership. It has been agreed that silence would be maintained on the financial details of the contract. Grundig Car InterMedia System GmbH was founded in October 2001 as a 100% subsidiary of Grundig AG. The objective has been to focus all activities of the former Car Audio business unit even more on business with the automobile industry. Fujitsu Ten Limited is a strategically formed Joint Venture of the Japanese technology concern Fujitsu and the Japanese automobile company Toyota as well as the largest Japanese automobile supplier Denso. Fujitsu Ten's involvement in Grundig Car InterMedia System means that both companies will go for strengthening their market position significantly and for becoming a worldwide leading supplier in the field of car infotainment/multimedia products to the automotive industry. Fujitsu Ten serves Japanese OEM customers in Asia and North America via a network of factories and development and service sites. Grundig Car InterMedia System, with its factory in Braga (Portugal) and a highly-developed European sales network, is one of the leading suppliers to Europe's largest automobile manufacturers. Beyond this, the contracting parties are confident they will experience a significant expansion in retail business, which will reach the end consumer directly. International presence and a extensive distribution network form an excellent starting position for this. Professor Dr. Anton Kathrein leads the group as chairman of the Supervisory Board at Grundig AG. KIRCHMEDIA: Insolvency Procedure Opens, Search for Investors On --------------------------------------------------------------- Formal insolvency proceedings for KirchMedia opened Monday before a Munich court, signaling the start of earnest search for new investors, reports Handelsblatt. There are currently two known bidders for the erstwhile core business of Leo Kirch's media empire: a group composed of Commerzbank, WAZ Gruppe and Columbia TriStar and another consortium known to be led by publishing giants Axel Springer Verlag and Heinrich Bauer Verlag. The Commerzbank-led group is reportedly offering under EUR2 billion for the insolvent media rights firm, whose core assets include a film library and a 52-plus percent stake in ProsiebenSat.1, Germany's leading free-TV network. The offer of the second group is still unknown. The German daily says the firm will continue to be managed by restructuring experts Wolfgang van Betteray and Heinz-Joachim Ziems, instead of a regular court-appointed insolvency administrator. This system is allowed under German laws. Interim insolvency administrator Michael Jaffe, appointed almost three months ago when the company applied for insolvency, was re- appointed by the court. His participation in managing the firm, however, is limited to ensuring that the two experts conduct KirchMedia's affairs in the best interests of its creditors, The Deal said in a separate report. "The aim of self-administration is to keep KirchMedia a going concern," the management said Monday, according to Handelsblatt. The three men will have to draw up an insolvency plan designed to get as much as possible for the creditors. They and UBS Warburg, which has been hired to handle the auction process, must find buyers for its sellable assets, The Deal says. UBS Warburg recently said it had already received more than 80 expressions of interest. The money raised from any auction will be distributed to creditors according to an agreement that has to be voted on by the creditors themselves, The Deal says. Insiders told Handelsblatt that Mr. Van Betteray and Mr. Ziems are planning to incorporate KirchMedia into a new company before the end of the summer. Creditors are scheduled to meet August 1. Officially, Mr. Van Betteray claims the company owes banks EUR1.4 million and Hollywood studios another EUR500 million. But some quarters estimate the actual debt is more. A source told The Deal U.S. studios have an outstanding collectible of EUR1.3 billion from KirchMedia. Aside from KirchMedia, other units of KirchGruppe are also into various stages of insolvency proceedings. These subsidiaries include KirchPayTV, parent holding group Taurus Holding GmbH & Co. KG and holding company KirchBeteiligungs GmbH & Co.KG. Altogether the group has at least EUR7 billion of debts and EUR2.4 billion of contingent liabilities, The Deal says. MOBILCOM AG: CEO Expects Less Than EUR22-bid From France Telecom ---------------------------------------------------------------- CEO Gerhard Schmid has long accepted that he won't get a EUR22 per share offer from France Telecom for his 40% stake and had settled for a much lower bid as early as two weeks ago, a source privy to the situation told Dow Jones Newswires. The decision coincides with France Telecom's unconfirmed intention to buy the stakes for only EUR17 to EUR18. Still, some analysts say Mr. Schmid could end up getting far less. "They'll play out the clock for one or two months," an analyst interviewed by the newswire said. The French expert said the chief will only get a maximum of EUR15 per share. At Dow Jones' estimate, Mr. Schmid's 40% stake in MobilCom would be valued at EUR473 million if France Telecom offers EUR18 a share. The chief is believed to be under pressure to sell his stakes. The supervisory board, which junked two attempts to oust Mr. Schmid, is expected to reverse the outcome to save the company from likely insolvency. France Telecom has already severed its cooperation ties with the German affiliate and had threatened to do more damage if the chief, with whom it has a long-running feud, remains at the helm. RTV FAMILY: Banks, Shareholders Have No Restructuring Plan ---------------------------------------------------------- The insolvency of Kirch Media, of co-production partner Phenomedia and losses from bad debts with long established foreign partners led to a rapid deterioration of the financial situation of RTV Family Entertainment AG -- http://www.rtv-ag.de. On May 15, the financial situation of RTV worsened as Austrian Bank cancelled a commitment for a credit line of EUR 5 Million. Of the total cash funds needed until the year's end, projected at EUR 6-7 Million, RTV Family Entertainment AG has short-term needs of about one third to restore solvency. In the past few weeks RTV Family Entertainment AG helped to create a restructuring plan in cooperation with independent management consultants. A decision is expected on the matter on Tuesday. SCIPHER PLC: Suit v. Taiwan Partner Doesn't Have Direct Bearing --------------------------------------------------------------- Recovering technology development and licensing company Scipher Plc assured investors last week that the current legal action against a Taiwanese partner does not have any direct effect on the company. In an advisory to the London Stock Exchange, the company said the legal action brought by Corning Inc. against PicVue alleges misappropriation of trade secrets and infringement of copyrights related to Corning's fusion draw technology for producing glass substrates. The company pointed out that its relationship with PicVue Electronics Ltd. of Taiwan relates to the establishment of a new venture for the mass production of micro-displays and is not related to the glass fusion technology. In addition, the actual defendant of the case is PicVue Opto, which is a manufacturer of glass. "This action does not have any effect on the establishment of a new high-volume micro-displays manufacturing plant between Scipher and PicVue in Taiwan," PicVue President and CEO Jacob Lin told AFX News in an interview. TEAMWORK INFORMATION: Austrian Investor Increases Share to 22.1% ---------------------------------------------------------------- The Austrian share investor, Aktieninvestor.com AG, has increased it share of teamwork information management AG to 22.1%, the german IT group announced Monday. Aktieninvestor.com AG intends to continue to expand its share of teamwork AG within the framework of the latter company's reconstruction. teamwork information management AG, listed on the Neuer Markt since July 1999, is an international provider of collaborative business solutions for the intranet and intranet. Collaborative business allows electronic information management both within companies and in their dealings with customers and business partners. With collaborative business, control of the information flow is automated and business processes are electronically mapped. The services offered by teamwork AG include consulting, development, implementation, support and training. Contact Information: Heinz Ikenmeyer Telephone: 05251-5201-0 Email: hikenmeyer@teamwork.de ===================== N E T H E R L A N D S ===================== UNITED PAN-EUROPE: Wins Extension on Waivers From Senior Lenders ---------------------------------------------------------------- Further to the announcements on February 1, 2002, and March 4, 2002, regarding United Pan-Europe Communications N.V.'s proposed recapitalization, UPC said Monday that bank lenders and UnitedGlobalCom have extended until July 1, 2002 the waivers of the defaults arising as a result of UPC's decision not to make interest payments under its outstanding Senior Notes. The terms of the waivers remain unchanged from those announced on March 4, 2002. UPC --- www.upccorp.com --- is one of the leading broadband communications and entertainment companies in Europe. Through its broadband networks, UPC provides television, Internet access, telephony and programming services. UPC's shares are traded on Euronext Amsterdam Exchange (UPC) and in the United States on the Over The Counter Bulletin Board (UPCOY). UPC is majority owned by UnitedGlobalCom, Inc. Contact Information: Claire Appleby Director of Investor Relations Telephone: + 44 (0) 207 647 8233 Email: ir@upccorp.com =========== P O L A N D =========== NETIA HOLDINGS: Local Phone Company Launches New Internet Service ----------------------------------------------------------------- Netia Holdings S.A., Poland's largest alternative fixed-line telecommunications services provider, announced Monday the launch of a new service, "Internet flat rate" a service for non-Netia directly connected customers using the dial-up Internet access service offered by Netia. This new service complements Netia's existing service offerings, under which "Internet flat rate" was available to Netia directly connected customers only. By introducing this new service, a greater number of users will be able to connect to the Internet for a specified number of hours each month at a pre-determined flat rate. The usage is measured on a per-minute basis. The service is available to users who activate Netia's dial-up service located in the following numbering zones: Warsaw, Poznan, Radom, Siedlce, Lublin, Katowice, Pila, Kalisz, Wloclawek and Kielce. Contact Information: Anna Kuchnio Investor Relations Netia, Warsaw STOCZNIA SZCZECINSKA: Enters Bankruptcy Monday ---------------------------------------------- When Stocznia Szczecinska announced last Friday that it was filing for bankruptcy soon, workers didn't think the filing would happen Monday. Spokesman Marek Molewicz told the Associated Press that management and shareholders approved and filed the bankruptcy petition before a local court Monday. According to the Economy Ministry, which owns 10% of the shipyard, creditors will meet this week to explore ways to resume production. The government, which is under pressure to reduce the country's 18% unemployment rate, believes that if the plant remains idle it will have a domino effect on other businesses that depend on it for their own survival. If approved by the court, the petition will allow workers to collect unpaid wages -- outstanding since April 4 when the company halted operations, the Associated Press said. Citing The Deal, Troubled Company Reporter-Europe yesterday said the company's failure to secure a bailout package from banks is accelerating its collapse. A plan, which would have forgiven 80% of the company's debts, was opposed by four of the seven members of a banking syndicate owed US$293 million. The report said banks lost confidence in the shipyard management after funds from a loan granted to produce a new ship were used instead to fix defects in three other ships under construction. "Earlier, a group of Polish investors who held 43.5% of the shares of the shipyard agreed to turn them over to the state for a symbolic PLZl1 (25 cents) in exchange for its re- nationalization, a step meant to guarantee a US$40 million loan to restart production and pay laid-off workers back wages," The Deal said. But analysts interviewed by the paper say bankruptcy may yet be the best way for the company to survive. The shipyard claims it needs just US$277 million to complete construction of 16 vessels that can be sold for US$310 million. The shipyard was privatized in 1993, four years after the end of communist rule. It slipped into financial trouble last year, reporting a loss of PLZ98 million (US$24 million), in part caused by the global economic meltdown and unfavorable exchange rates. The yard owes PLZ280 million (US$70 million) to suppliers. Szczecin Shipyard and the Porta Holding, which control the shipyard, have debts totaling PLZ1.85 billion ($460 million, the Associated Press said. =========== S W E D E N =========== LM ERICSSON: Slips to Baa3, Prime-3 Ratings Due to Falling Orders ----------------------------------------------------------------- The continued slump in demand for phone equipment and the relative uncertainty surrounding a pending rights issue forced Moody's to downgrade Monday several of Ericsson's debt ratings. Officially named Telefonaktiebolaget LM Ericsson, the Swedis firm's Baa2 long-term debt ratings slipped to Baa3, while its Prime-2 short-term debt rating deteriorated to Prime-3, following the action. The cut affected approximately US$5.1 billion of long-term debt securities. Ratings lowered to Baa3 from Baa2 are: -- Telefonaktiebolaget LM Ericsson - for Euro Medium Tem Notes, the US$600 million revolving credit, and the issuer rating. Ratings reduced to Prime-3 from Prime-2 are for: -- Ericsson Treasury Services AB - for guaranteed US- and Euro- commercial paper, and -- Ericsson Treasury Services U.S. Inc. - for guaranteed US- commercial paper. All ratings remain on review for possible further downgrade, Moody's said. "The rating downgrade is based on a downward revision of Moody's expected transition cycle for mobile infrastructure equipment driven by the erosion of orders for 2nd generation wireless systems and additional deferrals of installation plans for 3rd generation equipment in the market," Moody's said in a statement. "Financially, Ericsson carries substantial cash balances and plans to raise EUR3.3 billion in new equity and has initiated a comprehensive cost reduction program. However, the projected cash consumption during the period until its cost base has been adjusted to depressed revenue levels will likely reduce the company's financial flexibility significantly compared to the rating category," Moody's added. The ratings agency notes that although "global phone traffic rates and mobile phone subscribers continue to increase at a fair pace, this does not currently result in an equal growth of capital investment by the mobile carriers." It added: "equipment purchases of the operators and consequently orders for the vendors have fallen to very low levels." Moody's expects orders to stabilize on a low level this year and broadly stagnate in 2003. It does not, however, expect the build-out of 3rd generation mobile networks -- considered to become the main driver for an eventual industry recovery -- to contribute substantial revenues for the suppliers in 2002 and possibly well into 2003. Moody's, however, notes that the cost-base adjustments management is "diligently working" and plans to reduce workforce, rationalize research & development, and outsource manufacturing will "position Ericsson well for an eventual industry recovery." Moody's said it will only conclude its review of the company after a successful rights offering, which will demonstrate the continued support of shareholders and lenders. Domiciled in Stockholm, Sweden, Ericsson is a leading developer and manufacturer of mobile telecom and datacom equipment, and recorded revenues of about SEK232 billion (EUR25 billion) in fiscal year 2001. For more information, contact: Frankfurt Juergen Berblinger Managing Director European Corporates Moody's Investors Service Frankfurt Wolfgang Draack VP - Senior Credit Officer European Corporates Moody's Investors Service LM ERICSSON: Will Supply MMS to Swiss Mobile Operator Sunrise ------------------------------------------------------------- Ericsson supplies Swiss mobile operator sunrise with end-to-end MMS solution to be launched mid July, Mobile phone equipment manufacturer Ericsson announced in a statement to the press Monday. The Swiss operator sunrise has chosen Ericsson to supply, install and integrate Multimedia Messaging Service Center (MMS-C) in their existing mobile network. sunrise will launch MMS in Switzerland on July 15. Besides the network enhancement, Ericsson also supports sunrise with MMS applications and content. At launch, end-users will enjoy fun services like MMS comics and youth oriented party services. Following the launch, Ericsson and its application and content partners will continue to work closely with sunrise to ensure that exiting services are available to end-users at all times. "We look forward to making MMS a great success. We are proud that sunrise has selected Ericsson. This partnership underlines not only the technology leadership of Ericsson but also our expertise in supplying popular end-user services which make new technologies like MMS take off," says Kristian Tear, President Market Unit Germany, Austria and Switzerland. "Ericsson's strong content and application portfolio, coupled with its excellent technical solution, makes Ericsson uniquely positioned to provide remarkable experiences for our end-users," explains Allan Jakobsen, Director Marketing Mobile sunrise. 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. Ericsson provides innovative solutions in more than 140 countries. =========================== U N I T E D K I N G D O M =========================== ALBERT FISHER: Receivers Agree to Sale of Kings Lynn Plant --------------------------------------------------------- The Joint Administrative Receivers of The Albert Fisher Group plc and Fisher Foods Limited announce that they have agreed in principle to a sale of the plant, machinery and property of Fisher Foods in Kings Lynn to a party who they understand wishes to facilitate some or all of the processing of this year's pea crop. ALLDAYS PLC: Sales Improving But Bank Debts Stunting Growth ----------------------------------------------------------- Convenience store group Alldays Plc admits it is still considering several options to improve its financial footing, but ruled out a takeover following the failed attempt last year. The Scotsman says the company has a "very limited amount of cash," the reason why it cannot improve its store portfolio or invest in new shops. Although the company has managed to cut interest bill for the first half to GBP6.2 million, down from GBP7.8 million the last time, the company is still burdened by obligations brought about by last year's decision to buyback stores from franchisees. The company, based in Eastleigh, told the Scotsman that its bank loan totaling GBP186.5 million is a "significant financial restraint." The company has no timetable for restructuring its debts nor does it have a form in mind. The paper said its options are understood to include a rights issue or a debt-for-equity swap. A takeover is out of the question after the company failed to get an attractive deal when it put itself up for sale between November 2000 and February 2001. The company owns 600 stores and 30 franchisees - a net seven stores less than six months ago, the paper said. ANTISOMA PLC: Phase I Data for DMXAA Presented at Conference ------------------------------------------------------------ Prof. Gordon Rustin of Mount Vernon Hospital, Middlesex, UK, has presented details of the results from two Phase I trials of Antisoma's vascular targeting agent DMXAA, the pharmaceutical group announced Monday. Speaking on Friday at the First International Conference on Vascular Targeting in Cambridge, Mass, Prof. Rustin explained that the drug was well tolerated as monotherapy at doses that reduced tumour blood flow and increased the production of serotonin, effects that have been associated with the anti-tumour activity of the drug in pre-clinical studies. Antisoma plans to conduct Phase Ib trials with DMXAA in combination with taxanes, carboplatin and other anti-cancer therapies. These plans are supported by the Phase I findings, which showed that DMXAA does not cause neutropenia or other side effects classically associated with conventional chemotherapies. The lead indication to be investigated will be lung cancer. The Phase I trials reported by Prof Rustin included 109 patients in the UK and New Zealand, all of whom had advanced-stage cancer, with a wide variety of tumour types represented. Patients received 408 infusions of DMXAA over 19 dose levels from 6 to 4900 mg/m2, where dose-limiting toxicity was defined. Doses below the maximum tolerated dose were generally well tolerated, with mild temporary visual disturbance being the most commonly observed side effect. The text of Prof. Rustin's abstract to the Vascular Targeting meeting is reproduced below. Full results of the individual Phase I studies are expected to be published later in peer-review journals. Commenting on the findings, Glyn Edwards, CEO of Antisoma, said: "Building on the pre-clinical evidence for synergies between DMXAA and other cancer therapies, these results encourage us to go forward and explore the full potential of DMXAA in patients." Contact Information: Glyn Edwards Chief Executive Officer Antisoma plc Telephone: +44 (0)20 8799 8200 BRITISH AIRWAYS: To Take Over Heathrow Slots of Virgin Atlantic -------------------------------------------------------------- Virgin Atlantic and British Airways are cutting a deal that will transfer the former's take-off and landing slots at Heathrow airport to the bigger carrier, says AFX News. The move has earned the ire of rival bmi british midland Chairman Sir Michael Bishop, who accused the two of conspiring to block a new deal to open up transatlantic competition from London. Ironically, Virgin has long complained of not getting enough slots at the congested London airport. The Sunday Times, however, said the company is now close to buying a set of Heathrow slots from defunct Belgian flag carrier Sabena. Virgin Atlantic is vacating the slot it uses for a daily service to Athens, and two other sets that belong to Virgin Express. ICI: Troubled Chemicals Group Agrees to Sell Huntsman Stake ----------------------------------------------------------- ICI announced Monday it has reached agreement with CSFB Global Opportunities Partners, L.P. for the sale of ICI's interests in Huntsman International Holdings (HIH). Net proceeds, before interest, to be received by May 15, 2003 are expected to be circa US$430million (GBP295million) of which US$160million (GBP110 million) has been received. ICI Chief Executive Brendan O'Neill said: "This is a very good deal for ICI and its shareholders. It delivers excellent value overall, enables us to turn part of our investment into cash now and to get the remainder earlier than previously anticipated. It also means we can further focus our attention on building and developing our own businesses within the specialty products and paints markets." ICI's interests in HIH comprise a holding of subordinated loan notes in HIH, and an entity called ICI Alta Inc. ICI Alta is a wholly owned subsidiary of ICI which owns ICI's 30 % shareholding in HIH and a contract for the sale of the Shareholding to Huntsman Specialty Chemicals Corporation (HSCC), as announced on December 21, 2001. Under the 2001 Contract, ICI Alta received a pledge from HSCC of thirty per cent of the shares in HIH. The aggregate gross purchase price payable for the Notes and ICI Alta will be US$440 million (GBP301 million) before interest. Of this amount, US$160 million (GBP110 million) has been received. The remaining US$280 million (GBP191 million) will be payable on May 15, 2003, with the purchaser having the option to pay all or part of the amount due prior to May 15, 2003 by means of instalment payments. Other than the US$160 million (GBP110 million) already received, sums due from the purchaser will carry interest from May 2002 to the date of payment. Ownership of the Notes has been transferred; ownership of ICI Alta will be transferred when the full purchase price has been received. As security for the outstanding purchase price, the Notes will be pledged back to ICI. This pledge will be released when ICI has received in aggregate at least US$260 million (GBP178 million) of the total purchase price. When ICI has received at least US$350 million (GBP240 million) of the total purchase price, ICI will release ICI Alta's existing pledge over twenty one of the thirty percent shareholding in HIH pledged by HSCC to ICI and reduce the amount due from HSCC to ICI Alta under the 2001 Contract by 50 %. If no instalment payments are made, the 2001 Contract will remain in place on its existing terms until ICI has been paid the full US$440 million (GBP301 million). In the ICI Group's financial statements, HIH has been accounted for as an associate, and as at December 31, 2001, the net book value of the Shareholding and the Notes was GBP228 million. ICI has not received any dividends from ICI Alta, nor has it received any cash interest on the Notes. The ICI Group results for the twelve months ended December 31, 2001 included a GBP12 million loss before tax and exceptional items attributable to the Shareholding and GBP27 million interest receivable from the Notes. As a result of Monday's agreement, ICI will now account for the Notes as sold (with some of the purchase price outstanding) and will treat HIH as an investment, rather than an associate, until ICI has received the purchase price in full. At that time, ICI expects to record a profit after tax on the disposal of circa GBP55 million. If the disposal of the Notes and ICI Alta had occurred at the beginning of 2001, the impact on the ICI Group's earnings before exceptional items would have been broadly neutral for the twelve months ended December 31, 2001. If the disposal of the Notes and ICI Alta had occurred at the beginning of 2002, it would have been earnings enhancing for the three months ended March 31, 2002. The sale of ICI Alta is subject to certain conditions principally relating to regulatory clearances. HIH (formerly Huntsman ICI) was established when ICI agreed to sell its Polyurethanes, Tioxide and selected Petrochemicals businesses to HIH in 1999. HSCC contributed its US Propylene Oxide and MTBE businesses to HIH at the same time. At that time ICI agreed to retain a stake comprising a 30 % shareholding and the Notes for at least 3 years. In November 2000 ICI announced it had agreed a put option to sell the Shareholding to HSCC for US$365 million plus interest. The agreement was conditional upon a number of approvals and upon ICI selling the Notes. This transaction would have been due for completion around the middle of 2001. The transaction was not completed and on October 31, 2001 ICI announced that it had exercised its put option over the Shareholding to HSCC. After a period of negotiation, in December 2001 ICI announced the arrangements under the 2001 Contract for the sale of the Shareholding to HSCC with completion due to take place in the third quarter of 2003. The 2001 Contract did not involve the sale of the Notes. PACE-MICRO: Pace Extends Board With New Executive Director ---------------------------------------------------------- Set-top box manufacturer Pace Micro Technology plc has announced Monday the appointment of Neil Gaydon as Pace's regional Director for the Americas. Gaydon has been with Pace since 1995. In the last three years he has spearheaded development of the company's US business, securing long-term supply contracts with two of the largest US cable MSOs, Time Warner Cable and Comcast Communications. He leads a team of around 100 people to support and grow Pace business in North and South America from Pace's US office in Boca Raton Florida. Since Gaydon joined Pace in 1995, he has led sales teams developing Pace's business in the U.K., Europe, the Far East, as well as the U.S. Key roles have included Regional Sales Director EMEA and head of New Business Development and Product Marketing. He has been a key player in establishing digital business in the U.S., Holland, Italy, New Zealand and Mexico, as well as helping to strategically establish Pace in the digital cable space. Malcolm Miller leads Pace Micro as chief executive officer. PACE MICRO: Notification of Major Interests in Shares ----------------------------------------------------- Pace Micro Technology plc announced Monday that Fidelity International Limited (FIL) and its direct & indirect subsidiaries holds 11.09% interest of ordinary 5p shares in Pace. The registered holder(s) and the number of shares held by each are summarized as follows: 4,480,216 FISL Chase Nominees Ltd 7,500,000 FISL Chase Manhattan Bank London 35,800 FPM Citibank 61,107 FPM Nortrust Nominees Ltd 20,600 FPM BT Globenet Nominees Ltd 212,700 FPM RBS Trust Bank 1,790,191 FPM Chase Nominees Ltd 160,022 FPM Bank of New York London 562,200 FPM Northern Trust 181,600 FPM HSBC 466,441 FIL MSS Nominees Ltd 971,330 FIL Nortrust Nominees Ltd 283,730 FIL Bankers Trust 121,140 FIL Mellon Trust 38,080 FIL State Street Nominees Ltd 28,100 FIL Citibank 46,300 FIL RBS-EDINBURG 317,920 FIL State Street Bank & Trust 1,225,500 FIL Bank of New York London 38,220 FIL KAS Associatie 3,943,096 FIL Chase Nominees Ltd 1,404,650 FIL Northern Trust 577,517 FIL RBS Trust Bank 543,340 FIL Chase Manhattan Bank London 7,398 FIL HSBC Client Holdings Nominee (UK) Ltd 62,300 FIL Deutsche Bank Total holding following this notification: 25,079,498 SSL INTERNATIONAL: Sale of Continence Care Business to Coloplast ---------------------------------------------------------------- The board of SSL International plc notes the press release from the Department of Trade and Industry dated June 14, 2002 concerning Coloplast's purchase of SSL's continence care business that was completed in September 2001. In particular, SSL on Monday noted that following the Competition Minister's acceptance of a Competition Commission report into the transaction, Coloplast is to be required by the Director General of Fair Trading to renegotiate the terms of a supply agreement between Coloplast and Mentor Corporation in the USA. The board confirms that SSL's sale of the continence care business to Coloplast was unconditional, and that any renegotiation is therefore a matter for Coloplast and Mentor. TELEWEST COMMUNICATIONS: Bondholders Responds to Liberty Offer -------------------------------------------------------------- A Committee representative of a majority of the holders of all bonds publicly issued by Telewest Communications PLC has recently formed and has approached the board of Telewest concerning a debt restructuring. The Committee is issuing this statement in response to the tender offer launched June 13, 2002 by Liberty TWSTY Bonds, Inc, a subsidiary of Liberty Media Corporation, Inc. The Committee acknowledges that individual bondholders will take their own advice on the tender offer. However, the Committee is skeptical that the consummation of the presently proposed tender offer will facilitate a restructuring or other resolution of Telewest's debt problems in the best interests of bondholders as a whole. The Committee will wish to discuss urgently with Liberty Media Corporation and Telewest the Committee's own proposals for a restructuring of Telewest's publicly issued bonds. The Committee is in the process of appointing financial advisers and has requested meetings with Telewest and Liberty Media Corporation this week. Bondholders interested in joining or supporting the Committee (which should not, at this stage, involve becoming restricted) should contact Andrew Wilkinson of Cadwalader Wickersham & Taft, legal advisers to the Committee. THUS PLC: Management Team Target of Attractive Offers From Rivals ----------------------------------------------------------------- Thus Plc, the Scottish alternative telecom provider, has confirmed that its management team led by CEO Bill Allan has received various offers to transfer to rival firms. Sources, however, told the Scotsman that the company has been able to fend off such attempts, at least for now. They say the lack of trained and experienced executives is primarily the reason why management team members got several offers last year. Seen as the most viable among alternative telecoms, the company recently reported widening losses of GBP104 million, though EBITDA ended up positive at GBP3.1 million, against losses of GBP24.6 million the previous year. In a recent interview, Mr. Allan boasted to the Scotsman that the company is debt-free, owing to its demerger from parent Scottish Power in 2000. He said the company has untapped reserves of GBP90 million, one of the strongest balance sheets of any telecoms firm. "As a management team, we have delivered. We have got a strong balance sheet and a business model that has proven quite resilient." The company credits its success to its earlier strategy to build a solid customer base during the technology boom, instead of following rivals, who opted to buy and sell spare network capacity from other telecoms, which they are now regretting. Still, many pundits are not impressed. The company stocks, which have lost 72% of their value this year, are currently trading 14p, way at the bottom of what used to be 844p, which afforded the company a brief tenure in the FTSE 100, the index for blue- chip firms at the London Stock Exchange. The company began publicly trading in November 1999 with a market capitalization of GBP2.3 billion, the biggest flotation in Scottish corporate history, the paper says. But Mr. Allan, who defended the maximum bonuses recently awarded to top executives, believes the company's current share price does not reflect its true value. "No one was congratulating me when the shares were above GBP8. These things are [out] my control. I cannot manipulate the share price. All I can do is ensure the business fundamentals are in place. I believe that the company is undervalued," the chief told the Scotsman. Mr. Allan has been awarded a bonus of 178,500 pounds for the year to March 31, while the rest of his team were awarded up to 40% of their salary. THUS PLC: Urges Telecom Regulator to Make More Changes in Sector ---------------------------------------------------------------- Alternative telecom operator Thus Plc has criticized anew the slow action by U.K. telecom regulator Oftel to improve the competition framework in the sector. According to the Scotsman, the company urged the regulator ten months ago to solve the complex issues involving communication services to business customers. The firm alleged at the time that the system gave incumbent British Telecom an unfair competitive advantage. The company discredited the claim by Oftel recently that it had already taken action to encourage greater competition and lower prices in the provision of high-speed services to business customers. Thus said alternative players want more. The regulator recently announced that it had ordered British Telecom to make a number of improvements to its wholesale leased line products to allow businesses to have high-speed communications links between two or more sites. The improvements will allegedly promote greater take up of the products by other operators. ************ 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, Maria Lourdes Reyes, Jean Claire Dy, 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. 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