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/raid1/www/Hosts/bankrupt/TCREUR_Public/020624.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Monday, June 24, 2002, Vol. 3, No. 123 Headlines * B E L G I U M * UBIZEN NV: Will Povide Data Security for Electrabel UBIZEN NV: Fugro Awards EUR 3MM Contract to Ubizen * P O L A N D * ELEKTRIM SA: Agreements for Sale of Shares of El-Dystrybucja * F R A N C E * BULL SA: Re-capitalization to Alter Ownership Structure Next Year GIAT: Restructuring Involves Redundancies, Closures of Sites GILLES LEROUX: Datacard to Revive New French Affiliate Soon * G E R M A N Y * ADORI AG: Cancels June 25 Annual Shareholders Meeting BABCOCK BORSIG: Needs EUR 200MM to Continue Operations BABCOCK BORSIG: Restructuring Plan Update, Will Appoint CEO CEWE COLOR: Announces Supervisory, Management Board Changes CEYONIQ AG: Partners With Datawatch on Technology Integration COMMERZBANK GROUP: Moody's Cut Financial Strength Rating to C DEUTSCHE TELEKOM: Sale of Cable Network to Push Through This Year GERLING KONZERNS: Seeks Buyer for 100% of Reinsurance Unit KIRCHMEDIA: Axel Springer-Heinrich Bauer Bid to Face Opposition MOBILCOM AG: Supervisory Board Removes Schmid as Chief Executive UFA-THEATER: Restructuring Plan Splits Shareholders, Says Paper * I T A L Y * ALITALIA SPA: EU Commission Okays EUR1BB Re-capitalization Plan ALITALIA SPA: Buys Six New Planes From Embraer for US$250 MM * N E T H E R L A N D S * KPNQWEST: Administrators May Close Network Within Hours KPNQWEST NV: Ex-CEO Jack McMaster Says Collapse "No Enron" KPNQWEST NV: Receivers File Suit After Failed Talks With Banks UNITED PAN-EUROPE: Will Not Re-Hire Arthur Andersen as Auditor * P O L A N D * ELEKTRIM SA: Annual Meeting of Shareholders on June 28, 2002 * U N I T E D K I N G D O M * BIG FOOD: Top Executives Receive GBP1.17 Million Payout Last Year CHESTER BARRIE: Fails to Find Buyer, Fires 160 Staff, Times Say CORUS GROUP: French Rival Keen on Taking Over Aluminum Unit MARCONI PLC: Rescue Plan May Involve Debt-for-equity Swap ============= B E L G I U M ============= UBIZEN NV: Will Povide Data Security for Electrabel ---------------------------------------------------- Ubizen -- http://www.ubizen.com--, the principal provider of Managed Security Solutions(MSS) for global businesses, Thursday announced that Electrabel, a leading energy company in Europe, has selected Ubizen DMZ/ShieldTM Enterprise to optimize the security, performance and availability of the company's mission critical Web servers. "Electrabel's primary concern is responding to the needs of our customers," said Paul Buytaert, IT Responsible for the Demilitarized Zone (DMZ) at Electrabel. "Our customers want the assurance that their most sensitive information and data will not be compromised or become the target of the next Web exploit. We selected Ubizen DMZ/Shield Enterprise to protect against application-level attacks, because it is a proven solution and the best on the market." Ubizen DMZ/Shield was developed specifically to combat application-level vulnerabilities that are discovered and published almost every day - vulnerabilities that cost businesses almost $3 billion in 2001. According to a recent report by John Pescatore, at Gartner Group. "Today's firewalls constitute a maginot line against network-level attacks. They have succeeded so well that cyber attacks mostly occur at the application-level, where new protections will be required."* Because the malicious Web server requests resemble legitimate HTTP requests, these attacks usually pass through standard firewalls, intrusion detection probes and other security devices. Hackers, crackers and script kiddies use these windows of opportunity to misuse the HTTP protocol and deface a Web site or gain access to confidential company information. Despite the millions spent on infrastructure security to keep out undesirable traffic, attacks, such as Code Red or Nimda, happen at the application level, completely bypassing the existing firewall infrastructure. They can quickly infect millions of Websites worldwide, and cost billions of dollars in intellectual property theft and destruction of sensitive information. The Ubizen response to this is to place a security layer in front of a Website. Ubizen DMZ/Shield Enterprise examines every request to be sure it is a genuine Web request and is in line with security policies. If a request doesn't fit, it is rejected before any damage is done. This protects Websites proactively from known as well as unknown viruses and worms. Ubizen DMZ/Shield Enterprise resides on a stripped, hardened version of the operating system, which further removes potential vulnerabilities. Ubizen DMZ/Shield Enterprise is a unique product that protects any Web server, complements any firewall and is compatible with all leading high-bandwith solutions. * Gartner "Web Services: Application-Level Firewalls Required", J. Pescatore, March 2002. Ubizen is the principal provider of Managed Security Solutions for global businesses. Companies rely on Ubizen OnlineGuardian for outsourced management, monitoring and support of enterprise security devices 24x7x365. A Professional Services team complements Ubizen OnlineGuardian,by helping enterprises plan and implement vulnerability assessments, security policies and security infrastructures.Ubizen also protects Web servers against application-level attacks, such as Nimda and Code Red, with Ubizen DMZ/ShieldTM Enterprise. Ubizen is a public company with dual listings on Nasdaq Europe (UBIZ) and the Euronext (UBI) exchange. Contact Information: Ina Suffeleers VP Investor Relations Email: ina.suffeleers@ubizen.com Telephone: + 32 16 287 060 Mobile: + 32 495 59 02 32 UBIZEN NV: Fugro Awards EUR 3MM Contract to Ubizen -------------------------------------------------- Ubizen recently announced that Fugro, the world's largest Geotechnical and Survey company, has selected Ubizen to deliver managed security services, security components and professional services to more than 100 Fugro offices worldwide. "Fugro decided to implement a global security infrastructure because it enables us to use the Internet for end-to-end communication with our customers in a reliable and secure way," said Gert-Jan Kramer, President and CEO of Fugro. "Ubizen provides us the necessary security knowledge and services and allows Fugro to concentrate on its core business. We have been impressed by the broad scope of security services that Ubizen offers. With Ubizen's global approach to security policy management, we are able to have Fugro's security levels comply with ISO 17799 security standards." Under the agreement, Ubizen will provide Fugro with proactive, worldwide, 24x7x365 services that include the monitoring, management and support of critical network and application-level security components, backed by rigorous Service Level Agreements (SLA). Ubizen OnlineGuardian services, which have been earning the trust of large, global enterprises since 1997, cover a wide range of security tools, including today's existing best-of-breed firewalls, network intrusion detection systems (NIDS) and virtual private networks (VPNs), and are scalable from one to thousands of devices. With Ubizen's extensive security knowledge and technology leadership, Ubizen OnlineGuardian enhances an organization's security posture, while reducing costs and freeing valuable IT resources to focus on other business. According to Stijn Bijnens, CEO of Ubizen, Fugro's decision to implement a global security infrastructure is an indication that IT-security is becoming an integral part of large companies' quality programs. "Fugro is ahead of its competition when it comes to providing information to customers by using state of the art Internet portals. Instead of installing a local security solution, Fugro has taken the approach to define global security policies for its worldwide network and implement accordingly. This will enable other applications -- such as secure intercompany communication -- independent of the datacommunication provider." By applying best practice/acceptable use policies and implementing Ubizen OnlineGuardian services, Ubizen is able to considerably shorten the lead-time of the Fugro project. The contract with Fugro runs through the end of 2005 and covers Fugro offices in Europe, North America, the Middle East and Asia. =========== P O L A N D =========== ELEKTRIM SA: Agrees to Sale of Shares of El-Dystrybucja ------------------------------------------------------- The Management Board of Elektrim S.A. announces that on June 20, 2002 Elektrim S.A., Elektrim-Volt S.A. and Zespol Elektrowni Patnow-Adamow-Konin SA executed three agreements with BRE Bank S.A. providing for the sale of 1% of shares of El-Dystrybucja Sp. z o.o., based in Warsaw. The total price for the above shares amounts to PLN 10,000 and the PLN equivalent of USD 1,500 calculated according to the average exchange rate published by the National Bank of Poland (NBP) on the day preceding the transaction. In addition to the sale price for the shares, if, as a result of the privatisation process that is under way at the moment of the transaction's execution, El-Dystrybucja Sp. z o.o. or an entity indicated in the agreement acquire shares of any of the privatised energy distributors of the so called Northern Group G- 8, Elektrim S.A. will be entitled to receive from BRE Bank S.A., in addition to the sale price for the shares, an additional consideration of the PLN equivalent of USD 2,270,000 - USD 2,360,000, while Elektrim Volt S.A. and PAK will be entitled to an additional consideration of the PLN equivalent of USD 283,750 - USD 295,000 (for each company) calculated according to the average exchange rate published by the National Bank of Poland on the day preceding the payment. Conditions precedent for the transactions to become effective are as follows: a) consent to the transactions by Elektrim's court supervisor; b) consent by all shareholders of El-Dystrybucja Sp. z o.o. to the purchase of shares by BRE Bank S.A. =========== F R A N C E =========== BULL SA: Re-capitalization to Alter Ownership Structure Next Year ----------------------------------------------------------------- French computer maker Groupe Bull SA will implement a re- capitalization next year that's bound to re-align existing shareholders and may spur the company's sale to another investor, The Wall Street Journal says. In an exclusive interview, CEO Pierre Bonelli told the paper that the plan will be executed first-half next year. He said he will present the proposal to the board in a meeting after the summer. "Existing shareholders France Telecom, Motorola Inc., NEC Corp., the French government and Dai Nippon Printing would have the option of anteing up or seeing their stakes reduced in the re- capitalization that Mr. Bonelli expects to take place during the first half of 2003," The Wall Street Journal says. Of the five shareholders, only the French government has so far expressed willingness to sell its 16% holding. The four other industrial investors have not hinted their preference. If it's any indication, however, they've refused to put up more money to finance the company in recent years, the paper says. Mr. Bonelli says the re-capitalization "could be 100 percent." The chief, commissioned in December to try to breath new life into the company, does not have specific potential investors or buyers in mind at the moment. However, he prefers industrial rather than financial holders to take control of Bull, which sells computer servers and related services. Despite the dire condition in the tech market, the company has managed to carve substantial sales, which the chief says will hit the target of EUR700 million for the first-half. He expects losses of roughly EUR120 million before interest and taxes during the period. He projects a 5% revenue growth for 2002, and a profit next year, the paper says. The company has struggled mightily in recent years. This year, a severe cash-crunch forced it to ask government for EUR450 million in loans, which is now a subject of European Commission probe. The commission said in April that it was investigating the loans because it doubted whether the French government had complied with European Union rules on "rescue aid" and "restructuring aid" for a firm in difficulty. Mr. Bonelli said the outcome of that inquiry is expected this fall. GIAT: Restructuring Involves Redundancies, Closures of Sites ------------------------------------------------------------ French state-owned arms manufacturer Giat has started implementing a restructuring program, which involves job cuts from a workforce of 10,350 at the end of 1998 to 6,500 at the end of 2002 and the closure of three of its 12 production sites. A report on Les Echos and FT Information on Thursday said the French group's lacks of orders will be a problem by 2004. Unless Giat will be able to receive an order from abroad (possibly Saudi Arabia or Turkey) next year, it will have nothing but a few tanks to deliver in France. The then defence minister Alain Richard told the CGT union last year that Giat will have to implement another restructuring in 2003 which will further reduce the group's workers to 3,500-4,000 from 6,500, in order to return to profit. Luc Vigneron, Giat's chairman, has declined to comment on the reported drastic redundancy plan. GILLES LEROUX: Datacard to Revive New French Affiliate Soon ----------------------------------------------------------- U.S. personalized swipe-card firm Datacard plans to re-launch Gilles Leroux after it completes the acquisition of the company, Les Echos says. A commercial court in Orleans recently gave its nod on the plans by the American firm to buy Gilles Leroux, which specializes in machinery for the manufacture of swipe cards. The company was forced into receivership in December after incurring EUR12 million worth of liabilities, largely due to a slowdown in the mobile telecoms market. It has since fired two- thirds of its 300 workers, the French daily says. The buyer says it will turn Gilles Leroux's Orleans platform into a springboard for its own European production activities. The new American owner believes it has financial and industrial infrastructure needed to re-launch the company without delay. Datacard reported 2001 turnover of EUR340 million. It employs 1,600 workers worldwide and operates a software design center in London and small production units in Germany. Gilles Leroux caught the interest of Datacard through its expertise in the field of personalized telephone cards. The new owner will retain only 81 jobs. ============= G E R M A N Y ============= ADORI AG: Cancels June 25 Annual Shareholders Meeting ----------------------------------------------------- ADORI AG announced Wednesday that it has cancelled the Annual Shareholders' Meeting, for which notification had been given in issue no. 87 of the Federal Gazette dated May 14, 2002, page 10340, that was due to take place Tuesday, June 25, 2002 at 10.30 a.m. in Regensburg, Germany. Legal uncertainties have arisen with regard to the formal wording of agenda item 6 (resolution on consent to the acquisition of ArcTel AG). Adori will decide on a new date and for the Annual Shareholders' Meeting before the end of August, a report obtained from Frankfurter Allgemeine Zeitung and FT Information said. The meeting's agenda was insufficient to cover the potential sale of insolvent parts of the business, the paper adds. Adori loaned EUR 21 million to Arctel, one of its predecessor companies, which was due to be converted into share capital, with the approval of the AGM. Because the money has already changed hands between Adori and Arctel, Adori at the end of March is left with liquid assets of only EUR 4 million. The acquisition of Arctel was concluded on May 3, but there are, as yet, no details of the cost. Adori, listed on the Neuer Markt segment of the Frankfurt Stock Exchange, develops and operates online shops on the internet on behalf of its clients. It also provides other internet services. Contact Information: Christine Meier Corporate Communications ADORI AG Straubinger Strasse 81 D-93055 Regensburg Telephone: +49 (0)941-7088-447 Fax: +49 (0)941-7088-499 Email: ir@adori.de BABCOCK BORSIG: Needs EUR 200MM to Continue Operations ------------------------------------------------------ Babcock Borsig AG is currently conducting talks with its core group of banks and a number of shareholders on implementing the restructuring concept as prepared by Roland Berger /DBO. Based on the present stage of the talks, Babcock Borsig AG needs liquidity in the short term of some EUR 200 million to continue its operations. Should the ongoing talks not be successfully concluded by Tuesday June 25, then the company will not be in a position to pay out June salaries. Formerly known as Deutsche Babcock AG, Babcock Borsig AG operates in the engineering industry designing and building power generators, water treatment systems and hazardous waste disposal plants. The group also manufactures generators, boilers and other equipment for use in these facilities. Operating through more than 70 subsidiaries and associated companies worldwide, Babcock Borsig also produces drying and coating systems, cleanroom equipment and merchant and naval vessels such as cruise liners, yachts, and submarines. German-based logistics company Preussag holds almost 20% of the engineering group. BABCOCK BORSIG: Restructuring Plan Update, Will Appoint CEO ----------------------------------------------------------- The supervisory board of Babcock Borsig AG announced this month that the management board of the company was already informed regarding the key issues of the company's restructuring plan, as prepared by the commissioned corporate consultants of Roland Berger and the BDO. The board assumes that the overall restructuring plan will soon be available and it then intends to appoint Dr. Jochen Melchior as chairman and CEO of Babcock Borsig AG. Moreover, the supervisory board decided to convene an extraordinary shareholders' meeting in Oberhausen on August 14 and 15, 2002. This meeting will give shareholders the chance to discuss the entire HDW complex including the sale of the remaining HDW stake. The supervisory board appointed Ludger Kramer (42) as an additional management board member-responsible for power engineering. At the same time, Ludger Kramer was appointed as chairman of the board of directors of Babcock Borsig Power GmbH. Prof. Dr.-Ing. Klaus G. Lederer has relinquished all his posts in the Babcock Borsig Group with immediate effect. This action was approved by the supervisory board. CEWE COLOR: Announces Supervisory, Management Board Changes ----------------------------------------------------------- At the meeting of the Supervisory Board, held Thursday in Bremen after the Annual General Meeting of independent photofinisher CeWe Color Holding AG -- http//http://www.cewecolor.de--, Dr. Rolf Hollander was elected Chairman of the Board of Management and Hubert Rotharmel Chairman of the Supervisory Board. The proposal, jointly submitted by the Supervisory Board and the Board of Management, to pay out a dividend of EUR 0.80 per denominated share on profits generated during the previous business year was approved with a clear majority at the Annual General Meeting. At the Annual General Meeting, a resolution was passed whereby the company was granted authorization to acquire 200,000 of its own shares for a period of 18 months. These shares are to be utilized, either fully or partially, in return for investments in companies or in divisions of companies. The company was furthermore authorized to retain the 400,000 shares originally acquired for the purpose of serving the stock option plans but which are no longer required for this purpose in order to acquire stakes in other companies at such time as is deemed appropriate. Sales revenues generated by the CeWe Color Group during the first four months of the current business year have risen by 2.8 % to EUR 117.6 million (previous year: EUR 114.4 million). In the period from January to April 2002, CeWe Color reported a negative profit before tax (EBT) of EUR -3.6 million (2002: EUR - 5.1 million, which is 29.4 % more). In the first four months of this year, 25.6 million film rolls were developed in the company's 24 production plants, an increase of 4.1 % in comparison to the previous year. A total of 909 million prints were produced from these film rolls, representing an increase of 3.1 %. In view of current positive developments in business, the Board of Management of CeWe Color Holding AG is confident that the fiscal year of 2002 will produce positive results for the company. The company expects the projected sales figures for 2002 - between EUR 450 million and EUR 460 million - to be achieved. As expected, digital business is growing, and by the end of the current business year it is expected to account for 5 % of turnover. CEYONIQ AG: Partners With Datawatch on Technology Integration ------------------------------------------------------------- CEYONIQ, Inc., formerly known as TREEV, Inc., a leading provider of Content and Document Management solutions, announced Monday a new agreement with Datawatch Corporation, a provider of business intelligence, enterprise reporting, data transformation and support center solutions. Under the new agreement, CEYONIQ, Inc. will integrate Datawatch's Monarch Report Mining technology into its content and document delivery solutions to offer Monarch(TM) for CEYONIQ(TM). Monarch for CEYONIQ will help current and prospective customers increase productivity, reduce costs, and expedite workflow and informed enterprise decision-making. CEYONIQ(TM) Report Manager is an Enterprise Report Management (ERM) solution that receives data from both client/server and mainframe environments, allowing thousands of simultaneous users to instantly access reports via the Internet, intranets, Windows(R) and from 5250 and 3270 terminals. Monarch is a Report Mining client software tool that allows users to easily extract, analyze and export data from any existing computer- generated report, alone or in combination with other data sources. By integrating these solid technologies together, CEYONIQ Report Manager users will now be able to analyze the data within stored reports without programming. Monarch for CEYONIQ provides companies with an effective and second-to-none data mart solution at a fraction of the cost. Reports being generated across the enterprise should ideally be captured in a single location where they can be leveraged to drive a customer's business. The implementation of Monarch for CEYONIQ meets these stringent customer market requirements. Monarch's Report Mining capabilities eliminate the need to manually search through printed reports, build custom databases or manually key data into spreadsheets to effectively and accurately meet the information management needs of a range of different users in organizations. Users can bring existing reports into Monarch for CEYONIQ, transform the reports into "live data", and immediately begin discovering new business intelligence insights, with no programming. Monarch for CEYONIQ can also produce summary graphs automatically, ready to copy and paste in other applications such as MS Word, Excel, Access, 1-2-3, dBASE, Paradox and more. Examples of Report Mining include the ability to: * Analyze data from accounting and financial reports, to expedite reconciliations, financial analysis, fraud detection and more * Extract data from payroll and personnel reports, for easy Human Resources-related analysis * Analyze data within CRM reports to identify customer purchase patterns and target marketing campaigns * Perform trends analysis such as capturing data from multiple SAP R/3 sales reports Robert W. Hagger heads datawatch as chief executive officer and president while David E. MacWhorter leads CEYONIQ's U.S. operations as president and chief executive officer. MacWhorter stated last week that an agreement was reached with former parent company CEYONIQ AG for the sale of the company's U.S. operation, based in Herndon, Virginia. Under the terms of the agreement, the U.S. operation was sold to a private investor and is now legally independent in its entirety from the former parent company CEYONIQ AG. In July 2002, the U.S. operation will assume the well-known previous name of TREEV. Datawatch Corporation is a provider of enterprise reporting, business intelligence, data transformation and support center solutions software that helps organizations increase productivity, reduce costs and gain competitive advantage. Datawatch products are used in more than 20,000 companies, institutions and government agencies worldwide. CEYONIQ, Inc., formerly TREEV, Inc., is a leading provider of innovative Content and Document Management and process automation solutions that manage and link information and processes across the enterprise. COMMERZBANK GROUP: Moody's Cut Financial Strength Rating to C ------------------------------------------------------------- Credit ratings reporter Moody's Investors Service announced it has lowered Commerzbank International SA's financial strength rating to C from C+. Moody's said in a statement that the rating change with a stable outlook, reflects the changed strategy of Commerzbank AG, the parent firm of Commerzbank International, towards its strategic participations which are mostly held by the latter. So far, these holdings have bolstered Commerzbank International's recurring profitability as well as economic capitalization. According to Moody's, "Commerzbank AG's more pragmatic approach towards these holdings implies that they may be divested with negative implications for Commerzbank International's financial profile over time." Meantime, Commerzbank International's A2/Prime-1 debt and deposit ratings is maintained based on its importance to the Commerzbank group and the statement of support provided by its parent company. DEUTSCHE TELEKOM: Sale of Cable Network to Push Through This Year ----------------------------------------------------------------- Deutsche Telekom expects to close talks with potential buyers for its six remaining regional cable networks at the end of July, says Handelsblatt. In an interview last week, board member Gerd Tenzer told the Germany daily that the board was expected to approve a list of interested parties with whom it will hold more detailed negotiations. Mr. Tenzer said there's more than one bidder in the current list. However, due to the failed attempt to sell all six assets to Liberty Media for EUR5.6 billion, no more than two assets could be sold to one single buyer. The Federal Cartel Office blocked the Liberty deal early this year after the American cable group failed to satisfy certain requirements to preserve competition. Industry observers estimate the price of the six operations to range from EUR2-3.5 billion. Unconfirmed information, according to Handelsblatt, points to several British and American financial investors as among those bidding for the cable assets. They allegedly include Britain's Compere Associates, Heinz-Peter Labonte and British investor GMT. Mr. Tenzer expects the sale to be completed by year's end. GERLING KONZERNS: Seeks Buyer for 100% of Reinsurance Unit ---------------------------------------------------------- Gerling-Konzern Allgemeine Versicherungs AG (Gerling), is seeking a buyer to take up to a 100% stake in its reinsurance subsidiary Gerling Globale Rueck, a Financial Times Deutschland source said. Gerling is also considering the possibility of listing the unit or finding a financially strong investor who would be satisfied with a role in the background, the paper reported. According to the paper, the said options are independent of the planned sale of Gerling itself, which is being forced by 34.5 % shareholder Deutsche Bank. Investment bankers from Deutsche Bank have been on the look out for a buyer or partner for the reinsurance unit since Monday. Rolf Gerling, who holds a 65.5 % stake in Gerling, has hired UBS Warburg to represent his interests, the paper added. A solution is expected to be found this year. Gerling Globale Rueck revaled EUR 583 million in losses last year. The negative results were attributed to the September 11 terrorist attacks in the US, the paper said. The subsidiary posted EUR 86 million in profits in 2000. KIRCHMEDIA: Axel Springer-Heinrich Bauer Bid to Face Opposition --------------------------------------------------------------- Media watchdog KeK characterized the fusion of Axel Springer and Heinrich Bauer Verlag as a "cause for concern," hinting that it will oppose the publishers' bid for KirchMedia. The commission, tasked to investigate concentration of power in Germany's media industry, believes taking over KirchMedia will give the two a nationwide share of commercial television of between 28% and 28.5%. According to Handelsblatt, a new broadcasting law, which will come into force next month, has lowered the upper market-share limit to 25% from the current 30%. In an interview with the paper last week, KeK President Karl Peter Mailander said the commission fears the two publishing giants will give a higher profile to their television interests, which will eventually limit diversity of opinion in Germany's media. The two publishers confirmed last week that they are indeed bidding for KirchMedia, although they're only interested in taking 51% control of the company. Another consortium composed of Commerzbank and Columbia TriStar are also in the running for the former media rights trading arm of KirchGruppe. KirchMedia's core assets include Europe's largest film library and a 52% controlling stake in ProSiebenSat.1, Germany's leading free-TV network. MOBILCOM AG: Supervisory Board Removes Schmid as Chief Executive ---------------------------------------------------------------- As of Friday, June 21, 2002, the Supervisory Board of MobilCom AG removed Gerhard Schmid from his posts of Chief Executive and Chairman. Dr Thorsten Grenz, Chief Financial Officer has been appointed as Chief Executive of MobilCom AG. The Supervisory Board sees the latest developments concerning the refinancing of MobilCom's financial obligations and the maintenance of liquidity through France Telecom as a positive sign for the company's future. PHENOMEDIA: Non-existent Accounts Receivable in 1999 and 2000 -------------------------------------------------------------- An interim report of the special auditors Warth & Klein confirms the booking of non-existent sales and accounts receivable in Phenomedia AG's annual report for the year 2001, the company said in a statement Friday. At the same time, the auditors state that similar bookings were also found in the annual reports of 1999 and 2000, but to a lesser extent. It is still assumed that Phenomedia is not heavily indebted. Phenomedia develops pc-based games for the international market and develops advertising software. Previously, the IT company's managing board on May 14, 2002 applied for the opening of insolvency proceedings at the court of Bochum where Dr. Jur. Wulf-Gerd Joneleit was appointed temporary insolvency administrator. UFA-THEATER: Restructuring Plan Splits Shareholders, Says Paper --------------------------------------------------------------- An equally split vote was expected last week on the restructuring plan of cinema operator Ufa-Theater, as two major shareholders were known to have taken opposing positions. According to Handelsblatt, a group composed of investment funds Apax Partners and Pricoa was expected to back the plan drafted by CEO Stefan Lehmann. The plan aims to secure the company's liquidity and avert a collapse. A copy of an internal document obtained by Handelsblatt shows that the chief plans to suspend or substantially reduce the rent payments Ufa makes on its 42 or so cinemas. The idea is to close the EUR4 million funding gap and make it manageable until the situation on the German cinema market improves. But cinema realty lessor Volker Riech, which indirectly holds 45% stake in the company, is fiercely opposed to the plan. Insiders say Mr. Lehmann has already suspended payments to Mr. Riech, who rents out 15 cinemas to Ufa. This move is backed by the Federal Court of Justice, which ruled recently that Ufa can suspend payments if it prevents an acute financial crisis. The company's woes began a few months ago when HypoVereinsbank cut financial support, which is essential during the summer season, a traditionally weak period. In addition, the insolvency of Germany's largest cinema advertising agency, RMB Deutschland, also hurt advertising revenues. It is not yet known how Flebbe Filmtheater GmbH & Co., which controls the remaining 10% stake in Ufa-Theater, voted on the plan. But if it's any indication, Flebbe Filmtheater owner Hans Joachim Flebbe, who is also a majority owner of Cinemaxx AG, previously discontinued a strategic alliance with Ufa, claiming that the cinema chain had provided insufficient information about its financial situation. A Ufa collapse, however, would also pose problems for Cinemaxx in the form of write-down requirements of several million euros that would burden its results, Handelsblatt says. ========= I T A L Y ========= ALITALIA SPA: EU Commission Okays EUR1BB Re-capitalization Plan --------------------------------------------------------------- As earlier expected, the European Competition Commission approved the EUR1.43 billion recovery plan for Alitalia SpA, sharing the opinion of the Italian government that it did not amount to state aid. Under European Union rules, there is substantial distinction between state aid and governments investing as other shareholders in their airlines. Re-capitalization in April was divided between the Economy Ministry, which controls Alitalia through a 53% stake, and the market, giving it a slight hue good enough to be distinguished from a state aid. According to the Associated Press, the Commission did not discount the possibility that it will re-examine its position if the three private investors -- U.S.-based Merrill Lynch & Co. Inc., Switzerland's Credit Suisse Group and Italy's Banca d'Intermediazione Mobiliare IME -- back out from its commitment to provide 38 percent of the money. This re-capitalization is a key part of a wider restructuring plan and involves a share issue and a convertible bond component. But to execute this plan, the company must accomplish EU-imposed conditions -- cut routes, ground planes, slash jobs and sell-off non-core assets. The Commission lauded the carrier for its plans to substantially reduce routes and fleet and abandon loss-making activities to focus on core business, the Associated Press said. The airline managed to cut its first-quarter pretax loss in half to EUR103 million due to aggressive and a drop in fuel prices. In 2001, the company reported a loss of EUR907 million, the news agency said. The airline's board recently said it expect the plan to be wrapped up by July 2002. ALITALIA SPA: Buys Six New Planes From Embraer for US$250 MM ------------------------------------------------------------ Italian carrier Alitalia SpA bought six EMBRAER 170-jets from Empresa Brasileira de Aeronautica SA and has placed an option for six more EMBRAER 190 jets, Dow Jones Newswires says. According to the Brazilian plane-maker, the airline paid US$250 million for the purchase. If it pushes through with the additional birds, it will pay a total of US$400 million. Embraer told the newswires the deal would be closed within the next few weeks. The EMBRAER 190 jets carry between 98 and 110 passengers, while the EMBRAER 170 jets take 70 to 86 passengers, the report says. Alitalia announced last week that its board had agreed to buy 15 medium-range jets, but didn't disclose further details, the newswire says. ===================== N E T H E R L A N D S ===================== KPNQWEST: Administrators May Close Network Within Hours --------------------------------------------------------- The liquidators of bankrupt network operator KPNQwest's said on Friday that they might be compelled to stop the network's operations after a court ruled against them over a dispute with the firm's creditors, a report obtained from Total Telecom and Reuters said June 21. The papers said that the imminent demise of the Europe's largest data network would spell trouble for its 100,000 Eurpean business clients. These clients have depended on the network for services such as e-mail transmissions to Web access. The administrators have tried to convince banks to turn over money collected from the network's clients so it could continue operations, while they search for buyers. They were also planning to give their clients more time to look for other providers, the papers said. With the recent ruling, it will be impossible for KPNQwest to keep on. In an interview with reporters after the judgment was announced, KPNQwest administrator, Ed Meijer revealed that they would probably issue a press release announcing the network's closure any time. Meijer also disclosed that talks would still continue between liquidators and banks on postponing the network's shutdown. But he also said that there was insufficient time to reach an agreement. Among the banks included in the discussion are Citigroup and ABN AMRO. Meanwhile, the network has received a warning from Dutch utility NUON threatening a withdrawal of power supply to KPNQwest's facilities. This is if the network would still fail to pay an outstanding bill by five o'clock local time, the papers said. The Dutch telecom group KPNQwest declared bankruptcy at the end of May after key members of its supervisory board resigned. KPNQWEST NV: Ex-CEO Jack McMaster Says Collapse "No Enron" ---------------------------------------------------------- Former KPNQwest CEO Jack McMaster vehemently denied last week that the company had artificially inflated its results and thereby misled investors, Total Telecom said. In his first press appearance, Mr. McMaster said there was no truth to speculations that the firm indulged in capacity swapping with other operators at artificially high prices. "I stand by our numbers," said Mr. McMaster, who put the blamed on the company's heavy reliance on the sale of long-term capacity use through instruments called "indefeasible rights of use" (IRU). He said when these instruments were sold the company booked all proceeds from such sales upfront. But fears about the state of the telecom industry led many buyers to reluctantly pay their obligations, given that some operators might not survive the term of the contract. "This is no Enron. We didn't go under because of the way we accounted for the IRUs. We went under because there were no more IRUs," Mr. McMaster was quoted by Total Telecom as saying. Suppliers, creditors and investors are all shell-shocked at how the company rapidly deteriorated. A few months before filing for insolvency in May, the company was still projecting positive earnings for the year. Mr. McMaster said the write-down made by Dutch carrier KPN and U.S. telecom operator Qwest Communications, which together controls 87% of the company, was a key domino that accelerated the downfall. The situation became even worse when the two withdrew from the supervisory board. He said these moves prompted creditor bank, already reeling from the revelation of a potential cash crunch, to use the board resignation to close access to a remaining part of a EUR525 million credit facility and grabbed most of its assets and cash in May. "When the board resigned we received a blizzard of papers from the banks, which invoked a material adverse change clause in the credit facility," Mr. McMaster said. "They were just looking for a reason to do it." The ex-CEO came from Qwest and AT&T three years ago, leading KPNQwest in souring to EUR42 billion in market value. Today, however, the company is worth just EUR5 million. Its bonds are also virtually worthless, the industry paper says. KPNQWEST NV: Receivers File Suit After Failed Talks With Banks -------------------------------------------------------------- Receivers of the bankrupt Dutch telecom group KPNQwest have filed a case against its banks, which will be heard on Friday 11:00 a.m., a report obtained from AFX News said Wednesday. The news group said that in an interview with Agence France- Presse, KPNQwest administrator Eddy Meijer disclosed that the suit was filed after the receivers and the banks failed to reach a consensus on the issue of utilizing some of KPNQwest's cash. Meijer, however, did not confirm if a decision has been reached on whether the operations of KPNQwest network would keep on. He said that while many clients have paid their fees due, some banks are still reluctant to give out cash so the company could carry on its operations, the report said. UNITED PAN-EUROPE: Will Not Re-Hire Arthur Andersen as Auditor -------------------------------------------------------------- On June 19, 2002, the Supervisory Board of United Pan-Europe Communications N.V. (UPC) determined not to re-engage Arthur Andersen as its independent auditor. This determination was based upon the recommendation of UPC's Audit Committee. Arthur Andersen's affiliate, Arthur Andersen LLP, was also the independent auditor of UnitedGlobalCom, Inc. (United), which owns approximately 52% of UPC's outstanding ordinary shares. Except as noted in the following sentence, during the two most recent fiscal years of UPC ended December 31, 2001, and the subsequent interim periods, there were no disagreements between UPC and Arthur Andersen on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to Arthur Andersen's satisfaction, would have caused Arthur Andersen to make reference to the subject matter of the disagreement in connection with its reports. In connection with UPC's Annual Report on Form 10-K for the year ended December 31, 2001, UPC and Arthur Andersen disagreed on the appropriate application of accounting principles generally accepted in the United States to the valuation of certain features embedded in some of UPC's cross currency and interest rate derivative contracts. The Audit Committees of both UPC and United discussed the matter with Arthur Andersen. This disagreement was resolved following discussions among United and UPC personnel, Arthur Andersen and the Office of the Chief Accountant of the Securities and Exchange Commission. UPC has authorized Arthur Andersen to respond fully to any inquiry regarding this disagreement that a successor independent auditor of UPC may have. None of the reportable events described under Item 304(a)(1)(v) of Regulation S-K occurred within the two most recent fiscal years of UPC ended December 31, 2001. Except as noted in the following sentence, the audit reports of Arthur Andersen on the consolidated financial statements of UPC as of and for the fiscal years ended December 31, 2000 and 2001 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. In its audit report dated April 12, 2002, Arthur Andersen included the following statement: The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern. A letter from Arthur Andersen, pursuant to item 304(a)(3) of Regulation S-K, was submitted by UPC in its SEC filings as Exhibit 16.1. =========== P O L A N D =========== ELEKTRIM SA: Annual Meeting of Shareholders on June 28, 2002 ------------------------------------------------------------ RESOLUTION 7 Regarding coverage of loss of previous years The loss in the amount of PLN 21,733,934.47 is covered from the Company's reserve capital. JUSTIFICATION In the course of auditing the financial statement of Elektrim S.A. for the year 1998 the auditor recommended an adjustment providing for the comparability of financial data for the years 1997 and 1998. The adjustment was introduced to the 1997 financial statement as a result of which a loss in the amount of approximately PLN 21,7 million was recognized for the previous years. The adjustment was described and a justification presented in the 1998 financial statement. Maintaining this item on the Company's balance sheet does not seem beneficial and lacks substantive justification. Covering the loss from reserve capital will enable to arrange the structure of capitals in the balance sheet of Elektrim S.A. in order. RESOLUTION 8 Regarding the appointment of a Committee to prepare and implement a stock option program for the Company's boards A Committee to prepare and implement a stock option program for the Company's boards is appointed with the participation with the following persons: __________________ __________________ __________________ The Committee's duty will be to prepare detailed principles of the program of a management stock option to be presented in the Statutes of Management Stock Option Program. The final text of the Statutes of Management Stock Option Program will be approved by the Company's Supervisory Board. RESOLUTION 9 Regarding an increase in the Company's share capital by the amount of PLN 4,200,000 through issuance of 4,200,000 ordinary bearer shares with the nominal value of PLN 1 one share with the exemption of preemption rights of the Company's present shareholders 1. The Company's share capital is increased by the amount of PLN 4,200,000 (say: four million two hundred thousand) through issuance of 4,200,000 (say: four million two hundred thousand) ordinary bearer shares of VII issuance with the nominal value of PLN 1 one share. 2. The shares of VII issue will be entitled to dividend from 1 January 2002. 3. The issue price of shares of VII issue will be determined by the Company's Supervisory Board which will follow standard rules applied to determine the share price for such programs. 4. Shares of VII issue will be offered to the underwriter who will subsequently sell the shares to the members of the Management Board and Supervisory Board and other key employees of the Company on terms determined by the Statutes of Management Stock Option Program adopted by a committee appointed to prepare and implement the stock option program for the Company's boards and in the underwriting agreement. 5. Authorization is granted to the Company's Supervisory Board to: a) determine the number of shares of VII issue to be vested to the Management and Supervisory Boards members and other key employees of the Company and enter into respective agreements with those persons; b) determine the terms of the issue of the shares to be offered to the underwriter in execution of the Statutes of Management Stock Option Program in matters not covered by this resolution, in particular to determine the issue price of the shares to be offered to the underwriter for subsequent sale to the Eligible Persons, c) adopt By-laws of the Statutes of Management Stock Option Program, d) select the underwriter for the purposes of the Statutes of Management Stock Option Program, e) take any and all steps necessary to effect the Statutes of Management Stock Option Program. 6. The Management Board is hereby authorized to determine specific terms of the issue of shares of VII issue in matters not reserved to be the powers of other bodies, in particular to: a) determine the terms, method and procedure for payment for the shares of the VII issue, b) determine the dates of opening and closing of the subscription for the shares of the VII issue, c) enter into the agreements with entities allowed to carry on subscription and determine the locations and terms of subscribing for the shares of the VII issue, d) determine the terms of allotment of shares of the VII issue and to decide on the allotment of shares of the VII issue, e) enter into the underwriting agreement, f) determine the list of Management Board and Supervisory Board members and other key employees of the Company and the number of shares to be vested to them in accordance with the provisions of the Statutes of Management Stock Option Program. g) take any and all steps necessary to effect this resolution, in particular to register the capital increase in the Registry Court and file requests to admit shares of the VII issue to public trading and trading on the Warsaw Stock Exchange. 7. The present Shareholders' preemptive right to new shares is hereby exempted with respect to the shares of the VII issue. JUSTIFICATION The Statutes of Management Stock Option Program have been designed to address the challenges facing Elektrim, i.e. attracting and retaining the best personnel necessary to develop and maintain Elektrim's businesses. The Statutes of Management Stock Option Program are specifically designed to provide Elektrim with the ability to compete in the Polish and European market for the best personnel. These needs arise both in the power sector and in the market for management of enterprises similar to Elektrim that are focused on significant change of business, restructuring and significant growth potential where incentive programs for senior management can be effectively aligned with shareholder interests. The key principles of the Statutes of Management Stock Option Program will be prepared by a Committee appointed to prepare and implement the Company's Stock Option Program and its contents will be approved by the Company's Supervisory Board. The intent of the Statutes of Management Stock Option Program, which assume issuance of shares to an underwriter who will purchase the shares earmarked for the needs of the Statutes, is to achieve comparability to other international programs and efficiency in light of Polish corporate and tax requirements. The Supervisory Board will oversee the execution of the Statutes of Management Stock Option Program by the Management Board. In its review of management resources and incentives, the Company's Management Board has recognised a major need to strengthen management at tier 1 and tier 2 levels and the members of the Supervisory Board and accordingly the Statutes of Management Stock Option Program will be made available to a group of several Management Board and Supervisory Board members, executives and key employees of the Company. The long-term prospect and focus on shareholder value will be fostered through a 3 year vesting requirement, with exercise closely linked to current fair market value. Although some consideration was given to an exercise price based on historic share prices in light of the management's plans to implement such a program in prior years, the Management Board and Supervisory Board have determined that the option's exercise price under the Statutes of Management Stock Option Program shall be linked to current market price on the date of grant (tentatively July 1, 2002) in order to reduce dilutive effects and to increase the focus of the program's participants on building shareholder value going forward. In respect of the need to issue shares only for the underwriter for the needs of the Statutes of Management Stock Option Program, it is necessary to exempt the preemption rights of the present shareholders. RESOLUTION 10 Regarding changes to 5 Company Statutes 5 section 1 of the Company Statutes receives the following new wording: 1. The Company's share capital is PLN 87,970,297 (say: eighty seven million nine hundred seventy thousand two hundred and ninety seven) and is divided into 87,970,297 (say: eighty seven million nine hundred seventy thousand two hundred and ninety seven) bearer shares with a nominal value of PLN 1 (say one) per share. ========================== U N I T E D K I N G D O M ========================== BIG FOOD: Top Executives Receive GBP1.17 Million Payout Last Year ----------------------------------------------------------------- CEO Bill Grimsey and CFO Bill Hoskins are among executives in the U.K. who received hefty payouts last year despite slide in share value and poor performance. According to Reuters, the two bosses of Big Food Group received a combined GBP1.17 million in salary. Mr. Grimsey also took home other undisclosed benefits aside from his 767,000-pound basic. The pair would have been entitled to share a further 544,000 pounds in bonuses with two other executive directors, but they waived the option. Shares of Big Food has lost 40% during the last 12 months, while evidence of a sustainable turnaround a year and half since the two executives joined the company is still hazy, if not absent, Reuters says. The pair joined the group at the time sales collapsed as customers deserted its stores after switching disastrously to selling expensive organic food. Both men forecast that it will take three years to fully turn the business around. Meanwhile, the same report says the group will discontinue its "final salary" pension scheme at the end of next month. The company says the set-up was too expensive and disclosed that the scheme was in deficit by about GBP65 million at December 31 because of the fall in share prices. The company will, instead, offer defined-contribution schemes where members take the risk that their retirement savings will not be enough to provide for a comfortable retirement, Reuters says. Under the "final salary" scheme, retired member-employees receive fixed payouts based on salary near retirement and years of service. "In view of this and the company's own financial performance, the board decided that the accrual of benefits under this scheme should cease with effect from July 31," the company said in a statement. Some 4,000 employees are expected to oppose the move. The change in pension scheme will affect both new and existing staff, the news agency says. CHESTER BARRIE: Fails to Find Buyer, Fires 160 Staff, Times Say --------------------------------------------------------------- Upscale clothing manufacturer Chester Barrie Ltd. fired 160 of its workforce after its administrators failed to find a buyer, the Times of London sources said, according to Bloomberg Friday. Over 50 staff left immediately, the Bloomberg added. The 67-year-old company, which typically sold suits for between 600 pounds ($900) and 700 pounds, is still seeking a buyer for the Chester Barrie name, the Times said. The Troubled Company Reporter Europe's June 4 issue said that the fashion group fell into receivership after "significant sums" of investments from its parent failed to counter the effects of the global economic downturn. Deloitte & Touche has been appointed receiver of the company, BBC News said. Deloitte & Touche says it has received "a serious expression of interest from a party whose intention would be to continue manufacturing and retain the majority of the workforce." Luxury Lifestyles acquired Chester Barrie from Austin Reed two years ago. The group is engaged in the manufacture and wholesale of men's and ladies' high quality wear. Aside from the present economic slump, the company is also blaming its woes to competition from foreign manufacturers. CORUS GROUP: French Rival Keen on Taking Over Aluminum Unit ----------------------------------------------------------- French aluminum manufacturer Pechiney intends to pursue its plan, announced in March, to buy the aluminum business of British rival Corus Group, a spokeswoman told Reuters late last week. "Pechiney is involved in the offer procedure that is taking place in many stages, and the group has examined the antitrust issues posed," the spokeswoman said. The bidder is confident about it chances of getting pass competition concerns that might be raised should it win the bid for the GBP1 billion-business. In a recent interview with French daily Le Monde, Pechiney's aluminum production chief Philippe Varin said Corus is a particular attractive takeover target due to its "very interesting positions in aluminum transformation for the aerospace industry." Corus has annual aluminum production capacity of 244,000 tonnes, half of which serves Corus's own needs and is shared between three sites in the Netherlands, Germany and Canada, Reuters says. Since its emergence in 1999 out of the merger of British Steel and Hoovogens of the Netherlands, the company has struggled mightily. The company is planning to cut 4,000 jobs in the next two years. MARCONI PLC: Rescue Plan May Involve Debt-for-equity Swap --------------------------------------------------------- Further to its preliminary announcement stated on May 16, 2002, Marconi -- www.marconi.com -- announces that it continues to make good progress in its three-way restructuring discussions with its syndicate banks and an Ad Hoc Committee of its bondholders towards a consensual recapitalization of Marconi. The recapitalization process is likely to involve a debt for equity swap for a significant proportion of Marconi's GBP4.3 billion of gross financial indebtedness, which the Board expects will lead to a very substantial dilution in value for existing equity holders. Marconi also announces that it expects to receive a notice in the coming weeks from the Nasdaq National Market that its shares, which currently trade on the Nasdaq in the form of American Depositary Receipts (ADRs), will be delisted in accordance with Nasdaq rules relating to minimum ADR price requirements. Following the delisting from Nasdaq, Marconi's ADRs will be traded on the Over The Counter Bulletin Board (OTC BB). Marconi's ticker symbol on the OTC BB will remain MONI. Marconi's shares continue to trade on the London Stock Exchange under the symbol MONI. Mike Parton, Chief Executive of Marconi, said: "We continue our discussions as a part of a controlled process, to effect the recapitalisation of Marconi's balance sheet at the earliest opportunity. We are confident that our banks and bondholders will continue to be supportive during the process and that Marconi will emerge from this process with a significantly improved balance sheet." Marconi plc is a global telecommunications equipment and solutions company headquartered in London. The company's core business is the provision of innovative and reliable optical networks, broadband routing and switching and broadband access technologies and services. Contact Information: Heather Green Investor Relations Telephone: +44 (0) 207 306 1735 Email: heather.green@marconi.com ************* 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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