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            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 26, 2002, Vol. 3, No. 125


                             Headlines

* F R A N C E *

FRANCE TELECOM: Moody's Expects Debt to Reach EUR75 BB This Year
RHODIA SA: Chemicals Group Sells Paper Latex Business to Raisio

* G E R M A N Y *

BABCOCK BORSIG: Employees Offer Concessions, Not EUR 500MM
KIRCHMEDIA: Springer Confirms Interest in 25.1 % of ProSiebenSat1
KIRCHMEDIA: Set to Win Soccer Rights vs. Kloiber
KIRCHMEDIA AG: Hollywood's Haim Saban Joins Bid for KirchMedia
PHILIPP HOLZMANN: Set to Sell Large Parts of Its Business
PIXELNET AG: Photo Porst Files for Insolvency, Board Changes
PIXELPARK AG: Bertelsmann Waives EUR 20MM Loan Repayment

* H U N G A R Y *

ARTHUR ANDERSEN: Consultancy Group Plans Break up in Hungary

* I T A L Y *

BLU SPA:  June 25 Meeting May Break up GSM Operator

* N E T H E R L A N D S *

KPN NV: Telecom Operators Set up Foundation for KPNQwest Network
KPNQWEST: Belgacom Will Not Buy KPNQwest Assets

* P O L A N D *

TELEKOMUNIKACJA POLSKA: Still Negative Despite Covenant Waiver

* S P A I N *

JAZZTEL PLC: Shareholders Approve Resolutions Passed at AGM

* U N I T E D   K I N G D O M *

ENERGIS PLC: Banks to Take Over U.K. Business, Spurn Other Offer
KOKUSAI SECURITIES: To Liquidate 3 Units by 2003
RAILTRACK PLC: Pact Delayed Anew, Re-listing Moved Late This Week
TELEWEST: U.S. Tycoon, John Malone Plans to Take Over Telewest
TELEWEST COMMUNICATIONS: Responds to Liberty Media Offer


===========
F R A N C E
===========


FRANCE TELECOM: Moody's Expects Debt to Reach EUR75 BB This Year
----------------------------------------------------------------
Moody's Investors Service nudged France Telecom slightly lower on
Monday, attaching a negative outlook to both the new Baa3 long-
term and Prime-3 short-term ratings.

The rating agency said the downgrade from the previous Baa1 and
Prime-2 ratings reflects its apprehensions that the company won't
be able to raise enough "free cash flow in the near term to
reduce its high debt levels."

By its estimates, Moody's sees France Telecom ending the year
buried under EUR75 billion of debts (adjusted by Moody's for sale
and leaseback and asset-backed securitization).

"Despite expectations that FT's EBITDA will grow to around EUR14
billion in 2002, FT's substantial interest and capex requirements
means the company is not expected to generate material free
cashflow for de-leveraging in the near term.  FT is dependant
upon asset disposals and its treasury stock to make any
significant inroads into reducing its debt," Moody's noted.

Moody's also considered the impact of MobilCom on the company:
"In regard to MobilCom the rating agency factors either
significant contingent liability arising from potential legal
action or a significant increase in FT's net debt from acquiring
a majority stake."

"This assumes that FT exchanges either FT or Orange equity for
MobilCom stock and that a mandatory, perpetual convertible bond
is used to retire existing debt, which Moody's understands will
not impact FT's balance sheet.  Moody's further expects that
MobilCom will continue to be EBITDA negative in 2003, but that FT
will take action to reduce the negative cashflow impact."

Potentially compounding France Telecom's woes is the continuing
slide of its equity value.  Moody's said this "reduces the
potential value of the treasury stock [the company] holds,
reducing the probability of conversion of numerous convertible
bonds and potentially implying a lower realizable value for
expected non-core asset disposals."

Orange Plc, the mobile phone arm of the company was similar
downgraded. Approximately EUR60 billion of long-term debt were
affected.

The ratings downgraded to Baa3 include:

-- Convertible global bonds, Euro MTNs, Eurobonds, Floating Rate
   Euro MTNs, Floating Rate French Franc Bonds, French Bonds,
   Swiss Franc Bonds, its issuer rating and bank loan rating.

The short-term rating is downgraded to Prime-3

The Orange plc ratings downgraded to Baa3 are ratings on the
following bond issues:

-- GBP200 million 8.625% Global notes due 8/1/2008, EUR100
   million 7.625% Global Notes due 8/01/2008, USUS$545 million 8%
   Global Notes due 8/01/2008,

-- GBP150 million 8.875% Global Notes due 6/01/2009, USUS$275
   million 9% Global Notes due 6/01/2009, USUS$225 million Global
   Notes due 6/01/2006.

Moody's says France Telecom faces maturing long-term debts of
EUR15 billion next year, necessitating the negative outlook for
both its long-term and short-term debt grades.

Orange SA, domiciled in London, U.K., is a subsidiary of France
Telecom.  Orange SA had some 40.5 million wireless subscribers as
of March 31, 2002, 18.3 million of which were in France and 12.7
million in the U.K. (Orange's two most important markets),
Moody's says.

France Telecom is domiciled in Paris, France. It is the principal
provider of telecommunication services in France and one of the
world's leading telecommunication service providers, with
activities in over 75 countries.

For more information, contact:

London
Stuart Lawton
Managing Director
European Corporate Ratings
Moody's Investors Service Ltd.
44 20 7772 5454

London
Aidan Fisher
Vice President - Senior Analyst
European Corporate Ratings
Moody's Investors Service Ltd.
44 20 7772 5454


RHODIA SA: Chemicals Group Sells Paper Latex Business to Raisio
---------------------------------------------------------------
Rhodia announced the signing of an agreement Monday with the
Finnish group Raisio Chemicals to sell its 50% stake in Latexia,
a joint venture created in 2000 to produce and market latex for
the paper industry.

In addition to the Latexia shares, Rhodia will sell to Raisio
some paper latex production assets that were not part of the
joint-venture creation. Completion of the transaction, which is
subject to certain regulatory approvals, is expected to take
place at the end of July.

This sale is in accordance with Rhodia's strategy to divest non-
core businesses. In addition to targeting its offer to the high
value added segment of industrial paints, Rhodia will focus on
the development of its performance latex dispersions dedicated to
the decorative paints and construction materials markets.

These performance latex activities represent 30% of Rhodia PPMC's
annual turnover, approximately 180 million euros.

Latexia is the world's second largest supplier of latex for paper
coating applications with a turnover of 200 million euros and
employs approximately 200 people.

Latexes are polymers in emulsion with strong binding powers which
enable a wide range of applications. They are used for paper
coatings applications mainly to increase both the printing
quality of paper and the page's properties.

Rhodia PPMC offers a wide range of products, services and
technologies (performance latex, tolonates, etc.) for the
industrial and decorative coating, and construction industries.
Rhodia's innovative solutions meet the needs of manufacturers for
performance and environmental responsibility.

Rhodia manufactures specialty chemicals to for the world market.
The group makes a wide range of innovative products and services
to the automotive, healthcare, food, cosmetics, apparel, new
technology and environmental markets.

Rhodia generated net sales of EUR7.2 billion in 2001 and employs
27,000 people worldwide. Rhodia is listed on the Paris and New
York stock exchanges.


=============
G E R M A N Y
=============


BABCOCK BORSIG: Employees Offer Concessions, Not EUR 500MM
----------------------------------------------------------
Claus Eilrich, the IG Metall spokesman, said Monday that Babcock-
Borsig AG's works council and union offered the management
concessions under which employees will forego until the end of
2003 the 3.1% increase agreed to in the last round of sector-wide
pay negotiations.

Trade union representatives announced that employees are prepared
to make further sacrifices to secure continued activities of the
beleaguered engineering giant,the Handelsblatt said Monday.

However, the union spokesperson rejected a demand by the group's
creditors for a EUR 50 million inection for the rescue efforts.

The Union also offered to cut their working week from 35 to 33
hours. Babcock-Borsig's workforce has already waived its right to
a pay increase for June.

The company's unexpectedly announced Friday its dire need of
fresh funds of EUR 200 million in order to meet the group's June
payroll. The company employs 22,000 people globally.

Its principal creditors include: WestLB, Deutsche Bank,
Commerzbank, Dresdner Bank, HypoVereinsbank and BHF Bank
previously demanded from Babcock Borsig's workforce a EUR 50
million contribution to a restructuring plan, proposed by
business consultancies Roland Berger and BDO, before fresh credit
lines could be agreed.

The Handelsblatt, citing people familiar with the situation, no
pool leader had been elected and, so far, the creditors failed to
agree on a joint strategy.


KIRCHMEDIA: Springer Confirms Interest in 25.1 % of ProSiebenSat1
-----------------------------------------------------------------
German publisher Axel Springer has confirmed reports that it is
interested in the television assets of bankrupt KirchMedia, news
according to AFX said Tuesday.

Springer intends to increase its shareholding in broadcaster
ProSiebenSat1 by acquiring ownership of up to 25.1 % stake.

According to Mathias Doepfner, Springer chairman in an interview
with Stern magazine, Axel Springer would be negligent if it did
not recognize the opportunity to increase its stake in
ProSiebenSat1.

"We have the chance to build our 11.5 % shareholding in
ProSiebenSat1 Media AG into a strategic position in the
television business," he added.

KirchMedia owns 52 % of ProSiebenSat1. Springer has organized a
consortium with Heinrich Bauer Verlag to bid for the key assets
of KirchMedia.

However, Doepfner said it was not yet certain "whether we will
make an offer." He further said that, "in any case we won't offer
a price that is too high."


KIRCHMEDIA: Set to Win Soccer Rights vs. Kloiber
------------------------------------------------
The insolvent company Kirchmedia is set to win the battle for the
broadcasting rights to Germany's top soccer matches, after Georg
Kofler head of Kirch's pay-TV channel Premiere said he will buy
the company's rights solely from Kirch Media, a report obtained
from Handelsblatt said.

With this latest development, it is possible that rival media
mogul Herber Kloiber will again balk his chances in his bid for
the soccer rights, with Premier siding with Kirch, the paper
said.

Moreover, Handelsblatt said that with Premier siding with Kirch,
Kloiber is now seen to be out of the race, as he would find it
difficult to foot the 300 million euros price tag for the soccer
rights without the revenue generated from showing full-length
matches on pay-TV."

For now, the parties have to wait for the German Football League,
DFL's final decision, which will be revealed on Tuesday. The
league has postponed their decision for a week after Kloiber's
bid increased, the paper said.


KIRCHMEDIA AG: Hollywood's Haim Saban Joins Bid for KirchMedia
--------------------------------------------------------------
Leo Kirch's former business partner, Haim Saban, is said to be
involved in the battle to take over insolvent company Kirchmedia
AG but will not make a bid by himself, reports obtained from AFX
News said.

Saban, a Hollywood producer and creator of the TV series Power
Rangers, is reported to have an estimated US$1.45 billion after
selling his share of the American TV chain Fox Family, the paper
said.

Reports also said that Krichmedia is currently facing a complaint
filed by US financial investor Capital Research. Filed in the
Munich county court, the complaint focused on seeking for a EUR
30 million pay back from Kirchmedia.

Capital Research had invested the EUR 30 million in Kirchmedia
provided it would list in the stock exchange before June 30,
2002. The German company however, filed for insolvency before the
said date.

Meanwhile, head of TeleMuenchenGruppe Haim SabanHerbert Kloiber
is also reported to be backing Axel Spinger Verlag's AG's und
Heinrich Bauer Verlag's bid to takeover Kirchmedia AG, the paper
said.


PHILIPP HOLZMANN: Set to Sell Large Parts of Its Business
---------------------------------------------------------
Insolvent Phillip Holzman, is set to sell large parts of its
business to Dutch construction group Heijmands and to Alegerian-
based Khalifa, reports obtained from Financial Times said.

According to the paper, Holzmann's insolvency administrator said
he "believes that an agreement can be reached over the deal
proposed by the Dutch company, although some legal formalities in
connection with the proposal must still be examined."

The paper also reported, that "Heijmans is interested in
acquiring parts of the German and Dutch activities of Holzmann,
which it plans to operate under the Philipp Holzmann trade name,"
while Algerian company, Khalifa is planning to buy Holzmann's
business overseas.

It is said that a decision will be revealed from the creditors'
committee today, the paper said.


PIXELNET AG: Photo Porst Files for Insolvency, Board Changes
------------------------------------------------------------
The Board of Photo Porst AG, a 100% subsidiary of PixelNet AG,
initiated insolvency proceedings Monday with the District Court
at Nuremberg due to threatening illiquidity.

The Company is expecting the appointment of a temporary
insolvency trustee. The goal is to find a solution that will
allow jobs to be preserved and suppliers and customer relations
to be maintained.

In the last few months, intensive negotiations with perspective
partners and investors have been conducted without reaching an
agreement.

With a background of sinking revenues, the additional financial
requirements needed to successfully continue the restructuring
and expansion of the digital sector of the film business cannot
be guaranteed in the current financial climate.

The business and financial impact of the PHOTO PORST insolvency
on PixelNet AG will be thoroughly scrutinized in the next few
days under the leadership of Dr. Gerhard Kohler, who has been
named the new Chairman of the Management Board by the Supervisory
Board of PixelNet AG. Dr. Kohler has held the position of Chief
Financial Officer since December 31, 2001 and now replaces the
recently resigned Matthias Sawatzky as Chairman.

In addition to the Chairman of the Management Board, the new
Supervisory Board elected during the constitutive conference in
Wolfen Dr. Ulrich Franz as Chairman for the Supervisory Board and
Dr. Frank-Werner Andreas as acting Supervisory Board Chairman.
Dr. Franz was previously the acting Chairman of the Supervisory
Board.

The District Court in Dessau had previously appointed by decree
Dr. Frank-Werner Andreas und Dr. Frank Hartmann to the
Supervisory Board at PixelNet AG. They will replace Dr. Klaus-
Dieter Hoh - the former Chairman - and Gunther Bocks, who in the
previous weeks resigned from their positions on the Supervisory
Board.

The Supervisory Board has, thereby, once again, achieved a quorum
and will advise and assist the Management Board in the upcoming
structural changes of the Group as well as in future investment
negotiations regarding PixelNet AG.


PIXELPARK AG: Bertelsmann Waives EUR 20MM Loan Repayment
--------------------------------------------------------
Bertelsmann AG, with a 60.3% stake the largest shareholder in
Pixelpark AG, extended the EUR15-million-loan granted to
Pixelpark to a total of EUR 40 million, making it a subordinated
loan in the process.

Bertelsmann announced Monday in a statement to the press that it
will treat 20 million EUROS of this loan as a conditional write
off with debtor warrant.

Bertelsmann AG already pronounced that it will treat EUR 20
million of this loan as a conditional write off with debtor
warrant on March 1, 2002.

Thus, Bertelsmann did treat the entire loan of EUR 40 million as
a conditional write off with debtor warrant.

The company develops, designs and configures business strategies,
marketing solutions, Internet and Intranet connections for
industrial customers.

Pixelpark has subsidiaries in Germany, Austria, Switzerland,
France, the U.K. and the U.S.

The range of services includes strategic management consulting,
design implementation of complex web based solutions, technical
integration into existing IT systems and the handling of
logistics.


=============
H U N G A R Y
=============


ARTHUR ANDERSEN: Consultancy Group Plans Break up in Hungary
------------------------------------------------------------
The Hungarian unit of collapsed accounting consulting firm Arthur
Andersen will be split into four parts, a report according to the
Budapest Business Journal said Monday.

The group's consulting branch, active in the energy and telecom
sectors, will merge into KPMG Consulting Kft, while its audit and
taxation division will merge with Ernst & Young.

The Arthur Andersen law firm and the outsourcing division will
become independent entities and will start off separately, the
report adds.


=========
I T A L Y
=========


BLU SPA:  June 25 Meeting May Break up GSM Operator
---------------------------------------------------
Blu forsees that the shareholder meeting on June 25 might lead to
a plan for the break-up of Italian GSM operator, the AFX News
reported on Friday citing a Blu spokeswoman as saying.

This news came from a trade union representative source after
reports leaked that according to a letter from the European
Commission's competition directorate, the break-up would be
allowed only under exceptional circumstances.

If competition commissioner Mario Monti fails to clear the deal,
then Blu will be forced to hold a shareholder meeting already
scheduled for July 30, which calls for an automatic liquidation
of the company, she added.

Blu's assets, such as frequencies and customers, would be sold to
Telecom Italia Mobile SpA, ENEL SpA's Wind, Vodafone PLC's
Omnitel, and Hutchison Whampoa Ltd's H3G in case of a break-up

Autostrade holds 32% stake in Blu, the BT Group owns 29%,
Edizione has 9%, Distacom another 9 %, Banca Nazionale del Lavoro
SpA has another 7 %, Caltagirone also holds 7 % and Italgas also
another 7%.


=====================
N E T H E R L A N D S
=====================


KPN NV: Telecom Operators Set up Foundation for KPNQwest Network
----------------------------------------------------------------
At the instigation of a number of large telecom operators,
including KPN NV ("KPN"), which use the European network of
KPNQwest, KPN has established a foundation called "Customer
Support KPNQwest".

According to KPN's statement Monday, the foundation strives to
ensure that, with the approval of the trustees, rings 1, 2 and 3
(Northwest Europe and the Channel zone) remain operational until
at least Monday, July 1st, 2002.

The foundation has already received sufficient concrete
undertakings to meet this week's urgent operational commitments.

Various published articles have created the impression that
KPNQwest still has sizable financial claims on KPN. KPN announced
earlier that this impression is incorrect. Apart from that the
claim that KPN has on KPNQwest far exceeds the amount the banks
of KPNQwest say is owed to them by KPN.

In the first seven days after the bankruptcy of KPNQwest, KPN
made available EUR 3,500,000 in order to keep the network
operational.

From the outset, KPN has adopted a supportive stance in the
KPNQwest question by giving its full co-operation to finding
solutions based on continuity. Finding such solutions was
seriously impeded by the banks who refused to cooperate and
simply demanded the cash on hand.


KPNQWEST: Belgacom Will Not Buy KPNQwest Assets
-----------------------------------------------
Belgacom confirmed on Saturday it has no plans of buying assets
of KPNQwest following rumors that it is bidding for the bankrupt
Dutch-based company, Total Telecom and Reuters reported.

KPNQwest's liquidators have been looking for buyers for the fiber
optic network while seeking for funds to keep the network afloat.
In a recent interview, the liquidators reportedly claimed that
Belgian telecom operator, Belgacom, was one of the bidders lined
up for the sale of the network, the papers said.

The papers reported that Piet Van Speybroeck, spokesman for
Belgacom said that initially, Belgacom was interested in buying
the assets of KPNQwest but later decided against bidding.

Meanwhile, Ed Meijer, KPNQwest's administrator, said Friday that
U.S. telecom giant AT&T was also one of the companies bidding for
the network. Some of the other companies that are said to be
interested in the network include, Colt, Cable & Wireless and
Deutsche Telekom.

KPNQwest filed for bankruptcy last May and is said to be
currently, facing possible probes from creditors and bondholders.


===========
P O L A N D
===========


TELEKOMUNIKACJA POLSKA: Still Negative Despite Covenant Waiver
--------------------------------------------------------------
Despite successfully negotiating a "one-off waiver" on a banking
covenant, Moody's still assigns a negative outlook to the Baa2
long-term senior unsecured ratings of Telekomunikacja Polska SA.

The rating agency on Monday said the adverse outlook "reflects
the company's evolving situation with regard to liquidity risk
management and its debt-refinancing strategy."  Moody's, however,
believes that management is properly addressing these concerns.

Moody's projects the company to attain only modest revenue growth
than previously expected, partly due to liberalization and new
regulation.  Accordingly, the open-market policy of the
government will pressure overall tariff levels in fixed
telephony, which will in turn translate into pressure on profit
margins.

But Moody's believes the company will maintain its leading
position in fixed-line telephony in Poland even after the market
is fully liberalized.

"[T]he rating agency feels that TPSA's ongoing restructuring and
headcount reduction program aptly addresses the operating
uncertainties and the pressure on profitability that the company
currently faces.  Moody's therefore believes that TPSA will
continue to generate strong and stable free cash flow in the core
business over the rating horizon," Moody's said.

The agency initiated the review on the company's ratings on April
12, 2002.  Moody's said the action was triggered by the potential
breach of financial covenants in TPSA's bank facilities at the
covenant testing date in June 2002.

The rating agency confirmed the Baa2 long-term senior unsecured
ratings of the company, which in particular affected these debt
issues:

-- US$800 million 7.75% Guaranteed Senior Notes due December
   2008;

-- US$200 million 7.125% Guaranteed Senior Notes due December
   2003;

-- EUR500 million 6.125% Guaranteed Euro Medium Term Notes due
   October 2004;

-- EUR 475 million 6.5% Guaranteed Euro Medium Term Notes due
   March 2007;

-- EUR 500 million 6.635% Guaranteed Euro Medium Term Notes due
   March 2006.

According to Moody's, the company is the principal provider of
telecommunication services in Poland and offers a range of
services, including fixed-line domestic and international
telecommunications, leased lines, broadband data transmission,
Internet and other value-added services.

The company had 10.5 million fixed-line subscribers at year-end
2001 and retains exclusive rights to provide international voice
telephony until January 1, 2003.  Its wireless subsidiary PTK-
Centertel, in which it holds a 66% stake, had 2.8 million
subscribers at year-end 2001.  Its market share was 28%, compared
to 17% in 2000.

France Telecom and its local partner, Kulzcyk Holding, currently
hold a 47% stake in the company, although it is Moody's
expectation that the consortium will before the end of 2002
exercise an option giving them voting maturity (50% + 1 share) in
TPSA, Moody's said.

For more information, contact:

London
Stuart Lawton
Managing Director
Corporate Finance
Moody's Investors Service Ltd.
44 20 7772 5454

London
Ann-Christine Hagelin
Analyst
Corporate Finance
Moody's Investors Service Ltd.
44 20 7772 5454


=========
S P A I N
=========


JAZZTEL PLC: Shareholders Approve Resolutions Passed at AGM
-----------------------------------------------------------
Madrid-based telecom provider JAZZTEL plc announced Monday that
the shareholders at the Annual General Meeting of Shareholders of
the Company, held on June 21, 2002, approved validly all the
resolutions included in the Agenda of the meeting:

1 Receive the Company's accounts and the reports of the Directors
and Auditors for the year ended December 31, 2001.

2 Reappoint Arthur Andersen as Auditors and authorize the
Directors to fix the remuneration of the Auditors.

3 Re-elect Miguel Sals as Director of the Company.

4 Re-elect Massimo Prelz as Director of the Company.

5 Re-elect Eduardo Merig as Director of the Company.

6 Approve the increase in the Company's authorised ordinary share
capital from 77,500,000 to 90,000,000 by the creation of
12,500,000 ordinary shares of Euros 0.08 each.

7 Approve that the authority conferred on the Directors by
paragraph 10.2 of Article 10 of the Company's Articles of
Association be renewed for the period ending on the date of the
Annual General Meeting in 2007 or on the date which is five years
from the date on which this resolution is passed, whichever is
the earlier, and for such period, the Section 80 Amount shall be
EUR 2,411,701.92.

8 Approve the 2002 Share Option Scheme.

9 Approve that the authority conferred on the Directors by
paragraph 10.3 of Article 10 of the Company's Articles of
Association be renewed for the period ending on the date of the
Annual General Meeting in 2007 or on the date which is five years
from the date on which this resolution is passed, whichever is
the earlier, and for such period, the Section 89 Amount shall be
EUR 2,411,701.92.

10 Amend Article 50 of the Articles of Association to reduce the
quorum for shareholder meetings of the Company.


===========================
U N I T E D   K I N G D O M
===========================


ENERGIS PLC: Banks to Take Over U.K. Business, Spurn Other Offer
----------------------------------------------------------------
A 16-bank syndicate that has already lent GBP700 million to
Energis Plc is likely to take over the company, instead of giving
venture capitalists the bigger part of the pie, says the
Independent.

According to the report, the current offer by a consortium
composed of Apax Partners and Carlyle Group has fallen out of
grace with banks, which have the first right over Energis' U.K.
business.

Banking sources told the paper that the syndicate led by Royal
Bank of Scotland, Barclays Capital and HSBC regards the venture
capitalists as too "greedy."  This assessment comes as the
consortium plans to only pay a proportion of the debt, in return
for stripping all debt off its balance sheet and taking the
company over.  In addition, the group also plans to bring in its
own management team.

"The core Energis business model is sound.  The private equity
guys are being pretty aggressive and they want their own
management in.  We are not going to succumb to that.  We can be
patient because we're comfortable with Energis' U.K. business,"
an unnamed banking source told the Independent.

The report says the company needs about GBP100 million in
immediate capital injection.  The private equity groups are
currently offering to dangle this amount, but the banks could
provide the money themselves, which is most likely, says the
paper.

"The venture capitalists want it on the cheap, like all good VCs.
The banks see a good business in the U.K., which the VCs are
undervaluing.  Remember that even now, Energis continues to win
new business," a telecoms industry insider told the Independent.

A third option -- a debt-for-equity swap -- is also not appealing
to the banks because only bondholders will benefit from
exchanging their GBP560 million notes, the Independent says.

Energis is believed to have a turnover of about GBP800 million
and EBITDA of some GBP160 million, says the paper.


KOKUSAI SECURITIES: To Liquidate 3 Units by 2003
------------------------------------------------
Kokusai Securities revealed Monday its plans to liquidate three
of its units including in Britain, the United States and Hong
Kong in 2003, a report form Kyodo News said Tuesday.

The liquidation of the subsidiaries is in preparation for the
company's intention to merge with three securities own by
Mitsubishi Tokyo Financial Group Inc. The merger is set this
coming September 1, Kyodo News said.

Among the units to be liquidated are Kokusai Europe Ltd and
Kokusai America Inc. respectively.


RAILTRACK PLC: Pact Delayed Anew, Re-listing Moved Late This Week
-----------------------------------------------------------------
The re-listing of Railtrack will not happen until later this week
due to a last-minute hitch related to the terms under which
Network Rail will pay GBP375 million to Railtrack Group in order
to operate the Channel Tunnel rail link.

According to a Railtrack Group spokeswoman quoted by the
Independent, the board did not sign the GBP500 million deal
because "certain issues remain outstanding, some of which could
prevent cash being returned to shareholders in an acceptable
timescale."

Under the proposed deal, shareholders will receive between 2.30
pounds and 2.50 pounds a share for the 20,000 miles of railway
track, 2,500 stations and 1,100 signal boxes controlled by
Railtrack Plc.

Private and individual shareholders are opposed to the offer, as
it is way below the floatation price of 3.60 pounds and the 2.80-
pound level at the time the shares were suspended when the
company was placed under administration late last year.

Despite the delay, it is expected that institutional shareholders
will accept the offer during an extraordinary meeting next month.
Individual shareholders, who number 22,000, plan to initiate
legal action to compel the government to pay damages for ordering
the company's administration.

The group spurns the Network Rail offer, calling it "derisory."
They claim the settlement is an attempt by the government to re-
nationalize Railtrack at least cost after failing to "steal" the
company by forcing it into administration.


TELEWEST: U.S. Tycoon, John Malone Plans to Take Over Telewest
-----------------------------------------------------------
U.S. tycoon John Malone may finally fulfill his long-time dream
of expanding into Europe as he goes bond-building to take over
Telewest, the Independent reported.

The daily said that Malone planning buy out Telewest's
bondholders. If Malone's plans will push through, he will be able
to take full control of the troubled company.

According to the Independent, Liberty Media, which Mr. Malone
owns, has already offered $350 million (GBP234 million) for the
fifth of the bonds and has given debt-holders until Wednesday to
accept the offer. If the bondholders will agree, this will give
Malone rights to bid for the rest of Telewest's bonds.

However, a group of Telewest's bondholders have expressed their
dissent over the offer stating it will be rejected, the paper
said.

Meanwhile, some analysts observe that there is a possibility that
Malone will succeed if Telewest will be forced to succumb to a
debt-for-equity restructure in the coming months, the paper said.


TELEWEST COMMUNICATIONS: Responds to Liberty Media Offer
--------------------------------------------------------
In accordance with the provisions of Rule 14e-2 under the U.S.
Securities Exchange Act of 1934, as amended, Telewest
Communications plc Monday sent the following announcement to the
record holders of notes and debentures indicated below:

TELEWEST COMMUNICATIONS PLC
Genesis Business Park
Albert Drive
Woking, Surrey GU21 5RW
England
June 24, 2002

Re: Response to Liberty Media's tender offer for bonds of
Telewest

To: The holders of the following series of outstanding Notes and
Debentures of Telewest

Ladies and Gentlemen:

We are writing to inform you of our response to the tender offer
commenced by Liberty TWSTY Bonds, Inc., a Delaware corporation
and a wholly-owned subsidiary of Liberty Media Corporation, a
Delaware corporation, to purchase the following debentures and
notes:

- Up to US$60.0 million 9?% Senior Debentures due 2006
- Up to US$307.3 million 11% Senior Discount Debentures due 2007
- Up to US$70.0 million 11¬% Senior Notes due 2008
- Up to GBP65.0 million 9?% Sterling Senior Discount Notes due
     2009

- Up to US$100.0 million 9¬% Senior Discount Notes due 2009
- Up to GBP36.0 million 9?% Sterling Senior Notes due 2010
- Up to US$70.0 million 9?% Senior Notes due 2010
- Up to US$90.0 million 11?% Senior Discount Notes due 2010

of Telewest Communications plc, at a price per Note and otherwise
upon the terms and subject to the conditions set forth in the
Purchaser's Offer to Purchase, dated June 12, 2002.

Our response has been determined without the participation of any
of the directors designated by Liberty Media.

Please be advised that Telewest is unable to take a position with
respect to the Offer.

As part of its offer Liberty indicated that completion of the
Offer "will permit us [Liberty] as a creditor to participate in
and influence discussions and decisions regarding any future
restructuring or recapitalization of the Company.

If the offer is successful, Liberty presently intends to propose
to the Company's board of directors a restructuring plan pursuant
to which all or substantially all of the Company's publicly-
traded notes and debentures would be converted into equity of the
Company.

Liberty has disclosed in general terms its intention to make such
a proposal to the Company's board of directors. However, as of
the date of the offer, Liberty has not determined any specific
terms for a proposed restructuring.

The Company is not participating in and has no responsibility for
this offer."

As of June 24, Telewest does not have any additional information
regarding Liberty's intentions and cannot determine whether a
restructuring on Liberty's terms would be beneficial or whether
completion of the Offer is beneficial or detrimental to the
holders of the Notes.

As a result, each holder of Notes is advised to make his or her
own determination, in consultation with his or her financial
advisor, as to whether tendering Notes in the Offer, and
acceptance of the cash price currently being offered by the
Purchaser, is beneficial or detrimental to such holder.

Sincerely,

Anthony Stenham
Chairman
TELEWEST COMMUNICATIONS PLC


                                 ************

     S U B S C R I P T I O N   I N F O R M A T I O N

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