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/raid1/www/Hosts/bankrupt/TCREUR_Public/020725.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 Thursday, July 25, 2002, Vol. 3, No. 146 Headlines * F R A N C E * ALCATEL: OmniSwitch Receives Award From Communications News ALCATEL: Provides Broadband Services to Bristol, Virginia ALCATEL: Wins EUR15 MM Deal From Tata Teleservices in India FRANCE TELECOM: State Hires Lazard to Advise on Debts RHODIA SA: Sells Kermel Subsidiary Through Management Buyout VIVENDI UNIVERSAL: Plans to Create a New Canal Plus * G E R M A N Y * HERLITZ: Sees FY Operating Profit After Loss in H1 of 2002 EM.TV: Triumphs in Legal Dispute Against Minority Shareholders FLOTOTTO: Furniture Manufacturer Files for Insolvency KIRCHGRUPPE: HVB and BayernLB Will Take Control of Premiere KLING JELKO: Admits It Is Broke, Declares Itself Insolvent MOBILCOM AG: Cost Cuts Force Mobile Group to Close Computer Chain * I R E L A N D * ELAN CORPORATION: Schedules Webcast Q2 Results and Recovery Plan FLEXTRONICS: Announces First-Quarter Results FLEXTRONICS: Completes Takeover Offer for NatSteel Broadway Ltd. * N E T H E R L A N D S * VERSATEL TELECOM: Tiscali Signs 15-year Contract With Versatel * U N I T E D K I N G D O M * ASW HOLDINGS: KPMG Confident Steel-Making Business Finds Buyer BIOGLAN AB: Wilh. Sonesson Sells Product Rights Through Unit COLT TELECOM: Appoints Steve Atkin President and CEO COLT TELECOM: Results for 3 and 6 Months Ending June 30, 2002 MARCONI PLC: ANZ Bank Estimates Loan Exposure at US$131 MM RAILTRACK PLC: Shareholders Favors EUR1.3 BB Government Offer RAILTRACK PLC: Chairman's Message on Railtrack Plc Disposal WORLDCOM, INC.: Court Approves Use of DIP US$750 MM Financing WORLDCOM, INC: Owes European Banks USD3.718 BB WORLDCOM, INC: Labor Dep't Probes WorldCom Over Pensions =========== F R A N C E =========== ALCATEL: OmniSwitch Receives Award From Communications News ----------------------------------------------------------- Alcatel - www.alcatel.com -- announced on July 22 that Communications News magazine has awarded Alcatel's OmniSwitch 7000 series Editors Choice Award. Designed for the enterprise network edge and core, the Alcatel OmniSwitch 7000 is a series of carrier-class data switches that support high availability and security throughout the network and provide the ideal multi-service infrastructure for IP telephony and mission critical applications. "Our editors reviewed dozens of products and selected five products to receive Editors' Choice Award based on their usefulness to enterprise end users," according to Ken Anderberg, editor of Communications News. "Out of all of the products we reviewed, we believe that Alcatel's OmniSwitch 7000 was one of the most significant because it supports enterprise requirements for a highly-available, secure, and intelligent data infrastructure." The Alcatel OmniSwitch 7000 series is built upon a distributed, intelligent architecture to enable carrier-class availability, including full redundancy and resiliency, for continuous network operation. Coupled with the unique ability to protect against user misconfiguration and an optional redundant management module, the switches are ideal for the network edge, in the wiring closet for converged applications, and medium enterprise core. "The Alcatel OmniSwitch 7000's distributed intelligent architecture accelerates more network services than any switch on the market today," said Joelle Gauthier, Alcatel vice president of network infrastructure marketing. "Alcatel's OmniSwitch 7000 series is ideal for real-time requirements of mission critical applications and IP telephony, as it provides a highly-reliable and scalable architecture that enables our customers to grow their businesses." Communications News judged the OmniSwitch 7000 series among other products shown at Networld+Interop in Las Vegas in May of 2002. Editors' choice distinctions were published this month in Communications News and can be viewed at http://www.communicationsnews.com/stories/articles/c0602editchoic e.htm. Alcatel designs, develops and builds innovative and competitive communications networks, enabling carriers, service providers and enterprises to deliver any type of content, such as voice, data and multimedia, to any type of consumer, anywhere in the world. With sales of $22 billion (EURO 25 billion) in 2001 and 99,000 employees, Alcatel operates in more than 130 countries. ALCATEL: Provides Broadband Services to Bristol, Virginia --------------------------------------------------------- Alcatel - www.alcatel.com --, the worldwide leader in broadband access solutions, and Bristol Virginia Utilities, a forward- thinking municipal utility in Virginia, on Monday reached a multi-million dollar agreement to deploy the Alcatel 7340 Fiber- to-the-User (FTTU) solution in Bristol's new all optical network. Alcatel's solution enables Bristol Virginia Utilities (BVU) to deliver the complete trilogy of services: voice, video, and high- speed data services. Alcatel's 7340 FTTU solution enables BVU to deliver Internet access at much higher speeds than traditional dial-up modems, along with interactive video supporting analog and digital channels. Alcatel's FTTU solution, using a standards compliant technology, supports these services today as well as emerging high-bandwidth services like online gaming, music downloads, video-on-demand and high definition TV. Multiple lines of toll-quality voice services are delivered over a single connection via leading technology from General Bandwidth Inc. General Bandwidth's G6 packet telephony platform is part of Alcatel's complete solution for voice, video and data delivery. For Bristol and other municipal operators, the Alcatel 7340 FTTU is an ideal solution to deliver broadband to customers alongside traditional utility and electrical services. For example, a Bristol household will be able to simultaneously use four active phone lines, surf the Internet at fiber optic speeds, choose from hundreds of video channels, and take advantage of broadband services of the future - all delivered via a single fiber optic cable and with the convenience of a single bill to each consumer. "Providing all three services - voice, video and high speed data - over Alcatel's single fiber solution to each home proved to be a critical element in the economic analysis of competing technologies," said James Salter, CEO, Atlantic Engineering Group, an independent design engineering firm working on the Bristol Virginia Utilities project. "Alcatel's experience as a leader in broadband access will enable us to be one of the first communities in the U.S. to offer households an advanced full service optical network with all its advantages," said Jim Kelley, telecommunications manager, Bristol Virginia Utilities. "We will have the ability to provide a wide range of services backed with the high quality support that our customers expect and deserve." "Residents of Bristol, Va., will be among the technology elite by taking advantage of Alcatel's efforts to expand the benefits of broadband access," said Michel Rahier, President of Alcatel's Broadband Networking activities. "By working with a progressive municipality such as Bristol, we demonstrate another way in which we are committed to this goal." For more information about the Alcatel 7340 FTTU solution visit http://www.alcatel.com/fttu. About Bristol Virginia Utilities Bristol Virginia Utilities is a municipally owned system, providing electric, water, wastewater and telecommunication services to the City of Bristol, Va., and the surrounding area. These combined systems employ 68 people. It is governed by a six- member Board, including five members appointed by City Council and one member of the Washington County Board of Supervisors. ALCATEL: Wins EUR15 MM Deal From Tata Teleservices in India ----------------------------------------------------------- Alcatel -- http://www.alcatel.com.-- announced Tuesday that it has signed a contract with Tata Teleservices, a nationwide private fixed operator, to provide voice, data and multimedia services in India. The deal, worth EUR 15 million over a period of three years, will enable Tata Teleservices to be the first vendor to offer multimedia packet-based services in the country. Tata Teleservices broadband capabilities will be based on the Alcatel 1000 MM high capacity switching system as well as the Alcatel 7300 ASAM (Advanced Services Access Manager), the world's most widely deployed broadband access platform. Alcatel's solutions will enable the operator to smoothly migrate their networks towards next generation networks (NGN) and offer residential and business services such as music download, streaming video and high-speed internet access. M. Ramakrishnan, managing director Tata Teleservices Limited, said: "We have chosen Alcatel because of their technological excellence in switching and DSL markets. By implementing these solutions, we expect to get the first mover advantage in terms of technology within the country. This could enable us to service our customers with high quality voice, data and multimedia services on proven wireline technology." Gerard Dega, Alcatel's president for France, the Middle East, Central Asia, the Indian sub-continent, and Africa, added: "Alcatel has created yet another landmark in the Indian market by introducing and deploying new broadband solutions. This deployment showcases our broadband access solutions leadership and our ability in helping our customer delivering high quality multimedia services. " Active in India for more than two decades, Alcatel is a leading provider of end-to-end telecommunications and Internet based solutions to its customers in the government as well as private sector. Tata Teleservices Limited (TTSL) is a basic telecom service provider promoted by the Tata Industries limited. Presently operating out of Andhra Pradesh in India, it will soon be launching its range of products/ services across 5 other circles namely, Tamil Nadu, Karnataka, Gujarat, New Delhi and Maharashtra (including Goa). The companies product portfolio spans voice and data products/ services. In Andhra Pradesh where it is presently operational, the company has a network that includes an Optic Fibre Cable (OFC) backbone stretching over 2000 kms. and investments to the tune of USD 416 million with a customer base of over 170,000 customers. TTSL plans investing over USD 1700million (Rs 8500 crores), across the new circles with a network supported on OFC backbone, and other advanced support IT facilities. FRANCE TELECOM: State Hires Lazard to Advise on Debts ----------------------------------------------------- The French finance ministry has chosen and hired Lazard, a merchant bank, to come up with proposals focusing on restructuring the huge debts of France Telecom of which the French government retains 55.4% stake, a report from Les Echos and the Financial Times said. Lazard will be responsible in dealing with France Telecom's debt burden worth EUR63 billion at December 31 following an international acquisition spree, the papers said. Previously, Moody's Investors Service had predicted that France Telecom's debt could mount to about EUR70 billion by the end of 2002, despit eht group's attempt to sell assets in order to cut debts. This observation was the basis for the ratings agency to downgrade the group's credit rating to Baa3, the papers reported. France Telecom shares have kept on plunging since January 1 to 71% and closing at EUR13.01 last Sunday night. The papers said Lazard is seen to consider three possible strategies for reorganizing France Telecom's borrowings. First, will be a shareholder loan from the French government. Second, will be a debenture or bond issue at market rates and backed by the state. Lastly, Lazard will consider an issue of preference shares, without voting rights. Rumors regarding the possible renationalization of France Telecom were denied. Meanwhile, France Telecom is also expected to sign a deal with a consortium composed of Groupe Caissedes Depots et Consignations (CDC), plus Charterhouse Capital Development and CDC Equity Capital for the sale of its interest in French national television transmission company, Telediffusion de France. The sale is expected to generate EUR1.6-1.7 billion, the papers said. RHODIA SA: Sells Kermel Subsidiary Through Management Buyout ------------------------------------------------------------- Rhodia announced on July 23 that it had signed an agreement finalizing the sale of its wholly-owned Kermel subsidiary through a Management Buyout (MBO) led by the European private equity firm Argos Soditic. The transaction will be finalized before the end of August. Based in Colmar (in the Haut-Rhin department of eastern France), Kermel is one of the world leaders and the second European producer in the market for high performance technical fibers. Kermel manufactures and sells meta-aramid fiber used in fire- protection clothing (special clothing for the fire service, army, police, manufacturing industry, etc.) and various technical applications (electrical insulation, filtering of hot gases, printed circuits, etc.). This divestment is in line with Rhodia's decision to sell businesses not contributing to the Group's development model based on the cross-fertilization of technologies and the design of high added-value solutions for its customers. The separateness of Kermel's commercial and Research & Development activities offered no synergies with the rest of the Group. The different divestments planned for 2002 should allow the Group to reduce the level of its corporate debt by a total of EUR 500 million. Rhodia is one of the world's leading manufacturers of specialty chemicals. Providing a wide range of innovative products and services to the automotive, healthcare, food, cosmetics, apparel, new technology and environmental markets, Rhodia offers its customers tailor-made solutions based on the cross-fertilization of technologies, people and expertise. Rhodia subscribes to the principles of Sustainable Development communicating its commitments and performance openly with stakeholders. 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. Contact Information: Investor Relations Angelina Palus +33 1 55 38 42 99 Marie-Christine Aulagnon +33 1 55 38 43 01 VIVENDI UNIVERSAL: Plans to Create a New Canal Plus --------------------------------------------------- � A more coherent and independent group � A financial contribution to lower Vivendi Universal's debt 1. The Board of Directors of Vivendi Universal, chaired by Jean- Rene Fourtou, met on Tuesday July 23, 2002, and approved a plan to restructure the Canal+ Group. The plan has also been submitted for the opinion of the organizations representing the personnel of Vivendi Universal and the Canal+ Group SA. It has been presented to the Supervisory Board of the Canal+ Group and to the Board of Directors of Canal+ SA. It has also been presented to the regulatory body governing Canal+, the CSA, which is France's regulatory authority for the television and film sectors. 2. The plan aims to strengthen the future and growth of Canal+ by giving the company the means to finance its growth and foster creative production in both film and television. At the same time, the plan will provide new resources for Vivendi Universal. The plan is based on the following principles: - The grouping around Canal+ SA, a listed company that holds a CSA license, of what are essentially the French business activities of the Canal+ Group. The interests that Canal+ Group holds in Canal+ Distribution (100%), Canal+ R,gie (100%), CanalSatellite (66%), Multith,matiques (62%), it,l,vision (100%), Path, Sport (60%), as well as the whole of Media Overseas (owned by Vivendi Universal) will be transferred to Canal+ SA, a listed company, subject to the approval of the appropriate authorizations. In return, a capital increase will be carried out reserved for Vivendi Universal/ Canal+ Group. The holdings in Studio Canal (100%) and Sogecable (21.6%) will also be transferred to Canal+ SA. The remaining assets, especially those held outside France, will be retained by the existing Canal+ Group with a view to disposing of all or some of them. - The new group will continue to be listed on the Paris stock exchange. - Following the restructuring, Vivendi Universal will own 49% of the capital stock of the new group, which is the limit authorized by regulations. 3. The new group will be more coherent and independent. It will bring together the channel's production and distribution activities, and give it control over its customer databases and subscriber relations. The group will have all the resources needed to develop, move forward and improve its profitability. 4. Vivendi Universal will benefit from a financial contribution that will enable it to significantly lower its debt. The financial contribution will come from two elements: the sale of the equity exceeding the 49% retained by Vivendi Universal, and the disposal of a number of international assets, such as Telepiu in Italy. CONTACTS: Investor Relations Paris Laura Martin Telephone: 917.378.5705 Laurence Daniel Telephone: +33 (1).71.71.1233 New York Eileen McLaughlin Telephone: +(1) 212.572.8961 ============= G E R M A N Y ============= HERLITZ: Sees FY Operating Profit After Loss in H1 of 2002 ---------------------------------------------------------- Chairman Christian Supthut of Herlitz AG, the insolvent German stationery company is said he is confident the company will reveal an operating profit for the full year after a loss in the first half of 2002, a report from AFX News said. Herlitz had reported an operating loss of EUR5.5 million on sales in the first half of 2002. Supthut is confident that the company "will end the year with a profit." The company filed for insolvency in Berlin in April. However, it is now afloat after its creditors agreed on a rescue plan under which they will waive millions of euros in loans, the news outfit said. Supthut said the current debt level of the company is roughly EUR150 million. He added that the company is in ongoing talks with potential investors who may take a stake in the stationery company, AFX said. EM.TV: Triumphs in Legal Dispute Against Minority Shareholders -------------------------------------------------------------- Beleaguered media group EM.TV has won the lawsuit surrounding damage compensation claims of 55 minor shareholders at the court of second instance, Suddeutsche Zeitung /FT Information reports. A Munich-based court has rejected the claim of shareholders, who had sued the media group for damage compensation of more than EUR700,000. Fifty five minor shareholders of EM.TV accused its management management to be responsible for the company's huge share price drops. So far, all other lawsuits which shareholders have filed against the media company have been rejected at the court of first instance. FLOTOTTO: Furniture Manufacturer Files for Insolvency ----------------------------------------------------- The German furniture manufacturer, Flototto has declared itself insolvent without stating the reasons why it filed for insolvency, a report from the Financial Times said. Flototto's last turnover figure was EUR15 million. In the mid 1990s, group turnover stood at around DM100 million. KIRCHGRUPPE: HVB and BayernLB Will Take Control of Premiere ----------------------------------------------------------- Germany's HVB GROUP and Bayerische Landesbank are reported to be taking over pay-TV group Premiere by a conversion of loans worth EUR750 million into equity, a report from Reuters said. The two German banks will join U.S. investment bank Morgan Stanley in seeking for likely investors in Premiere among the finance sector, the report said. The loss-making unit of KirchGruppe, Premiere has been trying to stay afloat and waiting for an effective turnaround plan that would improve its profit by 2004, the news outfit said. A prospectus made by Morgan Stanley, said Premiere would be made into a New Premiere GmbH controlled by the two Munich banks after it would be drained of its debt, the news outfit said. The Munich banks would leave standing credits worth EUR300-400 million. They are also going to provide a further EUR100-200 million by 2004, Reuters reported. KLING JELKO: Admits It Is Broke, Declares Itself Insolvent ----------------------------------------------------------- Kling Jelko Wertpapierhandelsbank, the German stockbroker, has declared itself insolvent, as it admits to financial services watchdog BAFIN that it is facing a cash crunch, a report from Financial Times Deustcheland said. BAFIN has placed the bank under an immediate payment moratorium. Kling Jelko's credit line has been used up in spite of efforts to ask for an injection of fresh capital into the business, the report said. Kling Jelko is the latest in a line of financial services providers to face insolvency, after Gontard & Metallbank earlier filed for the move. MOBILCOM AG: Cost Cuts Force Mobile Group to Close Computer Chain ----------------------------------------------------------------- Cellular phone supplier Mobilcom AG said last week it will close its computer hardware and software chain, Comtech, by the end of August, a report from the Associated Press was cited as saying. The move comes after the group's decision to focus on its core business and implement cost-cutting plans. The closure will affect an undisclosed number of employees at Mobilcom's 62 Comtech branches. The chain has a workforce of about 325 employees, the paper adds. France Telecom holds 28.5 % stake in Buedelsdorf-based Mobilcom. The German mobile company is trying to cut spending after reporting a net loss of EUR 116.4 million ($117.2 million) in the first quarter. France Telecom has been in talks for months to take control of Mobilcom. ============= I R E L A N D ============= ELAN CORPORATION: Schedules Webcast Q2 Results and Recovery Plan ---------------------------------------------------------------- Elan Corporation, plc - www.elen.com -- announced Wednesday that it will report second quarter 2002 financial results on July 31, 2002, before the financial markets open. The announcement will be followed by a conference call at 8:30 a.m. Eastern Time with the investment community. The call will also address specifics of Elan's recovery plan. Live audio of the conference call will be simultaneously broadcast over the Internet and will be available to members of the news media, investors and the general public. The conference call is expected to last approximately one hour. Elan is a leading worldwide, fully integrated biopharmaceutical company headquartered in Ireland, with its principal facilities located in Ireland and the U.S. Elan is focused on the discovery, development, manufacturing, selling and marketing of novel therapeutic products in neurology, pain management and autoimmune diseases and the development and commercialization of products using its extensive range of proprietary drug delivery technologies. Elan shares trade on the New York, London and Dublin Stock Exchanges. FLEXTRONICS: Announces First-Quarter Results -------------------------------------------- Flextronics, a global provider of operational services focused on delivering design, engineering, manufacturing and logistic solutions to technology companies, today announced results for its first quarter ended June 30, 2002, as follows: First Quarter Ended June 30, ($ in millions, except EPS data) (A) 2002 2001 Net sales $3,127.0 $3,110.6 Proforma operating income $52.4 $123.0 GAAP operating income (loss) $(158.7) $120.7 Proforma net income $30.1 $90.6 GAAP net income (loss) $(131.2) $88.3 Diluted proforma EPS $0.06 $0.18 Diluted GAAP EPS $(0.25) $0.17 (A) Proforma results exclude intangibles amortization and unusual charges. Net sales for the quarter ended June 30, 2002 were $3.1 billion, up by $16 million from a year ago. Proforma net income before amortization and unusual charges was $30 million or $0.06 per diluted share. Including after tax unusual charges of $158 million and amortization of $3.2 million, GAAP net loss amounted to $131 million or $0.25 per diluted share. The unusual charges related primarily to a previously announced restructuring plan that includes the closure, sale or downsizing of a number of locations around the world, resulting in the elimination of approximately 1.5 million manufacturing square feet. The Company continues to manage and strengthen its balance sheet and working capital performance in the face of a slow economic environment. Flextronics reported $827 million in cash at the end of the June quarter, up from $745 million at the end of last quarter. In addition, total debt was reduced by more than $115 million from a total of $1.16 billion at the end of last quarter to $1.05 billion. The Company generated cash flows from operations of approximately $300 million during the quarter and achieved a cash conversion cycle of 31 days from improved working capital management. "We are moving to take costs out of our business throughout the Company. In addition to the expected savings from the restructuring announced this quarter, we are intensely focused on lowering costs in all areas over the next few quarters," said Michael E. Marks, Chairman and Chief Executive Officer of Flextronics. "In the meantime, we continue to win our fair share of new customer opportunities and are cautiously optimistic about our business even in the near term. The focus on improving profitability and cash flow is making our company better. We believe we have a stable liquidity position and are extremely well-positioned to meet customer needs in costs reductions and enhanced product offerings," Marks further added. The company's latest financial results may be viewed at: http://bankrupt.com/misc/flextron.pdf Contact Information: Laurette Slawson Hartigan Vice President Treasurer Telephone: +1-408-576-7722 Investor Relations: Email: relations@flextronics.com FLEXTRONICS: Completes Takeover Offer for NatSteel Broadway Ltd. ----------------------------------------------------------------- This transaction strengthens Flextronics'- www.flextronics.com -- manufacturing reach in Southern China and enhances Flextronics' complete supply chain offerings with more extensive toolmaking, plastic molding and electronics manufacturing capabilities. "The acquisition of NatSteel Broadway is significant to Flextronics as we aim to increase our global footprint, manufacturing presence and ongoing commitment in this region," said Ash Bhardwaj, President of Flextronics' Asia Pacific Operations. He further added, "The wide-ranging toolmaking and plastic molding capabilities that this acquisition will bring enhances our service offering as we continue to penetrate the consumer electronics market, and is an overall outstanding addition to our company." ===================== N E T H E R L A N D S ===================== VERSATEL TELECOM: Tiscali Signs 15-year Contract With Versatel -------------------------------------------------------------- Tiscali SpA's Dutch unit has signed a 15-year contract with Versatel Telecom International NV as it plans to build its own network in the Netherlands and expand its offerings, a report from AFX News said. Tiscali's Dutch unit will now rely on Versatel for connecting traffic with other networks, such as Royal KPN NV's fixed-line network. Cisco Systems will provide Tiscali with network equipment, the news agency said. Financial details of the project were not released. =========================== U N I T E D K I N G D O M =========================== ASW HOLDINGS: KPMG Confident Steel-Making Business Finds Buyer -------------------------------------------------------------- Administrative receiver KPMG is said to be in ongoing talks with several companies regarding the sale of Allied Steel and Wire (ASW) Holdings and is confident that a buyer could be found, a report from the Western Mail said. ASW went into administrative receivership on July 10 following its failure to secure continued support from its banks, the paper said. Cut-price competition from Eastern Europe and the Far East and the strict implementation of American steel tariffs were some of the reasons that lead to ASW's financial difficulties. ASW employs 1,000 people in Cardiff, 300 more in Sheerness, Kent, and 30 in Belfast. The company will continues operating its plants while KPMG looks for a purchaser, the report said. Previously, it was revealed that the Welsh Development Agency (WDA) had bought the freehold to ASW's Castle Works site in Cardiff Bay just six weeks before ASW went into receivership, the daily said. In the light of the revelation, WDA has insisted its only purpose to create part of a portfolio of sites across South Wales that were offered for sale by Associated British Ports, the paper said. WDA also expressed its hopes that ASW would not go into liquidation and would "acquired as a going concern, safeguarding the 1,000 jobs in the process," the Western Mail reported. BIOGLAN AB: Wilh. Sonesson Sells Product Rights Through Unit ------------------------------------------------------------ Wilh. Sonesson AB acquired the pharmaceutical company Bioglan AB in Malmo on May 13, 2002. In connection with the acquisition, Bioglan sold its whole research operation to a public English company, the company's statement recently announced. As previously announced Bioglan gave the buyer an option to acquire rights to marketed products, primarily in Germany. These products are not of strategic importance since the geographic focus of Bioglan, as well as all other Wilh. Sonesson operations, is the Nordic countries. The option has been called on, and the buyer is Riemser Arzneimittel AG, a German pharma company. Riemser has payed 52 MSEK for the product rights, which of SEK 20 Million is paid in cash and MSEK 32 by accepting liabilities. For the Wilh. Sonesson corporation the transaction has limited influence on profit, and the net debt is reduced by SEK20 million. COLT TELECOM: Appoints Steve Atkin President and CEO ---------------------------------------------------- COLT Telecom Group plc said Wednesday that Steve Akin, President of Fidelity Capital, the emerging business development arm of Fidelity Investments, had been appointed to the Board of Directors and will succeed Peter Manning as COLT's President and CEO with effect from 25 July 2002. Mr. Manning will step down as a director but will remain as an advisor to the Board. COLT also said that Vincenzo Damiani has been appointed to the Board of Directors. COLT Chairman Jim Curvey said: 'Reflecting the evolution of COLT's strategy and in particular the completion of the infrastructure build phase of our business plan and the increasing emphasis on sales, service and marketing Steve Akin has been appointed to lead COLT through the next stage of its growth and development. 'I take this opportunity to thank Peter for the great contribution he has made to the success of COLT over the past three years. He has taken COLT to the next level of its development and feels the time is now right to move on to new challenges. Under his leadership COLT has grown and developed, is financially strong and is now regarded as one of the leading European providers of business communication services. We are pleased to be able to retain his services as an advisor to the Board. 'I welcome Steve and Vincenzo to the Board. Their considerable business experience in IT systems and telecommunications services will be a real asset as we drive COLT forward through its next phase of growth and development.' About Steve Akin Steve Akin has been President of Fidelity Capital, the emerging business development arm of Fidelity Investments since January 1999. He is also a member of Fidelity's Operating Committee. In January 1997 he was named President of Fidelity Investments Systems Company. In this position he served as Chief Information Officer responsible for computer operations, global telecommunications networks and enterprise-wide applications support and development. Prior to joining Fidelity in 1992 as President of Fidelity Retail Investor Services, Mr. Akin was President of Sprint Long Distance Consumer Services Group. He also served as Senior Vice President of National Customer Operations of Sprint and prior to that held a number of operational management roles in the US telecommunications industry. He has a Bachelor of Arts degree in Economics and is a graduate the Managing the Enterprise Program at Columbia University Business School. About Vincenzo Damiani Before joining EDS in 1997, Vincenzo Damiani spent 29 years at IBM where he held several worldwide management positions, including President of Marketing and Services of IBM Europe, Middle East and Africa. He was also a member of the Executive European Committee and member of the Board of IBM Europe. In 1993 he was appointed Corporate Vice President and President of Digital Equipment Europe. Mr. Damiani is on the Board of Banca di Roma, a leading Italian bank, and is a member of its Executive Committee. He is also member of the Board of Augeo Holding BV, a Dutch high-tech start up. As a consequence of this announcement COLT has decided to bring forward the publication of its financial results for the three and six months ended 30 June 2002. The financial results are being published simultaneously with this announcement. Conference Call Details A conference call for analysts and shareholders is scheduled for 10.00 am (UK time) Wednesday 24 July. The dial in number for this call is +44 (0) 8700 013123 or +44 (0) 800 528 0621. A second conference call for North American based analysts and shareholders is scheduled for 3.30 pm UK time (10.30 am EST). The dial-in number for this call is +1 212 271 4811 or +1 888 209 3802. Contact Information: John Doherty Director Investor Relations Telephone: +44 20 7390 3681 COLT TELECOM: Results for 3 and 6 Months Ending June 30, 2002 --------------------------------------------------------------- Commenting on the results, COLT Telecom Group Chairman Jim Curvey said: 'Despite a difficult business environment COLT continued to make progress during the quarter with both turnover and EBITDA exceeding expectations. Turnover increased by 17% to GBP258.3 million and EBITDA increased by 127% to GBP14.7 million, excluding infrastructure sales, compared to the second quarter of 2001. 'We had over 14,400 directly connected network services and eBusiness customers at the end of the quarter and the difficulties being faced by a number of our competitors should over time help further increase market share. At the same time as continuing to expand our customer base we reduced capital expenditure to GBP111 million compared to GBP187 million in the second quarter of 2001 and GBP139 million in the first quarter of 2002. 'Reflecting the confidence we have in the strength of our financial position we purchased approximately GBP67 million of debt securities during the quarter resulting in an exceptional gain of GBP34.7 million. At the end of the quarter we had cash and cash equivalents of GBP1.1 billion.' Peter Manning, COLT's President and Chief Executive Officer said: 'COLT's reputation for quality, reliability and excellent customer service combined with our competitive financial strength is demonstrated by our ability to win business from current and new customers in difficult times. The strength of our balance sheet is an increasingly important differentiator in winning new business. 'At the end of the quarter we had 12,788 directly connected network services customers and 1,638 eBusiness customers, increases of 49% and 64%, respectively, over the position at the end of the second quarter last year. Despite the weakness in the wholesale bandwidth market we remain encouraged by the demand we are seeing from corporate customers with revenues up 32%. 'Among new customer contract wins in the quarter were NASDAQ Europe which placed a major IPVPN order covering 30 sites in 6 countries and in France we signed a master agreement with La Banque Federale des Banques Populaires which offers the potential to provide IPVPN services to 2,200 branches. Among other significant customer wins were Cadbury Schweppes, RTE, the Irish national television service, Oracle, Siemens and Rabobank. In the government and education sectors COLT achieved further success. 'In Belgium COLT is part of the FedMan project providing high bandwidth facilities to connect 15 Government buildings. In The Netherlands COLT has been selected by the Dutch government to be one of its four providers of web hosting activities and in Germany COLT has won new business with the Federal Bureau of Statistics and the Humboldt University, Berlin. 'COLT continues to be recognised by its customers as providing the highest levels of quality of service and for the third year in succession the Belgian Telecom Users Group survey gave COLT the best overall score for customer service. 'Average switched revenue per minute increased by 9% over the first quarter of 2002, reflecting a further improvement in mix and a more stable pricing environment generally. 'Non-switched network services continue to be influenced by the weakness in the wholesale bandwidth market. Nonetheless, we added a further 1.4 million private wire VGEs during the quarter bringing the total to 17.2 million, an increase of 42% over the position at the end of the second quarter last year. eBusiness revenues increased by 55% to GBP13.8 million compared to the second quarter of 2001. 'In the first six months of 2002 we have reduced employee numbers by 214 and temporary and contract workers by 156. We will continue to improve our operating efficiencies and ensure our organization is best placed to deliver the product range and service quality demanded by our customers.' HIGHLIGHTS FOR THE QUARTER - Results better than expectations - Turnover up 17% to GBP258.3 million - EBITDA up 127% to GBP14.7 million - Bond buy back exceptional gain of GBP34.7 million - Cash and cash equivalents of GBP1.1 billion - Directly connected network customers up 49% to 12,788 - eBusiness customers up 64% to 1,638 - Staff numbers down cumulatively by 370 including 156 temporary/contract workers FINANCIAL REVIEW Turnover Turnover increased from GBP224.1 million and GBP433.5 million for the three and six months ended June 30, 2001 to GBP258.3 million and GBP505.1 million for the three and six months ended 30 June 2002, increases of GBP34.2 million and GBP71.6 million or 15% and 17%, respectively. Turnover for the three and six months ended June 30, 2001 included GBP3.8 million in respect of infrastructure sales. There were no infrastructure sales during the equivalent periods in 2002. The increases in turnover were driven by continued demand for COLT's services from existing and new customers, new service introductions and the continued expansion of COLT's addressable market. However, the rates of growth have been affected by the slowdown in economic growth across Europe generally and reduced demand in some areas, particularly the wholesale bandwidth market. Turnover from switched network services increased from GBP127.8 million and GBP253.8 million for the three and six months ended June 30, 2001 to GBP159.0 million and GBP311.1 million for the three and six months ended June 30, 2002. Growth in switched network revenue reflects growth in switched minutes from 5.0 billion and 9.7 billion in the three and six month periods in 2001 to 5.1 billion and 10.4 billion in the comparable 2002 periods. For the three and six month periods ended June 30, 2002 compared to the equivalent periods of 2001, average switched revenue per minute increased by 22% and 13%, respectively, as a result of changes in mix and a more stable pricing environment. Carrier revenues represented 34% and 35% of total switched revenue for the three and six months ended June 30, 2002 compared with 36% for both equivalent periods in 2001. Total wholesale (carrier and ISP) switched revenues represented 54% of total switched revenues in both the three and six month periods in 2002 compared with 56% and 58% in the equivalent periods in 2001. Turnover from non-switched services, increased from GBP91.8 million and GBP174.3 million for the three and six months ended 30 June 2001 to GBP98.8 million and GBP192.6 million for the three and six months ended June 30, 2002. Non-switched network services revenue increased from GBP82.9 million and GBP158.3 million in the three and six month periods in 2001 to GBP85.1 million and GBP165.8 million in the equivalent periods in 2002. eBusiness revenue increased from GBP8.9 million and GBP16.0 million to GBP13.7 million and GBP26.8 million during the respective three and six month periods. Growth in non-switched network services revenue reflected the growth in demand for local, national and international bandwidth services from both retail and wholesale customers, partially offset by circuit cancellations from selected carriers either exiting the market or rationalising their networks. At June 30, 2002 COLT had approximately 17.2 million voice grade equivalent private wires in service, an increase of 42% compared to June 30, 2001. The growth in non-switched network services revenue also reflects the growing success COLT is achieving in the provision of IPVPN services. Growth in eBusiness revenue reflects the continued demand for COLT's range of hosting, managed and professional services and the inclusion of Fitec results following its acquisition in July 2001. At June 30, 2002, COLT had 2,516 racks installed, an increase of 38% compared to June 30, 2001 and 1,638 eBusiness customers. Non-switched turnover from retail customers represented 72% and 71% of total non-switched turnover for the three and six months ended 30 June 2002 compared to 54% and 59% in the equivalent periods in 2001. Turnover from other activities was GBP0.5 million and GBP1.3 million for the three and six months ended June 30, 2002 and GBP4.5 million and GBP5.4 million for the equivalent periods in 2001. Turnover from other activities in 2001 included GBP3.8 million of infrastructure sales. There were no infrastructure sales during the equivalent periods in 2002. Cost of Sales Cost of sales, before exceptional items and excluding costs associated with infrastructure sales increased from GBP193.1 million and GBP375.1 million for the three and six months ended June 30, 2001 to GBP236.2 million and GBP462.8 million for the three and six months ended June 30, 2002, increases of GBP43.1 million and GBP87.7 million or 22.3% and 23.4% respectively. Interconnection and network costs, before exceptional items and excluding costs associated with infrastructure sales, increased from GBP155.4 million and GBP304.2 million for the three and six months ended June 30, 2001 to GBP183.0 million and GBP359.1 million for the three and six months ended June 30, 2002. The increases were primarily attributable to interconnection payments associated with the 2% and 8% increases in switched minutes as well as additional network operating costs related to growth achieved in the 27 markets in service at June 30, 2001 and the 5 new markets brought into service over the twelve months to June 30, 2002. In addition, operating costs attributable to the expansion of eBusiness services, the inclusion of Fitec results following its acquisition in July 2001, and the introduction of additional services on COLT's inter-city network contributed to the increases in interconnection and network costs for the three and six months ended June 30, 2002. Network depreciation increased from GBP37.7 million and GBP70.9 million for the three and six months ended June 30, 2001 to GBP53.1 million and GBP103.7 million for the three and six months ended 30 June 2002. The increases were attributable to further investment in fixed assets to support the growth in demand for services, new service developments in existing markets, expansion into new markets and the introduction of additional services on COLT's inter-city network. For the six months ended June 30, 2002 an exceptional charge of GBP5.7 million was recognised for severance provisions related to the staff reduction program announced in February 2002. Operating Expenses Operating expenses, before exceptional items, increased from GBP68.1 million and GBP131.8 million for the three and six months ended 30 June 2001 to GBP73.9 million and GBP149.3 million for the three and six months ended June 30, 2002, increases of GBP5.8 million and GBP17.5 million or 8.5% and 13.3% respectively. Selling, general and administrative expenses, before exceptional items, increased from GBP58.4 million and GBP114.4 million for the three and six months ended June 30, 2001 to GBP60.5 million and GBP121.5 million for the equivalent periods in 2002. The increases were primarily due to increased personnel, office space, marketing and information technology expenses associated with the expansion of COLT's customer base, new services development and expansion into new markets. SG&A expenses decreased by GBP0.5 million compared to the first quarter of 2002 as a result of reduced staff numbers, expense controls and a reduction in rent, services and utilities expenses associated with excess leased space provided for in 2001. SG&A as a proportion of turnover excluding infrastructure sales and exceptional items in the three and six months ended 30 June 2002 was 23.4% and 24.0% compared to 26.5% and 26.6% in the equivalent periods of 2001 and 24.7%, excluding exceptional items in the first quarter of 2002. Other depreciation and amortisation increased from GBP9.7 million and GBP17.4 million for the three and six months ended 30 June 2001 to GBP13.4 million and GBP27.9 million for the equivalent periods in 2002. The increases were due mainly to depreciation on increased investment in information technology, customer service and support systems and office equipment in existing and new markets. For the six months ended June 30, 2002 an exceptional charge of GBP6.6 million was recognised for severance provisions related to the staff reduction program announced in February 2002. Interest Receivable, Interest Payable and Similar Charges Interest receivable decreased from GBP16.7 million and GBP36.0 million for the three and six months ended June 30, 2001 to GBP10.3 million and GBP20.6 million for the three and six months ended June 30, 2002 due to decreased average balances of cash and investments in liquid resources and lower rates of return during the period. Interest payable and similar charges decreased from GBP28.6 million and GBP57.2 million for the three and six months ended 30 June 2001 to GBP24.5 million and GBP50.2 million for the equivalent periods in 2002. The decreases were due primarily to a reduction in debt levels reflecting the purchase of GBP285.5 million accreted amount as at 30 June 2002 of the Company's outstanding notes. Interest payable and similar charges for the three and six months ended June 30, 2002 included: GBP9.1 million and GBP18.7 million, respectively, of interest and accretion on convertible debt; GBP14.9 million and GBP30.9 million, respectively, of interest and accretion on non-convertible debt; and GBP0.5 million and GBP0.7 million, respectively, of interest and bank commitment fees. Interest payable and similar charges for the three months ended 30 June 2002 comprised GBP17.7 million and GBP6.8 million of interest and accretion, respectively. Gain on Purchase of Debt COLT reported gains of GBP34.7 million and GBP73.2 million as a result of the purchase of a number of its notes by COLT Telecom Finance Ltd during the three and six months ended June 30, 2002. Exchange Gain (Loss) For the three and six months ended 30 June 2002 COLT had exchange gains of GBP10.5 million and GBP7.3 million compared with exchange losses of GBP2.5 million and GBP11.1 million in the equivalent periods in 2001. These gains and losses were due primarily to movements in the British pound relative to the U.S. dollar on cash and debt balances denominated in U.S. dollars. COLT realised an exceptional exchange gain of GBP4.8 million from the unwinding of the British pounds forward contracts previously held as a condition of it's bank facility which COLT terminated in June 2002. Tax on Loss on Ordinary Activities For the three and six months ended 30 June 2001 and 30 June 2002, COLT generated losses on ordinary activities and therefore did not incur a tax obligation. Financial Needs and Resources The costs associated with the initial installation and expansion of COLT's networks and services, including development, installation and initial operating expenses, have been, and in respect of new markets and services are expected to be significant and will result in negative cash flow. Negative cash flow is expected to continue in each of COLT's markets until an adequate customer base and related revenue stream have been established. For the three months ended June 30, 2001 there was a net cash outflow from operations of GBP23.7 million and for the six months ended 30 June 2001 there was a net cash inflow from operations of GBP4.8 million compared with net cash inflows of GBP31.4 million and GBP57.3 million, respectively, for the three and six months ended June 30, 2002. Changes to cash flow from operations include the effect of the timing of stage billings and payments with telecommunications operators associated with the construction of the Company's inter-city network and effects of movements in provisions. Net cash outflow from returns on investments and servicing of finance and from capital expenditure and financial investment decreased from GBP182.1 million and GBP358.9 million in the three and six months ended 30 June 2001 to GBP125.2 million and GBP261.8 million for the three and six months ended 30 June 2002. The decreases in net cash outflow were primarily a result of reduced purchases of tangible fixed assets, which decreased from GBP187.2 million and GBP379.4 million for the three months ended 30 June 2001 to GBP110.8 million and GBP249.8 for the equivalent periods in 2002. There were no proceeds from the exercise of options in the three months ended June 30, 2002, while proceeds of GBP0.1 million were raised during the six months ended June 30, 2002. COLT terminated it's bank facility in June 2002 and had balances of cash and investments in liquid resources at June 30, 2002 totaling GBP1,058.2 million compared to GBP1,304.5 million at December 31, 2001. The group's profit and loss and balance sheet financial results may be viewed at: http://bankrupt.com/misc/colt.pdf MARCONI PLC: ANZ Bank Estimates Loan Exposure at US$131 MM ---------------------------------------------------------- Australia and New Zealand Banking Group Ltd (ANZ Bank) admits it has loan exposures to Marconi plc of about USD131 million, Ananova sources say. According to ANZ, it remained well provisioned and expects to achieve a full year profit in line with market expectations. Analysts forecast ANZ to report a year to September net profit of AUD2.060 billion, Multex Global Estimates says. After Marconi's trading update where the company said it was in "relatively advanced" talks with its banking syndicate over a debt to equity swap, ANZ said it was releasing the total of its exposure. ANZ adds, "Negotiations between Marconi and its syndicate bankers are still to be finalized and it is inappropriate to comment further at this stage." "Marconi was investment grade just over 12 months ago but it has been severely impacted by the downturn in the telecommunications sector. In recent years however ANZ has substantially reduced its exposure to Marconi," says ANZ chief financial officer Peter Marriott. The company said its lending to the telecommunications sector represents about 2% of its total lending assets. RAILTRACK PLC: Shareholders Favors EUR1.3 BB Government Offer ------------------------------------------------------------- Majority of the shareholders of Railtrack Plc had voted in favor of accepting the government's EUR1.3 billion offer following investors' accusations against the government on the way investors were treated, the Independent said. The ministers were accused of "lying and cheating" and being "morally derelict." Calls have emerged for Stephen Byers, the former Secretary of State for Transport, to be incarcerated for the "theft" of Railtrack's assets, the paper said. It is reported that 97% majority of shareholders approved the government's compensation offer of 245p to 255p while Railtrack's big institutional investors exercised their "bloc vote" in favor, at an extraordinary shareholders' meeting in London's Alaexandra Palace, the paper reported. During the meeting, private shareholders expressed their fury for the first time since Mr Byers forced Railtrack into administration last October. They slammed the government for its treatment of the company and criticized Railtrack's board for recommending the acceptance of the offer, the daily said. Some shareholders were even more angry at the company's board for suggesting the acceptance of the offer. They said that according to calculations, the offer would represent just a third of the amount the government might be forced to pay if a court case ensued. They also criticized the board for not seeking legal action against the government, the paper said. RAILTRACK PLC: Chairman's Message on Railtrack Plc Disposal ----------------------------------------------------------- Addressing shareholders at the Extraordinary General meeting in July 23 called to consider the proposed disposals of Railtrack PLC and the Group's interests in the Channel Tunnel Rail Link Chairman Geoffrey Howe said: 'I would like to make some general remarks about the issues which are in front of us today. 'First the circumstances of the administration order. Angry as we all are with the action taken by the Government to put Railtrack PLC in administration, I see little purpose in dwelling on this now. 'We have already outlined the key events of 2001 in the circular you have received and, much as we would like to, we cannot change what has already happened. What we have to decide upon is the right course of action in the current circumstances. 'Since October your Board first successfully staved off the immediate and very real threat of insolvency of Railtrack Group. 'Then, together with the various shareholders action groups, we have fought a vigorous campaign against the Government with a view to achieving an acceptable settlement for shareholders. This has included an active media campaign and the threat of legal action. 'At the end of March, as a result of the many pressures on Government to find a resolution of the situation they had created, offers were made to us for the purchase of the shares in Railtrack PLC and our interest in CTRL. 'It was made very clear to us that these offers were not open to further negotiation. The Board supported by a team of financial and legal advisers of the highest quality undertook a detailed and lengthy evaluation of the offers and negotiated a series of improvements in them before making its recommendation to you. 'The proposals in front of you today are part of a package which should permit between 245p and 255p being returned to shareholders. While I know that many shareholders believe this sum should be higher, the Board has to be realistic about the options that are available. 'It is only 10% less than the share price on the day the our subsidiary Railtrack PLC went into administration and it is a significant advance on the Government's initial position that shareholders would receive nothing. 'In today's market and given the news that has emerged from Railtrack in recent months, who knows what the share price would have been had there been no Administration. 'We believe that this is the best offer we will get from Government and given the substantial risk and uncertainties of litigation (which is the only other available course of action), we unanimously believe that it is in the best interests of shareholders to accept it. Indeed the board strongly recommends it to you and believes it would be grossly irresponsible to do otherwise. If the proposals are implemented: Shareholders should be able to receive 245-255 pence per share in the relatively near future. If the proposals are not implemented: First - it is most unlikely that we would receive any value for the shares of Railtrack PLC. Second - without the cooperation of Government any realisation in respect of CTRL will be very significantly less. Third - it is unclear when, if ever, the o350m in cash would be recovered from Railtrack PLC. Fourth -the financial and performance guarantees relating to PLC and CTRL would remain outstanding for the foreseeable future. It follows that the amount and timing of any cash return to shareholders will be highly uncertain and it is doubtful whether this company would remain solvent. In this scenario you will have placed your hope on a higher offer being received from Government - most unlikely - or ultimate success in litigation. 'We have already commented on litigation but let me just repeat that in the Board's view valuations of the shares of Railtrack PLC at the levels mentioned by one of the action groups in a recent letter to its members are quite unsustainable and to pursue litigation in reliance on these will in our view, lead only to disappointment. 'Let me repeat therefore that your Directors believe that the Proposed Disposals are in the best interests of Railtrack Group shareholders as a whole and we unanimously recommend you to vote in favor of the Resolution, as all Directors with shares in the Group intend to do in respect of their own shareholdings.' WORLDCOM, INC.: Court Approves Use of DIP US$750 MM Financing ------------------------------------------------------------- WorldCom, Inc. - www.worldcom.com -- announced Monday that the U.S. Bankruptcy Court in the Southern District of New York approved $750 million dollars in interim financing that will provide the company with sufficient funds to continue operations, pay employees and continue service to customers. The company has finalized its agreement with the banks providing the debtor-in- possession (DIP) facility. A hearing for final approval of the DIP facility that would permit the company to borrow up to $2 billion dollars is scheduled for September 4, 2002. The Court also granted all of WorldCom's first day motions that are intended to support its customers, employees and other business partners and provide other forms of operational and financial stability as WorldCom proceeds with its financial reorganization. The Court authorized payment of pre-petition wages, salaries, medical, disability, vacation and other benefits. The Court also granted a further stay of the scheduled conversion of the MCI group tracking stock into WorldCom common stock until further order of the Court. John Sidgmore, president and chief executive officer of WorldCom, said, "The court's actions today are a solid first step toward restoring financial health to the company. These actions will enable WorldComm to continue operating without interruption and continue to provide service to our customers and a steady income to our employees and vendors." WorldCom, Inc. is a pre-eminent global communications provider for the digital generation, operating in more than 65 countries. With one of the most expansive, wholly-owned IP networks in the world, WorldCom provides innovative data and Internet services for businesses to communicate in today's market. In April 2002, WorldCom launched The Neighborhood built by MCI -- the industry's first truly any-distance, all-inclusive local and long-distance offering to consumers. WORLDCOM, INC: Owes European Banks USD3.718 BB ----------------------------------------------- WorlCom Inc. in its Chapter 11 filing said it owes major European banks a total of USD3.718 billion, a report from Dow Jones said. Court documents reveal that Deutsche Bank, which is WorldCom's biggest creditor is said to claim a USD1.241 billion against WorldCom. That includes USD1.006 billion worth of bonds it bought for itself and clients, and a USD240.8 million loan, the news agency said. Deutsche Bank however, would not comment on its true exposure. On Monday, ABN Amro said its exposure would not amount to more than EUR100 million, suggesting that most of the debt was sold on behalf of clients, the news outfit said. Citing WorldCom spokesman Jochem van de Laarschot, Dow Jones said that once WorldCom does become bankrupt and ABN Amro has to forfeit its EUR100 million, it won't lead to changes in its total provisioning for 2002. Four banks - Credit Lyonnais (F.CLC) of France, Bayerische Landesbank (G.BLG) of Germany and the U.K.'s Royal Bank of Scotland (U.RBK) and Lloyds TSB (U.LTS) - are owed the same figure, $100.2 million, suggesting the debt was syndicated between them. Deutsche Bank AG, Bayerische Landesbank AG (G.BLG) and WestLB (G.WLG) declined to comment. In Germany, HVB Group AG said that its exposure to WorldCom is less than EUR10 million. Allianz AG also said its exposure to WorldCom is in the low-three-digit millions of euros. Credit Suisse First Boston, which WorldCom owes USD272.6 million in bonds, refused to comment. IntesaBCI owed USD150.3 million in loans, said currently evaluating its position. UBS Warburg, the third largest European creditor is owed USD369.2 million. Following is a table showing the money claimed by European banks in the filing lodged at the U.S. Bankruptcy Court in the Southern Division of New York. The filing only lists debts above $100 million. WorldCom owes other European financial institutions less than this figure. Bank Debt type Total claimed Deutsche Bank bonds $1.006 billion bank loan $240.8 million ABN Amro bonds $753.1 million bank loan $203.2 million UBS Warburg bonds $369.2 million CSFB bonds $272.6 million WestLB bank loan $171.6 million BNP Paribas bank loan $150.3 million IntesaBCI bank loan $150.3 million Credit Lyonnais bank loan $100.2 million Bayer. Landesbank bank loan $100.2 million Royal Bank of Scot. bank loan $100.2 million Lloyds TSB bank loan $100.2 million WORLDCOM, INC: Labor Dep't Probes WorldCom Over Pensions -------------------------------------------------------- The United States Labor Department said on Tuesday it is conducting a probe into WorldCom regarding speculations that the company mishandled savings plans of thousands of its workers and retirees, the Associated Press reported. The probe is the latest among the investigations the beleaguered company has to face. Earlier, the Justice Department and the Securities and Exchange Commission had announced that it is investigating the company for mismanagement, irregularities or fraud, the news outfit said. The labor department's probe started on June 27, following WorldCom's disclosure of misappropriated accounts worth nearly USD4 billion in expenses, the news outfit said. WorldCom filed for bankruptcy protection Sunday, which made it the largest filing in corporate history. The Labor Department's investigation falls under the Employee Retirement Income Security Act of 1974, which governs retirement plans provided by employers, including profit sharing and 401(k) plans and also health, disability and life insurance plans. The Labor Department is also looking into WorldCom's plan documents, plan summary descriptions, investment policy statements, all communications between plans and participants and minutes from any meetings involving plan officials, the Associated Press reported. In the light of WorldCom's filing for bankruptcy protection, the Labor Department also wants to ensure that the company would comply with its pledge to current workers regarding health insurance coverage and retirement contributions, the news agency said. * ************ 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 and 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. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. * * * End of Transmission * * *