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/raid1/www/Hosts/bankrupt/TCREUR_Public/020902.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Monday, September 2, 2002, Vol. 3, No. 173 Headlines * F R A N C E * FRANCE TELECOM: Board Reschedules Meeting for September 12 NORTEL NETWORKS: Safeway Selects Nortel's Voice Over IP Solutions NORTEL NETWORKS: Aycell Will Invest USD94 MM in Network Expansion VIVENDI UNIVERSAL: Subsidiary Gets Joint Offer From Equity Firms * G E R M A N Y * BABCOCK BORSIG: Considers Legal Battle Over OEP's Purchase of HDW BKMU: Bank Investigations Extended EM.TV: Improves Comparable Operating Results in First Half EM.TV: Expects to Sell Jim Henson Co. in Next Few Weeks HELKON NATIONAL: Interactive Games Developer Files for Insolvency KIRCHGRUPPE: WAZ Set to Buy KirchHolding's Stake in Axel Springer KIRCHMEDIA: Axel Springer Confirms Interest in ProbSieben Stake MOBILCOM: Reviews UMTS Plans Amid Current Market Conditions PIXELPARK AG: Announces Figures for Second Quarter 2002 RAYOVAC CORPORATION: Moody's Confirms Ba3 Senior Implied Rating * I T A L Y * FIAT SPA: Confirms Change of Leadership at German Unit TELECOM ITALIA: Finalizes Sale of 97.5% Stake in 9Telecom * N E T H E R L A N D S * KPN NV: Smits Will Resign From Management Board * P O L A N D * ELEKTRIM SA: Offers Deutsche Telekom 6% Stake in PTC ELEKTRIM SA: Issued Schedule on Restructuring Date for Bonds NETIA HOLDINGS: Lenders Accept Subsidiary's Arrangement Plan * S W E D E N * ICON MEDIALAB: WM Data Acquires IT Provider's Unit in Finland LM ERICSSON: Hellstroem Seeks Quick Results From Sony Venture LM ERICSSON: China Mobile Awards MMS Contract to Ericsson LM ERICSSON: Confirms Secured Customer Financing for Leap Wireless * U N I T E D K I N G D O M * COOKSON GROUP: Metals Company's Rights Issue Raises GBP277 MM ENERGIS PLC: S&P Withdraws Credit Ratings at Elektrim's Request MARCONI PLC: Reveals Non-binding Terms for Financial Plan =========== F R A N C E =========== FRANCE TELECOM: Board Reschedules Meeting for September 12 --------------------------------------------------------- The forthcoming meeting of France Telecom's Board of Directors originally planned for September 4 has been rescheduled for September 12, 2002. The meeting will include a review of the different options involving MobilCom as well as approval of half- year results. This additional period is necessary to finalize the board's analysis. Consequently, France Telecom's (http://www.francetelecom.com) first-half 2002 financial results will be published on Friday September 13, 2002, one week later than originally planned. For the same reason, the meeting of the Orange Board of Directors is postponed from the 3rd until September 12, and the half-year results will be published on September 12, 2002. NORTEL NETWORKS: Safeway Selects Nortel's Voice Over IP Solutions ----------------------------------------------------------------- Safeway, one of the largest food and drug retailers in North America, selected solutions from Nortel Networks to deploy an advanced IP (Internet Protocol) communications platform. Safeway is implementing Nortel Networks Business Communications Manager, a unified network offering for small or medium businesses, or for branch locations of large enterprises. Business Communications Manager integrates voice over IP and quality of service data routing capabilities into a single, cost- effective solution. With approximately 1,800 locations, Safeway is streamlining its telecommunications networks as part of an overall store technology upgrade. "Safeway is committed to consistent networking systems across all locations while remaining focused on customer service," said Ken Lewis, director of network services, Safeway. "Business Communications Manager will give us seamless communications and allow us to better serve our customers." "Business Communications Manager is designed to help companies that desire a unified communications operation across their branch offices, or in this case, grocery stores," said Nick Pegley, vice president and general manager, Enterprise IP Services, Nortel Networks. "We're providing a solution expected to help improve customer service for one of North America's largest grocery store chains." Nortel Networks is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Metro and Enterprise Networks, Wireless Networks and Optical Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the Web at http://www.nortelnetworks.com. NORTEL NETWORKS: Aycell Will Invest USD94 MM in Network Expansion ----------------------------------------------------------------- Aycell expects to invest approximately US$145 million over three years, including approximately US$94 million in infrastructure equipment and services from Nortel Networks to expand its GSM 1800 digital wireless network. Under a three-year frame agreement, Nortel Networks/Netas, a Nortel Networks subsidiary, will supply Aycell with base stations and related equipment, as well as project management, technical support, training, repair and return, and other engineering and customer services. "Our target is 500,000 subscribers by the end of year 2002," said Fahrettin Aydin, general manager of Aycell, which is owned by Turk Telecom and operated as a separate entity. "We will secure this number with high quality, reliable and value added services." "We have big expectations from our cooperation with Nortel Networks/Netas, a company that played an important role in the development of the Turkish telecom network over the past 35 years," Aydin said. "Nortel Networks/Netas expertise in GSM technology, network solutions and service enablers will support Aycell in reaching its goals quickly and with confidence." "We are delighted to be working with Aycell, and are focused on bringing to them the benefits of our experience in wireless networks by offering a solution with optimized cost and performance from day one," said M. Sait G"z［, president, Nortel Networks/Netas. "We have been successful in winning contracts with both established players and new market entrants throughout Europe, and are recognized as a vendor of choice by a number of the strongest players in the European and global markets." For the Aycell expansion, Nortel Networks/Netas is working with Palmet, an established local construction company and representative of AMEC. Palmet will be responsible for site acquisition, construction and preparation; installation and commissioning; and OEM equipment supply. Nortel Networks/Netas has the largest private research and development group in Turkey, and has played a major role in modernization of the Turkish telecommunications infrastructure for 35 years by supplying approximately 12.5 million lines of switching equipment as well as transmission and datacom systems to Turk Telekom. In the private communications market, Nortel Networks/Netas had the largest share for 1999-2000 with 1.5 million supplied private lines and 41,000 enterprise customers in various sectors. The company also provides total solutions to the Turkish Armed Forces with long-term development contracts. Nortel Networks/Netas assists its customers throughout Turkey and other countries in Europe, the Middle East, CIS and Africa to design, operate and market network services supported by continuous online technical assistance. Nortel Networks has deployed 80 GSM/GPRS networks in 41 countries to enable wireless data network services for more than 30 operators, including: T-Mobile, mm02 and Orange in Europe; AT&T Wireless Services, Cingular Wireless and VoiceStream Wireless in the United States; SUNDAY in Hong Kong; China Mobile; Chunghwa Telecom in Taiwan; and Telstra in Australia. VIVENDI UNIVERSAL: Subsidiary Gets Joint Offer From Equity Firms ---------------------------------------------------------------- Vivendi Univeral's U.S. publishing arm, Houghton Mifflin has attracted a joint offer from two U.S. private equity firms that emerged as top bidders in the USD1.5-2 billion auction, a report from the Financial Times says. According to the paper, Blackstone and Thomas H. Lee placed the winning bid for Houghton Mifflin, the fourth largest education publisher in the U.S., and part of Vivendi's EUR10 billion disposal program. In the past days, a number of private equity firms have expressed their interest in the publishing arm, but Blackstone and Thomas H. Lee were considered the leaders, since they had chased after the publishing unit last year before Vivendi purchased it for USD2.2 billion, the daily adds. Vivendi's chairman Jean-Ren, Fourtou hopes to complete a sale of Houghton Mifflin by the end of this year, marking it as the first step towards completing his plans of a sweeping asset sale at the debt-laden French media empire, the paper says. But according to the Financial Times, some analysts or rival publishing executives believes that the Houghton Mifflin sale could generate more than Vivendi paid last year. Bear Stearns, the investment bank, has valued Houghton Mifflin on an earnings multiple of 6.4 times its estimated 2002 profits - equivalent to a EUR1.6bn price tag. But Vivendi's advisers on the transaction, led by Credit Suisse First Boston, are hoping for considerably more. Vivendi suffers a debt burden of EUR19 billion and is seen as a distressed seller in a publishing market that has declined since it acquired Houghton Mifflin. The company expectations could also be undermined by the regulatory hurdles faced by trade buyers, including Pearson of the UK, Reed Elsevier, the Anglo-Dutch publishing group, and McGraw Hill of the US, the daily says. Pearson, which owns the Financial Times, is the leader in US school publishing with 23-24% of the market, worth a total of USD3.6 billion a year. McGraw Hill and Reed Elsevier each control between 19% and 22%, while Houghton Mifflin has 15%. The daily observes that the dominance of the "big four" indicates that it is inevitable none of the existing school publishers could takeover Houghton Mifflin without facing significant anti- trust problems. Some of the prospective bidders, which include Thomson of Canada and Walters Kluwer of the Netherlands, for the publishing arm have indicated their interests in parts of the unit but not its whole, the paper reports. Vivendi Universal refused to provide information on the timetable or structure of the deal. ============= G E R M A N Y ============= BABCOCK BORSIG: Considers Legal Battle Over OEP's Purchase of HDW ----------------------------------------------------------------- A legal battle is likely to unfold surrounding Babock Borsig AG's controversial sale of its HDW unit to One Equity Partners of the United States, the Handelsblatt reports. Babcock's insolvency administrator Helmut Schmitz and its new chief executive, Horste Piepenburg, legal experts are currently studying the prospects for a legal application for the reversal of the sale. Mr. Piepenburg said: "If the chances of success are high enough, we will take the matter to court," the daily reports. According to Handelsblatt that Piepenburg noted there are many indications that OEP was aware of Babcock's woes when it closed the deal. He added that it is possible that OEP used the knowledge of Babcock's imminent insolvency at the time to its advantage. But he admitted that going into the legal process would take years for a resolution. Previously in March, Babcock's former chief executive, Klaus Lederer, sold a stake of 25% in HDW, the world's leading producer of conventional submarines, to OEP. The U.S. company purchased a further 50% from Preussag AG, now known as TUI, which was in the process of divesting its industrial interests as part of its strategic shift to tourism, the paper adds. Babcock still owns the remaining 25% in HDW, but it used the stake as collateral against a loan of EUR50 million from OEP. Babcock may be forced to pay back the EUR50 million in order to hold on to the shares. Unfortunately, the company doesn't own such amount as of the present. Once OEP would be able to take control of the remaining 25% stake, it will have the power to go ahead with its controversial plan to allow U.S. armaments firm Northrop Grumman to acquire a stake of 20% minus one share, the Handelsblatt reports. BKMU: Bank Investigations Extended ---------------------------------- The series of probes into the events surrounding the demise of Bank fur Kleine und Mittlere Unternehmen (BkmU) will be extended, a report from the Financial Times Deutschland says. The probes into the actions of the bank's former head, Marlene Kuck, and of six further managers of the bank and of companies with which it had ties, are ongoing, the daily adds. The paper reports that Mr. Kuck is suspected of embezzlement, giving preferential treatment to certain creditors and obstruction of insolvency. Accusations against BkmU include the company's granting a volume of credits higher than statutory equity cover. It is said to have transferred company credits of EUR120 million together with bad debt charges mounting to EUR11 million to an offshore institution in order to conceal the threat of over-indebtedness. Investigations into the bank's actions were announced after a report early this year, the daily reports. EM.TV: Improves Comparable Operating Results in First Half ---------------------------------------------------------- Despite the prolonged adverse market environment in the first six months of 2002, EM.TV & Merchandising AG improved its consolidated operating result on a comparable basis. The ongoing restructuring process is thus generating successes. Consolidated sales reached EUR 94.3 million in the first half compared with EUR 466.2 million in the same period of the previous year. On a comparable portfolio basis, sales last year would have been EUR 110.3m, which would indicate a decrease of 15 % this half. Second-quarter turnover of EUR 52.5 million contains part of the revenues from marketing the boxing fight between Lennox Lewis and Mike Tyson. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to EUR 8.2 million in the first half, of which EUR 7.8 million are attributable to the second quarter. Last year's figure of EUR 208.4 million included not only a series of companies since deconsolidated (most notably the Formula 1 Group) but also a high extraordinary profit. Net of these effects, last year's EBITDA figure amounted to minus EUR 19.1 million. After depreciation and amortization, the operating result (EBIT) was minus EUR 34.3 million (previous year: minus EUR 87.4 million, on a comparable basis net of the above effects). The financial result comprises a write-down of the investment in Constantin Film AG by approximately EUR 10 million, as following the dissolution of the intermediate company Constantin Holding GmbH & Co. KG shares in the film producer are held directly and have to be reported at their current stock market value. After taxes and minority interests, the EM.TV group recorded a half-year loss of EUR 70.2m (previous year: minus EUR 122.3 million). Liquidity in the first six months developed as budgeted. At June 30, 2002,liquidity funds totalled EUR 90.2 million compared with EUR 128.0 million at December 31, 2001. The operating cash flow (after changes in working capital) amounted to minus EUR 4.9 million in the first half (previous year: EUR 27.7 million). Shareholders' equity is reported at EUR 373.7 million (December 31, 2001: EUR 465.7 million), giving an equity ratio of 32.2% (December 31, 2001: 35.9 %). EM.TV: Expects to Sell Jim Henson Co. in Next Few Weeks ------------------------------------------------------- EM.TV & Merchandising AG said the group expects to sell its Jim Henson Co. animation unit within the next few weeks, Handelsblatt said citing a company spokesperson. Werner Klatt, EM.TV's chief executive, has been trying to sell Jim Henson since he took over the post in 2001. At the start of August, Klatt stated that a sale would take place soon, the German paper says. Jim Henson Co., which produces the children's television films as Sesame Street and the Muppets, has not been reaping profits. EM.TV's first-half figures showed EUR 70.2 million in losses, down from EUR 122.3 million one year ago. The losses have been attributed to a reduction in sales volume. Owing largely to divestments, first-half sales revenue declined from EUR 466.2 million one year ago to EUR 94.3 million. The year-ago sales came in at 110.3 million euros. HELKON NATIONAL: Interactive Games Developer Files for Insolvency ----------------------------------------------------------------- Due to the company's inability to pay its creditors, the management board of Helkon National Distribution GmbH filed at the district court in Munich a petition for insolvency on August 28, 2002, Wednesday. The group's insolvency is not a direct consequence of the provisional insolvency of Helkon Media AG announced on August 2, 2002. Helkon National Distribution is a 100% subsidiary of Helkon Media AG and the computer game Publisher Virgin Interactive Entertainment Germany GmbH. Contact Information: Helkon Media AG Anke Ludemann Investor Relations Telephone: 089/ 99805-842 E-mail: anke.luedemann@helkon.de KIRCHGRUPPE: WAZ Set to Buy KirchHolding's Stake in Axel Springer ----------------------------------------------------------------- German publisher WAZ Group has decided to purchase KirchHolding GmbH's 40% stake in rival Axel Springer Verlag AG, Bloomberg reports. Citing an article from Focus Magazine, Bloomberg adds that the German newspaper publisher is set to pay EUR900 million for the stake. There are no other interested parties. Kirch has until Sept. 10 to find a buyer for the stake. KirchHolding, which filed for protection from creditors amid mounting debt, is selling the stake to repay debt, Bloomberg says. KIRCHMEDIA: Axel Springer Confirms Interest in ProbSieben Stake --------------------------------------------------------------- The German newspaper publisher Axel Springer Verlag is interested in purchasing KirchMedia GmbH's 53% stake in Germany's largest broadcaster, ProSiebenSat1 Media AG, said its chief executive officer Matthias Doepfner, a report from Bloomberg says. German media empire KirchMedia, which filed for protection from creditors in April, disclosed that it is selling its 53% ProSiebenSat1 stake separately from other assets, such as its sports broadcasting rights, although the company had previously indicated the whole business would be sold together, the news agency says. Axel's chief executive officer Mr. Doepfner said that the company welcomes the new development and added that the company``can live well without KirchMedia on the print business alone, but if we can, we will take advantage of this opportunity,'' the news agency adds. Meanwhile, Mediaset SpA, Italy's largest commercial-television company, has also confirmed its interest in buying Kirch's stake in ProSieben if ``the price is right.'' The stake has a market value of about EUR845 million, Bloomberg reports. Axel Springer already holds 11.5% of ProSieben, while Mediaset owns 2.3% of KirchMedia. Under German takeover law, a bid is required for the rest of the shares in the media company if any of the other company would agree to purchase the ProSieben stake, Bloomberg says. MOBILCOM: Reviews UMTS Plans Amid Current Market Conditions ----------------------------------------------------------- German mobile operator MobilCom AG disclosed that the review of its UMTS business plan is ongoing and the company is considering writing down the value of its UMTS license, a report from AFX News says. Consequently, Mobilcom no longer plans to launch UMTS services this year and is looking for a technical partner, said a spokesman for the German mobile group, the news agency reports. Observers believe that the review is a result of France Telecom's de-facto takeover of the company in June. France Telecom owns a 28.5% stake in MobilCom and is believed to be gearing up for full control of the company, AFX adds. "We will take concrete action in the third quarter on the basis of the conclusions reached. In all probability this will include the reevaluation of the UMTS-license," MobilCom said in a statement. "In the UMTS sector, the company now faces the challenge of bringing the impressive progress achieved in building the network into line with market developments. It is becoming increasingly evident that the conditions for a commercially successful start will be difficult to fulfill." "First, there is still a lack of really convincing, efficient, low-cost handsets. Second, the demand for mobile data services is still lagging well behind expectation," it said. MobilCom also revealed it had 4.9 million mobile subscribers at the end of June. Its second-quarter net loss was EUR172.8 million, in line with market consensus of a loss of 170 million, while second quarter EBITDA beat expectations, coming in at a negative 49.7 million, compared with consensus of a negative 84 million. Sales were 520 million euro, slightly better than expected by analysts, who forecast a sales average of 518 million. In addition, an involvement of considerable expenditure is seen as part of the company's restructuring program, which is seen to affect its third quarter result. The company added that no "material improvement" is expected in results before 2003, AFX says. PIXELPARK AG: Announces Figures for Second Quarter 2002 ------------------------------------------------------- Pixelpark AG announced its figures for the second quarter from April 1, to June 30, 2002, for the first time in accordance with IAS. It is therefore possible to make only a limited comparison with figures previously issued by the company. The total operating performance of the Pixelpark Group in the second quarter of 2002 was EUR 12.0 million (compared with EUR 23.5 million the previous year). The EBITDA (before restructuring and impairment) was EUR -2.9 million (EUR -4.0 million the previous year). In comparison with the previous quarter, Pixelpark was able to improve its operating result by EUR 1.3 million. Due to write-offs of tangible and intangible assets in the amount of EUR -2.2 mil-lion (EUR -0.9 million in the previous year) and amortization of goodwill in the amount of EUR -2.6 million (EUR - 12.3 million in the previous year) as well as re-structuring expenses amounting to EUR -2.3 million (EUR -1,5 in the previous year), the operating result (EBIT) is EUR -10.0 million (EUR - 18.6 million in the previous year). The net loss in the second quarter amounts to EUR -11.8 million (EUR -16.4 million in the previous year). Despite the improved operating result, the Management Board of Pixelpark AG no longer views the current investor reticence as a temporary development and considers it probable that we will not be able to meet the previous projection of reaching break-even in the fourth quarter of 2002. RAYOVAC CORPORATION: Moody's Confirms Ba3 Senior Implied Rating --------------------------------------------------------------- International Rating Agency Moody's Investors Service confirms Rayovac Corporation's senior implied rating at Ba3 and assigns a Ba3 rating to its proposed USD675 million senior secured bank facilities (subject to review of final documentation), a report from the rating agency says. The assigned rating marks the completion of Moody's review on Rayovac started on July 31, 2002 after the company announced the acquisition of the consumer battery business of Varta AG for USD262 million, Moody's says. The following ratings are assigned: Rayovac Corporation: USD150 million senior secured revolving credit facility due 2008, Ba3, E50 million senior secured term loan due 2008, Ba3, E50 million senior secured term loan due 2009, Ba3, USD375 million senior secured term loan due 2009, Ba3. Varta KGaA: E50 million senior secured revolving credit facility due 2008, Ba3. The following ratings are confirmed: Rayovac Corporation: Issuer Rating, B1, Senior Implied, Ba3. The ratings on existing bank facilities will be withdrawn upon closing of this transaction. Ratings Outlook: Negative Moody's notes that "the post acquisition ratings reflect ROV's materially increased EBITDA/EBITA leverage (3.4x/4.3x vs. 2.2x/2.8x), decreased EBITDA/EBITA interest coverage (3.9x/3.1x vs. 5.9x/4.7x), and diminished free cash flow as a percent of total funded debt (12% vs. 18%). The ratings are restrained by ROV's resulting increased exposure to more volatile Latin American markets (now 17% vs. 14% of EBITDA) and the inherent challenges which these and other new or expanded ROV markets pose to the company's overall working capital efficiency and EBITDA margins, which typically have longer trade terms and lower margins than North America." The rating agency adds that the "challenges of cost effective and rapid integration of the acquired Varta operations into the existing ROV business is likewise viewed as a restraint to the ratings given its relative magnitude and global scope. This risk is subject to further pressure from opportunistic responses by brand empowered and well capitalized competitors to step-up marketing tactics based upon this acquisition. Finally, the structural form of the proposed financing obliges the borrower to engage in various inter-company cascade funding to subsidiaries in order to achieve optimum tax results for all parties." Moody's says explains that the "ratings are supported by the seminal nature of this transaction as a defining maneuver by Rayovac to ensure itself a position as one of the top three global players in the worldwide consumer battery market. After the acquisition, the company will have a USD1 billion top-three tier position in all the Western Hemisphere markets it competes in and is expected to be able to generate approximate opening EBITDA of USD140 million. This pro forma cash flow will be available to service USD30-35 million in annual interest expense and USD25-30 million in annual cap-ex, leaving room for added outlays to sustain growth and reposition its now globally expanded brand. Pro forma cash flow is also expected to easily address required debt amortization and provide for added near term reductions through the 50% cash flow sweep contained in the proposed credit agreements. "Further support to the ratings resides in the near 'add-on' nature of the acquisition, with little obvious market overlap and very few redundancies in manufacturing, distribution, marketing or systems. The planned combination also allows for complementary improvements for "'new ROV" in the areas of brand management and marketing (ROV strength), logistical support and manufacturing/machining expertise (Varta strength) and technological innovations (shared strength). The company's increased size is also expected to afford it greater IT and logistical efficiencies, materials purchasing leverage and enhanced marketing opportunities. Additional support to the ratings resides in the comprehensive nature of the collateral package being presented to the bank group and the conservative covenant levels in the proposed loan agreements (e.g. maximum leverage decreasing from 3.9x to 2.5x and minimum interest coverage increasing from 3.5x to 5.0x, yrs.1-5)," Moody's adds. Moody's says that the "ratings outlook is negative based upon the margin, trade allowance and working capital pressures associated with the highly competitive consumer battery business and the fractional size and limited capitalization of ROV relative to its two major competitors, USD2.4 billion Gillette owned Duracell and USD1.8 billion publicly traded Energizer. Both Duracell and Energizer compete directly and aggressively with ROV in all of its major markets and each is dominant in the drug, discount and grocery markets, channels that ROV has not thus far meaningfully penetrated. The situation in Europe, where ROV now plans to expand, is likewise harsh in terms of its marketplace demands for limiting margins and providing generous trade terms. Such an environment adds further to ratings pressure when acquisition consolidation risks and added funded debt leverage are considered." Lastly, Moody's further explains that, "the Ba3 rating on the proposed bank facilities reflects their senior position in ROV's capital structure and the benefits and limitations of their first lien collateral position. All ROV bank lines will be fully secured by all present and future tangible and intangible assets of Rayovac Corporation and its domestic subsidiaries, as well as benefit from stock pledges from all domestic subsidiaries. The Credit Facilities at Rayovac will also benefit from a pledge of 66% of the stock of ROV Holding GmbH (the holder of ROV's JV interest) and a pledge of 100% of the stock of ROV Cayman Finance Co. For tax purposes, a portion of the USD625 million Credit Facilities will be invested in ROV Cayman Finance Co., which will lend such funds to ROV Holding GmbH to accommodate the purchase of non-Latin America Varta assets at closing. The loan by ROV Cayman Finance Co. will be secured by a pledge of 100% of ROV Holding GmbH's interests in non-American subsidiaries and its interests in the intermediary holding companies of the JV, and such loan (and the related security) will be pledged to the Administrative Agent to secure the ROV Cayman Finance Co.'s guaranty of the Credit Facilities. The E50 million Revolver at Varta KGaA will be secured by all present and future assets of Varta KGaA, and have a guarantee from Rayovac Corporation and the same guarantee package as the senior secured bank credit facilities." Headquartered in Madison, Wisconsin, Rayovac Corporation is the third largest US manufacturer of general batteries. The company also has the leading market share in Latin America (outside of Brazil, where it does not own the Rayovac brand). Rayovac's products include general batteries (alkaline, heavy duty and rechargeable batteries), specialty batteries (hearing aid, lantern and PC memory back-up) and flashlights and other battery powered lighting devices. Sales for fiscal 2001 were approximately USD616 million. Varta AG, based in Hannover, Germany, is an automotive and consumer battery manufacturer owned by affiliates of Deutsche Bank. The company's consumer products division sells its products in over 100 countries, with leading market positions in Western Europe and Latin America. Consumer battery sales in fiscal 2001 were USD398 million. ========= I T A L Y ========= FIAT SPA: Confirms Change of Leadership at German Unit ------------------------------------------------------ Italy's top car manufacturer Fiat SpA confirmed the change of leadership at its German unit Fiat Automobil AG, the Handelsblatt reports. The Italian company said that Fiat Automobil AG's chief executive Mr. Haydan Leshel would be resigning from his post on Wednesday. He will be replaced by Klaus Fricke, who currently works as marketing director at the Turin head office of the parent company, the daily says. Increase dissatisfaction with the performance of Fiat's German arm has been plaguing Fiat for the past weeks. Fiat Automobil's sales have dropped 20%. Renault has overtaken the unit as the top importer of cars to Germany. It is said that Fiat's chief executive Giancarlo Boschetti insisted on a change in the leadership at the German unit, the daily says. In addition, the daily observes that the group's performance is not going well outside Germany. In Western Europe, its sales have declined by some 20% this year. In the first six months, its autos division has incurred an operating loss of almost EUR1 billion. Moreover, there is a growing apprehension among analysts regarding Fiat's capacity to return to profit any time soon. According to Albrecht Denninghof, automobiles analyst at HypoVereinsbank, there is no marked improvement, adding that everything points to a takeover by US company General Motors within in two years' time. General Motors now holds a 20% stake in Fiat and holds an option to buy the remaining 80% in 2004, the Handelsblatt reports. TELECOM ITALIA: Finalizes Sale of 97.5% Stake in 9Telecom --------------------------------------------------------- The sale of Telecom Italia's 97.5% stake in French fixed-line unit 9Telecom has been completed and finalized, a report from Europe Media says. The stake has been sold to LDcom, the telecoms arm of trading house Louis Dreyfus and was originally announced in June 2002, but it only received approval from French regulators just recently, the news agency says. Telecom Italia revealed last June that it would take a E282m provision on its 2002 results from the sale. Separately, late in August, the Trouble Company Reporter had reported that Telecom Italia SpA would reduce 20% of its stake in Brasil Telecom Participacoes SA so it can launch nationwide wireless service there. Under the rules of Brazil's telecommunications regulator, Telecom Italia must sell 18% of its 38% stake in Brazil Telecom prior to the launching of Telecom Italia Mobile SpA's wireless service in Brazil, the TCR added. Telecom Italia Mobile's decision to partially sell its stake was the only solution it could choose so that its operations could begin. This was after Brazil Telecom's failure to meet a set of network expansion targets required by Brazil's telecom regulator, Anatel, as a condition to launch the wireless service, the TCR said. Telecom Italia and Brazilian private-equity fund Opportunity have been fighting for control of Brasil Telecom for two years, the TCR said. Previously, Telecom Italia attempted to convince Anatel that it has to have control over Brasil Telecom and should consider its operations of TIM as exclusive from Telecom Italia's. However, Anatel rejected Telecom Italia's stance, the TCR reported. ===================== N E T H E R L A N D S ===================== KPN NV: Smits Will Resign From Management Board ----------------------------------------------- The KPN Supervisory Board recently announced that Mr. Paul Smits would resign from the KPN Board of Management on 1st November 2002 at his own request. The Supervisory Board regrets but respects his decision. Pending the appointment of a person to fill the vacancy, Mr A.J. (Ad) Scheepbouwer, Chairman of the KPN Management Board, will assume responsibility for the KPN Mobile portfolio in the Board of Management. Mr Smits has held various positions within the KPN group since 1983. He was Chairman of the Managing Board of Unisource from 1996 to 1998 before returning to KPN as a member of the Board of Management in 1998. Mr Smits was Chairman of the KPN Board of Management from March 2000 to November 2001. =========== P O L A N D =========== ELEKTRIM SA: Offers Deutsche Telekom 6% Stake in PTC ----------------------------------------------------- The Polish utilities group, Elektrim SA, has offered Deutsche Telecom a 6% stake in Polish telecom company Polska Telefonia Cyfrowa, a report from the Financial Times Deutscheland says. Moreover, Deutsche Telekom confirmed its interest in acquiring a majority stake in PTC, but declined to comment on the offer by Elektrim, the paper adds. But with the takeover of PTC, Deutsche Telekom would also have to assume debts of roughly EUR1.14 billion that eventually affect its bid to reduce its own debt pile from EUR64.2 billion to EUR50 billion by the end of 2003, the daily says. Since 2001, Deutsche Telekom has figured in a legal battle with Elektrim after the Polish company preferred French media group Vivendi Universal as among the bidders for the PTC shares. Deutsche Telekom had claimed that a pre-emptive purchasing right was not granted, the paper reports. ELEKTRIM SA: Issued Schedule on Restructuring Date for Bonds ------------------------------------------------------------ On August 28, 2002, Elektrim S.A. gave notice to the holders of the PLN 1,795,024,000 (Euro 440,000,000) 3.75% Euro-Linked Exchangeable Bonds due 2004 of Elektrim Finance B.V. irrevocably and unconditionally guaranteed by Elektrim S.A., that the Restructuring Date for the Bonds will be September 4, 2002. On that date, the conditions precedent to the modifications referred to in the Extraordinary Resolution of the Bondholders, dated July 31, 2002, will be satisfied or waived and the various restructuring documents implementing the Extraordinary Resolution will be executed. Accordingly, the accounts of the holders of the Bonds will be blocked beginning September 2, 2002 through September 6, 2002. NETIA HOLDINGS: Lenders Accept Subsidiary's Arrangement Plan ------------------------------------------------------------ Netia Holdings S.A., Poland's largest alternative provider of fixed-line telecommunications services, announced that creditors of Netia South Sp. z o.o., one of its subsidiaries, representing 100% of total value of claims, voted on August 29, 2002 in favor of the arrangement plan submitted to the court in Warsaw. The arrangement plan is currently awaiting the required approval by the court, which is expected to be issued on September 18, 2002. Detailed conditions of the arrangement plan for Netia South Sp. z o.o. accepted today are as follows: (1) 99 % of the debts subject to the arrangement plan will be written off; (2) Creditors will be repaid in annual installments; (3) Installment obligations will be denominated in Polish zloty, will be zero coupon and shall be payable on the last day of each consecutive calendar year during the period when the arrangement plan is in force: (a) The first installment payable on December 31, 2003 shall be equal to 33.3% of the reduced claims subject to the arrangement; (b) The second installment payable on December 31, 2004 shall be equal to 33.3% of the reduced claims subject to the arrangement plan; (c) The third installment payable on December 31, 2005 shall be equal to 33.4% of the reduced claims subject to the arrangement plan; The obligations under the arrangement plan will not be secured by any form of security interest. Contact Information: Netia, Warsaw Investor Relations Anna Kuchnio Telephone: +48-22-330-2061 =========== S W E D E N =========== ICON MEDIALAB: WM Data Acquires IT Provider's Unit in Finland ------------------------------------------------------------- Icon Medialab Oy (http://www.iconmedialab.com),the Finnish subsidiary of the international eBusiness and IT professional services company and WM-data, one of the leading IT services companies in the Nordic region, announced that they have reached an agreement whereby WM-data will acquire parts of the operations of Icon Medialab Oy in Finland. This asset transfer includes a take over of certain client agreements and employees of Icon Medialab Oy. For Icon Medialab this transaction will further enable a focus on core activities in key markets in Europe and the US, thus it means that the company will leave the Finnish market. Icon Medialab has 45 employees in their Tampere and Helsinki offices. "This strategic fit will offer the company both long and short term benefits. We believe that Internet consultancy and its significance will grow also in the future, even if the forecasts a couple of years ago were not right. Since WM-data acquired IconMedialab in Norway the company has been able to benefit from several synergies and have in particular increased and broadened their customer base " says Crister Stjernfelt, CEO, WM-data. "I believe that this solution is positive for both our clients and employees in Finland. This withdrawal enables IconMedialab/Lost Boys to further strengthen our international network of offices in our key markets", says Robert Pickering CEO of IconMedialab/Lost Boys. IconMedialab and Lost Boys (http://www.lostboys.com)merged in January 2002 to become one of the world-leading IT professional service providers. The group provides user-driven solutions through innovative technology for all-digital channels, with global reach and local expertise. The group has developed solutions for a broad range of clients, including Audi, Chello, Siemens Mobile, ING Group, KLM, MasterCard and Perfetti Van Melle. The IconMedialab stock is traded on the Stockholm Stock Exchange O-List (ICON). Contact Information: Seppo Matikainen Country Manager WM-data Finland Telephone: +358 40 588 7950 Email: seppo.matikainen@wmdata.fi LM ERICSSON: Hellstroem Seeks Quick Results From Sony Venture ------------------------------------------------------------- Telefon AB L.M. Ericsson's chief Kurt Hellstroem warned that he will stop providing financial backing for the high-profile mobile-phone joint venture with Sony Corp. unless their newly developed handsets quickly catch on, the Wall Street Journal reports. Ericsson said recently that it may have to invest as much as EUR500 million (US$490 million) in Sony Ericsson between now and Oct. 1, 2003, but company officials said that investment will depend on the joint venture's performance in the short term, the paper adds. Sony Ericsson developed the T300, an inexpensive color-screen phone capable of playing and downloading high-speed games. If this product and other new mobile phones are successful, the CEO said the venture will push for the No. 1 spot in the market for multimedia cellphones. The report adds that according to Hellstroem, the Swedish company, which is close to completing a US$3.2 billion share offering aimed at bolstering its shaky finances, may also stop funding other underperforming businesses. LM ERICSSON: China Mobile Awards MMS Contract to Ericsson --------------------------------------------------------- China Mobile Communication Corporation (CMCC) selects Ericsson (http://www.ericsson.com)as one of the main suppliers to provide its complete MMS system solutions. The contract includes the MMS Center (MMSC) and peripherals. China Mobile plans to set up its MMS service centers in four major cities in China, including Shanghai, Guangzhou, Beijing and Wuhan. Ericsson is awarded the contracts in the first two cities. The contract also includes implementation, integration and two year of system support services. To secure rich and quality MMS applications when China Mobile launches MMS services nation wide in China in October, Ericsson has co-organized a MMS application contest with China Mobile to encourage the development and commercialization of quality MMS applications from July to September 2002. "It is strategically important for Ericsson to have footprint in China Mobile's service network, which will keep Ericsson in a more favorable position in China Mobile's service and network migration process. Ericsson's solutions meet China Mobile's both technical and business requirements in system design and construction. Understanding customers' demand was the key factor for Ericsson to win the contract," says Jan Malm, President of Ericsson China. Ericsson is a forerunner in MMS and has supplied more than 80 test systems worldwide. Ericsson has already secured over 30 orders to supply commercial MMS systems. Ericsson is shaping the future of Mobile and Broadband Internet communications through its continuous technology leadership. Providing innovative solutions in more than 140 countries, Ericsson is helping to create the most powerful communication companies in the world. LM ERICSSON: Confirms Secured Customer Financing for Leap Wireless ----------------------------------------------------------------- Telefonaktiebolaget LM Ericsson confirms that is has provided senior secured customer financing to Leap Wireless International, Inc., which at June 30, 2002, amounted to gross exposure of SEK 1.1 billion (SEK 0.9 bn net of provisions). In addition, Ericsson has provided undrawn commitments to Leap which at the same date amounted to SEK 3.4 billion. The Leap exposure represents approximately 4.2 % of Ericsson's total outstanding exposure. The un-drawn commitments to Leap account for approximately 13.6 % of all Ericsson un-drawn customer finance commitments as of June 30, 2002. While Leap has stated its intention to continue its operations in an uninterrupted fashion, the outcome of the process publicly announced and communicated to Ericsson today is uncertain. Ericsson intends to continue its close cooperation with Leap while protecting its outstanding exposure. Ericsson serves the Mobile and Broadband Internet communications industry in over 140 countries. Contact Information: Gary Pinkham Vice President Investor Relations Telephone: +46 8 719 0858; +46 730 371 371 E-mail: gary.pinkham@ericsson.com =========================== U N I T E D K I N G D O M =========================== COOKSON GROUP: Metals Company's Rights Issue Raises GBP277 MM ------------------------------------------------------------- London-based metals and mining company Cookson Group plc announced that the Rights Issue launched on July 19, 2002 has been fully subscribed and has raised GBP277 million net of expenses. As announced earlier, Cookson received valid acceptances in respect of 1,065,705,484 New Shares, representing approximately 91.6 % of the New Shares offered by way of the 8 for 5 Rights Issue at 25 pence per share. The remaining New Shares for which valid acceptances had not been received on August 28, 2002, were placed at a price of 30 pence per share today. Interest in these remaining New Shares was four times subscribed. The net proceeds of the sale of the shares placed, after deduction of the Issue Price of 25 pence per New Share and expenses of procuring subscribers, will be paid by cheque (without interest) to Shareholders who have not taken up their entitlements, pro rata to their lapsed provisional allotments. Net proceeds of less than GBP3 per holding will not be so paid but will be aggregated and retained for the benefit of the Company. Commenting on the completion of the Rights Issue, Stephen Howard, Group Chief Executive of Cookson, said: 'We are pleased that Shareholders have fully supported the Rights Issue and that the Company has raised the GBP277 million it was seeking. This will allow Cookson to continue to build on its leading market positions with a stronger balance sheet. The proceeds will be applied to significantly reduce the Group's bank facilities. This will leave the Company with a sustainable capital structure and borrowings with long term maturity profiles. Cookson is now in a better position to benefit from a sustained upturn in its key markets, especially given its high operational leverage.' (1) Pro-forma net debt position as at June 30, 2002, post Rights GBPm Maturity Loan Notes 380 2005 - 2012 (Average : 7.5 years) Convertible Bond 80 November 2004 Syndicated bank facility* 20 September 2004 Overdrafts, etc. 20 Cash (28) ___ Net debt 472 ___ *(Assumes net proceeds used to repay drawings under the Syndicated bank facility) (2) Number of Ordinary Shares in issue post Rights Issue: 1,892 million Contact Information: Stephen Howard Group Chief Executive Dennis Millard Group Finance Director Cookson Group plc Telephone: 020 7766 4500 ENERGIS PLC: S&P Withdraws Credit Ratings at Elektrim's Request --------------------------------------------------------------- International ratings agency Standard & Poor's Rating Services has removed Energis Plc's credit ratings, upon the business, telecom and Internet service company's request, a report from AFX News said Among the ratings S&P withdrew is Elektrim's D long-term corporate credit rating and senior unsecured debt ratings, the news outfit adds. S&P's Leandro de Torres Zabala explained that, "the ratings withdrawal was requested by Energis, as, after the Scheme of Arrangement proposed by the administrators of Energis PLC has been implemented, the GBP560 million in high-yield debt at the Energis PLC level will no longer be outstanding," AFX reports. MARCONI PLC: Reveals Non-binding Terms for Financial Plan --------------------------------------------------------- Marconi plc (http://www.marconi.com)announced that it has concluded non-binding heads of terms, which set out the principles for the financial restructuring of Marconi and its wholly owned subsidiary Marconi Corporation plc. The heads of terms are the culmination of good faith negotiations between Marconi, the Co-ordination Committee of Syndicate Banks and an informal ad hoc committee of bondholders. Mike Parton, Chief Executive of Marconi, said: "The financial restructuring will allow the Group to emerge with a balance sheet that we believe is robust and appropriate to the size of our business. This is very reassuring for customers, suppliers and employees and we are grateful for their continued support. As always we remain absolutely committed to servicing our customers' needs. "The level of cash and non-core assets retained by the Group allows us to withstand a prolonged market downturn. Managing our assets for value has been and continues to be an important part of our strategy. The agreed debt structure, combining a mix of cash-pay and pay in kind instruments, gives us a stable and flexible balance sheet. "We have worked hard to refocus the business and reduce costs in response to the severe market downturn experienced across the telecom equipment sector. The financial restructuring allows us to plan our future with renewed confidence." Derek Bonham, Interim Chairman of Marconi, said: "The heads of terms we have set out today recognises the position of the Group's creditors and also allows Marconi's shareholders to retain an economic interest in the ongoing business through the equity and warrants that they will receive. We continue to focus on concluding this complex process as soon as we can." Key Points: (1) Marconi Corporation claims to be exchanged for a package of cash, new equity and new debt securities of Marconi Corporation (2)Restructuring to be effected at Marconi Corporation: - Marconi Corporation to become new holding company of the Group - following its scheme, Marconi expected to be "liquidated" on a solvent basis (3) Restructuring targeted to be completed by end January 2003 (4)Restructuring aims to preserve the ongoing business operations of Marconi Corporation and the rights of customers, suppliers and employees. Creditor and employee claims at subsidiary levels will not be involved in the Restructuring and their claims will not be compromised (5) The prospective capital structure has been designed to: - provide flexibility for Marconi Corporation's ongoing success - maximise cash recovery to creditors - allow existing Marconi shareholders to maintain an ongoing economic interest in Marconi Corporation (6)Creditors participating in the scheme of arrangement of Marconi Corporation will be offered a distribution pro rata to their claims: - cash equal to at least GBP260 million less approximately GBP95 million of accrued interest to be paid up to October 15, 2002 in respect of accrued and payable interest on Marconi Corporation's financial indebtedness - GBP450 million of new senior secured notes due 2008 bearing quarterly cash interest at 8% per annum - redemption from surplus cash at 110 % of par, plus accrued interest following settlement of junior secured notes and limited recourse notes - no redemption at Marconi Corporation's option - GBP250 million of new mandatorily redeemable junior secured notes due 2008 - two year interest holiday and thereafter bearing quarterly interest at 10% if deferred (pay in kind) or 8 % if paid in cash - mandatory redemption at 110 % of par, plus accrued interest from releases of restricted cash (cash collateral and ESOP retention) and/or from disposal proceeds(non-US Asset disposals and US Asset disposals after settlement of the limited recourse notes) - USD300 million (approximately GBP197 million) of new secured limited recourse notes due 2008 - two year interest holiday and thereafter bearing quarterly interest at 10% if deferred (pay in kind) or 8 % if paid in cash - secured against, and with limited recourse solely to, the US Assets of the Group - mandatory redemption at 110 % of par, plus accrued interest from the disposal proceeds of any US Assets - 99.5 % of Marconi Corporation's issued share capital immediately following the Restructuring (7) Existing Marconi shareholders to receive 0.5% of Marconi Corporation's issued share capital immediately following the Restructuring and warrants maturing four years after the Restructuring allowing the purchase of 5 % of Marconi Corporation's issued share capital, with a strike price equivalent to a post Restructuring market capitalization of GBP1.5 billion (8)Restructuring to reduce significantly Marconi Corporation's debt: - approximately GBP4 billion of externally held financial indebtedness, as well as actual and contingent claims, in aggregate totalling not less than GBP4.9 billion - approximately GBP0.8 billion of this GBP4.9 billion represents claims by Marconi (or its subsidiaries), where the principal creditors are, through their guarantee provisions, the external financial creditors of Marconi Corporation (9) Creditors participating in the scheme of arrangement of Marconi will be offered a distribution pro rata to their claims of Marconi's assets principally comprising the benefit it derives from Marconi Corporation's scheme of arrangement (10) Marconi Corporation to provide interim security to the Group's syndicate banks, bondholders and ESOP derivative providers against GBP850 million of the cash held in the lockbox by 5 September, 2002 (11) On completion of the Restructuring, Marconi Corporation expected to have approximately GBP635 million of cash (including approximately GBP320 million of restricted cash) - pro forma total Group net debt expected to be approximately GBP300 million on completion of the Restructuring - pro forma Core net debt (excluding the Limited Recourse Notes) is expected to be approximately GBP100 million (12) Restructuring based on Marconi Group's Business Plan, which has been prepared: - to capitalise on the Group's strengths and European market leadership in Optical Networks - to build on the Group's strong customer relationships and it's "best in class" solutions - to provide for sufficient retained cash and adequate working capital to ensure that the Group can withstand an extended downturn in its markets - to provide for the transfer of the Outside Plant and Power and the US Access businesses to Marconi Capital where they will be managed for value - to create a firm foundation from which the Group can deliver value for all stakeholders (13)Operational restructuring to deliver the Business Plan is well advanced (14) Marconi Corporation intends to apply for a new listing on the London Stock Exchange and to establish an ADR programme on NASDAQ. Marconi has agreed that it will begin to file 10-K, 10-Q and 8-K reports with the SEC in an agreed timeframe and hold quarterly investor conference calls (15) Completion of the Restructuring will be conditional on appropriate creditor consent as well as further due diligence by the syndicate banks and bondholders Marconi plc is a global telecommunications equipment and solutions company headquartered in London. The company's core business is the provision of innovative and reliable optical networks, broadband routing and switching and broadband access technologies and services. Contact Information: Heather Green Investor Relations Marconi plc Telephone: +44 (0) 207 306 1735 E-mail: heather.green@marconi.com *********** S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Kimberly MacAdam, Larri-Nil Veloso, Maria Lourdes Reyes 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 * * *