/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/021002.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, October 2, 2002, Vol. 3, No. 195 Headlines * F I N L A N D * SONERA CORP: Court Rules Against Sonera * F R A N C E * ALCATEL: Wins Inter-Carrier Settlement System Contract in China ALCATEL: Ranks Second In North American Medium IP-PBX Market COMPLETEL: Fractional Shares Joins Board of Delisted Securities * G E R M A N Y * CARGOLIFTER AG: Shareholders to Offer Final Rescue Deal DEUTSCHE TELEKOM: New Law Increases Competition in Local Market MOBILCOM AG: Obtains Extension Agreement for UMTS Loan MOBILCOM AG: Talkline Eyes Mobilcom's Client Base * I R E L A N D * ELAN CORPORATION: Announces Payment Under Guarantee * I T A L Y * FIAT SPA: Questor and JPMorgan Acquires Automotive Parts Business * N E T H E R L A N D S * UPC: Signs Recapitalization Agreements With Bondholder Committee * P O L A N D * ELEKTRIM SA: Requests Postponement of Bankruptcy Hearing NETIA HOLDINGS: Judge Re-Adjourns Acceptance of Composition Plans LM ERICSSON: Comments on Industry Development LM ERICSSON: Signs ENGINE Contract With Telenor Networks LM ERICSSON: Winpro Purchases Software Development Product SONERA: Telia Issues Prospectus on Telia/Sonera Merger * S W I T Z E R L A N D * ABB LTD: Wins US$ 48 Million Power Transmission Contract in India CREDIT SUISSE: Issues Forecasts for Global and Swiss Economies ZURICH FINANCIAL: Sells Interest to Endurance Holding Company * U N I T E D K I N G D O M * ABERDEEN ASSET: Re-Structures Fund Management Team ALLDAYS PLC: Co-operative Group Proposes Takeover BRITISH ENERGY: Moody's Downgraded Unsecured Bond Ratings to Caa1 COLT TELECOM: Marina Wyatt to Be Appointed CFO ENERGIS PLC: Global Crossing Asks Court to Okay Deal With Energis EQUITABLE LIFE: To Appease Former Members With GBP75 Million HP BULMER: Sacks Finance Director as Accounting Errors Balloon MARCONI PLC: U.S. Naval Lab Demonstrates Marconi's 10 Gbps CPR P&O PRINCESS: Ends Final Exercise of Option With Chantiers TELEWEST COMMUNICATIONS: Creditors Pushed for Restructuring ============= F I N L A N D ============= SONERA CORP: Court Rules Against Sonera ---------------------------------------- Sonera Appeals to the Supreme Administrative Court The Administrative Court of Helsinki has issued a decision on the appeal filed by Sonera Corporation against the decision which was issued on April 24, 2001 by the Finnish Communications Regulatory Authority (FICORA; formerly the Telecommunications Administration Centre). FICORA ruled that the interconnection pricing applied by Sonera in domestic mobile communications was not reasonable in relation to the actual costs, and that that Sonera had priced its interconnection fees contrary to the Telecommunications Market Act. It accordingly obliged Sonera to revise its pricing. In May 2001, Sonera filed an appeal against FICORA's decision with the Administrative Court of Helsinki, as the company considered that Sonera and FICORA had different ideas of what should be taken into account in the pricing of interconnection. Sonera did not agree with FICORA's view on the pricing grounds because, for example, the company considers it to reward inefficient operations. In its decision issued today, the Administrative Court of Helsinki stated that the FICORA's method of determining the amount of capital tied to mobile networks and method of handling the above-mentioned costs allocated by Sonera to mobile networks shall not be considered erroneous. Sonera will appeal the decision of the Administrative Court of Helsinki to the Supreme Administrative Court. The decision issued by FICORA in April 2001 is not enforceable until the Supreme Administrative Court has issued its decision. Sonera believes that the correct, essential elements have been taken into account in its pricing regime, and that its regime encourages efficiency. The correct price level for interconnection traffic should be based on commercially negotiated solutions. In the spring and summer of 2001, Sonera concluded new mobile communications interconnection agreements with all mobile network operators in Finland. The interconnection fees of Sonera's mobile communications that are now examined are lower than those of other Finnish operators and, even internationally speaking, they are low. The revenues generated in 2001 by Sonera's mobile communications business amounted to EUR 1,213 million, which is about 55% of the total revenues of Sonera in 2001. SONERA CORPORATION Jari Jaakkola Executive Vice President Corporate Communications and IR CONTACT: Tiia Tuovinen, Deputy General Counsel, Legal Affairs Tel: +358 2040 58249 E-mail: tiia.tuovinen@sonera.com =========== F R A N C E =========== ALCATEL: Wins Inter-Carrier Settlement System Contract in China --------------------------------------------------------------- Alcatel extends cooperation with China Telecom Group Alcatel (Paris: CGEP.PA and NYSE: ALA) has been awarded a contract by Yun Nan Telecom for the Inter-Carrier Settlement System (ICCS). The contract, which was won through Alcatel Shanghai Bell (ASB), covers 17 districts in Yun Nan province to be provided with this real-time data collection and billing system within a one year period. It is the first commercial contract of this kind signed by Alcatel in Yun Nan and with the China Telecom Group as a whole. Alcatel has been awarded the entire software part of this ICSS project. To optimally suit telecom service providers' needs, the ICSS is an efficient and reliable solution, ensuring real-time data collection and billing. The ICCS will enable Yun Nan Telecom to collect all the data for billing from different regions in a uniform way and arrange smooth settlement of inter-carrier bills from networks belonging to Yun Nan Telecom itself, or from other operators' networks. This will manage the evolution of inter- carrier payment settlements, as well as the high growing rate of voice and data traffic requiring specific settlement solutions. Wu Yongquan, general manager of Yun Nan Telecom, said: "In our long-term partnership with Alcatel Shanghai Bell, Alcatel 1000 switches now have been installed to cover most of Yun Nan province. This ICSS contract further extends the cooperation with Alcatel Shanghai Bell in a totally new domain. We fully trust that Alcatel will live up to our expectations as they have done in the past." Andrew Young, President of Alcatel Shanghai Bell, said, "This breakthrough in Yun Nan Telecom shows the confidence that our customers have in us. We are convinced that Alcatel's 's products and solutions will serve our customers well and help them meet their business needs and requirements." About Yun Nan Telecom Yun Nan Telecom is the subsidiary company of China Telecom Group. The main operation of Yun Nan Telecom covers fixed telecom network domestics and overseas, voice, data, multimedia and information services based on telecom network etc. About Alcatel 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. Relying on its leading and comprehensive products and solutions portfolio, stretching from end-to-end optical infrastructures, fixed and mobile networks to broadband access, Alcatel's customers can focus on optimizing their service offerings and revenue streams. With sales of EURO 25 billion in 2001, Alcatel operates in more than 130 countries. About Alcatel Shanghai Bell Alcatel Shanghai Bell is the first foreign-invested company limited by shares in the telecommunications sector in China, with Alcatel holding 50%+1 shares and Chinese shareholders holding the remainder. The multibillion dollar telecom technology leader delivers end-to-end telecommunications solutions and high-quality services, covering the fixed, mobile networking, broadband access, intelligent optical networking, multimedia solutions and network applications. It also has a key international R&D center with full access to Alcatel's global technology pool, developing original technology for use in China and export to Alcatel's customers worldwide. With 6,500 employees, an advanced manufacturing center, and the most extensive sales and support network in China, it is the only company capable of meeting the global needs of Chinese customers. For more information, visit Alcatel Shanghai Bell on the Internet at http://www.alcatel- sbell.com.cn ALCATEL: Ranks Second in North American Medium IP-PBX Market ------------------------------------------------------------ Alcatel announced that it is the second leading vendor in the North American medium to large IP-PBX market (400 plus lines), based on the second-quarter 2002 IP-PBX market share results published in InfoTech's InfoTrack for Enterprise Communications. Alcatel has increased its overall IP telephone line shipment by 30 percent from the previous quarter and 73 percent from the same quarter in 2001. "As the IP-PBX market gains momentum, market share results show that Alcatel has been successful in targeting large enterprise users with its OmniPCX 4400," said Frank Stinson, program director, InfoTrack Programs, InfoTech. "Alcatel's competitive advantage lies in its ability to offer a rich and consistent feature set in multi-site, multi-vendor environments." InfoTrack for Enterprise Communications tracks the sales of IP- based PBXs that InfoTech predicts will exceed those of conventional PBXs and key/hybrid equipment in 2005. This allows the industry to view Alcatel alongside vendors with IP-based products, rather than against the install base of traditional PBXs that will be abandoned in the future for full IP capabilities. Alcatel's #2 position in the IP-PBX segment demonstrates that medium to large enterprises are choosing Alcatel over incumbents and over data vendors who have developed voice solutions that are tied to their switches. "Alcatel's focus has been on providing large enterprises with a product that is IP at its core, but that allows customers to migrate to IP at their own pace," said Tom Wilburn, general manager, Alcatel North America enterprise business. "As some vendors waiver in their commitment to the enterprise and the industry puts closed, proprietary solutions under heavy scrutiny, Alcatel continues its mission of building best-of-breed products that are independent of the underlying data switching infrastructure and provide a smooth migration path to IP." The Alcatel OmniPCX 4400 IP-PBX recently won TMC Labs' Innovation Award, specifically focused on the voice-over-IP industry. The OmniPCX 4400 was chosen from almost 200 applicants to win this prestigious award based on its standards-based platform and rich feature set, especially its integrated in-building wireless capabilities and multimedia contact center solution. About Alcatel enterprise networking solutions Alcatel delivers standards-based IP communications solutions to a global customer base of over 500,000 small, medium and large enterprises, government agencies, healthcare facilities, and educational institutions. Alcatel's award-winning Omni family of IP Communications solutions consists of an extensive portfolio of network switching infrastructure, security appliances, and IP telephony applications built to provide long-term value. About Alcatel Alcatel (NYSE: ALA) 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. Relying on its leading and comprehensive products and solutions portfolio, stretching from end-to-end optical infrastructures, fixed and mobile networks to broadband access, Alcatel's customers can focus on optimizing their service offerings and revenue streams. With sales of $22 billion in 2001 and 99,000 employees, Alcatel operates in more than 130 countries. COMPLETEL: Fractional Shares Joins Board of Delisted Securities --------------------------------------------------------------- Completel Europe N.V. reminds its shareholders that, as previously announced, the 670-to-one reverse split of its ordinary shares was effected on September 16, 2002, and that the conversion of each 670 old ordinary shares (which are now fractional shares) into one new ordinary share is mandatory. Any outstanding fractional shares will remain listed solely in order to facilitate their negotiation. As indicated in the Euronext release n 2002-3348 issued on September 23, commencing today, fractional shares (Sicovam code 5728) are listed on the "Board of Delisted Securities." The Company's converted ordinary shares are listed on the Premier Marche (Sicovam code 5506). Completel Europe NV (ParisBourse: CTL). Completel is a facilities-based provider of fiber optic local access telecommunications and Internet services to business end- users, carriers and ISPs in France. Ordinary shares of CompleTel Europe N.V. will be issuable upon exercise of the warrants previously distributed by it to certain of its existing shareholders and any such issuance will represent new financing for the company. A registration statement relating to the ordinary shares of the company underlying its warrants has been filed with the U.S. Securities and Exchange Commission but has not yet become effective. These ordinary shares may not be sold nor may offers to buy them be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state. Following effectiveness of the registration statement, a written prospectus relating to these securities and meeting the requirements of Section 10 of the U.S. Securities may be obtained from CompleTel Headquarters Europe S.A.S. at Tour Egee, 9-11, allee de l'Arche 92671 Courbevoie Cedex, France; attention: investor relations. Telephone requests may be directed to our investor relations director at 01-72-92- 20-32. CONTACT: Tour Egee, 9-11 allee de l'Arche 92671 Courbevoie Cedex, FRANCE Phone: +33 1 72 92 20 00 Home Page: http://www.completel.com ============= G E R M A N Y ============= CARGOLIFTER AG: Shareholders to Offer Final Rescue Deal ------------------------------------------------------- Creditors of Cargolifter comprising 72, 000 shareholders were asked to provide EUR20 million by the end of October in a last chance to prevent the liquidation of the company, according to the Financial Times. The new deal, which is initiated by UK-based rival, Advanced Technologies Group, is a reworked of a previous plan, which mandates the reorganized public limited company, CargoLifter AG, to also carry out orders on behalf of other companies, while a separate subsidiary will take over research and development activities. Another company will be formed to absorb those employees of the company who are not offered employment either by CargoLifter AG or by the research subsidiary, a previous TCR-Europe revealed. Rolf-Dieter Monning is Cargolifter's insolvency administrator. The company's formal insolvency proceedings began in July 31 before the Cottbus District Court. DEUTSCHE TELEKOM: New Law Increases Competition in Local Market ----------------------------------------------------------------- Phone company Deutsche Telekom will face increased competition in domestic market for local calls due to a German parliament law that gives customer freedom to choose operators, Europemedia says. A code provided before dialing will allow users to access local call service from their own choice of operator. The access, which has been available only in long-distance calls, is to be effective in December. The new law is seen to affect the company's most profitable division. Deutsche Telekom, which posted net loss of EUR3.9 billion for the first half of 2002, is currently conducting a review to solve the EUR4 to EUR7 billion gap in the company's plan to reduce its debt to EUR50 billion by the end of 2003. The company had EUR64.2 billion-debt at the end of June. MOBILCOM AG: Obtains Extension Agreement for UMTS Loan -------------------------------------------------------- MobilCom AG and the lending banking consortium under the guidance of ABN Amro Bank, Deutsche Bank AG London, Soci,t, G,n,rale, and Merrill Lynch have agreed to an extension agreement for the refinancing of the UMTS loans amounting to to Euro 4.7 billion due by September 30, 2002. Like the first extension agreement, among others, this agreement is subject to the condition subsequent that a Memorandum of Understanding concerning a long-term financing solution between France Telecom and the banking consortium remains effective. Hence, the UMTS loan (Senior Interim Facility) falls due by October 14, 2002. The extension agreement will allow the parties to wrap up the refinancing within this period. Furthermore it has been agreed that the interest payment is deferred until this date as well. MOBILCOM AG: Talkline Eyes Mobilcom's Client Base ------------------------------------------------- TDC AS's German unit Talkline expressed interest in taking over Mobilcom AG's 4.7 million clients, says AFX. MobilCom is currently undertaking a restructuring with the assistance of the German government following the pullout of France Telecom. Last week the company announced the freezing of its UMTS roll-out to attract possible buyers. The mobile phone operator is also in talks to sell its fixed-line business. Meanwhile, Huchison Whampoa is also reportedly examining a participation in Mobilcom. According to sources within the company, preliminary talks have been held within the company. The move, however, was seen as a cheap way to enter the German UMTS market according to a report in Telecom.paper. MobilCom provides cellular phone services to more than 5 million subscribers and fixed-line services to more than 925,000 customers following its purchase of rivals TelePassport and D Plus. MobilCom operates its own fiber-optic network and owns 78% of ISP freenet.de. CONTACT: MOBILCOM AG Hollerstra e 126 D-24782 B�delsdorf, Germany Phone: +49-43-31-69-11-73 Fax: +49-43-31-69-28-88 Home Page: http://www.mobilcom.de ============= I R E L A N D ============= ELAN CORPORATION: Announces Payment Under Guarantee --------------------------------------------------- Elan Corporation, plc (NYSE: ELN) announced that it has finalized payment of its guarantee in respect of a sale of certain financial assets by Elan Pharmaceutical Investments III, Ltd. ("EPIL III"). Additionally, the company provided an update on its third quarter. Elan expects to release its third quarter results on Wednesday, October 30, 2002. In July, Elan indicated that it would not provide earnings guidance through 2003, as results would be impacted by the timing and composition of asset sales and the timing of operational and balance sheet initiatives. Summary of Announcement -- $142 million cash charge to be incurred as a result of Elan's satisfaction of its guarantee related to a sale of assets by EPIL III. -- Non-cash charge to be recorded of up to approximately $400 million, related to Elan's investment portfolio and the remaining EPIL guarantees. The potential for this charge was previously referred to in Elan's second quarter earnings release and will have no impact on its cash balance. -- Product revenues for the quarter are expected to be approximately $200 million, as a consequence of generic competition for Zanaflex; elimination of product rationalization revenue sources; termination of the arrangements with Autoimmune Diseases Research & Development Corporation ("Autoimmune"); a change in the company's discounting strategy; short-term product supply constraints from third parties; and the asset divestiture program. -- Cash balances at the end of the quarter are expected to be in excess of $600 million after, among other factors, the payment of the guarantee related to EPIL III's recent asset sale and payments in respect of previous product purchase obligations. Payment Under Guarantee Elan on September 30, 2002 made a $142 million cash payment to satisfy its previously disclosed commitment under a guarantee in connection with the sale of certain financial assets by EPIL III, one of Elan's qualifying special purpose entities. EPIL III completed this sale, for approximately $148 million, on June 29, 2002. The sale of these assets by the purchaser was subject to significant time constraints, the continued deterioration of values of emerging biotech companies and the composition of this particular portfolio. The proceeds of the sale, together with the available cash in EPIL III, were used to repay, at maturity, $160 million of notes issued by EPIL III in March 2001. Elan has no further obligation under the guarantee. As a result of the payment under the guarantee, Elan will record a cash charge of $142 million in the third quarter. Non-Cash Charges During the third quarter, Elan expects to record an estimated non-cash charge of up to approximately $400 million, of which approximately $150 million is related to the remaining Elan Pharmaceutical Investments II, Ltd. ("EPIL II") and EPIL III guarantees. Further details of this charge will be disclosed when the third quarter earnings are released. The financial markets for emerging biotechnology, drug delivery and pharmaceutical companies continued to decline in the third quarter. Elan has a substantial portfolio of investments in this sector. Elan has guaranteed the EPIL II and EPIL III notes, which mature in 2004 and 2005, respectively. The principal amount outstanding under these notes is $840.0 million, as of September 30, 2002. After the writedown, the carrying value of the cash and investments held in EPIL II and EPIL III is expected to be approximately $391 million. Product Revenues While the prescriptions for Elan's key US promoted brands continue to grow, product revenues are expected to be approximately $200 million in the third quarter, compared to $375 million in the second quarter of 2002. The reduction in revenues of approximately $175 million is principally attributable to the genericization of Zanaflex ($60 million) and the termination of the arrangements with Autoimmune ($15 million). The remaining reduction is attributable to the elimination of certain product rationalization revenue sources; a change in Elan's discounting strategy; short-term product supply due to manufacturing constraints of third parties; and the asset divestiture program. Liquidity At September 30, 2002, Elan estimates it will have cash and liquid resources in excess of $600 million. In connection with its previously announced recovery plan, Elan has initiated a program of asset divestitures to supplement its liquidity requirements. Under this program, in August 2002, Elan announced a licensing agreement with Watson Pharmaceuticals, Inc. involving Elan's 30mg and 60mg dosage strengths of extended release nifedipine. Discussions are ongoing on asset divestitures. Elan's cash position will in future periods be dependent on a number of factors, including its asset divestiture program, its balance sheet restructuring, its debt service requirements and its future operating cash flow. In addition to the actions and objectives outlined with respect to Elan's recovery plan, Elan may in the future seek to raise additional capital, restructure or refinance its outstanding indebtedness, repurchase its equity securities or its outstanding debt, including its Liquid Yield Option Notes, in the open market or pursuant to privately negotiated transactions, or take a combination of such steps or other steps to increase or manage its liquidity and capital resources. Elan is focused on the discovery, development, manufacturing, selling and marketing of novel therapeutic products in neurology, pain management and autoimmune diseases. Elan shares trade on the New York, London and Dublin Stock Exchanges. CONTACT: Elan Corporation Investors: (U.S.) Jack Howarth Phone: 212/407-5740 800/252-3526 or Investors: (Europe) Emer Reynolds Phone: 353-1-709-4000 00800 28352600 ========= I T A L Y ========= FIAT SPA: Questor and JPMorgan Acquires Automotive Parts Business ----------------------------------------------------------------- Questor Management Company, LLC; JPMorgan Partners, the private equity arm of J.P. Morgan Chase & Co.; Private Equity Partners, Spa; and funds managed by a subsidiary of American International Group (AIG) have received necessary regulatory approvals and have completed their acquisition of the aluminum automotive components business of Fiat S.p.A.'s Teksid unit. Completion of the deal was announced simultaneously by Fiat in Turin, Italy. The investment group used a combination of cash and bank loans to finance the transaction. The former Fiat aluminum automotive business acquired by the group includes plants in the U.S., Italy, France, Poland, Mexico, Brazil and Argentina, and joint venture facilities in Turkey and China. Products include aluminum cylinder heads, engine blocks, transmission casings and suspension components. The deal required regulatory approval from the European Union, the U.S. and certain other countries. "The acquisition is an ideal fit for Questor, which has established a worldwide reputation for developing and growing automotive businesses," said Robert E. Shields, chief operating officer and the principal of Questor Management Company who was involved in the transaction. "We are not passive investors, and in the days ahead we will be working closely with Teksid Aluminum's excellent management team to improve production efficiencies and introduce new marketing efficiencies. "JPMorgan Partners is uniquely positioned to partner with Questor on this transaction. Our international presence and expertise in the automotive sector will enable us to facilitate the growth of Teksid Aluminum's business platform," John O'Connor, Executive Partner of JPMorgan Partners, said. "Fiat's aluminum business has been a leading force in the steadily growing global trend toward using strong, lightweight aluminum in a wide range of automotive applications. We are dedicated to keeping the business at the cutting edge in design and production, and in maintaining or expanding its position as the leading independent producer of aluminum automotive components in the global industry," Shields said. Automobile manufacturers on Teksid Aluminum's customer list include DaimlerChrysler, Fiat, Ford, General Motors, Nissan, Peugeot, Renault, Toyota, Volkswagen and Volvo. "We have been working closely with Francesco Rangoni and other members of the Teksid Aluminum management team, and we believe the business will perform well and maintain its growth momentum under new management," Shields said "Our goal is to develop even closer relationships with customers as we deliver outstanding technology, quality, value and advanced engineering support." Automotive and transportation companies are well represented in portfolios of the Questor funds. Questor created AP Automotive Systems by acquiring and then consolidating Tube Products Corporation and AP Parts, Inc. Other Questor automotive or transportation companies have included AZ Automotive, created by consolidating Aetna Industries and Zenith Industrial, producers of stamping and modular assemblies; Ryder TRS, a leading truck rental company; ASC, a supplier of automotive convertible systems, open-air systems and specialty vehicles; and GeoLogistics, a major freight forwarder and global logistics provider. Many of Questor's professionals have had extensive experience in the automotive industry. Questor, JPMorgan Partners, Private Equity Partners and the AIG funds are acquiring the Fiat entity through holding companies that have been established in France and Luxembourg. JP Morgan Securities Inc. was financial advisor to the buyers. About Questor Questor Management Company, based in Southfield, Michigan, manages the Questor Partners funds ( http://www.questorfund.com), which have more than $1.1 billion of committed equity capital. The funds' objective is to acquire significant positions in companies that are considered non-core or are underperforming or have not met their owners' expectations, but offer the potential for superior returns with the application of appropriate levels of capital and management expertise. About JPMorgan Partners JPMorgan Partners (JPMP), formerly Chase Capital Partners, is a global partnership with over $30 billion under management. It is a leading provider of private equity and has closed over 1,800 individual transactions since its inception in 1984. JPMP has more than 150 investment professionals in eight offices throughout the world. JPMorgan Partners' primary limited partner is J.P. Morgan Chase & Co. (NYSE: JPM), one of the largest financial institutions in the United States. For additional information, please visit the website at http://www.jpmorganpartners.com. About Private Equity Partners Private Equity Partners, Spa, is a leading Italian merchant bank, founded and controlled by Fabio Sattin and Giovanni Campolo. The Private Equity Partners team has extensive experience in the Italian private equity market and has completed over 60 transactions. Private Equity Partners functions as the management company for the JPMorgan Italian Fund III, an Italian regulated closed-end fund that focuses on buyout and expansion capital transactions in Italy. For additional information, please visit the website at http://www.privateequitypartners.com. About the AIG funds participating in the investment AIG Horizon Partners Fund, L.P., along with AIG Horizon Side-by- Side Fund, is a $340 million balanced private equity fund controlled by American International Group that seeks to lead or co-lead investments in both high growth and middle-market companies. With $400 million in combined capital, AIG Private Equity Portfolio I, L.P. and AIG Private Equity Portfolio II, L.P. are private equity funds-of-funds that invest in leveraged buyout, venture capital, and special situations private equity funds and also make direct investments in companies on a global basis. Note: In August, Fiat SpA sold the profitable half of its Teksid components unit to private equity investors for EUR460 million in cash and assumed debts. The sale is the second major sale after banks imposed a restructuring plan to decrease the company's debt and prevent further downgrade of its bonds to junk status. CONTACT: Harry Savage for Questor Management Company Phone: +1-212-371-2200 Home Page: http://www.questorfund.com ===================== N E T H E R L A N D S ===================== UPC: Signs Recapitalization Agreements With Bondholder Committee ---------------------------------------------------------------- UnitedGlobalCom, Inc. (UGC) (Nasdaq: UCOMA) announced today that it has entered into definitive agreements with its subsidiary United Pan-Europe Communications, NV (UPC) and an ad hoc committee of UPC bondholders relating to the recapitalization of EUR 5.2 billion of UPC consolidated debt. The Recapitalization will substantially deliver UPC's consolidated balance sheet through the judicially supervised conversion of EUR 925 million accreted value of debt issued by a subsidiary of UPC (Belmarken Notes) and EUR 4.3 billion accreted value of UPC Senior Notes and Senior Discount Notes into new common stock of New UPC, Inc. New UPC is a newly-formed US- registered holding company which will own all or substantially all of the existing UPC. UGC currently holds all of the outstanding Belmarken Notes, approximately 35% of the UPC Notes, 20% of UPC's Preference Shares, 53% of UPC's Ordinary Shares and all of the outstanding UPC Priority Shares. The members of the Bondholder Committee hold approximately 25% of the UPC Notes. After the Recapitalization, New UPC ownership will be as follows: Security Holder of UPC Percentage of New UPC Common Stock(1) Belmarken Notes and UPC Notes owned by UGC 65.5% UPC Notes owned by third parties (other than UGC) 32.5% Holders of UPC Preference Shares, Ordinary Shares A, Priority Shares (including UGC) and Litigation Claims(3) 2.0%(2) (1) Percentage of the number of shares to be outstanding immediately following the completion of the Recapitalization, before any dilutive impact of (a) the purchase by UGC of additional New UPC common stock, (b) equity and options which may be issued to New UPC management, and (c) existing UPC rights, options and warrants. (2) Relative allocation to be determined. (3) If the litigation claims cannot be treated as subordinated under the Plan, they will be treated as general unsecured claims to which Management Comments Gene Schneider, Chairman and CEO of UGC, said: "This agreement confirms what we set out to achieve earlier this year and will enable UPC to build its future upon a firm financial structure. The management team at UPC remains committed to the future of the business and will continue to focus on business execution. UPC will emerge from this restructuring with one of the strongest balance sheets in the European media and telecom sector at a time when it's operations are achieving record financial results." Mike Fries, President and COO of UGC, added: "This recapitalization plan is a great result for UGC shareholders. First, UGC will end up with a controlling 66% interest in UPC -- by far our largest and most important operation. The implied total equity value of UPC based upon the proposed Recapitalization is EUR 1.9 billion. And second, as a result of reduced interest costs, EUR 100 million of new equity and increased operating and financial headroom in its bank deal, UPC should have sufficient resources to fund its operations through to positive free cash flow without the need for additional capital. We look forward to closing this deal early next year and building on what will be a very strong operating and financial performance in 2002." New money Upon completion of the Recapitalization, New UPC will offer to each holder of UPC Notes and Belmarken Notes the right to purchase a pro rata share of up to EUR 100 million of additional shares of New UPC common stock at the share price implied by the Recapitalization plan. The EUR 100 million amount will be reduced by the net proceeds of any assets sold by UPC and any non- dilutive capital raised by UPC prior to completion. UGC has agreed to subscribe for that portion of the EUR 100 million subscription amount offered to the other holders of the UPC Notes for which those holders do not subscribe. Bank Waiver and Amendments In order to facilitate the Recapitalization, UPC's senior bank lenders have agreed to extend until March 31, 2003 the waivers of the defaults arising as a result of the Company's decision not to make interest payments under the UPC Notes. The proposed bank waiver includes amendments to the UPC Distribution bank facility to (1) increase operational headroom for the UPC Distribution group by increasing and extending the maximum permitted ratios of senior debt to annualized EBITDA and by lowering and extending the minimum required ratios of EBITDA to total cash interest, (2) increase the interest margin on outstanding loans under the facility by 150 basis points, (3) include a new commitment fee of 0.25% on the total commitment amount (4) reduce the total commitment amount under the facility from EUR 4.0 billion to EUR 3.5 billion, and (4) require UPC to inject EUR 125 million of cash to UPC Distribution, the borrower. Dutch and US court procedures In order to ensure an efficient and effective Recapitalization, UPC has agreed to file a voluntary case for reorganization under Chapter 11 and will file a plan of reorganization and disclosure statement as soon as practicable. Either simultaneously with or following the filing of the Chapter 11 case, UPC will voluntarily file a petition for moratorium and a plan of composition (the "Akkoord") in the Amsterdam (Netherlands) Court. Completion of the Recapitalization will be conditional on receiving the appropriate creditor consents. Timing The parties are working towards completion of the Recapitalization by the end of the first quarter of 2003. About UnitedGlobalCom UGC is the largest international broadband communications provider of video, voice, and data services with operations in 21 countries. At June 30, 2002, UGC's networks reached, in aggregate, 19.1 million homes and over 13 million customers including 11.2 million video subscribers, 916,400 telephony subscribers, 901,800 high speed Internet access subscribers. In addition, its programming business had approximately 45.9 million subscribers worldwide. UGC's significant operating subsidiaries include UPC, the largest pan-European broadband communications company; VTR GlobalCom, the largest broadband communications provider in Chile, and Austar United Communications, a leading satellite, cable television and telecommunications provider in Australia and New Zealand. CONTACT: Investor & Media Relations: Rick Westerman, CFO Phone: 03-220-6647 Fax: 303-770-3464 Email: rwesterman@unitedglobal.com Home Page: http://www.unitedglobal.com =========== P O L A N D =========== ELEKTRIM SA: Requests Postponement of Bankruptcy Hearing -------------------------------------------------------- The Management Board of Elektrim S.A. announces that its attorneys have filed today with the Warsaw District Court, XVIIth Economic Division a motion requesting the postponement of the bankruptcy hearing scheduled for 7 October 2002 to a date after 31 October 2002. The filing of such application was ordered to the Company by the Arbitral Tribunal in Vienna in case SCH-4750 DeTeMobil vs. 1. Elektrim and 2. Elektrim Telekomunikacja. NETIA HOLDINGS: Judge Re-Adjourns Acceptance of Composition Plans ----------------------------------------------------------------- Netia Holdings S.A. (Nasdaq: NTIAQ/NTIDQ, WSE: NET), Poland's largest alternative provider of fixed-line telecommunications services (in terms of value of generated revenues), announced that the creditors' meetings to accept the composition plans of its three Dutch subsidiaries, Netia Holdings B.V., Netia Holdings II B.V. and Netia Holdings III B.V., were re-adjourned by the supervisory judge until October 28, 2002. The verification hearings by the court in the Netherlands have been provisionally scheduled for November 6, 2002. CONTACT: Netia IR: Anna Kuchnio Phone: +48-22-330-2061 =========== S W E D E N =========== LM ERICSSON: Comments on Industry Development --------------------------------------------- A number of telecom equipment suppliers have recently reported lower than expected sales and orders for the third quarter. This is consistent with our view that the market remains uncertain with few signs of stabilizing in the near term. However, we are firmly optimistic about the demand for mobile systems in the longer perspective. Our competitive position remains strong, however for the third quarter we expect sales and especially orders to decline from the second quarter. This is a consequence of reduced investments by many of our customers and is in line with the industry trend. We continue with full force to reduce our cost base and improve working capital efficiency to establish a SEK 120 billion breakeven point. Ericsson (NASDAQ:ERICY) remains among the most liquid and well-capitalized companies in the industry. We believe we have sufficient resources to fund our restructuring actions and cover our losses until we can return to profit sometime during 2003. 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. On September 16, TCR-Europe reported that Moody's Investors Service downgraded the long-term debt ratings of Telefonaktiebolaget LM Ericsson (Ericsson) from Ba1 to Ba2, with a Ba2 senior implied rating. The downgrade was due to a weak market for telecommunications equipment. Several wireless operators announced withdrawal or scale back from investment plans in 3rd generation (3G) wireless infrastructure. CONTACT: Ericsson Media: Pia Gideon, +46 705 198 903 E-mail: pia.gideon@lme.ericsson.se Investors: Gary Pinkham, +46 8 719 0858, +46 730 371 371 E-mail: investorrelations@ericsson.com LM ERICSSON: Signs ENGINE Contract With Telenor Networks -------------------------------------------------------- Ericsson (NASDAQ:ERICY) has signed an agreement with Norwegian operator Telenor Networks, for the migration of Telenor's fixed network. The ENGINE Multi-Service Network Solution will enable Telenor to cost-efficiently integrate different types of data and voice traffic on the same network and to offer new services to its customers. Implementation will start immediately. The ENGINE Multi-Service Network Solution gives Telenor Networks a future-proof migration path to evolve their circuit-switched network to a multi-service packed based network. Telenor will initially use the solution to modernize their existing transit network, and aggregate ADSL traffic. The ENGINE network is capable of carrying large and growing volumes of voice and data traffic and enables integrated traditional fixed telephony with IP-based broadband traffic on a single network. "Telenor is seeking cost efficiency and Ericsson's ENGINE network contributes to our achieving this goal by providing a cost- efficient solution connected to fixed network and broadband applications. In addition, the new platform will open new business opportunities within interconnect areas," said Jan Edvard Thygesen, President and CEO at Telenor Networks. "We are pleased that Telenor Networks has chosen to take advantage of the cost-saving potential that ENGINE provides and we hope that our co-operation will further optimize Telenor's network. With this contract Ericsson further establishes its position as the leading provider of packet-based solutions for fixed networks," said Tor 0. Frydenberg, President, Ericsson Norway. Ericsson is shaping the future of Mobile and Broadband Internet communications through its continuous technology leadership. Providing innovative solutions Ericsson is helping to create the most powerful communication companies in the world. Read more at http://www.ericsson.com/press About Telenor Networks Telenor Networks is the leading supplier of fixed network services to the Norwegian telecommunications market. The company supplies service providers and the wholesale market with capacity, transport and access. The services include fixed telephony, leased lines and numerous other services. Telenor Networks supply international transit and capacity and has total responsibility for fixed telephony within the Telenor group. About ENGINE ENGINE is Ericsson's global multi-service network offering for network operators, designed for real-time services; a carrier- class network able to carry large and growing volumes of IP-based traffic. ENGINE efficiently builds new and migrates operators' current circuit-switched networks into a single next generation network, based on ATM and IP packet switching technologies. Ericsson's access portfolio comprises end-to-end solutions and access technologies like fiber Ethernet, copper, and wireless technologies. Ericsson has numerous worldwide commercial agreements for ENGINE solutions including BT, Telmex, Skanova, eircom, Telia International Carrier, KPN, Comensus, Edisontel and others. To learn more about Ericsson's ENGINE, please visit: http://www.ericsson.com/broadband CONTACT: Ericsson Kathy Egan, 212/685-4030 Pressrelations@ericsson.com or Glenn Sapadin, 212/685-4030 Investor.relations@ericsson.com LM ERICSSON: Winpro Purchases Software Development Product ---------------------------------------------------------- Ericsson and Wipro have signed a Letter of Intent concerning purchase of the resources of Ericsson's software development centers in Bangalore, Hyderabad, and New Delhi. In connection with this transaction, Ericsson will transfer the personnel working in the software development centers to Wipro. In turn, Ericsson will purchase Consultancy Services from Wipro that continue Ericsson's development work in India through outsourcing. The partnership will provide Ericsson with access to the pool of highly skilled engineers in India, and is in line with Ericsson's overall ongoing concentration of R&D activities, which includes outsourcing development operations to achieve greater efficiencies and economies of scale. "This agreement reinforces Wipro's telecom domain expertise and highlights the strong value proposition we offer to our clients in telecom space," says Dr. A L Rao, President Telecom & Internetworking group, Wipro Technologies. "Ericsson has identified India as an important outsourcing location. Wipro's technical depth and quality leadership make it the ideal long term partner to Ericsson for software development" says Jan Campbell, Managing Director, Ericsson India Private Limited. Finalization of the transaction is subject to completion of due diligence, negotiation of definitive agreements, and receipt of customary required approvals. SONERA: Telia Issues Prospectus on Telia/Sonera Merger ------------------------------------------------------ On March 26, 2002, Telia (SSE: TLIA) and Sonera (HEX: SRA, NASDAQ: SNRA) announced plans to merge. Today, Telia is issuing the prospectus setting forth the terms and conditions of the exchange offer being made to all Sonera shareholders through which the merger between Sonera and Telia will be effected. The Exchange Offer acceptance period will commence on October 7, 2002 and end on November 8, 2002. The prospectus has been approved by the Finnish Financial Supervision Authority and an application to have it recognized by the Stockholm Exchange has been made. In addition, Telia expects to file a registration statement in relation to the Exchange Offer and have it declared effective by the Securities and Exchange Commission (SEC) on October 1, 2002. Telia has applied to have the Telia ADSs (American Depository Shares) to be issued pursuant to the Exchange Offer quoted on NASDAQ in the United States and an application for listing of the Telia share and certain warrants on the Helsinki Stock Exchange will be submitted shortly. The prospectus will be made available on Telia's and Sonera's websites, and will be distributed to all current Sonera ADS holders by mail, with detailed instructions on the procedure to be followed in order to accept the offer. A marketing brochure will also be distributed by mail to all Sonera shareholders with detailed instructions on the procedure to be followed in order to accept the offer. The results of the exchange offer are expected to be announced on November 14, 2002. Telia offers 1.51440 Telia shares in exchange for each Sonera share, one new Telia warrant is offered in exchange for each Sonera warrant issued pursuant to Sonera's 1999 and 2000 stock option programs and 0.30288 Telia ADSs are offered in exchange for each Sonera ADS (each Telia ADS will be equal to five Telia shares). The completion of the Exchange Offer is subject to certain conditions including the condition that shares representing more than 90 percent of the shares and votes in Sonera (on a fully diluted basis) shall have been validly tendered and not withdrawn. The merger is conditional upon Telia's current shareholders authorizing the Board of Directors to issue the new shares and warrants necessary to complete the Exchange Offer. Telia will therefore convene an Extraordinary General Meeting, to be held on November 4, 2002. The Finnish Financial Supervision Authority has issued a ruling to the effect that no additional cash consideration, so called "top-up", will be payable in connection with the Exchange Offer. The cash offer price in a mandatory redemption offer will, absent special circumstances, be based on the volume weighted average trading price for the Sonera shares during 12 months preceding the expiration of the exchange period. The EU Commission and the competition authorities in Russia, Estonia, Latvia and Lithuania have already approved the merger and no other competition authority acceptances are required. In the prospectus Telia and Sonera provide information relating to the strategy and group governance of the combined company, management as well as expected synergies to be achieved by the combination. The combined company is proposed to be renamed TeliaSonera, and will continue to use the brand name Telia in Sweden and Denmark, Sonera in Finland, and NetCom in Norway. Telia's shares are listed on the Stockholm Exchange and TeliaSonera will primarily comply with the rules of the Stockholm Exchange also in Finland. The main differences between the rules of the Helsinki and Stockholm Exchange are described in the prospectus. Indicative Timetable Beginning of the exchange offer period: October 7, 2002 Telia Extraordinary General Meeting: November 4, 2002 Expiration of the Exchange Offer period: November 8, 2002 Announcement of the results of the Exchange Offer: November 14, 2002 Closing/ Settlement: On or about November 29, 2002 TeliaSonera shares and certain warrants commence trading in Helsinki: December 2, 2002 TeliaSonera ADSs commence trading on NASDAQ: December 2, 2002 TeliaSonera Business and Operations TeliaSonera will be the leading telecommunications group in the Nordic and Baltic regions. Based on number of customers, the combined company will be the largest mobile operator in Sweden and Finland, the second largest operator in Norway and the fourth ranking operator in Denmark. TeliaSonera will also be the leading fixed voice and data provider in the region with strong positions in Sweden and Finland and a significant position in Denmark. The combined group will be the largest operator in the Baltic region, with majority owned mobile and fixed line operations in Lithuania and majority owned mobile operations in Latvia. TeliaSonera will also have minority interests in fixed line operations in Latvia and in mobile and fixed line operations in Estonia, minority interests in mobile operators in Russia and Turkey as well as majority-owned investments in mobile operators in Azerbaijan, Georgia, Kazakhstan and Moldova through Fintur. On a pro forma basis as of June 30, 2002, adjusted for the disposal of Telia Finland and Com Hem AB and the consolidation of Fintur Holdings as of September 1, 2002, TeliaSonera had approximately 9.8 million mobile customers, approximately 8.6 million fixed network access lines and 1.5 million Internet subscriptions. In addition, the associated companies of the combined company had 15.9 million mobile customers in Turkey, Russia and the Baltic region and approximately 1.2 million fixed network access lines in the Baltic region. Pro forma net sales of TeliaSonera amounted to EUR 8.9 billion in 2001and amounted to EUR 4.4 billion in the first six months of 2002. As of June 30, 2002, TeliaSonera had 34,045 employees on a pro forma basis. TeliaSonera will use the Swedish krona as its reporting currency but intends to, in all investor information, present key information in relation to its results in euro. The implementation of the strategy and business structure for TeliaSonera will not commence until the exchange offer has been completed. Until such time, Telia and Sonera will continue their respective operations under their current strategies and business structures. Strategy Focus on Customer and Shareholder Value Following a review of the stand-alone operations, financial situation and strategic direction of Telia and Sonera, the companies have reached the following conclusions with respect to the strategy of the combined company: TeliaSonera's overall focus will be on best serving its customers in its core business and creating value for its shareholders through stronger profits and cash flows. Focus on Core Business The principal focus of TeliaSonera will be to further develop its business, in its home market, comprising of the Nordic and Baltic countries. In Sweden, Finland and the Baltic countries, TeliaSonera will provide a full range of telecommunications services to its customers, whereas in Norway and Denmark the combined company will initially offer a selected range of services with a focus on services that can be delivered profitably. Provided that the right expansion opportunities develop, TeliaSonera intends to become a provider of a full range of services in all countries within its home market. Growth Opportunities Outside of the Home Market TeliaSonera intends to achieve growth through further development of its Russian business with the aim, in the longer term, of having Russia form part of TeliaSonera's extended home market. TeliaSonera will seek to grow and create value in the international mobile businesses in Turkey and Eurasia. The combined company will also seek growth in the refocused international carrier business. Adopt Customer-oriented Approach TeliaSonera will be in the business of providing telecommunication services to customers rather than providing technology or access to networks as such. Accordingly, the combined company will aim at accelerating the refocusing of its operations from a technology-driven approach to a customer- oriented approach, thereby enhancing its ability to achieve growth in its core businesses. TeliaSonera will seek to be innovative in packaging its products and services for both retail and business customers to better meet the needs of its customers for integrated easy-to-use services. Pursue Profitable Growth TeliaSonera will seek balanced growth in its home market and target selected growth opportunities outside its home market where requirements for return on investment and other factors are satisfied, as well as continue to evaluate participation in the consolidation of the European telecommunications services industry. The intention is to: - achieve profitable growth in its core business through combined product and service offerings, cross-selling, communication intensive ICT-Services and an intensified customer service approach. - pursue growth in Russia by, among other things, taking advantage of growth opportunities presented by the increasing penetration of mobile services; - pursue growth in international mobile operations in Turkey and Eurasia by enhancing the ability of majority-owned and associated companies in these regions to achieve growth through TeliaSonera's expertise in mobile communications; - participate in the consolidation of the European telecommunications services industry provided such a step would improve TeliaSonera's ability to serve its customers and enhance shareholder value. Generate Increased Profits and Cash Flow TeliaSonera aims to significantly increase profits in the longer term, on an operating income level as well as on EBITDA and on the net income per share level. Increased profits are expected to come from profitable growth, cost synergies from the merger, stand-alone efficiency improvements, improvements of under-performing businesses and divestments of non-core assets. TeliaSonera will have an equally strong focus on increasing operating cash flows, which are expected to come from increased profits, capital expenditure synergies from the merger and a cautious business-oriented approach to capital expenditure. TeliaSonera plans to maintain a strong financial position to enable it to develop its core business. The following actions will be undertaken to support increased profits and cash flows: - The combination is expected to result in significant synergies, which are presented in the section titled "Significant Synergies." - TeliaSonera plans to realize savings from both the continuation of the independent companies' on-going efficiency programs as well as from new efficiency improvement programs. The larger size of the combined company is expected to allow it to use benchmarking more efficiently as a tool to achieve cost and capital expenditure savings. - Both Telia and Sonera have divested non-core assets in recent years. TeliaSonera intends to continue to streamline its businesses by divesting operations and assets that are not essential to its core business. - TeliaSonera plans to improve the performance of its under-performing businesses with the goal of having such businesses achieve profitability on an operating profit level and generate positive operating cash flow. Following a comprehensive review of its international carrier operations, Telia decided to change the strategic focus of Telia International Carrier and to restructure the operations. The change in strategic focus and additional planned actions are expected to result in positive cash flow, excluding restructuring costs, during 2003. Telia has already taken actions to improve the performance of its Danish operations. TeliaSonera will continue to aim for growth in Denmark. Sonera has commenced a restructuring of its Service Businesses unit and has made a commitment that underlying EBITDA losses will not exceed EUR 50 million in 2002. The restructuring is proceeding according to plan and will be continued following the merger. Sonera has announced that it expects the Service Businesses to at least reach break-even in 2003 on an EBITDA level. Group Governance Board of Directors The Board of Directors of TeliaSonera will comprise a total of nine non-executive members. Initial members, in addition to the current chairmen of the Board of Directors of Telia and Sonera, Lars-Eric Petersson and Tapio Hintikka respectively, will include three representatives from the current Board of Directors of Telia and three representatives from the current Board of Directors of Sonera and one newly-appointed independent director. As of the annual general meeting of the shareholders of TeliaSonera in 2003, two of the members appointed from the current boards (one from each board of directors), will resign and two new independent directors will be appointed. In addition, the Board of Directors will include up to three employee representatives. The nomination committee of TeliaSonera will comprise of the chairman and deputy chairman of its board of directors. The nomination committee shall organize a consultation procedure to provide the principal shareholders of the combined company an opportunity to participate in the nomination process. It is the intention that the board members initially appointed in connection with the Exchange Offer and re-appointed at the annual general meeting in 2003 will serve at least until the annual general meeting in 2004. Tapio Hintikka, the chairman of the Board of Directors of Sonera, is proposed to be the chairman of the Board of Directors of TeliaSonera and Lars-Eric Petersson, the chairman of the Board of Directors of Telia, is proposed to be the deputy chairman. Management TeliaSonera will operate as an integrated company with strong central control over strategic matters and achievement of synergies and stand-alone improvements. At the same time, responsibilities for achieving profitability, day-to-day operations and local businesses will be decentralized to country- based profit centers. Central control of the combined company will be carried out by the corporate headquarters, and two operational units. Corporate Headquarters The principal executive officers of TeliaSonera upon completion of the exchange offer will be as follows: Mr. Anders Igel, Chief Executive Officer (currently CEO of Telia); Mr. Harri Koponen, deputy Chief Executive Officer (currently CEO of Sonera); Mr. Kim Ignatius, Chief Financial Officer (currently CFO of Sonera); Mr. Michael Kongstad, responsible for corporate communications currently Communications Director of Telia); Mr. Jan Henrik Ahrnell, responsible for corporate legal affairs currently General Counsel at Telia); Mr. Harri Koponen, will also be responsible for the operational unit Marketing, Products and Services, with responsibility for the control of common product and services development in TeliaSonera's home market and key account responsibility for large multi-domestic home market accounts; and Mr. Lars-Gunnar Johansson, will be responsible for the operational unit Networks and Technology, which will be responsible for the common telecommunications platforms and IT support platforms in TeliaSonera's home market and will also have responsibility for procurement.(currently head of Skanova within Telia Networks). The two operational units will have authority over country-based profit centers on central control matters and over decisions involving a longer time horizon. Country-based profit centers and the two operational units will use the same financial reporting systems, including customer segment profits, product segment profits and selected key performance indicators. Profit Centers Country-based profit centers will be grouped into four units, each of which is led by the following individuals: Mr. Anders Igel, acting responsible for the Swedish profit center; Ms. Anni Vepsalainen, responsible for the Finnish profit center (currently Executive Vice President responsible for human resources and acting head of Products and Services at Sonera); Mr. Kenneth Karlberg, responsible for the profit center including Norway, Denmark and the Baltic countries (currently Senior Executive Vice President and head of business area Telia Mobile); and Mr. Aimo Eloholma, responsible for the International Operations profit center, including Russia, Turkey, Eurasia and International Carrier(currently Deputy CEO of Sonera). Country-based profit centers are to be responsible for all operational resources, including marketing, sales, network operations and development of products and services. In Sweden and Finland, the network operations units will be maintained separately from the units carrying out the corresponding retail activities with transparent financial reporting, and will also provide wholesale services to third-party operators. In Sweden and Finland, profit center responsibilities will be allocated based on customer segments, including consumers, business and large corporate customers. Significant Synergies Telia and Sonera expect to derive significant synergies as a result of the merger. Following the announcement of the merger a comprehensive analysis of the companies' businesses has been carried out quantifying cost and capital expenditure synergies within a number of areas, mainly in TeliaSonera's wholly-owned Nordic operations. In addition, synergies are also expected to be derived from the combination of Telia's and Sonera's interests in the Baltic region and Russia, although such synergies have not been included in the figures presented below. Telia and Sonera also expect to achieve revenue synergies, although these have not been quantified. Cost Synergies 2002 - 2005 Telia and Sonera expect that the annual cost synergies will reach EUR 250 million by the end of 2005. Measured on a monthly basis, TeliaSonera is expected to achieve approximately 20 percent of this annual level by the end of 2003 and 50 percent by the end of 2004. Capital Expenditure Synergies 2002 - 2005 Annual capital expenditure savings are expected to amount to EUR 70 million by the end of 2005. Measured on a monthly basis, TeliaSonera is expected to achieve approximately 30 percent of this annual level by the end of 2003, and 60 percent by the end of 2004. One-off Expenses 2002 - 2005 One-off expenses (excluding transaction expenses) are expected to be limited in 2002 and to total approximately EUR 220 million over the years 2003-2005, of which approximately one-third will be in the form of capital expenditure. The total transaction expenses related to the merger are expected to amount to approximately EUR 135 million. Total Pre-tax Cash Flow Synergies after 2005 Telia and Sonera estimate that the total recurring annual pre-tax cash flow synergies to be generated from the TeliaSonera merger will be approximately EUR 300 million after 2005. Press Conferences and Conference Call Tuesday October 1, 2002: Press Conference in Helsinki Time: 09.30 Swedish time. 10.30 Finnish time Place: Sonera's head office, Teollisuuskatu 11D, Helsinki Conference room: Auditorium The press conference will be broadcasted over the Internet: www.sonera.com Press Conference in Stockholm Time: 14.00 Swedish time. 15.00 Finnish time Place: Telia VisionsCenter, Vitsandsgatan 9, Farsta Conference room: Horsalen The press conference will be broadcasted over the Internet: www.telia.com/investorrelations Conference Call for Analysts and Investors Time: 18.00 Swedish time. 19.00 Finnish time Call-in number: +44 (0)20 8240 8240 Password: Telia or Sonera Call-in meeting over Internet: www.telia.com/investorrelations Recorded call available up until October 8, 2002: +44 (0)20 8288 4459 Password: 205182 The following people will speak at the press conferences: Telia: President and CEO Anders Igel Sonera: President and CEO Harri Koponen, CFO Kim Ignatius The following people will speak at the call-in meeting: Telia: President and CEO Anders Igel, CFO Jorgen Latte, Investor Relations Tobias Lenner Sonera: President and CEO Harri Koponen, CFO Kim Ignatius For further information journalists can contact: Sonera Corporation: Jari Jaakkola, EVP Corporate Communications & Investor Relations phone: +358 2040 651 70 or, Samppa Seppala, VP Investor Relations, phone: +358 2040 634 16 In the US: Steve Fleischer, Vice President, Sonera Corporation Tel. +1 973-448-4616 E-mail: steve.fleischer@sonera.com Telia AB: Michael Kongstad, SVP Corporate Communications, phone: +46 8 713 64 10, or Tobias Lenner, VP Investor Relations, phone: +46 8 713 66 49 Cautionary Disclaimer/Legend The combination of Sonera and Telia will be implemented through an exchange offer made by Telia to all shareholders of Sonera. This press release is neither an offer to purchase nor a solicitation of an offer to sell shares of Sonera. Any offer in the United States will only be made through a prospectus which is part of a registration statement on Form F-4 filed with the U.S. Securities and Exchange Commission (the "SEC"). Sonera shareholders who are U.S. persons or are located in the United States are urged to carefully review the registration statement on Form F-4 and the prospectus included therein, the prospectus, the Schedule TO and other documents relating to the offer that will be filed by Telia with the SEC because these documents contain important information relating to the offer. You are also urged to read the related solicitation/recommendation statement on Schedule 14D-9 that will be filed with the SEC by Sonera regarding the offer. You may obtain a free copy of these documents after they are filed with the SEC and other documents filed by Telia and Sonera with the SEC at the SEC's web site at www.sec.gov. Once such documents are filed with the SEC, you will also be able to inspect and copy the registration statement on Form F-4, as well as any documents incorporated by reference therein, the Schedule TO and the Schedule 14D-9 at the public reference room maintained by the SEC at 450 Fifth Street, NW, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information about the public reference room. These documents may also be obtained free of charge by contacting Telia AB, Investor Relations, SE-12386 Farsta, Sweden. Attention: External Communications and Investor Relations (tel: +46 8 7137143, or Sonera, Teollisuuskatu 15, P.O. Box 106, FIN-00051 SONERA, Finland. Attention: Investor Relations (tel: +358 20401). YOU SHOULD READ THE PROSPECTUS AND THE SCHEDULE 14D-9 CAREFULLY BEFORE MAKING A DECISION CONCERNING THE OFFER. CONTACT: Sonera Corporation: Jari Jaakkola EVP Corporate Communications & Investor Relations Phone: +358 2040 651 70 or, Samppa Seppala VP Investor Relations Phone: +358 2040 634 16 or In the US: Steve Fleischer Vice President, Sonera Corporation Tel. +1 973-448-4616 E-mail: steve.fleischer@sonera.com or Telia AB: Michael Kongstad SVP Corporate Communications, Phone: +46 8 713 64 10, or Tobias Lenner VP Investor Relations Phone: +46 8 713 66 49 ===================== S W I T Z E R L A N D ===================== ABB LTD: Wins US$ 48 Million Power Transmission Contract in India ----------------------------------------------------------------- High-voltage system will increase transmission capacity between networks ABB, the leading power and automation technology group, said it has won a US$ 48 million order in India to design, build and install a new power transmission system that will strengthen the country's power supply. The order, signed with Power Grid Corporation of India Ltd., is to supply a 500-megawatt highvoltage direct current (HVDC) system that will connect two regional grids which feed power to millions of consumers in eastern and southern India. "We pioneered HVDC technology, and understand customer requirements for projects of this nature," said Richard Siudek, executive vice president and head of ABB's Utilities division. "This interconnection will contribute to Power Grid's phased development of a national grid, while providing the near-term benefit of improved regional power reliability." The Vizag II HVDC project will be installed at Gazuwaka, located at Vishakhapatnam on India's southeast coast. Located beside an existing HVDC station, it will increase the capacity for highvoltage power exchange between the eastern and southern power grids by 500 MW. In addition, the system will provide voltage and frequency support for both grids during power disturbances. Vizag II is scheduled for completion and commercial operation by the beginning of 2005. The order is for project manageme nt, civil works and buildings, erection and commissioning and equipment including thyristor valves, converter transformers, and control and protection systems. ABB has installed more than half the HVDC systems in the world, including projects in North and South America, Africa, China, India, Australia and Europe. ABB (www.abb.com) is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impacts. The ABB Group of companies operates in more than 100 countries and employs about 150,000 people. Note: On September 13, TCR-Europe reported that analysts expect ABB Ltd.'s newly installed chairman, Juergen Dormann, to add the company's oil-drilling and reinsurance units on his list of divestments as he tries to bring the company to health. CREDIT SUISSE: Issues Forecasts for Global and Swiss Economies -------------------------------------------------------------- The lack of international economic recovery led to stagnation in Switzerland in 2002. A recovery in the Swiss economy is not expected until next year, laying the foundation for stronger growth in 2004. At a press conference Credit Suisse economists forecast moderate growth in Swiss gross domestic product (GDP) of 1.2% for 2003. Unemployment is likely to rise from an average of 2.8% this year to 3.4% next year. Inflationary pressure remains low. At the start of 2002, promising indicators in the USA seemed to point to the economic effects of 11 September being left behind. Despite this, the international economy was not able to find its way back onto a path of sustained recovery faced with the remaining influence of the excesses from the previous boom period. This will continue to cloud the global economic outlook next year, in addition to ongoing geopolitical uncertainties. But the international economy is not likely to fall back into recession. Credit Suisse economists anticipate moderate economic growth in both the USA and the euro zone for 2003. The Japanese economy will also see only scant GDP growth next year. No upswing in demand in the USA The collapse of equity markets, combined with a chronic loss of confidence, has left its mark on private consumption. Consumer demand, once the bulwark of the economy, will continue to support US economic growth. However, a drop in the wealth effect and the accumulation of private debt over the last few years will also weigh heavy on consumer spending. The associated increase in savings bodes well for healthy growth in the medium term. In the short term however, lower consumer demand clearly casts a pall on investment spending by businesses. Despite some improvement, the capacity of businesses is still generally underutilised. Investment activity will only see a gradual revival in the course of next year as investment for rationalisation and replacement falls due. Euro zone consumption under pressure Export trade stimuli are few and far between, leaving the euro zone economy turning to the domestic market for growth impetus. But consumers in the region have also become more hesitant. Although real disposable incomes have risen slightly due to falling inflation, conditions on the labour market have dampened consumer spending. The situation should ease somewhat in the course of next year, reviving private consumption at the same time. Against this backdrop, the outlook for investment in the euro zone is still gloomy, although business profitability is likely to benefit from the most recent round of crisis-driven restructuring. Steady growth in consumption and exports is needed to kick off considerable investment spending, but as yet this remains elusive. Given prevailing conditions, the world's major central banks are likely to send out expansionary interest rate signals. Switzerland slow to overcome stagnation The Swiss economy experienced stagnation in 2002. Unemployment has been on the rise since the end of 2001 and is likely to increase further, from an average of 2.8% this year to 3.4% next year. Consumer spending, the largest component of GDP, is expected to increase by only 0.8% this year with similar growth next year. The shift from private consumption to investment and exports as the driving force behind the economy is not going smoothly and is taking place with a considerable time lag. Moderate GDP growth of 1.2% is anticipated for 2003. Momentum should build during 2003 and form the basis for stronger economic growth in 2004. This means that Swiss economic growth in 2002 and 2003 will clearly underperform that of its major trading partners. Restrained investment in export countries is one factor behind weak growth; this hampers the sales prospects of the Swiss export sector with its concentration of investment goods producers. A 1.6% decline in the export of goods and services is expected for 2002, with growth (2.4%) expected to return in 2003. Imports will decline by 1.7% this year, while growth of 1% is expected for 2003. A second trend is the constraining effect on the economy of weak business activities among financial service providers and associated sectors. Unused capacity and restrained turnover and profit prospects are likely to lead to a decline of 11.1% in capital expenditure in equipment and plant for 2002. Improved prospects for exports and the baseline effect should lead to growth of 4.4% for 2003. Investment in plant this year is underpinned by construction activity. Spending on infrastructure and residential construction will have a positive effect while overcapacity will place pressure on commercial construction. Investment in construction should increase during the current year by 0.8%, and will decline by 1% next year due in large part to saturated commercial construction. Stable prices expected Swiss inflation has been moving in the 0%-1% range for a year. Credit Suisse economists expect further price stability with consumer prices rising by 0.5% this year and 0.9% next year. The Swiss National Bank (SNB) has not ignored the fears of exporters, and its expansionary monetary policy has contributed to the stabilisation of the CHF/EUR exchange rate. Low interest rates will not have an immediate effect on the Swiss economy. The economy needs to see business, consumer and investor confidence restored. The SNB is not expected to increase key interest rates until sometime in late 2003. The Swiss Franc will probably remain popular in the light of global uncertainty. This means that any rise in interest rates should be restrained, with a stronger impact at the short end than on the capital market. Swiss sector outlook sees a large difference between industrial and service sectors The Swiss economy viewed by sector is currently characterised by overall weakening. The present cycle has seen major setbacks for the service sector in particular. Sector performance is likely to be generally negative in terms of both production and turnover. The exception is the pharmaceutical sector which is likely to maintain its sustained growth trend. A change in this outlook cannot be expected before the new year and development in individual sectors will remain very uneven next year. CONTACT: Alois Bischofberger Chief Economist at Credit Suisse Telephone Phone: +41 1 333 61 26 Martin Neff Head of Swiss Economy Research Telephone Phone: +41 1 333 24 84 Dr. Anja Hochberg Head of Fixed Income & Forex Analysis Telephone Phone: +41 1 333 52 06 Credit Suisse Media Relations Telephone Phone: +41 1 333 81 02 ZURICH FINANCIAL: Sells Interest to Endurance Holding Company ------------------------------------------------------------- Zurich Financial Services has sold 100% of its direct equity investment of USD 100 million in Endurance Specialty Insurance Ltd., Bermuda, to Endurance Specialty Holdings Ltd., the holding company of Endurance Specialty Insurance. The proceeds of the transaction were USD 100 million. The Zurich investment was made as part of the initial capitalization of Endurance on December 14, 2001. An additional investment of USD 100 million was made by Capital Z Financial Services Fund II, L.P., in which Zurich is a limited partner with a minority share. David Wasserman, Head of the Global Asset Business Division and Zurich's Chief Investment Officer, said, "The sale of our interest in Endurance is in line with our intention to reduce our exposure to equity investments. This frees up risk-based capital that will be redeployed in core operations promising sustainable and profitable growth." Endurance Specialty Holdings is a global provider of property and casualty insurance and reinsurance. The company commenced operations at the end of 2001 and it raised more than USD 1.2 billion from initial investors. The Zurich Financial Services Group is an insurance-based financial services provider with an international network that focuses its activities on its key markets of North America, the United Kingdom and Continental Europe. Founded in 1872, Zurich is headquartered in Zurich, Switzerland. It has offices in approximately 60 countries and employs well over 70,000 people. Note: On September 12, troubled Zurich Financial Services has unloaded its UK-based venture capital firm--a move seen to indicate that the insurer is living up to its new strategy of focusing on core business. CONTACT: Zurich Financial Services, Media and Public Relations 8022 Zurich, Switzerland Phone +41 (0)1 625 21 00, Fax +41 (0)1 625 26 41 Home Page: http://www.zurich.com =========================== U N I T E D K I N G D O M =========================== ABERDEEN ASSET: Re-Structures Fund Management Team -------------------------------------------------- In a robust move to put investment process at centre stage, and to rationalize her fund management team, Katherine Garrett-Cox, Chief Investment Officer at Aberdeen, has made the following announcements Wednesday: The appointment of Chong Yoon-Chou as Head of U.K. Equities, and consequent departures of Simon Atherton and Neil Cumming. The appointment of Alex Ingham as Head of U.S. Equities, and consequent departures of Rupert Della-Porta and Rupert Howard. U.K. Equities The move signals a major re-structuring of the investment process for U.K. equities and draws heavily from the highly respected style championed by veteran Hugh Young. At its core, the approach is characterised by fundamental, independent research, discipline and clear and decisive portfolio positioning. Although client- specific risk parameters will continue to be rigorously adhered to, less constrained portfolios can be expected to be constructed bottom-up, hold a smaller number of stocks and be less benchmark driven. Katherine Garrett-Cox commented: "The U.K. industry has become more crowded, yet it's become a widespread complaint that active managers are behaving as a herd and failing to add value. We are addressing the issue head on and planting our feet firmly in the camp of those who believe in fundamentals. This is not merely about wanting to differentiate our product. In effect we're calling time on the whole cult of benchmarking. In our opinion, if you don't like a company, you shouldn't own it - unless a mandate dictates otherwise." Chong holds an undergraduate degree and a Double Masters in Information Systems and Accounting & Finance from the London School of Economics. He has since qualified as a CFA and has been with Aberdeen for eight years. Chong will lead a team of seven and report to Adrian Fowler, Head of Pan-European Equities. US Equities Aberdeen has appointed Alex Ingham as Head of U.S. equities to succeed Rupert Della-Porta. The move follows a searching review of the Group's product offerings in U.S. equities which has concluded that the current practice of outsourcing "aggressive" funds to Phoenix Investment Partners' Chris Bertelsen should continue and that Aberdeen will restrict itself to managing "core" mainstream, risk-constrained but value-added funds in- house. The bulk of Aberdeen's in-house U.S. equities under management consist of funds managed on behalf of institutions seeking risk-constrained fund management. Commenting on this move, Katherine Garrett-Cox said: "We are choosing to position our main in-house product as the core, solid added-value holding which many investors seeking mainstream U.S. exposure wish to buy. We have decided not to pursue the manufacture of more aggressive U.S. equity products ourselves at the current time but to continue our successful relationship with Chris Bertelsen of Phoenix Investment Partners in that area. In Alex, I have a high quality fund manager with great potential who I have worked with for 5 years. We have established the momentum of improving performance and I am confident that we are on the right track to maintain it." Ingham is a graduate of Bristol University and has been an Investment Professional for 5 years. He joined Aberdeen from Hill Samuel Asset Management where he also specialised in U.S. Equities. Ingham will lead a team of three, focussed exclusively on U.S. equities. Note: On Wednesday last week, the firm announced that another of its split caps, Aberdeen Preferred Income Trust, had appointed receivers as a result of continuing deterioration in the value of the company's portfolio assets. ALLDAYS PLC: Co-operative Group Proposes Takeover ------------------------------------------------- After putting itself on the block a year ago, Alldays has finally received a first serious proposal. Co-operative Group has signed interest in taking over the struggling convenience store chain, says the Independent. According to the report, Co-op is in talks with the Allday's creditor, Royal Bank of Scotland, about the acquisition. Under the proposal, Co-op would assume the bulk of Alldays debts, which currently totals GBP190 million, and write off some of the loans. Alldays' liabilities, accumulated through buying franchises, reduced the business' value to just GBP2.4 million on the stock market. At its interim results for the six months ended April 28, Alldays reported a loss of GBP 4 million on turnover of GBP251 million. The supermarket chain, which has about 600 stores, then warned of a need for "financial reconstruction". BRITISH ENERGY: Moody's Downgraded Unsecured Bond Ratings to Caa1 ----------------------------------------------------------------- Moody's Investors Service downgraded British Energy's unsecured bond ratings from B2 to Caa1 following an extension on the company's emergency loan deadline and an increase of the loan from GBP410 million to GBP650 million. With the extension, the nuclear power generator granted the government security, which Moody's warns could "increase the level of losses incurred by par bondholders". Moody's, at the same time assigns on the unsecured bond senior implied rating of B2 to reflect Moody's belief that, "in the absence of a significant restructuring, assurance of debt service over any long period is small." The rating agency maintained the ratings on review for possible downgrade as the company may still go into administration, an event that would mean significant losses for par bondholder. After the U.K. privatized its nuclear power industry in the mid- 1990s, British Energy emerged as one of the nation's largest electricity generators. It is the holding company for British Energy Generation, which produces about 20% of the U.K.'s power through its eight nukes in Scotland and England (total capacity is 9,600 MW). CONTACT: BRITISH ENERGY PLC 3 Redwood Crescent, Peel Park East Kilbride, Strathclyde G74 5PR, United Kingdom Phone: +44-135-526-2000 Fax: +44-135-556-5656F Home Page: http://www.british-energy.com COLT TELECOM: Marina Wyatt to Be Appointed CFO ----------------------------------------------- COLT Telecom Group plc (COLT), the leading European provider of business communication services, announces the appointment of Marina Wyatt as Chief Financial Officer. Andrew Steward, Acting CFO, will resume his responsibilities as CFO of Fidelity International following a suitable transition period. Marina Wyatt has been Group Financial Director of Psion plc since 1996 and will leave the company at the end of October to take up her appointment at COLT in early November. She joined Psion as Group Financial Controller in 1994. Marina is a Chartered Accountant and she worked for Arthur Andersen in London and in the US between 1985 and 1994. She is a Non-Executive Director of Blackwell Publishing Ltd. Commenting on this appointment COLT President and CEO Steve Akin said: "I am pleased that Marina has accepted our offer to join the COLT team. . Her experience and expertise will be much valued as we continue to grow and develop our business." Marina Wyatt said: "I am looking forward to taking up my new role at COLT and to working with the management team through the next phase in its development." About Colt COLT Telecom Group plc is a leading European provider of business communication services. COLT has over 14,000 network services and eBusiness customers with high bandwidth local networks in 32 European cities in thirteen countries supported by a series of Internet Solution Centres and inter-linked by a 15,000 route kilometre high capacity fibre-optic long distance network. COLT Telecom Group plc is listed on the London Stock Exchange (CTM.L) and Nasdaq (COLT). Information about COLT and its products and services can be found on the web at www.colt.net CONTACT: John Doherty Director Investor Relations Phone: +44 20 7390 3681 ENERGIS PLC: Global Crossing Asks Court to Okay Deal With Energis ----------------------------------------------------------------- Paul M. Basta, Esq., at Weil Gotshal & Manges LLP, in New York, recounts that in 1998 and 1999, Worldport Communications entered into various agreements with certain Global Crossing entities to purchase cable capacity on the Debtors' Network. On January 14, 2000, Energis NV entered into a certain novation agreement with Worldport and the Debtors, whereby Energis assumed Worldport's capacity purchase obligations under the Contracts. Upon executing the Novation, Energis is liable under the Contracts to the Debtors for $3,500,000 for capacity purchased, and has committed to spend $36,000,000 on future capacity purchases. Energis asserts that the Future Purchases provisions of the Contracts are not enforceable because there is no consideration underlying the obligations for Future Purchases. The Debtors deny these assertions and maintains that the Future Purchases provisions are enforceable. Irrespective of the enforceability of the Future Purchases provisions of the Contracts, Mr. Basta informs the Court that Energis is a company in dire financial straits that is incapable of performing its payment obligations with respect to the Future Purchases. Energis is a wholly owned subsidiary of Energis plc, an international telecommunications company organized under the laws of the United Kingdom. On July 16, 2002, trading of Energis plc shares on the London Stock Exchange was suspended and Joint Administrators were appointed for Energis plc. The Debtors and Energis have agreed to a settlement of matters related to the Contracts. The salient terms of their August 15, 2002 Settlement Agreement are: -- Energis will pay $1,500,000 to Atlantic Crossing Ltd., on behalf of itself and each of the Debtors; -- Energis will make 3 payments to Atlantic Crossing, on behalf itself and each of the GX Entities, of $333,333.33 on or before each of these dates: a. December 31, 2002; b. March 31, 2003; and c. May 30, 2003. -- On the Effective Date, the Debtors will discharge and cancel the $3,555,632 of accounts receivable currently outstanding from Energis. All other obligations relating to the purchase, operation, administration or maintenance of any cable or fiber will be discharged and cancelled. -- On the Effective Date, the Debtors will release and discharge Energis and its subsidiaries from any and all liability under any correspondence or course of dealing in connection with the Contracts, including any remaining purchase commitments. -- On the Effective Date, all rights of Energis under the Contracts to Circuits will be of no further force or effect and all right to title and any other interest in the Circuits will vest with and be the exclusive property of the Debtors. -- On the Effective Date, Energis and the Debtors will terminate and settle, release, remise and forever discharge each other, their successors, affiliates, agents and assigns, all former, present and future directors, officers incorporators, stockholders, subsidiaries and partners and all other persons, firms or corporations liable or who might be claimed to be liable from any and all costs, liabilities, obligations, claims, demands, damages, actions, etc., whether present or contingent, known or unknown, now existing or which may in the future exist, based upon the Contracts. In connection with its reorganization, Energis plc has identified a potential purchaser, Management Company Het Berghuis BV. The sale of Energis is conditioned upon Court approval of the Settlement Agreement. In addition, the parties entered into a loan facility whereby Management Company agreed to lend Energis $1,000,000. Under the Facility, Management Company is fully secured by all of Energis' assets. Mr. Basta contends that non-approval of the Settlement Agreement is an event of default under the Facility requiring all funds owing under the Facility to be immediately payable. If the Settlement Agreement is not approved, the sale of Energis will not occur and the Facility will be terminated, leading to the insolvency and liquidation of Energis. In that event, the Debtors will be left with a claim against Energis, the value of which, while uncertain, will likely be less than the payments to the Debtors under the Settlement Agreement. Thus, the Debtors ask the Court to approve the Settlement Agreement and authorize the rejection of the Contracts. Mr. Basta insists that the Settlement Agreement is fair and equitable, falls well within the range of reasonableness, enables the parties to avoid the costs of litigation and avoids difficulties associated with collection. Absent authorization to enter into the Settlement Agreement, the Debtors and Energis would require judicial intervention to resolve their dispute regarding whether the Debtors are entitled to funds owing under the Future Purchases obligations. The undertaking of a risky litigation would be an unnecessary drain on the resources of the Debtors' estates and would divert the attention of its management and legal personnel from the current efforts to maximize the value of the estates. The Debtors have entered into the Settlement Agreement because, among other reasons, they do not believe that Energis has the ability to honor the Future Purchases obligations pursuant to the Contracts. By entering into the Settlement Agreement with Energis and rejecting the Contracts, Mr. Basta points out that the Debtors will have an opportunity to re-market the Network Capacity and Circuits subject to the Contracts to other consumers in the industry, thereby generating revenue greater than the amount likely to be recovered from Energis if the Debtors sought to enforce the Contracts. (Global Crossing Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 609/392-0900) Note: In April, TCR-Europe reported the intention of Energy Plc to sell is units in The Netherlands. EQUITABLE LIFE: To Appease Former Members With GBP75 Million ------------------------------------------------------------ Mutual life insurer Equitable Life plans to offer compensation package to avoid a possible legal action from policyholders who claimed they were not informed of the firm's liabilities to guaranteed pension holders. According to The Times, the insurer will offer GBP75 million package to former members. The House of Lords, meanwhile, had told the insurer to meet the guarantees in full at a cost of o1.5 billion. Consultant B&W Deloitte believed that those who quit Equitable between July 2001 and February 2002 is possibly disadvantaged by the cost of paying out on the guarantees. The customers can file the suit on grounds that they were not advised on the effect of the guarantees offered to others on their own savings. Chief Executive Charles Thomson disclosed that the House is devising a plan that would be endorsed for approval to its 70,000 former customers next year. While the society determines that up to 70,000 former customers without guarantees could file mis-selling claims, existing customers are not allowed to file a legal suit under a financial restructuring agreement in February. HP BULMER: Sacks Finance Director as Accounting Errors Balloon -------------------------------------------------------------- Cider maker HP Bulmer kicked finance director Alan Flockhart as the board discovered that the accounting errors in its books are greater than expected, the Independent reports. The group, which had GBP29.2 million deficits in April, claimed that Mr. Flockhart was aware of the discrepancies in the company's promotional costs. The costs, which auditors Deloitte & Touche estimate at GBP3.8 million (up from the previous GBP3.3 million), are discounts promised to retailers, including Tesco and J Sainsbury, and are thought to have run since 1999. The company chairman, Will Samuel, disclosed that a probe is currently being conducted on the issue. According to the report, the review of Bulmer's books reduced pre-tax profits for the year to April 26 by GBP900,000. The adjustments are expected to delay the company's fulfillment of bank obligations, says Mr. Samuel. The chairman hopes to find a replacement for Mr. Flockhart by the end of the year. Mike Hughes, the former chief executive, also resigned by force a few weeks ago. Bulmer claimed that he too was aware of the accounting errors. MARCONI PLC: U.S. Naval Lab Demonstrates Marconi's 10 Gbps CPR ------------------------------------------------------------- Advancing the vision of an ultra high-speed multiservice communications infrastructure, Marconi (MONI) announced the successful demonstration of its 10 Gbps (OC-192c/STM-64c) Asynchronous Transfer Mode (ATM) port card. Marconi believes it is the first company to achieve and demonstrate through a third party 10 Gbps ATM transmission, thereby creating a new benchmark in networking technology. The demonstration involved passing multiple 1.6 Gbps streams of high-definition video through the new OC-192c/STM-64c interface on Marconi's industry-leading switch-router, the BXRr-48000, at the U.S. Naval Research Laboratory in Washington, D.C. The BXR-48000, in demonstration by the Naval Research Lab since early this year, was recently purchased by the U.S. Department of Defense (DoD). "With the delivery of an OC-192c ATM port card for its 480 Gbps multiservice switch-router, the BXR-48000 dramatically raises the bar for networking performance," said Dr. Hank Dardy, Navy Chief Scientist at NRL's Center for Computational Science. "Data transport at OC-192c rates provides DoD networks with the capability for moving encrypted information at the highest feasible speeds under the most stressful real world conditions, such as transport of real-time high-definition video streams, the integration of large data archive assets to decision support centers, remote collaborative visualization and distributed high productivity supercomputing." Numerous government agencies - at national, regional and local levels - are currently engaged in planning mission-critical network upgrades in response to various security initiatives. The capability to transport multiservice traffic at 10 Gbps ATM speeds on Marconi's BXR-48000 will give the service providers being called upon to support these agencies new options for meeting those demands. "Once again, Marconi is delivering new technology that provides real benefits to our customers, whether they are in the Government sector or are operating in commercial environments," said Joe Pajer, executive vice president and general manager of Marconi's Broadband Routing & Switching group. "The pragmatic result of Marconi's technological leadership assures network operators they are deploying networking platforms that will help them reduce operating costs and protect traditional revenue sources while earning new revenues as markets continue to develop for newer, IP-based services." Potential Commercial Applications When configured in the BXR-48000 with its unique payload- and protocol-agnostic features, Marconi's new OC-192c ATM port card will enable commercial network operators to offer new services that can efficiently manage huge volumes of data traffic. Further, service providers with large DSL (Digital Subscriber Line), Frame Relay and ATM networks now have new options for evolving their networks. With Marconi's new 10Gbps ATM interface, they are no longer limited to MPLS (Multi-Protocol Label Switching) and 10 Gbps POS (Packet-over-Sonet) links to address network scalability issues. The BXR-48000's IP and MPLS capabilities, coupled with Marconi's new OC-192c ATM interface, will allow service providers to evolve their networks with a platform that enables a smooth migration from ATM to IP/MPLS without risking the implementation of premature technological standards. Anticipated application environments for these new carrier offerings include: Financial markets: improved records efficiency and transaction precision facilitated by real-time transfers of massive amounts of financial data; Public security: high-speed integration of surveillance video with data archives for security monitoring and recognition; Earth sciences and geologic industries: improved weather forecasting and more efficient oil and gas exploration via real- time integration of bandwidth-intensive data and video imagery from satellite and ground sensors linked to large-scale supercomputing sites. Technical Notes The introduction of OC-192c/STM-64 ATM interfaces continues Marconi's history of introducing industry-leading technology, including the BXR-48000 multiservice switch-router, with its leading 40 to 480 Gbps of capacity in just two standard equipment racks. Marconi was also first to introduce OC-48c/STM-16 ATM interfaces with the release of the ASXT-4000 in 1998. Marconi's new OC-192c ATM interface provides the necessary bandwidth and quality of service (QoS) guarantees for mission-critical applications. In its 480 Gbps configuration (960 Gbps in router terminology), the BXR-48000 can accommodate up to 48 OC-192c interfaces at full, line-rate performance. The BXR-48000 employs carrier-class, single-stage, output buffered, deterministically non-blocking architecture to ensure full performance at that line rate. The BXR-48000's patent- pending architecture delivers protocol- and payload-agnostic performance to help network operators both reduce operating costs and roll out new IP-based services on the same platform, while insuring against stranded technology investments. About Marconi plc 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. The company's aim is to help fixed and mobile telecommunications operators worldwide reduce costs and increase revenues. The company's customer base includes many of the world's largest telecommunications operators. The company is listed on the London Stock Exchange under the symbol MONI. Note: On October 1, TCR-Europe cited Bloomberg reporting that Marconi Plc may resort to selling the record of founder Guglielmo Marconi's work, to raise cash. P&O PRINCESS: Ends Final Exercise of Option With Chantiers ---------------------------------------------------------- As previously reported, P&O Princess Cruises plc has options with Chantiers de l'Atlantique, for delivery in 2005 and 2006, for two repeat 2000 berth vessels of the same innovative design as the Coral Princess. The final exercise date for these options was the end of September 2002. Chantiers de l'Atlantique has advised P&O Princess that it is not in a position to further extend these options which were initially granted at the end of 1999. Accordingly they have lapsed. Nevertheless, P&O Princess remains favourably disposed to acquiring further vessels for its North American brand Princess Cruises and believes that it has a number of attractive alternatives for doing so including ordering further vessels from Chantiers de l'Atlantique with whom it continues to have excellent relations. CONTACT: P&O Princess Cruises plc Caroline Keppel-Palmer Phone: +44 20 7805 1214 07730 732015 Brunswick Sophie Fitton +44 20 7404 5959 Home Page: http://www.poprincesscruises.com TELEWEST COMMUNICATIONS: Creditors Pushed for Restructuring ----------------------------------------------------------- Bondholders are pressuring U.K. cable-giant Telewest to restructure its GBP5.3 billion (EUR8.4 billion) debt within one month after the company delayed payment on GBP68-million (EUR108 million) bond, says Europemedia. Part of the restructuring plan is the agreement of U.S. part-owner Liberty Media, which when reached, may finally set off the merger of Telewest and rival NTL. Manging Director Charles Burdick also expects the restructuring to proceed quickly, says the report. Mr. Burdick, who replaced Chief Executive Adam Singer last month, admits the alternatives are few, says a previous TCR-Europe report, There are plans to swap control with bondholders for GBP3.6 billion of debts. Telewest, together with NTL Inc., accumulated more than US$25 billion of debt building fiberoptic networks and acquiring rival businesses during the Internet boom. The company lost more than EUR16.3 billion in market value due to low demand in their digital TV and Internet services. Shares fell to 1.4 pence from 569.75 p in 2000. Telewest was founded in 1984 to provide cable-TV services in Croydon, south London. Liberty Media Corp is the company's biggest shareholders. CONTACT: TELEWEST Richard Williams, Investor Relations Manager, Phone: +44 (0)20 7299 5479 Phone: +44 (0)20 7299 5495 E-mail: Richard_williams@flextech.co.uk Vani Gupta, Investor Relations Manager Phone: +44 (0)20 7299 5353 Phone: +44 (0)20 7299 5495 E-mail: vani_gupta@flextech ************* 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, Ma. Cristina Canson 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 * * *