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/raid1/www/Hosts/bankrupt/TCREUR_Public/021030.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 30, 2002, Vol. 3, No. 215 Headlines * F R A N C E * ALCATEL: Ships Record 20 Million Digital Subscriber Lines ALCATEL: Attacks DSL Deployment Costs, Expands Service Reach ALCATEL: Telstra Chooses Alcatel to Expand Broadband Footprint ALCATEL: Obtains Contract to Supply First GSM/GPRS ALCATEL: T-Mobil, O2 and E-Plus Select Alcatel Solutions FRANCE TELECOM: Denies EUR10 Billion Increase in Debt RHODIA SA: Narrows Net Loss to EUR7 Million for 3Q VIVENDI UNIVERSAL: Has a Month to Acquire Control of Cegetel * G E R M A N Y * BAYER AG: Healthcare Unit Head Steps Down, Troubles Loom HVB GROUP: Leads Launching of Subordinated Notes for Investkredit * N E T H E R L A N D S * IFCO SYSTEMS: S&P Withdraws 'CC' Rating on Credit Facility * P O L A N D * ELEKTRIM SA: Calls Meeting to Approve Restructuring of Bonds ELEKTRIM SA: Announces Opening of Escrow Account NETIA HOLDINGS: Composition Plans of Dutch Subsidiaries Approved GDYNIA SHIPYARD: Needs Nearly PLN1 Billion in Financing * R U S S I A * LUKOIL OAO: S&P Revises Outlook to Positive From Stable * S W I T Z E R L A N D * SWISS LIFE: Provides Facts Concerning Long-Term Strategy AG, Zug * U N I T E D K I N G D O M * ABERDEEN ASSET: May Sell Businesses to Trim Debt ALLDAYS PLC: Cooperative -Group Announces Acquisition of Alldays EQUITABLE LIFE: Action Group Anxious About FSA Probe EQUITABLE LIFE: Policyholders Enraged by Secrecy of Penrose Probe MARCONI PLC: Partners With TCI to Offer Service for TETRA MYTRAVEL: Meeting With Shareholder Meditor Eases Concern NTL INC: Committee Taps Quest to Render Advice re Euroco Business PACE MICRO: Signs New Supply Contract With NTL Ireland SODEXHO: Selects TempoSoft to Manage Workforce Optimization TELEWEST COMMUNICATIONS: Head Close to Announcing Debt Swap =========== F R A N C E =========== ALCATEL: Ships Record 20 Million Digital Subscriber Lines --------------------------------------------------------- Alcatel (Paris: CGEP.PA and NYSE: ALA), the world leader in broadband access, on Monday announced it has reached a major deployment milestone by shipping 20 million digital subscriber lines (DSL), nearly four times that of its nearest competitor. With more than 70 DSL operator customers worldwide and a global market share of 37.3%, Alcatel has proven the success of its technology and the popularity of DSL. The 20 million lines encompass the full range of DSL solutions including asymmetric and symmetric digital subscriber lines (ADSL, SHDSL) to deliver standards-based broadband services to residential and professional subscribers. Both are supported by the Alcatel 7300 Advanced Services Access Manager (ASAM), which is the world's most widely deployed broadband access platform, and combined DSL/POTS lines on the Alcatel Litespan Next Generation Digital Loop Carrier (NGDLC). "We think DSL will carry on growing strongly," says Tim Johnson, publisher of point-topic.com. "Point Topic reported nearly seven million DSL subscribers were added worldwide during the first half of this year. This means that DSL is already a mass market medium in the leading countries, and others are catching up rapidly. With all its technical and market advantages, we see DSL leading the development of a broadband world." Alcatel's extensive list of broadband customers includes some of the largest service providers around the world such as Bell Canada, BellSouth, British Telecom, China Telecom, France Telecom, SBC, Telefonica, Telstra and Verizon. "DSL is the dominant broadband technology for service providers to offer new revenue generating services and Alcatel is leading the charge," says Michel Rahier, President of Alcatel's broadband networking activities. "We have reached this significant milestone in partnership with our customers. Alcatel remains committed to the continued delivery of a broadband access portfolio that enables our customers to offer high-speed services their subscribers want and will pay for." 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. Note: It is reported in TCR-Europe's October 14 issue that analyst Ben Cohen of UBS Warburg believes that Alcatel will be pressured to launch a capital increase--although fellow analyst, Sean Faughnan of Credit Suisse First Boston, believes otherwise. Mr. Cohen predicts the need for the company to increase capital, with negative consequences for its stock-market performance. JP Morgan, meanwhile, estimates that the junk-bond status of the company's debts will cost the group EUR380 million in the third quarter. ALCATEL: Attacks DSL Deployment Costs, Expands Service Reach ------------------------------------------------------------ Broadband access leadership reinforced by upgrade to most popular DSL platform, and record shipment of 20 million DSL lines worldwide Alcatel (Paris: CGEP.PA and NYSE: ALA), the world-wide leader in digital subscriber line (DSL) technology, on MOnday announced a suite of feature enhancements for the widely-deployed Alcatel 7300 Advanced Services Access Manager (ASAM) that helps speed DSL deployment and reduce operator costs. Alcatel has strengthened its market-leading access portfolio with the introduction of features on the 7300 ASAM that empower operators to deploy broadband services with extremely quick payback. Most significantly, Alcatel is first to deliver standards-compliant customer premises equipment (CPE) auto- configuration - a vital feature that enables the service provider to quickly and dynamically configure the central office (CO) and CPE. As a result, many costly manual field operations tasks are eliminated. With this release, Alcatel is also introducing a new "low- profile" remote DSLAM - making it possible for operators to deploy DSL everywhere. Combined with a reduction in power consumption and increase in density, service providers now have the most comprehensive set of solutions, all on a single platform, to deliver nation-wide broadband services with minimal capital investment and operational expense. "Telstra recognizes the importance of understanding the latest technology and applying it to meet the needs of our current and future customers," says Ken Benson, Telstra's managing director of Wireless and Wireline. "We are announcing the deployment of the latest in proven broadband technology, based on the Alcatel 7300 ASAM, to service both metropolitan and regional areas experiencing high customer demand." Alcatel DSL line shipments now total 20 million, and global market share is at 37.3 percent. With these milestones, Alcatel has proven the success of its technology and the growing popularity of DSL. Alcatel's extensive list of broadband operator customers includes some of the largest service providers around the world such as Bell Canada, BellSouth, British Telecom, China Telecom, France Telecom, SBC, Telstra and Verizon. "Carriers are eager to offer intelligent broadband services, but not at any expense. The demand for lower costs, incremental revenue flow and increasing efficiency has never been higher," says Ernie Bergstrom, senior analyst - Advanced Carrier Strategies at In-stat/MDR. "Alcatel is able to reinforce its leadership in broadband access with the continued delivery of product enhancements which help operators increase DSL profitability." "The most critical element in ensuring DSL network success for carriers is reducing customer acquisition costs and activation time to the absolute minimum," says Michel Rahier, President of Alcatel's broadband networking activities. "We are committed to DSL profitability and to the delivery and support of leading-edge DSL solutions that ensure our customers increase their revenue potential while decreasing their costs and simplifying the use of this technology." 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. ALCATEL: Telstra Chooses Alcatel to Expand Broadband Footprint -------------------------------------------------------------- Alcatel (Paris: CGEP.PA and NYSE: ALA), the world leader in broadband access, has announced it has been selected by Telstra to extend the reach of Telstra's national broadband infrastructure. Alcatel made the announcement from the Broadband DSL World Forum in Berlin. The expansion, part of a multi-million dollar contract over three years, will be based on the latest release of the Alcatel 7300 Advanced Services Access Manager (ASAM) the world's most widely deployed broadband access platform. Alcatel's Cross Domain Manager will continue to act as the carrier's overall network management system for both broadband and narrowband services. Service activation on the ASAM 7300 platform will be managed by the Cross Domain Manager via the Alcatel Work Station (AWS) Element Manager. This seamless blend into the existing operations flow enables significant operational efficiencies and easy integration across Telstra's network. "Telstra recognizes the importance of understanding the latest technology and applying it to meet the needs of our current and future customers," said Ken Benson, Telstra's managing director of Wireless and Wireline. "We are today announcing the deployment of the latest in proven broadband technology to service both metropolitan and regional areas experiencing high customer demand." Beginning in October, the Alcatel 7300 ASAM's highly scalable and robust architecture will allow Telstra to offer both residential and business services, whilst providing a seamless migration path to new broadband-based entertainment services. Recent feature enhancements to the Alcatel 7300 ASAM include the multiservice Internet Protocol Services Module (ISM) which can potentially bring higher-value, IP-based services such as video on demand and music downloads closer to the DSL (digital subscriber line) subscriber. "Broadband is the key growth area in telecommunications," said Michel Rahier, President of Alcatel's broadband networking activities. "Telstra's decision to expand the coverage of its broadband infrastructure is an excellent step in extending the reach of broadband to many Australians and accelerating the uptake of broadband services." Added Rahier: "Telstra is investing wisely in the long term success of broadband in Australia through both the provision of robust and scalable infrastructure and its recent commitment to the Broadband Development Fund. It is this sort of leadership that will drive the demand for broadband services to the point that today's highly valued services will be viewed as tomorrow's necessities." 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. ALCATEL: Obtains Contract to Supply First GSM/GPRS -------------------------------------------------- Alcatel (Paris: CGEP.PA and NYSE: ALA), the world's fastest- growing GSM/GPRS supplier, announces that it has signed a multi- million dollar contract with TSKL (Telecom Services Kiribati Limited), the national telecom service provider in Kiribati's Pacific islands, for the supply of their first cellular network. Under the terms of this contract, Alcatel will provide TSKL with its Evolium™ solution including a Mobile Switching Center, base stations and a service node platform encompassing value added services such as prepaid and voice mail services. Alcatel will also supply TSKL with its new range of One Touch series of mobile phones, such as the One Touch 311, 511 and 715. This GSM/GPRS network is expected to be operational by the end of this year and will immediately support more than 2,000 subscribers, with full capability to be expanded in the future according to new market needs in the area. GSM coverage will initially be provided around Tarawa and the Christmas Islands, two of the most populated islands in Kiribati. "We chose Alcatel over other suppliers because they offer mobile operators a compelling end-to-end solution customized to our needs. Our cooperation with Alcatel will provide Kiribati inhabitants with advanced digital technology in terms of mobile networks," said Ieronimo Kienene, TSKL chief executive officer. "Alcatel's strong local presence in the Pacific Islands was another element we considered, as we are guaranteed of qualified services and a solid relationship." "We are pleased that TSKL has chosen Alcatel to implement the country's first GSM network, and we are proud to be part of the development of Kiribati. As Alcatel's fifth GSM network in the Pacific Islands, this contract reinforces our leading position in this region and proves that our solutions are fully capable of meeting the needs of all Pacific Islands telecom operators," added Marc Rouanne, President of Alcatel's Mobile Networks. About Kiribati The Gilbert Islands were granted self-rule by the UK in 1971 and complete independence in 1979 under the new name of Kiribati. Kiribati today has a population of about 90,000 people. Twenty of the 33 islands are inhabited. Banaba (Ocean Island) in Kiribati is one of the three great phosphate rock islands in the Pacific Ocean - the others are Makatea in French Polynesia, and Nauru. About Telecom Services Kiribati Limited TSKL is the national telecommunication supplier in Kiribati. In June 2001, TSKL became for the first time a company fully owned by the Government of the Republic of Kiribati after nine years of being a joint venture company owned by the Government of Kiribati and Telstra Australia. TSKL is operating a 3,000 line fixed network using Alcatel technology. TSKL is also operating a 300-subscriber analog mobile network. For more information, http://www.tskl.net.ki. 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. For more information, visit Alcatel on the Internet: http://www.alcatel.com. About Alcatel's Evolium solutions Alcatel is now the world's fastest growing GSM/GPRS supplier. Currently, over 110 mobile operators worldwide rely on Alcatel's Evolium(TM) GSM/GPRS core and radio solutions. By creating Evolium SAS, an Alcatel-Fujitsu company, Alcatel clearly reinforces its position in both mobile infrastructure and mobile Internet. Evolium SAS combines Alcatel's expertise in GSM, GPRS, and EDGE as well as in ATM and IP technologies, with the advanced experience of Fujitsu as supplier of NTT DoCoMo. NTT DoCoMo is the world's leading mobile communications company with more than 40 million customers. The company provides a wide variety of leading-edge mobile multimedia services. These include i- mode(TM), the world's most popular mobile Internet service, which provides e-mail and Internet access to over 32 million subscribers, and FOMA, launched in 2001 as the world's first 3G mobile service based on W-CDMA. Alcatel's UMTS solutions are a reality today, with 20 UMTS pilot networks in operation or planned to be delivered by Alcatel in Europe and in Asia by end 2002. Alcatel's strategy covers all aspects of UMTS deployment, from radio access and core network to terminals. Evolium SAS delivers a radio infrastructure that is 3GPP-compliant, field-proven and capitalises on Japanese 3G technical and field experience. Alcatel, which played a vital part in developing the mobile Internet market, in particular through the successful roll out of GPRS commercial networks world-wide, has today a timely UMTS offering. ALCATEL: T-Mobil, O2 and E-Plus Select Alcatel Solutions -------------------------------------------------------- Alcatel (Paris: CGEP.PA and NYSE: ALA), the leading supplier of STP-based intelligent routing applications, on Monday announced that three German mobile operators, T-Mobil, O2 and E-Plus, rely on Alcatel technology to deploy mobile number portability applications. The mobile number portability (MNP) applications will enable subscribers to keep the same telephone number when changing telephone operator. German mobile service providers were mandated to offer the portability of numbers in their networks by November 1, 2002. Ludwig De Maeyer, President of Alcatel's voice network activities, says: "This demonstrates our leading position in delivering efficient solutions for mobile number portability and our capacity to provide innovative network applications required by the market." He adds: "With the growing number of mobile communications customers, deregulation of the telecommunications market and introduction of additional services, the efficient use of new and existing network resources is of an extreme importance." These MNP applications are based on Alcatel's INfusion Signal Transfer Point (STPs) server, which delivers a full-featured, carrier-class, standard-based set of signaling services in the ETSI* market. It enables mobile and fixed service providers to manage their network centrally, through processing SS7 messages, and support new applications such as Mobile/Wireless Number Portability (MNP/WNP), Local Number Portability (LNP), Application Location Register (ALR) routing and gateway screening on a single solution. * ETSI: European Telecommunication Standards Institute About Alcatel STP Alcatel's family of STPs, including the INfusion STP C and the Alcatel 5070 Signaling Server, are high-speed signaling servers designed to receive, route and transmit signaling messages for call set-up and Intelligent Network applications. The Alcatel STP solution enables service providers to meet the messaging requirements of their increasingly complex networks, support a full range of network-wide, revenue-generating features and services while offering a signaling gateway to other carriers. For mobile operators, the Alcatel Signal Transfer Point provides an Mobile Number Portability (MNP) solution that maintains the high-reliability standards expected in the telephone network. It supports all signaling aspects of MNP without impacting the regular functions of Mobile Switching Centres (MSCs), Home Location Registers (HLRs), Short Message Service Centres (SMSCs) and Voice Mail Systems (VMSs). For more information on the Alcatel 5070 Signaling Server, visit http://www.alcatel.com/5070ansior http://www.alcatel.com/5070etsi 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. For more information, visit Alcatel on the Internet: http://www.alcatel.com FRANCE TELECOM: Denies EUR10 Billion Increase in Debt ----------------------------------------------------- France Telecom denied reports from Daily La Tribune that a sharp plunge in its shares and bonds raised its debt from EUR69.7 billion at the end of June to a current debt of EUR80 billion. Shares in the state-controlled firm fell as much as 9%. The debt, which includes off-balance sheet liabilities, would pose a significant problem for the French government when it drafts a plan for the bailout of the telecoms company, says the report. Chairman Thierry Breton is currently under mounting pressure to hasten his refinancing plan after discovering the financing gap. Mr. Breton's review is to be revealed at the start of December, a spokesman said. Mr. Breton's examination of the business to draw up a business strategy had disappointed investors who were expecting a multi- billion-euro cash injection by the end of October, says Reuters. Bankers had suggested a EUR15 billion capital increase for the ailing telecoms company—-a scheme which would leave the government as much as EUR8 billion to shoulder. CONTACT: FRANCE TELECOM 6, Place d'Alleray 75505 Paris Cedex 15, France Phone: +33-1-44-44-22-22 Fax: +33-1-44-44-95-95 Home Page: http://www.francetelecom.fr RHODIA SA: Narrows Net Loss to EUR7 Million for 3Q -------------------------------------------------- Margin Resilience and 4.2% organic growth Rhodia today published its results for the third quarter of 2002. The financial highlights are as follows: ORGANIC GROWTH OF 4.2% COMPARED WITH THE THIRD QUARTER OF 2001 - Increased volumes in all Group Divisions EBITDA/SALES RATIO UP 2.6 POINTS COMPARED WITH THE THIRD QUARTER OF 2001 - An EBITDA/Sales ratio of 11.5% compared to 8.9% in the third quarter of 2001 (on a recurring basis) - Resistance compared with the first half of 2002 in a business environment marked by a weakening in the recovery noted in the second quarter of 2002 - Improved margins in all the Group's Divisions. NET INCOME IMPACTED BY THE ANNOUNCED DIVESTMENTS - -Receipt of 80% of the EUR500 million generated from the divestments planned for 2002 - Excluding the impact of divestments already announced, net loss for the third quarter stands at EUR7 million (compared to a reported loss of EUR27 million). - Excluding the impact - Excluding the impact of divestments already announced, net income for the first nine months of the year amounts to EUR30 million, (compared to a reported loss of EUR22 million), representing growth of 15% compared with the same period last year on recurrent basis. RESULTS FOR THE THIRD QUARTER OF 2002 In millions of Euros Q3 2001 Q3 2001 Q3 2002 Reported Recurring 1,684 1,684 Net sales 1,604 105 150 EBITDA 184 6.3% 8.9% EBITDA/Sales 11.5% -44 45 Operating income 76 -38 -2 Net result -15 (after minorities) Before amortization of goodwill* -74 -14 Net result -27 (after minorities) After amortization of goodwill * in accordance with US accounting rules (US GAAP) ** in accordance with French accounting rules (French GAAP) - Organic growth of 4.2% For the third quarter of 2002, Rhodia generated net sales of EUR1,604 million, representing a decline of 4.8% compared with the same period last year. On a comparable basis (constant structure and exchange rates), net sales increased by 4.2% with a price effect of - 3.1% and a volume effect of + 7.3%. The seasonal downturn in sales usually observed at this time of the year led to a decline in volumes during the third quarter (on a comparable basis) while prices remained stable compared with the second quarter of 2002. - Operating margin up 2.6 points compared with the third quarter of 2001 on a recurring basis Compared with the third quarter of 2001, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) rose 22.7% (on a recurring basis) to reach a total of EUR184 million. The Group benefited from an improvement in its product mix and was able to resist downward pressure on its selling prices. As a result, the EBITDA/Sales ratio, at 11.5%, is 2.6 points higher than it was at the end of the third quarter of 2001 (8.9%). In line with the Group's earlier forecasts, this ratio - despite strong resistance - declined by 1.3 points compared with the second quarter of this year under the combined impact of a downturn in business activities and the effect of higher raw material prices. The following table shows changes in the net sales figures, EBITDA and EBITDA/Sales ratio over five quarters. The last two quarters of 2001 are presented on a recurring basis: Q3 2001 Q4 2001 Q1 Q2 Q3 recurring recurring 2002 2002 2002 Net sales 1684 1688 1711 1774 1604 EBITDA 150 182 197 227 184 EBITDA/Sales 8.9% 10.8% 11.5% 12.8% 11.5% - Net result impacted by the announced divestments For the third quarter of 2002, net result stands at a loss of EUR27 million compared to a loss of EUR74 million reported for the same period in 2001. Excluding the impact of capital losses on divestments, this figure would have been a loss of EUR7 million. The divestments already announced have led to a loss in the third quarter of EUR12 million in gross value and EUR20 million in net value. For the first nine months of the year, net result stands at a loss of EUR22 million compared with a loss of EUR56 million in 2001. Excluding the impact of divestments announced in 2002, net income would have been EUR30 million, representing a 15% increase compared with the recurring net income of the first 9 months of 2001. The divestments already announced have resulted in a loss of EUR62 million in gross value, and EUR52 million in net value, for the first 9 months of 2002. Results per Division: enhanced margins in all the Group's Divisions. In millions of euros Q3 2001 Q3 2002 % change recurring Fine Organics Net sales 268 284 +6.0% EBITDA 14 25 +78.6% EBITDA/Sales 5.2% 8.8% +3.6 pts Consumer Specialties Net sales 494 458 -7.3% EBITDA 48 53 +10.4% EBITDA/Sales 9.7 11.6% +1.9 pts Industrial Specialties Net sales 304 273 -10.2% EBITDA 34 32 -5.9% EBITDA/Sales 11.2% 11.7% +0.5 pts Polyamide Net sales 310 320 +3.2% EBITDA 29 53 +82.8% EBITDA/Sales 9.4% 16.6% 7.2 pts Service & Specialties Net sales 259 240 -7.3%% EBITDA 46 51 +10.9% EBITDA/Sales 17.8% 21.3% +3.5 pts - Analysis by Division for the third quarter of 2002: - Fine Organics For the third quarter of 2002, the Division reports strong growth in volumes compared with 2001. The pace of growth during this quarter tended to be slower than during the first six months of this year. The business activities of the Life Science Systems enterprise - which remained stable overall - achieved good results in the pharmaceutical sector but performed less strongly in agrochemicals. Rhodia ChiRex enjoyed rapid growth in sales compared with 2001 but the enterprise forecasts a greater slow-down in its business activities than anticipated in 2003 owing to delays in the launch of new products in the pharmaceutical industry, which will require a restructuring of industrial activities. The Pharmaceutical Ingredients business achieved a satisfactory performance in paracetamol and calcium phosphate. The Perfumery & Specialties enterprise improved The Perfumery & Specialties enterprise improved its profitability under the combined impact of enhanced volumes and selling prices. The Intermediates business reported extremely good business performance despite still being penalized by start-up difficulties in one of its production units. These problems have led to a charge of €10 million with respect to this 3-month period. - Consumer Specialties Despite a continuing weak level of business, mainly in the United States, the Division was successful in maintaining its earning capacity. Specialty Phosphates benefited from its restructuring actions while Phosphorus Derivatives experienced strong growth both in sales and in operating earning performance. The Division also improved its product mix in the Detergents and Cosmetics business. The Food business maintained its profits despite low volumes in the North American market. - Industrial Specialties The Division recorded an improvement in its operating results compared with the same period in 2001. The PPMC business enjoyed enhanced volumes and an improved product mix in the paints and coatings markets. Silica Systems continued to grow its business but at a slower pace than in the second quarter in tires, while Silicones—operating in what continued to be a sluggish market particularly in the United States—resisted well due to an improved product mix. - Polyamide The Division improved its profitability compared with the same period last year and with the first half of 2002 thanks to enhanced volumes and the restructuring actions taken at the end of 2001. Growth in volumes is particularly strong for the Polyamide Intermediates and Engineering Plastics enterprises, which are both enjoying sustained demand in the American and Asian markets. The activities of the Textile Yarns business continue to be penalized by a persistently depressed market in Europe. - Services & Specialties The Division experienced a stable business environment overall with enhanced profitability compared with the same period in 2001 and the first six months of 2002. Acetow's operating earning capacity continued to improve; Eco Services enjoyed growth in volumes in its sulfuric acid regeneration business, helping to enhance its operating earning performance. Electronics & Catalysis marginally enhanced its profitability, reaping the initial rewards of its industrial reorganization started in 2001. OUTLOOK For the fourth quarter of 2002, the Group anticipates, at best, stability in the business environment. Under these conditions, Rhodia should continue its organic growth at the same pace and record an EBITDA comparable to that achieved in the third quarter of this year. The Group confirms the expected favorable impact during the fourth quarter from enhanced cash flow management. Finally, the Group confirms its commitment to reducing its net financial debt from EUR2.6 billion at the end of 2001 to around EUR2 billion at the end of this year. VIVENDI UNIVERSAL: Has a Month to Acquire Control of Cegetel ------------------------------------------------------------ Jean-René Fourtou, Vivendi Universal's chief executive, is set to seek board support to keep control of Cegetel after a commercial tribunal in Paris granted the company an extra month to contest Vodafone's offer for the telecom operator. The tribunal extended to December 10 Vivendi's deadline to pre- empt a EUR6.3bn (USD6.2 billion) offer by Vodafone, the UK mobile company, to take control of Cegetel, says the Financial Times. The French communications company contested to the court that Vodafone's deadline breached a shareholder agreement that says an investor buying into Cegetel must send a letter of intent, followed by a 30-day period for parties to conduct due diligence, followed by a further 20-day period for Vivendi to exercise its pre-emption rights. Vodafone offered EUR4 billion for BT's 26% stake, EUR2.3 billion for SBC's 15% stake, and EUR6.77 billion for Vivendi's 44% stake. The French group has until Wednesday night to respond to Vodafone's offer for its own stake in Cegetel. Earlier reports of TCR-Europe said Chairman Jean-Rene Fourtou has been in talks with banks since Vodafone launched its bid, but lenders are said to be reluctant to support the move without further asset sales as assurance. The company is also understood to be in discussions with at least one private equity consortium to sell Houghton Mifflin, its US publishing arm, for more than EUR1.7bn. Last week, it has agreed to sell its non-US publishing assets to Lagardere for EUR1.25 billion. CONTACT: VIVENDI UNIVERSAL 42 avenue de Friedland 75380 Paris Cedex 08, France Phone: +33-1-71-71-10-00 Fax: +33-1-71-71-11-79 Home Page: http://www.vivendiuniversal.com ============= G E R M A N Y ============= BAYER AG: Healthcare Unit Head Steps Down, Troubles Loom -------------------------------------------------------- The recent resignation of Frank Morich, Bayer's healthcare unit head, suggests internal problems regarding the German company's fate, particularly its troubled pharmaceuticals unit, the Financial Times says. A person close to the proceedings explained that it is only "natural" for some managers to fall off while the company's chief executive, Werner Wenning, tries to put together a "perfect team" to manage the chemicals and pharmaceuticals company. Rolf Classon, who headed Bayer's diagnostics unit until now, will replace Mr. Morich. The German company has been seeking for a pharmaceuticals partner after being forced to withdraw its best-selling drug Baycol last year due to linked deaths. Bayer's pharmaceuticals business had drifted off from its status as the world's no.2 pharmaceuticals company as its size and profitability diminished. Critics indicated that Bayer may have to accept a minority stake if it wants to team up with a powerful partner instead of insisting on a majority role. Bayer had also mentioned selling part of its agrochemicals activities to BASF--a sale expected to raise almost EUR1.2 billion (USD1.1 billion) and help the company reduce its EUR12 billion net debt. CONTACT: BAYER AG Werk Leverkusen 51368 Leverkusen, Germany Phone: +49-214-30-58992 Fax: +49-214-307-1985 Home Page: http://www.bayer-ag.de HVB GROUP: Leads Launching of Subordinated Notes for Investkredit ----------------------------------------------------------------- As lead manager, HVB is launching subordinated noncumulative limited recourse notes for Investkredit Funding Ltd, Jersey, (securities ID 957610) with a volume of up to EUR100 million on the market. The paper is being offered through Bank Austria- Creditanstalt primarily private investors in Austria and carries an interest rate of 3-month Euribor plus 1.65% p.a., which is distinctly higher than the current Interbank rate. Interest is paid quarterly, but payments depend on whether Investkredit posts a profit or pays a dividend. Because of these special conditions, the bond is counted toward Investkredit's regulatory core capital. This is the first time the HVB Group through its Corporates and Markets has launched such a bond for an Austrian bank. It is thus expanding its leading position in this market segment. This note is the fourth product of its kind which HVB has brought to market. Investkredit Bank AG is a specialised Vienna-based bank which offers its financial services exclusively to companies. Investkredit, a listed company, is rated A1 by Moody's Investors Service and is owned mainly by the four large banking groups in Austria. Total assets of the Investkredit Group amount to over EUR 13 billion. The notes will be rated A3 by Moody's. This transaction will enable the Investkredit Group to further improve its core capital ratio. The bank with a corporate focus is thus creating additional growth potential for financings. The Group specializes in medium- and long-term financial services for companies, local governments and real estate. With expanded capital, the entire range of services of a specialized bank will be offered to a larger European market (core markets of Austria, Germany, Czech Republic and Poland). An important aspect of the transaction will be to round off existing business segments through innovative financing instruments in compliance with international standards (mezzanine financing, corporate bonds). Existing strategic alliances with leading specialists in the respective sub-markets (EIB and KfW for equity financing for companies, Dexia for local government financing, EBRD for real estate operations in Central and Eastern Europe) will be further intensified. This transaction will make it possible to take greater advantage of international capital and syndication markets. CONTACT: HVB GROUP Oliver Gruß. Phone: 0049/89/378-25424 E-mail: oliver.gruß@hvbgroup.com Dr. Knut Hansen Phone: 0049/89/378-24644 E-mail: knut.hansen@hvbgroup.com Investkredit Bank AG Hannah Rieger Phone: 0043/1/53135-112 E-mail: rieger@investkredit.at ===================== N E T H E R L A N D S ===================== IFCO SYSTEMS: S&P Withdraws 'CC' Rating on Credit Facility ---------------------------------------------------------- Standard & Poor's Ratings Services withdrew its double-'C' bank loan rating on IFCO Systems N.V.'s USD178 million secured bank credit facility. The rating agency foresees that the company's current restructuring of the facility is likely to result in impairment to current holders. Standard & Poor's also withdrew its corporate credit and subordinated debt ratings on the company. The ratings were lowered to 'D' on March 15, 2002, after IFCO failed to make its interest payment on its 10.625% senior subordinated notes due 2010. In July, IFCO reported its financial results for the first quarter of 2002 with total revenues before granulate sales at 1.5% lower in Q1 2001, primarily due to slightly lower revenues in the RPC division in Europe and Pallet Services in the US. RPC revenues, without granulate sales, declined by USD1.9 million to USD38.2 million compared to the same period in the previous year. The company's total debt, including capital lease obligations and the 10 5/8% Senior Subordinated Notes, at end March 2002 was USD302.1 million compared to USD374.4 million at the same time in the prior year. In the first quarter of 2002 the Company sold its Industrial Containers division; the cash proceeds of USD36.8 million were used to pay down Senior debt. IFCO Systems is a holding company that manufactures round-trip container (RTC) systems through three Germany-based subsidiaries. CONTACT: Rivierstaete, Amsteldijk 166 1079 LH Amsterdam, The Netherlands Phone: +31-205041772 Fax: +31-206460793 Home Page: http://www.ifcosystems.de =========== P O L A N D =========== ELEKTRIM SA: Calls Meeting to Approve Restructuring of Bonds ------------------------------------------------------------ On 24 October 2002, Elektrim S.A., as guarantor of EUR 440 million exchangeable bonds due 2004 issued by Elektrim Finance BV, called a meeting of bondholders to approve a resolution regarding the restructuring of the bonds. The meeting of bondholders will be held on 15 November 2002, at 9.30 London time, in the offices of Skadden, Arps, Slate, Meagher & Flom LLP at One Canada Square, Canary Wharf, London E14 5DS, UK. The key terms and conditions of the proposed restructuring of exchangeable bonds are as follows: 1. redenomination: from PLN to euro and an increase in the principal amount of the bonds from ?440,000,000 to ?510,000,000, with accretion at the rate of 1 per cent per annum. The bonds will be in registered form in the denomination of ?1, or integral multiples thereof, without coupons attached; 2. interest: 2 per cent per annum; 3. a first initial payment by the issuer: shortly after the Bondholders' Meeting (convened for 15 November 2002) of approximately ?25,000,000 in respect of a partial pro rata redemption of the bonds; 4. a second initial payment: approximately ?32,000,000 in respect of a partial pro rata redemption of the bonds on 30 June 2003; 5. mandatory redemption: a mandatory redemption of the bonds, in whole in the event that Elektrim S.A. disposes of its holding of shares in Elektrim Telekomunikacja Sp. z o.o. and/or Carcom Warszawa Sp. z o.o. by way of a sale and in part in the event that Elektrim S.A. disposes of its holding of shares in Zespól Elektrowni Patnów-Adamów-Konin S.A.; 6. security: pledges in favour of Citibank N.A. as Security Agent on the shares held by Elektrim S.A. in the following companies: Elektrim Telekomunikacja Sp. z o.o., Carcom Warszawa Sp. z o.o., Elektrim Volt S.A., Elektrim Megadex S.A., Port Praski Sp. z o.o., Mostostal Warszawa S.A. and Fabryka Kotlów Rafako S.A., assignment by way of security of the certain receivables owing from Elektrim Telekomunikacja Sp. z o.o. to Elektrim S.A. and loan of ?32,000,000 granted to Zespól Elektrowni Patnów-Adamów- Konin S.A. by Elektrim S.A., mortgage over the Elektrim S.A.'s real estate assets (situated at (i) Chalubinskiego, and (ii) ul. Panska 85); and subject to and immediately upon obtaining any required approvals, pledges over Elektrim S.A.'s equity interests in Zespól Elektrowni Patnów-Adamów-Konin S.A.; 7. contingent payment: following the full redemption of the bonds, an additional contingent payment to the bondholders in the event that the fair market value of Elektrim S.A., net of debt, (based on Elektrim S.A.'s accounts for the year in which full redemption of the bonds is made) exceeds ?160,000,000 (the amount of the contingent payment, if any, will rise from 10 to 25 per cent in proportion to the time required for the issuer to redeem the bonds in full). The restructuring of the bonds is governed by English law. Mr. Piotr Rymaszewski is the proposed bondholders' nominee to the Management Board of Elektrim S.A. ELEKTRIM SA: Announces Opening of Escrow Account ------------------------------------------------ The Management Board of Elektrim S.A. announces that, pursuant to the binding restructuring agreement providing for the terms and conditions of restructured bonds signed on 3 October 2002 by Elektrim S.A. and bondholders, on 24 October 2002 Elektrim and the bondholders executed an Escrow Agreement to secure completion of the restructuring. Pursuant to the Escrow Agreement, on 25 October 2002 Elektrim deposited 25 million in an escrow account to fund the first initial payment under the Restructuring. The Restructuring Agreement will come into force (Closing) after approval of the agreed restructuring by bondholders at the general meeting of bondholders that has been convened for 15 November 2002. The resolutions at the bondholders meeting require approval by a minimum of 75% of the bonds by principal value. The Restructuring Agreement currently has the written support through voting commitments of approximately 77.3% of the total outstanding bonds. NETIA HOLDINGS: Composition Plans of Dutch Subsidiaries Approved ---------------------------------------------------------------- Netia Holdings S.A. (WSE: NET), Poland's largest alternative provider of fixed-line telecommunications services (in terms of value of generated revenues) today announced that at the creditors' meetings of its three Dutch finance subsidiaries held today in Amsterdam, the Netherlands, all creditors present cast their votes in favor of the composition plans of Netia Holdings B.V., Netia Holdings II B.V. and Netia Holdings III B.V., respectively. The hearing on approval of the composition plans will be held on November 6, 2002. CONTACT: Netia (Investor Relations) Anna Kuchnio Phone: +48-22-330-2061 GDYNIA SHIPYARD: Needs Nearly PLN1 Billion in Financing ---------------------------------------------------------- Troubled Gdynia Shipyard needs to obtain PLN0.8 million to PLN1 billion (USD198,000 to 247 million) from banks in order to implement its restructuring program. The banks, however, are hesitant to dish out the cash without a guarantee from the state, says Warsaw Business Journal. Last week's warranty for a capital increase had only been enough to complete two of the 12 ships presently being constructed. Shipyard representatives and bank executives met Monday to discuss further details of the loan after the previous meeting in October 23 failed to yield results. An October 11 report of TCR-Europe indicated that Gydnia's management had been waiting for USD250 to USD300 million loans guaranteed by the government. The Polish government, in September, had offered state-owned PKO BP banks and BPH-PBK guarantees for a total of USD52 million loans. The government said in a statement that it would offer US$25.5 million in loan guarantees for PKO BP and USD26.7 million for BPH-PBK. The guarantees for PKO BP are due to expire on April 30, 2003, and for BPH-PBK, a unit of Germany's HVB Group, on May 31, 2003. The Infrastructure Ministry had also said the shipyard, which owes USD100 million to banks and a similar amount to suppliers, may also obtain additional USD40 million in guarantees form the Export Guarantee Fund. The State Treasury owns 24.8 percent of Gdynia, banks own 25 percent, insurers 15.2 percent, a private investor group 16.3 percent, the city Gdynia 1.4 percent and others 17.3 percent. =========== R U S S I A =========== LUKOIL OAO: S&P Revises Outlook to Positive From Stable ------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on LUKoil OAO, Russia's largest vertically integrated oil major, to positive from stable. Eric Tanguy, a Standard & Poor's credit analyst, says "The outlook change is supported by management's recent measures to improve the company's overall cost structure, as well as by LUKoil's relatively prudent debt-maturity profile and historically sound cash flow generation," S&P had indicated to continue monitoring LUKoil's LUKoil's ability to generate sufficient after-tax cash from operations to finance its capital-expenditure requirements, ambitious expansion plans, and financial-debt obligations. The rating agency would particularly keep a close watch on prices of crude as it expects that these would decrease significantly from their current high levels. S&P also affirmed the single-'B'-plus long-term corporate credit rating on LUKoil. LUKoil's credit quality benefits primarily from the company's ability to export large crude-oil volumes and exports of refined products. S&P, however, noted that the company's credit quality remains constrained. LUKoil is Russia's largest oil company in terms of crude reserves, production, and exports. In 2001, LUKoil produced 78.3 million tons of crude oil (1.58 million barrels per day) from its considerable reserves, which totaled 14.6 billion barrels at year-end. ===================== S W I T Z E R L A N D ===================== SWISS LIFE: Provides Facts Concerning Long-Term Strategy AG, Zug ---------------------------------------------------------------- In its edition of 27 October 2002 the "Sonntagszeitung" carried an article concerning the Long Term Strategy investment company. The facts of the case are as follows: The Long Term Strategy AG (LTS AG) investment company was founded by Swiss Life/Rentenanstalt in 1999 with capital amounting to CHF 250 000. It is a company under Swiss Law with its head office in Zug; it is entered in the Register of Companies and in all publicly available Stock Guides. In the spring of 2000 LTS AG conducted a capital increase, raising its capital to CHF 2 million. Within this framework members of the Swiss Life/Rentenanstalt Corporate Executive Board - but not members of the Board of Directors - were able to invest private assets at their own risk. Following the capital increase Swiss Life/Rentenanstalt maintained a 15% stake in LTS AG's share capital. This co-investment with Swiss Life/Rentenanstalt took place in keeping with precisely defined criteria, was subject to prior legal review and judged to be perfectly in order. Additionally, it was established that these private investments by members of the Corporate Executive Board did not in any way represent an element of remuneration on behalf of Swiss Life/Rentenanstalt. During 2001 and 2002 Swiss Life/Rentenanstalt acquired all shares of the investment company at a price equal to their net asset value. The proportion of stocks acquired now has a higher value than the net asset value originally paid to the members of the Corporate Executive Board. At the end of July 2002 the investments in question were realised by LTS AG. Swiss Life/Rentenanstalt generated a gain from this investment. LTS AG no longer actively conducts investments. LTS bore its own costs. In addition, provisions were made for the remaining costs and a final settlement will be drawn up for these. =========================== U N I T E D K I N G D O M =========================== ABERDEEN ASSET: May Sell Businesses to Trim Debt ----------------------------------------------- Aberdeen Asset Management, a fund firm hit by the collapse of the split capital trust sector, is set to announce the sale of at least one of its businesses this week to reduce EUR250 million of debt, reports say. The GBP4.8 billion unit trust and open-ended investment company portfolio is the asset that analysts expect to go first. Aberdeen's shares have crashed more than 90 per cent since the start of the year as sliding stocks, heavy borrowing and cross- shareholdings in other trusts hit the split capital sector. Aberdeen's three split caps went into receivership along with eight others among the 19 that were suspended from the stock market. The firm, which denied being close to breaching its banking covenants, is also believed to soon announce job cuts across the group to cut costs. Aberdeen was not immediately available for comment on the plans, says The Scotsman. CONTACT: ABERDEEN ASSET MANAGEMENT 1 Albyn Place Aberdeen, Grampian AB10 1YG United Kingdom Phone: +44-1224-631-999 Fax: +44-1224-647-010 Home Page: http://www.aberdeen-asset.com ALLDAYS PLC: Co-operative Group Announces Acquisition of Alldays --------------------------------------------------------------- Co-operative Group (CWS) Limited announces that it has acquired the business of Alldays from its receivers. Total funding required to effect the acquisition is approximately GBP131.0 million. Alldays is one of the largest convenience store chains in the U.K., operating 600 owned stores as well as 30 stores run by independent franchisees. For the year ended 28 October 2001 Alldays generated turnover of GBP 524.9 million. The Co-operative Group believes that the Acquisition represents an attractive addition to its existing food retailing operations and will further strengthen its position in the convenience store sector. The Co-operative Group will assume responsibility for creditors and employees of Alldays and, in addition to the payments made to the receivers, will also make a payment to the shareholders of Alldays of 5 pence per share, which in aggregate will amount to approximately GBP2.2 million. The acquisition will become effective immediately, with the Co- operative Group taking over the operations of Alldays from today. Alldays, including its employees, will be integrated into the existing operations of the Co-operative Group. Commenting on the acquisition, Martin Beaumont, Chief Executive of the Co-operative Group, said: "This deal establishes the Co- operative Group as the U.K.'s leading convenience store operator. Following the successful integration of Co-operative Wholesale Society and Co-operative Retail Services, like-for-like sales in our Welcome convenience stores are running at 7 per cent up - well ahead of the market - while profitability in food retailing has more than doubled since the merger. The acquisition of Alldays will help us to build the momentum behind our highly successful convenience proposition." HSBC Bank plc, which is regulated in the United Kingdom by The Financial Services Authority Limited, is acting for the Co- operative Group and no-one else in connection with the Acquisition and this document and will not be responsible to anyone other than the Co-operative Group for providing the protections afforded to customers of HSBC Bank plc, nor for providing advice in relation to the Acquisition nor any matter referred to in this document. Information relating to Co-operative Group (CWS) Limited In April 2000, Co-operative Wholesale Society and Co-operative Retail Services merged to form a business with combined turnover of GBP4.7 billion. Subsequently, in January 2001 the Co-operative Wholesale Society changed its name to Co-operative Group (CWS) Limited. The Co-operative Group now comprises a diverse range of businesses including retailing (food retailing and specialist retailing), milk processing, farming, banking and insurance. It is the world's largest consumer co-operative and is owned and controlled by its members. For the year ended 12 January 2002, the consolidated operating profit of the Co-operative Group (excluding the results of Co- operative Insurance Society) was GBP164.2 million compared with GBP110.8 million in the previous financial year, representing an increase of 48 per cent. The Co-operative Group's trading operating profit for the year was GBP58.3 million before exceptional costs, which represented an increase of over 40 per cent. from GBP41.7 million for the previous financial year. Food retailing, focusing on the convenience and market-town sectors, is the largest contributor to the Co-operative Group in terms of turnover, number of employees and customers. In the year ended 12 January 2002 the food retailing operations achieved GBP2.4 billion of turnover whilst operating profit rose from GBP25.9 million to GBP45.6 million. This result was generated from 1,071 stores with 5.2 million square feet of retail selling space. CONTACT: Co-operative Group (CWS) Limited Martin Henderson Phone: 0161 827 5292 MB: 07770 925 959 HSBC Bank plc Jonathan Grassi Phone: 020 7336 9000 EQUITABLE LIFE: Action Group Anxious About FSA Probe ---------------------------------------------------- Equitable Life action groups are suspicious that the Treasury is trying to block the investigation that would see policyholders receive compensation from the government, the Financial Times report. Sir Michael Buckley, more than a year ago, promised to launch an investigation on the regulation of Equitable by the Financial Services Authority, which acts on behalf of the Treasury and took over responsibility for Equitable. Should the probe discover that policyholders were unjustly dealt, the government is compelled to stand by its indications that it would consider paying compensation to concerned policyholders. Policyholder groups are concerned that no publication date has been announced for the report and both the ombudsman and his deputy, Alan Watson, are retiring, says the report. The parliamentary ombudsman's office, on the other hand, reasoned that no publication date had been announced because the investigation was still ongoing. It also denied that the retirement of Sir Michael would delay the results. EQUITABLE LIFE: Policyholders Enraged by Secrecy of Penrose Probe ----------------------------------------------------------------- The secrecy of the Penrose inquiry into the collapse of Equitable Life drew an angry response from policyholders' groups who were given indications last year they would be able to observe the proceedings. The policyholders had hoped to receive compensation from the government, as Equitable's former regulator, should the probe discover that policyholders were unjustly denied coverage. The seven Equitable Life action groups will today lobby MPs, hoping to press the government to pay compensation, Times Online says. The inquiry, set up by the Treasury, has informed one of the leading Equitable Life policyholder action groups that the latter cannot demand the publication of the inquiry's findings if they prove controversial or damaging to the government. The inquiry headed by Scottish judge, Lord Penrose, is investigating events leading up to the insurer's collapse, including the activities of regulators from the Department of Trade and Industry and the Treasury, which oversaw Equitable's activities until the Financial Services Authority took over in 2000. Equitable Life was forced to close to new business in December 8, 2000 after the House of Lords ruled that it must meet guarantees offered to holders of guaranteed pension plans in full--a cost pegged at more than GBP1.5 billion. A Treasury spokesman confirmed yesterday that, at the judge's decision, there were "no plans" for Lord Penrose to hold open hearings. MARCONI PLC: Partners With TCI to Offer Service for TETRA --------------------------------------------------------- Partnership combines Marconi's extensive field support and TCI validation and data processing skills Marconi (MONI) and Telecom Consultants International (TCI) have signed an agreement to develop a Ready For Service (RFS) coverage validation and optimisation solution for the TETRA Private Mobile Radio market. The two companies have complementary skills and together provide a complete range of services to assist operators and system integrators validate network coverage and related service level agreements. Under the partnership, Marconi Customer Services' extensive field force will carry out route planning and drive testing with TCI validating and processing the data to produce coverage reports. These reports will then be used to help the operator to demonstrate the existing level of coverage in priority locations and optimise existing infrastructure where necessary. "This partnership provides TETRA operators with a one-stop solution for ensuring that their networks meet the exacting standards of the emergency services" says Marconi's Director of Special Projects Paul Walton. "By ensuring that all high priority locations within a network have optimum coverage and capacity so communications channels can be assured in the event of an emergency." Marconi is a leading provider of services to both mobile and wireline network operators, offering network design and optimisation — using market-leading wireless network planning tools such as Planet® — and a turnkey Acquire, Design and Construct (ADC) capability for mast sites. The group has considerable experience of in-building services and is a leading provider of value-added communications solutions to the emergency services. TCI has experience in implementing coverage validation methodologies, in particular the coverage delivered by TETRA networks to the emergency services. TCI was instrumental in bringing about the use of a voice quality measurement (rather than bit error rate or signal strength measurements) to validate coverage performance, with this being a realistic representation of what end users would receive in practice. About TCI TCI is an independent high technology company specialising in leading-edge telecommunications consultancy. We provide consultancy services to professional users across all sectors of industry and government. Our competencies encompass strategic and technical studies, procurement and integration support, spectrum management and regulatory support, system testing and service validation. We have particular expertise in the Emergency Service and Transportation sectors. We draw on our experience gained from working with mobile radio systems (both analog and digital), mobile data, transport, control rooms, IS/IT strategy, communication system architectures, Government regulators and IPR issues. We have extensive experience in the design, implementation and verification of complex communication systems. 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. MYTRAVEL: Meeting With Shareholder Meditor Eases Concern -------------------------------------------------------- Meditor Capital Management, which recently boosted its holding in tour operator, MyTravel, had asked for a meeting with the company, easing concerns of the troubled holiday company. "We've requested a meeting with the company, as we would do with any company that announces significant news where we have a shareholding," reasoned Meditor portfolio manager Talal Shakerchi. The move, however, was seen to add pressure on the tour operator, as the capital management company was reported to have asked troubled firm Amey to consider a break up or sale of the equally troubled firm last week, says The Scotsman. On previous reports, MyTravel, the tour operator which issued three profit warnings in five months, is believed to be considering restating its accounts for the previous years. The company is seen to abandon the conservative accounting principle blamed as the cause of the profit warning and the loss of more than 60% of the group's market capitalization. Some GBP232 million were wiped out when the company's share price collapsed by 47p to 28.5p. CONTACT: MYTRAVEL GROUP PLC Parkway One, Parkway Business Centre, 300 Princess Rd. Manchester M14 7QU, United Kingdom Phone: +44-1-61 23-20-066 Fax: +44-1-61 23-26-524 Home Page: http://www.airtours.com NTL INC: Committee Taps Quest to Render Advice re Euroco Business ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of NTL Incorporated and its debtor-affiliates, asks the U.S. Bankruptcy Court for the Southern District of New York for an authority to contract Quest Turnaround Advisors, LLC as its management services consultants, nunc pro tunc to August 30, 2002. The Committee reminds the Court that the Debtors' Plan currently contemplates that upon consummation of the Plan, the Debtors will divide their current businesses and investments into two new groups, the holding companies for which are referred to in the Plan as New NTL and Euroco. Euroco will be the holding company for the substantially all of the Debtors' businesses and investments in continental Europe (excluding France) as well as holding certain other various investments. The Committee believes that it is in the best interest of the Debtors, their estates, and their creditors to employ and retain Quest to provide to the Committee management consulting services with respect to the future businesses, management and operations of Euroco. The Committee further points out that a new business entity like Euroco has numerous requirements and the Committee believes that Quest is qualified to provide the management consulting services that it requires. Quest will render management consulting services to the Committee in order to maximize and realize the value of Euroco. Quest will: i) provide management consulting services; ii) ensure that Euroco has all necessary transitional IT and back office service agreements in place necessary to conduct its affairs; iii) oversee of the development and implementation of a cohesive communication plan for managers and employees in operating subsidiaries and for partners/co-investors to convey managerial control and direction; and iv) provide advice and guidance relating to the operations of Euroco post-consummation. The Debtors agree to pay Quest at its current hourly rate of $400 per hour plus all of the fees and expenses incurred by Quest in performing its management consulting services. NTL is the largest cable television operator and a leading provider of business and broadcast services in the UK, and the owner of 100% of Cablecom in Switzerland and Cablelink in Ireland. Kayalyn A. Marafioti, Esq., Jay M. Goffman, Esq., and Lawrence V. Gelber, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors in their U.S. Bankruptcy proceedings and Jeremy M. Walsh, Esq., at Travers Smith Braithwaite serves as U.K. Counsel. On December 31, 2001, the Company's books and records reflected, on a GAAP basis, $16,834,200,000 in total assets and $23,377,600,000 in liabilities. PACE MICRO: Signs New Supply Contract With NTL Ireland ------------------------------------------------------ Pace Micro Technology plc has signed a new supply contract with NTL Ireland, Ireland's largest multi channel TV operator. The contract will see Pace supply NTL Ireland with its new Di300 home gateway (set-top box) over a two-year period, starting in October 2002. NTL Ireland will utilise Pace's Di300 home gateway to continue the development of its digital television service which currently includes an extensive range of channels, on-demand films and interactive programme guide. The Di300 is the latest addition to Pace's cable home gateway line-up and is highly cost-effective through a combination of new developments in product design and tailored functionality. The Di300 is built using the same silicon and software as other models in Pace's cable range to ensure there are no differences in overall speed, performance and interoperability. Graham North, Pace's regional director for UK and Ireland commented: "We have developed the Di300 based on the needs of NTL Ireland, by tailoring set-top box functionality to customer requirements. The Di300 builds on the success of its stable-mate, the Di4000, which was certified to the EuroDOCSIS 1.0 standard in July. North added: "The Di300 takes advantage of the high performance architecture of the Di4000 whilst being scaleable to meet current as well as future operator needs. The Di300 is the most effective cable gateway we have ever developed meaning that NTL Ireland will benefit in the performance stakes as they grow and develop their digital service." cont'd/2 Pace Micro Technology to supply ntl Ireland/2 Mark Mohan, marketing director at NTL Ireland commented: "NTL is the first choice for digital TV in Ireland, and this deal will help us to lead from the front as we grow and expand our business further." About Pace Micro Technology plc Pace Micro Technology plc (LSE: PIC) is a leader in digital television technology. The Company's primary focus is the development of innovative home gateway (set-top box) solutions for operators, broadcasters, telecommunications companies and retail markets worldwide. In addition, Pace develops edge of network devices for service providers, in particular digital IP voice gateways for low-cost integrated voice and data services. Pace's head office is in Shipley West Yorkshire, with further offices in Bracknell, Cambridge, the USA, France and Hong Kong. For further information, please visit Pace's web site at http://www.pace.co.uk. About NTL NTL offers a wide range of communications services to homes and business customers throughout the UK and Ireland. 12 million homes are located within NTL`s fibre-optic broadband network, which covers nearly 50% of the UK including, London, Manchester, Nottingham, Oxford, Cambridge, Cardiff, Glasgow, and Belfast. NTL Ireland offers similar services across an extensive network using fibre optic, broadband coax & copper, broadcast, satellite and radio to its 371,000 customers in Dublin, Galway and Waterford. NTL Home serves over 3 million residential customers. http://www.ntl.ie Note: The recent resignation of Malcolm Miller, the chief executive of Pace Micro Technology is seen as another blow to the company, which has been hit by the collapse of ITV digital, NTL's bankruptcy proceedings and a new deal with BSkyB. CONTACTS: Pace Corporate Helen Kettleborough Pace Micro Technology Phone: +44 1274 538005 E-mail: helen.kettleborough@pace.co.uk Amanda David Pace Micro Technology Phone: +44 1274 537093 E-mail: amanda.david@pace.co.uk NTL Sandra Eaton Phone: +353 1 245 8405 E-mail: sandra1.eaton@ntl.com NTL Phone: Anna-Maria Barry Phone: +353 1 245 8419 E-mail: annamaria.barry@ntl.com SODEXHO: Selects TempoSoft to Manage Workforce Optimization ----------------------------------------------------------- TempoSoft, the HCM provider whose solutions are used by more people than any other web-based, integrated workforce management solution in the world, today announced that Sodexho (NYSE:SDX), the leading provider of food and facilities management in North America, has chosen TempoSoft's solution to manage its workforce optimization. Sodexho has more than 130,000 employees at more than 6,000 locations across North America. "With today's labor costs increasing, and labor supplies such as skill and availability becoming scarce, we were searching for a new way to manage the technical and informational aspects of our business," said Paul Kury, Sodexho Campus Services senior director, business development. "TempoSoft provided a scalable, centralized solution to manage enterprise-wide information that easily integrates with our existing infrastructure to manage our workforce optimization." The flexibility of TempoSoft's architecture allows Sodexho to incorporate all of its business processes, drivers, labor standards and key performance indicators into the solution. Using the TempoSoft solution, Sodexho will be able to increase real- time visibility into issues that affect labor costs, increasing employee retention and more effectively utilizing skills and time. These issues include budgeting and forecasting, business planning, recruitment, people management, workload generation and analysis, leave management, automated scheduling and optimization, time and attendance, self-service kiosks, compliance reporting and decision support. "With the reduced total cost of ownership and demonstrated ease- of-use, we expect that Sodexho will see significant return on investment as a result of implementing TempoSoft's solution," said John Orr, TempoSoft's vice president of sales operations. "We estimate that with full deployment, the solution will literally pay for itself within six months." Sodexho (www.sodexhoUSA.com) is the leading provider of food and facilities management in the U.S. and Canada, with USD4.9 billion in annual sales. Sodexho offers innovative outsourcing solutions in food service, housekeeping, grounds keeping, plant operations and maintenance, asset and materials management, and laundry services to corporations, health care and long term care facilities, retirement centers, schools, college campuses, military and remote sites. Headquartered in Gaithersburg, Md., the company has 130,000 employees at more than 6,000 locations across North America. Sodexho is a proud endorser of the Global Sullivan Principles for Corporate Responsibility. Learn more about these principles at www.globalsullivanprinciples.org. About TempoSoft Founded in 1998, TempoSoft is Human Capital Management (HCM) software company whose solutions are used by more people than any other web-based, integrated workforce management solution in the world. Combining the power of enterprise-class optimization with the flexibility of the web, TempoSoft's scheduling and time and attendance solutions enable optimum utilization of resources, allowing companies to manage their entire workforce efficiently and effectively. TempoSoft is revitalizing some of the world's largest companies with a new and unique approach to workforce management, including Office Depot, Sodexho, Big 'Y' Foods, Advance Auto Parts, Carrefour, France Telecom, J Sainsbury and Champion. Based in Atlanta, Ga., TempoSoft Inc. is a wholly owned subsidiary of TempoSoft SA, a privately held company with headquarters in Paris, France, and wholly owned subsidiaries in the U.S., U.K. and Germany. For more information, visit www.temposoft.com. CONTACT: TempoSoft, Inc. John Orr Phone: 770/576-2069 E-mail: jorr@temposoft.com or Loma Communications, Inc. Bethany Weiss Phone: 415/928-1796 E-mail: bethanyj@pacbell.net TELEWEST COMMUNICATIONS: Head Close to Announcing Debt Swap ----------------------------------------------------------- Telewest's chief executive, Charles Burdick, is close to announcing the company's launching of a debt-for-equity swap, a source close to the negotiations revealed the information to Times Online. The group has reportedly won approval from its lenders for a GBP3.5 billion (USD5.43 billion) debt-for-equity swap that would enable it to meet coupon payments. It has until Thursday to make sure it does not default on the obligation. Early in October, Standard & Poor's Ratings Services downgraded the long-term corporate credit ratings on Telewest Communications PLC fro CC to "SD" after the the broadband communications and media group failed to pay interest coupons due October 1, 2002 on 9.625% and 11% senior notes, which mature 2006 and 2007, respectively. The restructuring, which was negotiated earlier, would eliminate GBP3.5 billion of Telewest's GBP5.3 billion debt in exchange for 97% of its equity. As for the merger talks with NTL, the Financial Times report say the progress by Telewest on its restructuring is not likely to immediately end any possible merger discussions between it and NTL, the largest U.K. cable operator. ************ 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 and Ma. Cristina Canson, 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. 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